IDEAS home Printed from https://ideas.repec.org/p/ags/aaae10/96159.html
   My bibliography  Save this paper

Commercialization of Smallholders: Is Market Participation Enough?

Author

Listed:
  • Gebremedhin, Berhanu
  • Jaleta, Moti

Abstract

The literature on commercial transformation of smallholders makes little distinction between market orientation (production decision based on market signals) and market participation (sale of output). However, policy implications to enhance commercial transformation of subsistence agriculture drawn from the analysis of the determinants of household market participation alone could be inadequate, if in fact, the determinants of market orientation and market participation are not the same or not consistent with each other. This paper analyzes the determinants of market orientation and market participation in Ethiopia separately and examines if market orientation translates into market participation. Empirical results show that the determinants of market orientation and market participation in crop output markets are not the same, but market orientation translates strongly into market participation. Results imply that while interventions to enhance market orientation could also help in promoting market participation, interventions to promote market participation may not be adequate to promote market orientation.

Suggested Citation

  • Gebremedhin, Berhanu & Jaleta, Moti, 2010. "Commercialization of Smallholders: Is Market Participation Enough?," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 96159, African Association of Agricultural Economists (AAAE).
    • Handle: RePEc:ags:aaae10:96159
    DOI: 10.22004/ag.econ.96159
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/96159/files/100.%20Market%20Orientation-Market%20Participation%20in%20Ethiopia.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.96159?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. 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.
    2. Romer, Paul, 1993. "Idea gaps and object gaps in economic development," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 543-573, December.
    3. Blarel, Benoit, et al, 1992. "The Economics of Farm Fragmentation: Evidence from Ghana and Rwanda," The World Bank Economic Review, World Bank, vol. 6(2), pages 233-254, May.
    4. Lapar, M. L. & Holloway, G. & Ehui, S., 2003. "Policy options promoting market participation among smallholder livestock producers: a case study from the Phillipines," Food Policy, Elsevier, vol. 28(3), pages 187-211, June.
    5. 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.
    6. Romer, Paul, 1994. "New goods, old theory, and the welfare costs of trade restrictions," Journal of Development Economics, Elsevier, vol. 43(1), pages 5-38, February.
    7. Marc F. Bellemare & Christopher B. Barrett, 2006. "An Ordered Tobit Model of Market Participation: Evidence from Kenya and Ethiopia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(2), pages 324-337.
    8. 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.
    9. 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).
    10. Pingali, Prabhu L., 2001. "Environmental consequences of agricultural commercialization in Asia," Environment and Development Economics, Cambridge University Press, vol. 6(4), pages 483-502, October.
    11. Alene, Arega D. & Manyong, V.M. & Omanya, G. & Mignouna, H.D. & Bokanga, M. & Odhiambo, G., 2008. "Smallholder market participation under transactions costs: Maize supply and fertilizer demand in Kenya," Food Policy, Elsevier, vol. 33(4), pages 318-328, August.
    12. 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.
    13. Pingali, Prabhu L. & Rosegrant, Mark W., 1995. "Agricultural commercialization and diversification: processes and policies," Food Policy, Elsevier, vol. 20(3), pages 171-185, June.
    14. Gabre-Madhin, Eleni Z., 2001. "Market institutions, transaction costs, and social capital in the Ethiopian grain market:," Research reports 124, International Food Policy Research Institute (IFPRI).
    15. Prabhu L. Pingali, 1997. "From Subsistence to Commercial Production Systems: The Transformation of Asian Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 628-634.
    16. Pender, John & Alemu, Dawit, 2007. "Determinants of smallholder commercialization of food crops: Theory and evidence from Ethiopia," IFPRI discussion papers 745, International Food Policy Research Institute (IFPRI).
    17. Wu, Ziping & Liu, Minquan & Davis, John, 2005. "Land consolidation and productivity in Chinese household crop production," China Economic Review, Elsevier, vol. 16(1), pages 28-49.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Keita, Moussa, 2012. "Impact of subsidized inputs credits on land allocation and market-oriented agriculture in rural households in Mali," MPRA Paper 57542, University Library of Munich, Germany.
