Determinants of farmer participation in direct marketing channels: A case study for cassava in the Oyo State of Nigeria

Abstract

Improving rural farmers’ access to direct agricultural markets is required to ensure sustainable supply of food. Rural farmers in the developing world account for the largest share of food supply including cassava. Globally, cassava (Manihot esculenta Crantz) is recognised as an important source of valuable semi-processed industrial raw materials such as ethanol, high-quality cassava flour and starch. However, there is less empirical research on rural farmers’ participation in direct marketing channels in the cassava sector. This study focused on analysing the determinants of farmer participation in direct marketing channels using the case of the cassava sector in the Oyo State of Nigeria. The Bivariate Tobit model was applied in the empirical analysis, based on a primary dataset generated from 400 rural cassava farmers from the Oyo State of Nigeria. The result showed that, in general, farmers sold a higher percentage of their cassava output to processors. The Bivariate Tobit results showed that human capital, physical capital, social capital, and market conditions had significant effects on farmers’ decisions on whether to sell their cassava output directly to processors or middlemen. On the contrary, natural and financial capitals did not significantly affect farmers’ marketing channel decision. The study recommends that policy instruments should target improving road networks in rural areas, enhancing farmers’ access to market information, and increasing membership of farmer association to ensure an active participation of farmers in the direct marketing channels.

The Market Channel Preference Among Smallholder Cocoyam Farmers in South Africa: A Food Security Perspective

“…Various studies related to the market channel choice among smallholder farmers have classified the available market channels under different categories. Some consider it as a choice between informal and formal market channels (Kawala et al, 2018;Mafukata 2015), a direct or indirect sale to various intermediaries and users (Donkor et al 2018), while others have studied these channels through exploring the various value-chain actors and structures (Benmehaia 2019), or compared the institutional and technical factors involved (Panda & Sreekumar, 2012). Irrespective of the classification used, the choice of a market channel depends on a multitude of composite and inter-dependent factors, ranging from the economic, personal and social, to the technical, political and institutional.…”

Determinants of Rice Farmer Participation in the Direct Marketing Channel in Ghana

“…In addition, farmers with a large farm have higher bargaining power when dealing with processors than those with a smaller farm. Other empirical studies [11,54,55] also established a positive relationship between farm size and farmers' choice of marketing channel. Ownership of a motorbike encourages farmers to intensify their participation in the direct marketing channel.…”

“…The study's findings are consistent with those of existing studies [26,43,45] that found a positive relationship between farm output price and farmers' marketing channel choices (traders and wholesalers). On the contrary, Barrett [8] and Maspaitella, Garnevska [11] argued that price is not the only determinant of farmers' participation in a marketing channel, but non-price factors are equally important in affecting their marketing decisions.…”

“…Therefore, the choice of marketing channel is a key consideration for smallholder farmers because different channels affect their profit margins. Smallholder farmers can improve their profitability by choosing to sell through a profitable channel, which enhances their investment in productive assets and new agricultural technologies, and improves the welfare of the household [11,27]. Farmers' understanding of each channel, including its benefits, requirements, and limitations, is an important starting point for channel selection [28].…”

“…In the marketing of agricultural goods, the decision on the choice of channel is critical to farmers. Marketing channel choice is one of the critical components to successful marketing for rural producers, because different channels are characterized by different costs, profit margins, and risks [10,11]. Selling to middlemen or brokers or collectors at the farm gate is often less remunerative [12].…”