Determinants of commercialization and choice of market channels among smallholder groundnut farmers in the Capricorn District, Limpopo Province, South Africa

Abstract

Groundnut (Arachis hypogaea) is one of the most significant crops in South Africa and Africa due to its various health benefits and diverse uses. Groundnut production provides employment for farmers, starting from the production to the marketing phase. This study aims to analyse the determinants of commercialization and the choice of market channels (local market, urban market and farm gate) among smallholder groundnut farmers. The study was conducted in the Capricorn District of Limpopo Province, South Africa, in the three villages namely; Moletlane, Ga-Molepo and Zebediela. A purposive sampling technique was used to sample 100 smallholder farmers from a sampling frame of 405 groundnut farmers. A semi-structured questionnaire was used to collect data by interviewing 100 selected smallholder farmers and Statistical Package for Social Science (SPSS) version 27.0 was used to analyze the data. The binary logistic regression model was employed to analyze the factors affecting commercialization of groundnuts amongst the smallholder farmers. Furthermore, the study applied multinomial logit model to determine the choice of market channels for groundnuts amongst the smallholder farmers. The study’s results indicated that 51% of the smallholder farmers sold their groundnuts at an urban market, 35% at a local market and 14% at the farm gate. The results of the study further indicated that age, gender, level of education, household size, access to extension services, groundnut yield, and employment status had a significant influence on the groundnuts commercialisation by smallholder groundnut farmers. The variables of gender, distance to the market, vehicle ownership and employment status had significant influence on the choice of market channel of the smallholder groundnut farmers in the study area. Smallholder farmers’ access to market information is limited, therefore, the local agricultural department and municipalities should initiate an extension programme that will focus and put more emphasis on the access to market information. Policies aimed at improving commercialization among smallholder groundnut farmers should be informed by the factors and determinates found in this study. Key words: Groundnut, smallholder farmers, commercialization, market channel, multinomial logit model