    2. Sicelo Ignatius Dlamini & Wen-Chi Huang, 2019. "A Double Hurdle Estimation of Sales Decisions by Smallholder Beef Cattle Farmers in Eswatini," Sustainability, MDPI, vol. 11(19), pages 1-27, September.
    3. Opondo, F. & Owuor, G., 2018. "The Effect of Cassava Commercialization On Household Income of Smallholder Farmers in Arid and Semi-arid Land (Asal), A Case of Kilifi County, Kenya," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 276040, International Association of Agricultural Economists.
    4. Minot, Nicholas & Warner, James & Dejene, Samson & Zewdie, Tadiwos, 2021. "Agricultural Commercialization in Ethiopia: Results from the Analysis of Panel Household Data," 2021 Conference, August 17-31, 2021, Virtual 315314, International Association of Agricultural Economists.
    5. Kabeto, Agete Jerena, 2014. "An Analysis of Factors Influencing Participation of Smallholder Farmers in Red Bean Marketing in Halaba Special District, Ethiopia," Research Theses 198526, Collaborative Masters Program in Agricultural and Applied Economics.
    6. Agwu, Nnanna Mba & Anyanwu, Cynthia Ijeoma & Mendie, E.I., 2013. "Socio-Economic Determinants of Commercialization Among Smallholder Farmers in Abia State, Nigeria," 2013 Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 161518, African Association of Agricultural Economists (AAAE).
    7. Mai, Nhat Chi, 2018. "The effect of agricultural commercialization on food security," OSF Preprints acw3h, Center for Open Science.
    8. Jan Van der Lee & Laurens Klerkx & Bockline Omedo Bebe & Ashenafi Mengistu & Simon Oosting, 2018. "Intensification and Upgrading Dynamics in Emerging Dairy Clusters in the East African Highlands," Sustainability, MDPI, vol. 10(11), pages 1-24, November.
    9. Adem Kelifa, 2023. "Review of Tobit, Heckman and double hurdle econometric models: supported with evidences from the studies conducted in Ethiopia," SN Business & Economics, Springer, vol. 3(6), pages 1-14, June.
    10. Jalang'o, Dorcas Anyango, 2016. "Economic Analysis Of Smallholder Farmers’ Participation In Domestic High-Value Markets For Indigenous Vegetables In Siaya County, Kenya," Research Theses 276431, Collaborative Masters Program in Agricultural and Applied Economics.
    11. Mutayoba, Venance & Ngaruko, Deus, 2015. "Determinants of Farmers’ participation in high value crops in Tanzania," African Journal of Economic Review, African Journal of Economic Review, vol. 3(2), July.
    12. Kabeto, Agete Jerena, 2014. "An Analysis Of Factors Influencing Participation Of Smallholder Farmers In Red Bean Market In Halaba Special District, Ethiopia," Research Theses 276425, Collaborative Masters Program in Agricultural and Applied Economics.
    13. Ogunleye, W., 2018. "Output Market Participation by Smallholders Rice Farmers in Obafemi Owode Local Government Area, Ogun State, Nigeria," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277055, International Association of Agricultural Economists.
    14. Marion Herens & Monica Gabrielli & Bram Peters & Jan Brouwers & Diane Bosch, 2018. "Farmers’ Adaptive Strategies in Balancing Commercial Farming and Consumption of Nutritious Foods: Case Study of Myanmar," Sustainability, MDPI, vol. 10(12), pages 1-20, December.
    15. Jalang’o, Dorcas Anyango & Otieno, David Jakinda & Oluoch-Kosura, Willis, 2016. "Economic Analysis Of Smallholder Farmers’ Participation In Domestic High-Value Markets For Indigenous Vegetables In Siaya County, Kenya," Dissertations and Theses 269269, University of Nairobi, Department of Agricultural Economics.
    16. Vincent Linderhof & Valerie Janssen & Thom Achterbosch, 2019. "Does Agricultural Commercialization Affect Food Security: The Case of Crop-Producing Households in the Regions of Post-Reform Vietnam?," Sustainability, MDPI, vol. 11(5), pages 1-20, February.
    17. van der Lee, Jan & Oosting, Simon & Klerkx, Laurens & Opinya, Felix & Bebe, Bockline Omedo, 2020. "Effects of proximity to markets on dairy farming intensity and market participation in Kenya and Ethiopia," Agricultural Systems, Elsevier, vol. 184(C).
    18. Sirak Bahta & Amos Omore & Darek Baker & Iheanacho Okike & Berhanu Gebremedhin & Francis Wanyoike, 2021. "An Analysis of Technical Efficiency in the Presence of Developments Toward Commercialization: Evidence from Tanzania’s Milk Producers," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 33(3), pages 502-525, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gebremedhin, Berhanu & Jaleta, Moti, 2013. "Policy Imperatives of Commercial Transformation of Smallholders: Market Orientation Versus market Participation in Ethiopia," 2013 Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 160580, African Association of Agricultural Economists (AAAE).
