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Transaction costs and cattle farmers’ choice of marketing channel in North-Central Namibia

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  • T. Shiimi
  • P.R. Taljaard
  • H. Jordaan

Abstract

About 70 per cent of the Namibian population depends on agricultural activities for their livelihood. Moreover, agriculture remains an important sector in Namibia owing to the fact that its national economy is widely dependent on agricultural production. Cattle producers in the Northern Communal Areas (NCAs) have an option to market their cattle via the formal or informal market. Efforts have been made to encourage producers to market their cattle through the formal market; however, these proved to be futile as the strategy yielded limited improvements. In this study, a number of variables have been analysed to determine factors that influence cattle marketing decisions. Factors influencing the marketing decision on whether to sell or not sell through the formal market have been analyzed using the Probit model. Factors influencing the amount of cattle sold through the formal market, assuming that a producer uses the formal market to sell cattle, were analysed using the Truncated model. Testing the Tobit model against the alternative of a two-part model was done using Cragg's model. Results from empirical research suggest that problems with transportation to MeatCo, marketing experience and the age of cattle producers are some of the factors that significantly influence the decision whether or not sell through the formal market. The accessibility of marketingrelated information, accessibility of new information technology, the age of respondents and a lack of improved productivity are some of the factors that influence the proportional number of cattle sold through the formal market. The results suggest that substantially more information is obtained by modelling cattle marketing behaviour as a dual decision-making framework instead of a single decision-making framework.

Suggested Citation

  • T. Shiimi & P.R. Taljaard & H. Jordaan, 2012. "Transaction costs and cattle farmers’ choice of marketing channel in North-Central Namibia," Agrekon, Taylor & Francis Journals, vol. 51(1), pages 42-58.
    • Handle: RePEc:taf:ragrxx:v:51:y:2012:i:1:p:42-58
    DOI: 10.1080/03031853.2012.649543
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    Cited by:

    1. D. Layne Coppock & Lucas Crowley & Susan L. Durham & Dylan Groves & Julian C. Jamison & Dean Karlan & Brien E. Norton & R. Douglas Ramsey, 2021. "Cooperation in the commons: Community-based rangeland management in Namibia," Discussion Papers 2106, University of Exeter, Department of Economics.
    2. Nsakilwa, Musowe & Kalaba, Mmatlou, 2021. "Effects of Drought and Animal Diseases on Smallholder Farmers' Participation in the South African Livestock Market," 2021 Conference, August 17-31, 2021, Virtual 315283, International Association of Agricultural Economists.
    3. Abdul Quddus & Jaclyn D. Kropp, 2020. "Constraints to Agricultural Production and Marketing in the Lagging Regions of Bangladesh," Sustainability, MDPI, vol. 12(10), pages 1-24, May.
    4. Antia-Obong, Essien Akpan & Hubbard, Carmen & Garrod, Guy, 2016. "My lived experience should also explain my market choice: Mixing methods to examine the influence of transaction cost on live chicken sales in Nigeria," 90th Annual Conference, April 4-6, 2016, Warwick University, Coventry, UK 236335, Agricultural Economics Society.
    5. Yohana James Mgale & Yan Yunxian, 2020. "Marketing efficiency and determinants of marketing channel choice by rice farmers in rural Tanzania: Evidence from Mbeya region, Tanzania," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(4), pages 1239-1259, October.
    6. Mohd Suhaimi, Nurul Aisyah & de Mey, Yann & Oude Lansink, Alfons, 2017. "A transaction cost analysis of Malaysian dairy farmers' marketing channel selection," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 261436, European Association of Agricultural Economists.
    7. Maspaitella, Marcus & Garnevska, Elena & Siddique, Muhammad I. & Shadbolt, Nicola, 2018. "Towards high value markets: a case study of smallholder vegetable farmers in Indonesia," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 21(1).

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