Determinants of Smallholder Crop Commercialization: The Case of Agarfa and Sinana Districts of Bale Zone, Southeastern Ethiopia

Abstract

Smallholder crop commercialization entails enhancing market participation and product choice decision of smallholders based on market signal. The study was initiated to identify the current level and determinants of smallholder crop commercialization in Agarfa and Sinana districts of Bale zone. Unlike the previous studies, this study focused on all crops produced by the households. The study used multistage random sampling techniques to select 188 respondents. Primary data was collected using interview schedule, focus group discussion and key informant interview while secondary data was collected from different sources such as records of line offices, Central Statistical Agency and other publications. Both quantitative and qualitative data were collected for the study. Descriptive statistics, household commercialization index (HCI) and truncated regression model were used for data analysis. Accordingly, HCI shows 16% of households in the sample were fully subsistence oriented while 5.9% of them categorized as low, 30.9% medium, 36.7% high and 10.6% very high levels of commercialization. Truncated regression depicts that level of education, equine holding (TLU), application of fertilizer, irrigation use, frequency of extension contact, use of credit, membership to cooperatives and social network affected level of commercialization positively and significantly while household size, distance from all-weather road and market center affected negatively and significantly. Therefore, to enhance smallholder commercialization, improving and expanding utilization by smallholders to strong institutions such as credit use, adult education, use of irrigation, effective use of production inputs and market oriented extension services should be the key tasks of policy makers and development planners.

Keywords: Commercialization, crop, determinants, subsistence production, truncated model

DOI: 10.7176/RHSS/11-9-05

Publication date:May 31^st 2021