Commercialization level and determinants of market participation of smallholder wheat farmers in northern Ethiopia

Beyond Least Squares Assumptions: Quantile Regression Estimates of the Heterogeneity in Commercialization–The Case of Sunflower-Producing Households in North West Province, South Africa

“…Considering the average sample output was 82 tons, this signifies that nearly all (95%) of the respondents sold their sunflower seeds. The percentage of sunflower sold was significantly higher than other reports of comparable crops such as wheat in Ethiopia, cowpea in Nigeria and Zambia, and common bean in Malawi (Mignouna et al, 2016;Gondwe et al, 2017;Abate et al, 2021). This indicates that even the least market-oriented households in our estimate cannot be classified as subsistence farmers.…”

“…The negative impact is premised on the assumption that as the number of dependents increases, households at the lower part of the commercialization continuum incur limited returns on sale outputs. Analogously, Kassaw et al (2019) and Abate et al (2021) find that the larger the household size, the less commercially oriented tomato farmers are in the South Gonder zone, Ethiopia. Insofar, the QR coefficient in panel 4 sloped downward from the lowest quantiles to the 40th before stabilizing, illustrating that households in this category are less market oriented, possibly owing to financial constraints.…”

“…While as a farmer reaches full commercial status, the urge to extend the area under cultivation diminishes since differences generated would be negligible, mirroring diminishing marginal returns. Abate et al (2021), Aku et al (2018) and Radchenko and Corral's (2018) also find that larger farm holdings favor less commercial households. The farming system variable impacts both lower and upper quantiles.…”

“…The seamless, strong positive relationship across numerous nations, crops, livestock, and years on welfare effects of commercialization highlight its importance in achieving food security. Scientific evidence on smallholder commercialization in Sub-Saharan Africa (SSA) dating back to the 1980s has attracted increasing attention due to its vital role in modernization, agricultural specialization, and systemic economic transformation in the direction of exponential and sustainable growth (Mbitsemunda and Karangwa, 2017;Abate et al, 2021). Other previous studies conducted in SSA and elsewhere indicate that agricultural commercialization increases household incomes and promotes rural development, combating food insecurity (Lifeyo, 2017;Kyaw et al, 2018).…”

“…However, the existing empirical evidence on commercialization differs widely in several dimensions, including methodologies. There are quite a lot of studies that touch on commercialization in SSA in regard to livestock, high-value cash crops, and staple food grains using various methodologies, such as supply and demand function (Ouma et al, 2010), probit regression model (Mbitsemunda and Karangwa, 2017;Mathagu et al, 2018;Yaméogo et al, 2018;Dlamini-Mazibuko, 2019), Cragg double hurdle model (Mignouna et al, 2016;Mbitsemunda and Karangwa, 2017;Dlamini and Huang, 2019;Abate et al, 2021;Hlatshwayo et al, 2021), Triple Hurdle Model (Burke et al, 2015;Lifeyo, 2017), Heckman and Tobit models (Zamasiya et al, 2012;Adeoti, 2014;Mbitsemunda and Karangwa, 2017;Kyaw et al, 2018), and instrumental variable approach using two-stage least square (Kondo, 2019). While these studies cited above have different coverage and certain commonalities, the trend is relatively explicit-farm households participate actively in markets as a function of distinct concurrent decisions and sales volume choices, both of which are contingent on market participation.…”