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Econometric analysis of factors affecting market participation of smallholder farming in Central Ethiopia

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  • Demeke, Leykun
  • Haji, Jemma

Abstract

It is evident that for a developing country, agriculture forms the basis for every economic activity. It plays an active role in determining the economic, social, and political system of a society of a developing world. The title of the study is Econometric Analysis of Factors Affecting Market participation of Smallholder Farming in Central Ethiopia. The main objective of this study was to identify and examine the demographic and socioeconomic factors determining market participation of smallholder farmers. The findings from the multinomial logistic regression analysis revealed what factors influence the probability of being commercial farmers. Accordingly, age, being male, urea application, labor expenditure, and land size cultivated had positive sign and significantly affect the probability of being commercial farmer. Nevertheless, use of improved seed, number of oxen owned, and water harvesting had unexpected negative sign, but they are statistically insignificant. Finally, there is still the potential of integrating non-participant farm households with the market if better support services in the form of technical advice and capacity building training to use technology and intensify production are provided. Moreover; if additional funds for agricultural research activities dealing with high-yield seed varieties are allocated and if investments in irrigation projects are made, it is possible to better integrate smallholder farmers to the market.

Suggested Citation

  • Demeke, Leykun & Haji, Jemma, 2014. "Econometric analysis of factors affecting market participation of smallholder farming in Central Ethiopia," MPRA Paper 77024, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:77024
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    References listed on IDEAS

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    Cited by:

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    4. Obed Owusu & Talan B. İşcan, 2021. "Drivers of farm commercialization in Nigeria and Tanzania," Agricultural Economics, International Association of Agricultural Economists, vol. 52(2), pages 265-299, March.

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    More about this item

    Keywords

    Degree of market participation; commercialization; Adaa District; and multinomial logistic regression analysis;
    All these keywords.

    JEL classification:

    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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