Determinants of Market Participation and Intensity of Participation of Teff Producers in West Arsi Zone of Oromia, Ethiopia

Kuftu Keno Dule

doi:10.7176/fsqm/101-04

Abstract

In Ethiopia, agricultural transformation is taken as a pathway to transition from a traditional subsistence orientation to market focused and commercialized farming system. In this regard, efforts to enhance smallholders’ participation in cereal market in general and teff in particular have made through boosting production . Nevertheless there is dearth of information on the teff of market participation and its intensity of participation in central Oromia particularly in Shashamane district. Therefore, this study was analyzed market participation and extent of teff market participation of farmers. The total 202 respondents were selected by using two stage sampling techniques and also interviewed. Double hurdle model was used to identify the determinants of market participation decisions and extent of market participation. The study showed that, educational level, livestock owned, land allocation for teff production, extension contact had positive significant effect on teff market participation decision, while sex of household head, family size, distance to nearest market had significant and negative effect. Intensity of market participation was affected positively and significantly by land allocated for teff, while family size and non-farm income significantly and negatively affect level of teff mark supply Therefore, focus on strengthening the technical, resource base, infrastructural and institutional capacity building of smallholder farmers are strategies that promote teff producers market participation and Intensity of participation. Keywords: Double hurdle model, Smallholder farmers, Teff market participation DOI: 10.7176/FSQM/101-04 Publication date: September 30 th 2020

Highlights

Agricultural sector is a backbone of the Ethiopian economy accounting for 36.3% of overall GDP (NBE, 2018) and 70% of foreign exchange earnings and the sector provides employment for 72.7% of the population (USAID, 2018)
The Wald chisquare value of 67.17 for market participation decision model is statistically significant at 1% indicating that at least one of the explanatory variables included in the model jointly explain the probability of participating in teff output market
The marginal effects showed that being female headed household decrease the probability of being participant by 5.77% as compared to male headed households. This result was due to the fact that activities accomplished at home like cooking, washing and child care fall upon the females. This specifies that empowering of female household head by proving a continuous and practical training on teff production and marketing is crucial to improve teff market participation

Summary

Introduction

Agricultural sector is a backbone of the Ethiopian economy accounting for 36.3% of overall GDP (NBE, 2018) and 70% of foreign exchange earnings and the sector provides employment for 72.7% of the population (USAID, 2018). In Ethiopia 95.9% of the total area is cultivated by smallholder farmers and contribute 90% of the total agricultural output indicating the dominant contribution of smallholder farmers to the overall agricultural growth in the country and the entire movement of the agriculture sector depends on what is happening in smallholder farmers (USAID, 2018; Gebreslassie and Bekele, 2012). Cereals are dominant in terms of both land area coverage and volume of production. Cereals cover about 80.71% of the total grain crop area (10,232,582.23 hectares) and contribute about 87.48% (267,789,764.02 quintals) of the grain production (CSA, 2018).Teff (Eragrostis tef) accounts for the largest share of total cultivated area (23.85%) in 2017/18 production season, followed by maize (16.79%) and sorghum (14.96%). In terms of total production, teff takes the second rank (17.26%) next to maize (27.43%) (CSA, 2018).

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