Abstract
In Ethiopia, teff is an important cereal crop, particularly in Dera district. It is a source of food and provides cash income for majority of smallholder farmers. To commercialize teff producers, selecting an appropriate market channel is mandatory. However, selecting an appropriate market channel is not an easy task because there are different factors that influence market outlet choices. Therefore, this study aimed to identify factors that influence teff market outlet choices. A two-stage random sampling procedure was used and a total of 154 smallholder farmers were randomly and proportionally selected to collect primary data. Multivariate probit model was employed to identify factors affecting teff market outlet choices. The result of the study shows that the probability of teff producers to choose wholesaler, retailer, consumer and cooperative market outlets was 31.82%, 35.71%, 37.01% and 16.88%, respectively. This shows that consumer was the most likely chosen market outlet while cooperative was the less likely chosen market outlet. The joint probability of farmers to choose the four market outlets is (0.1%) lower than the likely of no choosing four market outlets (19.5%). The result of multivariate probit model revealed that age of household head, land size, quantity of teff produced, lagged price of teff, family size (AE), membership of cooperatives and distance to the nearest market were found to be statistically and significantly affecting the market outlet choice behavior of teff producers. This implies that improving the production capacity of farmers and invests on rural cooperatives would help smallholder farmers to choose the rewarding market outlet. Therefore, the study suggested that improving the existing production system, farmers relying on intensive cultivation; giving better price for farmers and being membership of cooperative are important strategies to select the appropriate market channel.
Highlights
Commercializing smallholder agriculture is an indispensable path toward economic growth and development for most developing countries which rely on the agriculture sector including Ethiopia (Gashaw et al 2015)
The result of this study revealed that, as the land size allotted for teff production increases by 1 hectare, the probability of farmers to sell their produce to the retailer market outlet decreases by 47.9% and consumer market outlet increases by 84.6%, ceteris paribus
4.7 Conclusion and recommendation The result of this study affirms that quantity of teff produced, membership to rural cooperatives, land size allotted for teff production, lagged price of teff, age of household head, family size and distance to the nearest market were found to be significantly influencing the choice of households’ teff market outlet
Summary
Commercializing smallholder agriculture is an indispensable path toward economic growth and development for most developing countries which rely on the agriculture sector including Ethiopia (Gashaw et al 2015). According to MoFED (2015), the Ethiopian government, in its two-consecutive 5-year Growth and Transformation Plans (GTP-I and GTP-II), has given much emphasis for agricultural commercialization, Abate et al Economic Structures (2019) 8:39 among which the second pillar intends to achieve growth and thereby improve people’s livelihoods and reduce poverty. According to Getahun Tefera (2018), commercialization of agricultural production is conceived as the process of agricultural modernization, specialization, and structural transformation of the economy toward more rapid and sustainable growth. Commercialization entails agricultural production decision, intended for market-based signals, offered produce for sale and use of purchased inputs. In Ethiopia, cereal production and marketing are the main means of livelihood for millions of smallholder households. Teff is a staple food and one of the most important crops for generating farm income, cultural heritage, national identity and nutritional security
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