    2. Gebremedhin, Berhanu & Tegegne, Azage, 2012. "Market Orientation and Market Participation of Smallholders in Ethiopia: Implications for Commercial Transformation," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 125847, International Association of Agricultural Economists.
    3. Montalbano, P. & Pietrelli, R. & Salvatici, L., 2018. "Participation in the market chain and food security: The case of the Ugandan maize farmers," Food Policy, Elsevier, vol. 76(C), pages 81-98.
    4. Edward Martey & Prince M. Etwire & Alexander Nimo Wiredu & Benjamin D. K. Ahiabor, 2017. "Establishing the link between market orientation and agricultural commercialization: Empirical evidence from Northern Ghana," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 9(4), pages 849-866, August.
    5. Mekonnen, Tigist, 2017. "Impact of agricultural technology adoption on market participation in the rural social network system," MERIT Working Papers 2017-008, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    6. Kirk, Angeli & Kilic, Talip & Carletto, Calogero, 2018. "Composition of Household Income and Child Nutrition Outcomes Evidence from Uganda," World Development, Elsevier, vol. 109(C), pages 452-469.
    7. Justus Ochieng & Beatrice Knerr & George Owuor & Emily Ouma, 2020. "Food crops commercialization and household livelihoods: Evidence from rural regions in Central Africa," Agribusiness, John Wiley & Sons, Ltd., vol. 36(2), pages 318-338, April.
    8. Tesfaye Woldeyohanes & Thomas Heckelei & Yves Surry, 2017. "Effect of off-farm income on smallholder commercialization: panel evidence from rural households in Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 48(2), pages 207-218, March.
    9. Asante, S. B. & Osei-Asare, Y. B. & Kuwornu, J. K. M., 2016. "Smallholder Maize Farmers’ Food Consumption Expenditures in Ghana: The Mediating Role of Commercialization," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 8(3), pages 1-15, September.
    10. Kirk, Angeli & Kilic, Talip & Carletto, Calogero, 2015. "How Does Composition of Household Income Affect Child Nutrition Outcomes? Evidence from Uganda," 2015 Conference, August 9-14, 2015, Milan, Italy 212006, International Association of Agricultural Economists.
    11. Tigist Mekonnen Melesse, 2015. "Agricultural Technology Adoption and Market Participation under Learning Externality: Impact Evaluation on Small-scale Agriculture from Rural Ethiopia," Working Papers 2015/06, Maastricht School of Management.
    12. Muricho, G. & Kulundu, D. & Sule, F., 2018. "Impact Assessment of Agricultural Commercialization on Food Security Among Smallholder Farmers in Kenya: An Application of Correlated Random Effects," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277325, International Association of Agricultural Economists.
    13. Mignouna, D.B. & Abdoulaye, T. & Alene, A. & Akinola, A.A. & Manyong, V.M., 2015. "Drivers of Market Participation Decisions among Small-scale Farmers in Yam Growing Areas of Nigeria and Ghana," 2015 Conference, August 9-14, 2015, Milan, Italy 230219, International Association of Agricultural Economists.
    14. B.C. Okoye & A. Abass & B. Bachwenkizi & G. Asumugha & B. Alenkhe & R. Ranaivoson & R. Randrianarivelo & N. Rabemanantsoa & I. Ralimanana, 2016. "Effect of transaction costs on market participation among smallholder cassava farmers in Central Madagascar," Cogent Economics & Finance, Taylor & Francis Journals, vol. 4(1), pages 1143597-114, December.
    15. Jaleta, Moti & Gebremedhin, Berhanu, 2010. "Crop-Livestock Interactions in Smallholders’ Market Participation: Evidence from Crop-Livestock Mixed Systems in Ethiopia," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 96168, African Association of Agricultural Economists (AAAE).
    16. 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).
    17. Cazzuffi, Chiara & McKay, Andrew, 2012. "Rice market participation and channels of sale in rural Vietnam," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126566, International Association of Agricultural Economists.
    18. Barrett, Christopher B., 2008. "Smallholder market participation: Concepts and evidence from eastern and southern Africa," Food Policy, Elsevier, vol. 33(4), pages 299-317, August.
    19. Jorine Tafadzwa Ndoro & Patrick Hitayezu, 2014. "Drivers of cattle commercialization in rural South Africa: A combined test of transaction cost and store-of-wealth hypotheses," Agrekon, Taylor & Francis Journals, vol. 53(3), pages 57-78, September.
    20. Dlamini, Lucinda Nosizo, 2019. "Determinants of commercial orientation and the level of market participation by women maize farmers in Eswatini," Research Theses 334763, Collaborative Masters Program in Agricultural and Applied Economics.

    More about this item

    Keywords

    Marketing;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaae10:96159. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaaeaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.