Influence of transaction costs on smallholder poultry market participation in Nigeria: A mixed‐methods analysis

Abstract

AbstractKey to doing business involves lowering transaction costs which incorporates both tangible and intangible costs. Investigations traditionally apply quantitative analysis. Consequently, intangible costs perceived to influence smallholder market participation decisions have been left unobserved. The study therefore investigates how and why transaction costs influence smallholder poultry market participation using explanatory sequential mixed‐methods design for the first time. Cragg's double‐hurdle model is used for the quantitative analysis. Findings show that probability of market participation is influenced by access to veterinary services (VET), access to alternative sources of farm cash, longer distance to market, and shorter distance to tarred roads. Extent of market participation is influenced by access to informal information sources and inaccessibility of non‐farm income. Qualitative analysis identified three themes “Accessibility,” “Availability,” and “Adequacy” of transaction costs in influencing the decision and level of market participation. The findings indicate the need for continuous rural infrastructure development in the areas of roads and transport. Furthermore, to ease access to market information, institutionalized market information services need to be prioritized. In addition, improved access to VET for farmers needs to be strengthened. Importantly, agricultural interventions should account for employment status to enhance extent of market participation.