Analysis of Transaction Costs and Market Participation among Cassava Farmers in Osun State, Nigeria

Abstract

This study examined the effects of transaction cost variables on market participation among cassava farmers in Osun State, Nigeria. This was with a view to providing insight into how transaction cost factors can be managed to ensure that cassava farmers in Osun State participate more in the market for the purpose of promoting cassava production and hence agricultural growth as well as reducing poverty among the rural community. Access to market information, non-farm work, road condition, credit availability, access to telecommunication facilities, personal transport, farm size, farming experience, price of cassava, market distance, transport cost, dependency ratio, as well as age were used as proxies for transaction costs. The study made use of primary data by administering copies of a well-structured questionnaire to 100 cassava farmers drawn from three local governments in the State. Data obtained were analysed descriptively using frequencies, tables, simple percentages as well as pie and bar charts. Data collected were also analysed by inferential statistical procedure using Logit regression model. Results of the logit regression showed that access to market information and farm size have significant positive effects on cassava farmers’ participation in the market (). Findings also revealed that cost of transportation and dependency ratio have weakly significant negative effects on the probability of cassava farmers participating in the market (). The study concluded that access to market information and farm size play significant positive roles in the participation of cassava farmers in the market. Thus, policies that are aimed at lowering transaction costs through the creation of an enabling environment in which farmers can easily access market information, cultivate more farmlands and incur low cost of transportation are recommended.