Determinants of Smallholder Farmers' Marketing Channel Choice: Evidence from the Vietnamese Rice Sector

Abstract

Cash crops such as specialty rice and other high‐value varieties produced for domestic and international markets are considered an increasing source of income for smallholder farmers in many Asian countries. The present study focuses on the factors affecting Vietnamese specialty rice farmers' choice of marketing channel and how their choice influences farm performance. The analysis has been conducted using multinomial logit and linear regression models on quantitative data collected from 280 specialty rice farmers in the Red River Delta, one of the main rice production regions in Vietnam. Results reveal that even though local collectors and wholesalers are still the most common recipients of farmers' goods in rural areas, reduction in transaction costs with regard to uncertainty influences farmers to choose modern marketing channels through collective action (via specialty rice farmer associations). This collective marketing channel helps farmers increase average prices received by US$0.028 per kg of paddy. Based on the results, manifold political implications are derived.

Marketing efficiency and determinants of marketing channel choice by rice farmers in rural Tanzania: Evidence from Mbeya region, Tanzania

“…Market distances can be a barrier for farmers to access better markets. This situation was similar to Okoye et al (2016), Romero and Wollni (2018), Pingali et al (2019), and Pham et al (2019), who argued that, in most cases, farmers choose farm gate because it incurs no transaction cost. The results also show that farmers with a higher risk perception are most likely to sell at the farm gate compared to other channels.…”

“…(2014), Fan and Salas Garcia (2018), and Pham et al . (2019) who argued that timely access to marketing information helps smallholder farmer to make informed decisions about what crops to produce, where to sell their product and buy inputs. According to Mmbando et al .…”

“…Similar studies conducted in Tanzania, Vietnam and Ethiopia, respectively, found that social network variables, such as membership in local associations and networks or participation in collective action, can increase smallholder farmers' market participation. The studies also highlighted the role of marketing information, postharvest handling facilities and transportation infrastructures on marketing channel decisions (Barham and Chitemi 2009;Cazzuffi and McKay 2012;Tadesse and Kassie 2017;Pham et al 2019).…”

“…(2015) and Pham et al . (2019) revealed that level of education and age of household head were significant determinants of market channel choice by smallholder farmers in Swaziland and Tanzania, respectively. According to the authors, farmers who have more education tend to be good negotiators and are risk‐averse.…”

“…The studies also highlighted the role of marketing information, postharvest handling facilities and transportation infrastructures on marketing channel decisions (Barham and Chitemi 2009; Cazzuffi and McKay 2012; Tadesse and Kassie 2017; Pham et al . 2019).…”