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Commercialization of Smallholders: Is Market Participation Enough?

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  • 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);Agricultural Economics Association of South Africa (AEASA).
  • Handle: RePEc:ags:aaae10:96159
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    References listed on IDEAS

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    6. 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.
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    Cited by:

    1. Agwu, Nnanna Mba & Anyanwu, Cynthia Ijeoma & Mendie, E.I., 2013. "Socio-Economic Determinants of Commercialization Among Smallholder Farmers in Abia State, Nigeria," 2013 AAAE Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 161518, African Association of Agricultural Economists (AAAE).
    2. 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.
    3. 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.

    More about this item

    Keywords

    commercialization; smallholders; market orientation; market participation; Marketing; C21; C24; Q12; Q13;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • 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

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