An Analysis of Factors Influencing Participation of Smallholder Farmers in Red Bean Marketing in Halaba Special District, Ethiopia

Market participation in rural households is a vital strategy in assuring better income and a key factor to lifting rural households from poverty. Red bean is an important crop in Ethiopia, especially Halaba Special District (HSD), but farmers are not participating in the market adequately. The overall objective of the study was to assess the factors determining the participation of smallholder farmers in the red bean market chain in HSD. The specific objectives of the study were characterizing the marketing chain of red bean in HSD, identifying constraints of red bean farmers, traders and cooperatives, examining the factors influencing market participation decision and extent of participation in the district. A multi-stage sampling procedure was employed to draw a random sample of 150 red bean producers, and stratified sampling was employed to get 33 red bean traders. A two-stage Heckman model was used to investigate factors affecting market participation decision for red bean and extent of market participation decision. The study found that about 79, 0.8, 0.7, and 19.5 percent of the produce was purchased by urban collectors, rural assemblers, primary cooperatives, and wholesalers respectively. Traders graded the produce after purchase and sold to the next actors. Wholesalers and a few assemblers used intermediaries to purchase red beans while urban collectors bought directly from the farmers and conveyed to the next actors. It was reported that brokers were a major obstacle to red bean marketing in the district because they confuse farmers with wrong price information and compete benefits expected to be earned by the farmers. Red bean farmers received higher returns when they sold their outputs directly to wholesalers. In the district, major red bean farmers‟ production and marketing constraints were brokers, price fluctuations, access to improved seed and access to credit. On the other hand red bean traders marketing bottlenecks were low quality, informal traders and shortage of finance. The market participation decision was significantly influenced by price, ownership of transportation means, number of extension visits per year, amount of red bean produced, awareness about quality standards; market information, family size, access to credit, and gender. These suggest that there is an urgent need for concerned organization to take part and improve the income and hence the livelihood of red bean farmers. The extent of market participation was significantly influenced by price, ownership of means of transport, amount of red bean produced and family size. Awareness about quality standards influenced market participation decision positively, indicating that farmers should be trained on red bean quality standards. Comprehensive extension work is urgently needed to assist red bean farmers in post harvest handling, and linking them with markets. Based on the findings, the study recommended creating good market networks, reliable market information, strong extension intervention, and training farmers on methods of producing high quality red bean. Attention should be given to brokers‟ activities and access to improved seeds, and the government should enhance credit supply.