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Market Orientation and Market Participation of Smallholders in Ethiopia: Implications for Commercial Transformation

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  • Gebremedhin, Berhanu
  • Tegegne, Azage
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    Abstract

    The literature on commercial transformation of smallholders makes little distinction between market orientation and market participation. This paper analyzes the determinants of market orientation and market participation in Ethiopia separately and examines if market orientation translates into market participation. Results show that subsistence requirements, market access, and production factors affect market orientation, while market access and volume of production affect market participation. Results also show that market orientation translates strongly into market participation. The key implication of this study is that interventions aimed at promoting commercial transformation of subsistence agriculture should follow two-pronged approach: improving market orientation of smallholders at production level, and facilitation of market entry and participation of households in output markets. Focusing on either may not be as effective in achieving the transformation. Keywords: commercialization, smallholders, market orientation, market participation.

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    Bibliographic Info

    Paper provided by International Association of Agricultural Economists in its series 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil with number 125847.

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    Date of creation: 2012
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    Handle: RePEc:ags:iaae12:125847

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    Keywords: commercialization; smallholders; market orientation; market participation; Agribusiness; Marketing; C21; C24; Q12; Q13;

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    1. Selnes, Fred & Jaworski, Bernard J. & Kohli, Ajay K., 1996. "Market orientation in United States and Scandinavian companies. A cross-cultural study," Scandinavian Journal of Management, Elsevier, vol. 12(2), pages 139-157, June.
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    6. Rios, Ana R. & Masters, William A. & Shively, Gerald E., 2008. "Linkages between Market Participation and Productivity: Results from a Multi-Country Farm Household Sample," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6145, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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    11. C. Peter Timmer, 1997. "Farmers and Markets: The Political Economy of New Paradigms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 621-627.
    12. Berhanu Gebremedhin & Moti Jaleta & Dirk Hoekstra, 2009. "Smallholders, institutional services, and commercial transformation in Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 40(s1), pages 773-787, November.
    13. Nigel Key & Elisabeth Sadoulet & Alain De Janvry, 2000. "Transactions Costs and Agricultural Household Supply Response," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 245-259.
    14. Bellemare, Marc F. & Barrett, Christopher B., 2005. "An Ordered Tobit Model of Market Participation: Evidence from Kenya and Ethiopia," Working Papers 14748, Cornell University, Department of Applied Economics and Management.
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