Reviews of Smallholder Farmers Market Participations Levels and It Determinant Factor in Ethiopia

Abstract

In agrarian economy, empirical evidence of smallholder farmers’ participation in the market has been extensively considered for variety of agricultural products. Smallholders’ decision to participate in larger, more lucrative national or regional markets depends on the degree of constraints they face relative to the benefits they could derive from such participation and depends on their capacity to meet minimum production requirements, both in terms of quantities and product standards; it also requires that expected profits will be large enough to encourage them to produce. Improved market participation is a key precondition for transformation of the agriculture sector from subsistence to commercial production. Smallholder farming constitutes the livelihoods of many rural households in developing economies. Rural areas are the home of the majority in Africa and small scale agriculture is the mainstay of the rural economy serving mainly as a source of food income. Ethiopian economy is highly dependent on agricultural sector which account for about 38.8% of national GDP, 87% of export earnings and remains the main source of employment; generating 72.7% of total employment. Numerous factors are believed to have an influence on farmers’ market participation decision. Such factors range from social-economic factors, institutional factors, market factors and external factors. Social-economic factors include age, gender, off-farm income, level of education, years of farming, household size, farm size and output level. Institutional factors entail membership to a group, access to extension services, access to credit, land tenure, infrastructure, contractual arrangements and, policies and law. Market factors such as access to market information, prices of output, distance to the market place, means of transport and other external factors such as natural calamities that result in crop failure also determines market participation by the crop farmers.

Keywords: level of market participations, determinant of market participations

DOI: 10.7176/JPID/59-03

Publication date: February 28^th 2021