Analysis of Factors Influencing Market Participation of Smallholder Bean Farmers in Nyanza District of Southern Province, Rwanda

Jean Pierre Kamanzi Mbitsemunda,Antoine Karangwa

doi:10.5539/jas.v9n11p99

Abstract

Rwanda remains trading very low volume of beans inside the country and across borders thereby becoming unable to meet national and international demands. This is exacerbated by low market participation of bean growers. This study assessed factors that influence market participation and extent of participation among bean growers in Nyanza district. Probit model was used to analyze the factors influencing market participation among bean growers while the extent of market participation was analyzed using Tobit model. The probit results indicated that factors that positively and significantly influenced the probability of farmers to participate in output market were bean quantity produced, market experience, and access to credit while factors that negatively and significantly influenced market participation decisions included distance to nearest market, age and access to off-farm activities. Tobit results revealed that factors that were found to have positive statistical significant impact on the extent of market participation were bean quantity produced, marketing experience and selling price. Contrary to earlier expectation, land size was found to have negative significant impact on the quantity of bean marketed. This is possibly an indication that the increased household’s participation in output market is a function of farm productivity too.

Highlights

There is strong empirical evidence that promoting market participation of smallholder farmers enhances their welfare as well as whole economic development (Wickramasinghe et al, 2014)
The first subsection describes the sample and provides the socioeconomic characteristics of farming households focusing on the variables of interest for the probit and Tobit model analysis, and the results were disaggregated by market participation
Policy creators in developing country like Rwanda are challenged with increasing income to smallholder farmers who mainly depend on subsistence agriculture on one hand and provide more affordable food commodities to non-producers on the other hand

Summary

Introduction

There is strong empirical evidence that promoting market participation of smallholder farmers enhances their welfare as well as whole economic development (Wickramasinghe et al, 2014). Studies conducted in Africa and elsewhere find that commercialization increases household incomes because farmers realized their comparative advantages in agriculture farming activities and specialization (World Bank, 2015; Wickramasinghe et al, 2014). It provides chances for the off-farm employment (Braun, 1991). In Rwanda, despite the government efforts to transform agriculture sector, many farmers remain largely in subsistence farming with little level of commercialization where nearly 21% of crop production is sold (NISR, 2012; MINAGRI, 2013; IPAR, 2015). While Common beans are the second most cultivated crop after bananas covering 20% of the total arable land in the country and grown by 90 of households, the commercialization of its overall production is reported to be at 19.8 percent (NISR, 2015). That importance is expected to increase as Rwanda’s population keeps rising, urbanization extends and income level increases

Methods

Results

Conclusion