Do Medium‐scale Farms Improve Market Access Conditions for Zambian Smallholders?

Abstract

AbstractThis study is motivated by the need to understand how the rise of medium‐scale farms in Africa is affecting small‐scale farm households. Survey evidence over the past decade has shown a dramatic rise in the prevalence of ‘medium’ sized farms between 5 and 100 hectares, but smaller farms still constitute the vast majority of farms and rural households. Prior evidence highlights a co‐evolution between the concentration of landholdings, surplus production volumes, and entry of larger traders into the market. Whether these changes tend to impact on smallholders negatively, crowding them out of markets, for example, or positively, potentially opening new marketing channels, is an empirical question. Using a multi‐stage model for maize market participation in Zambia, we find that in areas where medium‐scale farms are growing, even the smaller farms are becoming more likely to sell maize, more likely to sell to the private sector, more likely to sell to larger traders, and expected sales amongst sellers are higher. On balance, the growth of medium‐scale farms and large‐scale traders seems to have positive spillover effects on nearby smallholder marketing options.