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A multivariate probit analysis of market outlet decision-making of smallholder tomato producers

Author

Listed:
  • K. Nirmal Ravi Kumar

    (Professor & Head (Agril. Economics), Agricultural College, Bapatla, Acharya NG Ranga Agricultural University (ANGRAU))

  • G. Mohan Naidu

    (S.V. Agricultural College, Acharya NG Ranga Agricultural University (ANGRAU), Department of Statistics & Computer Applications)

  • D. Suresh Kumar

    (Tamil Nadu Agricultural University, Dean of Post-Graduate Studies and Professor and Head, Department of Agricultural Economics, Centre for Agricultural and Rural Development Studies)

  • Adinan Bahahudeen Shafiwu

    (University for Development Studies, Faculty of Agriculture, Food, and Consumer Sciences)

  • Ishaque Mahama

    (Dombo University of Business and Integrated Development Studies, Department of Applied Statistics, Faculty of Social Science and Arts, Simon Diedong)

Abstract

The aim of this study is to examine the market participation patterns of smallholder tomato farmers in Ananthapuramu District of India and identify the key factors influencing their choice of marketing channels. The analysis focuses on four channels: local wholesalers, processors, retail outlets, and restaurants. Primary data were collected from 200 farmers during the 2024 farming season. To address overlapping factors and simplify interpretation, a multivariate probit approach combined with principal component analysis (PCA) was employed to identify the main drivers of farmers’ marketing decisions. Results reveal that economic considerations—particularly price incentives, financial viability, and immediate cash flow—are the dominant motivations across all channels. Participation in Farmer Producer Organizations (FPOs) enhances access to structured markets by facilitating collective sales, quality compliance, and reduced transaction costs. While farm size and production surplus exert limited influence on channel choice, institutional support, infrastructure, and logistics emerge as critical determinants of market access. The study highlights that standardized procurement practices lessen the role of individual skills, and interdependencies between market choices underscore the need for coordinated interventions. Policy measures aimed at strengthening farmer organizations, improving rural infrastructure, and expanding financial support could significantly enhance the competitiveness and resilience of smallholder tomato farmers in emerging markets.

Suggested Citation

  • K. Nirmal Ravi Kumar & G. Mohan Naidu & D. Suresh Kumar & Adinan Bahahudeen Shafiwu & Ishaque Mahama, 2026. "A multivariate probit analysis of market outlet decision-making of smallholder tomato producers," SN Business & Economics, Springer, vol. 6(1), pages 1-32, January.
    • Handle: RePEc:spr:snbeco:v:6:y:2026:i:1:d:10.1007_s43546-025-01013-4
    DOI: 10.1007/s43546-025-01013-4
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    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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