Cereal crops commercialization and welfare of households in Guji Zone, Ethiopia

Abstract

Cereal crops account for 88.52% of grain production in Ethiopia and 87.6% in the Guji Zone. Despite its size, its contribution to household welfare has yet not been studied. Besides, there are limited studies with rigorous methodological approaches regarding the effects of commercializing cereal production on household welfare. This paper is set out to measure the commercialization of cereal crops and examines its welfare effects measured as food and nonfood consumption expenditure. The study was based on cross-sectional data collected in 2019 from 288 sample farm households selected through a multistage sampling technique. A Kruskal-Wallis test and post hoc Dunn's test were employed to examine the welfare effects of commercialization. The study shows that about 48.33% of cereal production was sold to the market, suggesting a moderate level of commercialization. Moreover, the finding indicates that the welfare effects differed across various levels of commercialization at p < 0.01, p < 0.05, and p < 0.1 significance levels. This implies that at least one of the commercialization categories had a different mean. The effects of cereal crop commercialization were statistically significant in terms of monetary expenditure on coffee and sugar, edible oil, clothes and shoes, education, medications, farm implements, durable goods, and aggregate expenditure. The study showed the positive welfare effects of cereal crop commercialization between comparisons considered (moderate vs. low, high vs. moderate, and high vs. low commercialization categories). It also pinpointed the possibility of further improving their consumption expenditure by enhancing their intensity of commercialization if appropriate strategies are designed and implemented. Thus, stakeholders involved in cereal subsector development should work collaboratively to enhance the farm-level intensity of commercialization by improving public service delivery in rural areas. Besides, farm households should work on value addition and market linkage to achieve a better commercial status, thus, improve their welfare.