Smallholder Commercialization Research Articles

Farm production, marketing, and children's nutritional outcomes in rural Zambia

AbstractDespite increasing agricultural productivity, malnutrition remains high among food producers in many developing countries. This study examines how the difference between agricultural household nutrition requirements and production kept for home consumption, the Nutritient deficiency from own production (NDOP), impacts children's height‐for‐age z‐scores (HAZ) using a unique survey of 528 households in Zambia. The study also investigates the relationship between NDOP and market‐bought nutrition and the role of intra‐season price changes in nutrition. To address the endogeneity of NDOP, we use a control function approach. We find that NDOP is associated with lower HAZ. Both energy (calories) NDOP and nutrient‐specific NDOP, resulting from underproduction relative to nutritional requirements and from selling more than surplus food crops, are negatively correlated with HAZ. This result suggests that higher productivity and market participation do not always lead to better nutrition. We also find that crop sales (commercialization) only benefit nutrition if the household only sells surplus output relative to its nutritional requirements. Finally, we also find that NDOP does not correlate with market food purchases, and that the seasonal price increases for cereals further dampens market food purchases. The findings highlight that policies promoting smallholder commercialisation may overlook detrimental nutrition trade‐offs when own‐production falls short of household needs. Accounting for post‐harvest allocation of nutrients between own‐consumption, sales, and purchases can help ensure agricultural interventions improve farmer livelihoods and child nutrition.

Effects of vegetable commercialization on household food security: a generalized propensity score matching approach

ABSTRACT The commercialization of smallholder farmers is seen as the most significant driver of improved food security and household welfare in most countries with low-agricultural economies. This study used a Generalized Propensity Score Matching (GPSM) approach to evaluate the average causal effects of vegetable commercialization levels on the food security status of households in Sabbata Hawas Woreda, Oromia Region, Ethiopia. Data were collected through surveys of 385 farm households, key informant interviews, focus group discussions, and observations. The results revealed that vegetable commercialization had both positive and negative effects on households’ food security. The MAHFP increased steadily as the levels of commercialization increased. However, the lower levels of commercialization are associated with negative outcomes for calorie intake, food consumption scores, and household dietary diversity scores. The caloric intake, HDDS, and FCS were improved after commercialization levels reached 50%, 40%, and 25% respectively. The findings indicate that an increase in commercialization may not always lead to consistent increases across all indicators of food security and it has heterogeneous effects on households with different levels of commercialization. The subsequent policy recommendations of the study results are that, even though smallholder commercialization strategies are crucial for ensuring increased food production, productivity, and incomes for food security, it still requires taking into account the heterogeneous food security effects of vegetable commercialization levels.

Smallholder commercialization: What drives the household welfare of smallholder rice farmers?

Objective: The objective of this study was to evaluate the socio-economic and institutional determinants of smallholder rice farmers’ household welfare in Nigeria, one of the countries with extreme cases of multidimensional poverty in the world. Material and Methods: Multistage sampling techniques were used in the selection of 288 smallholder rice farmers. Primary data was collected from the respondents with a semi-structured questionnaire. The market participation index and ordinary least square regression were the models used to realize the objectives. Results: It was revealed that the smallholder rice farmers were semi-commercialized with a market participation index of 0.73. The educational level of the household head, household size, access to fertilizer, rice output, the quantity of rice sold, cooperative membership and distance to an established market were identified as the key drivers of smallholder rice farmers’ welfare. Conclusion: Engagement in the output market impacted positively on the farm income and per capita consumption expenditure, especially among educated smallholder rice farmers who had access to fertilizer and belonged to cooperatives.

Complementary technology adoption and smallholder commercialization: Panel data evidence from Ethiopia

AbstractAgricultural transformation involves the transition from subsistence agriculture marked by cultivating crops for auto‐consumption to cultivating crops for output markets. This transition from subsistence agriculture to market‐oriented agriculture can be a key policy boost to economic development, but evidence on the key entry points to increasing smallholder commercialization remains scarce. We examine the relationship between the adoption of improved maize varieties (IMVs), inorganic fertilizers, and smallholder commercialization. We model commercialization as a two‐step decision process involving market participation and the extent of participation (sales quantity) conditional on participation. Given these two related steps, we estimate a double‐hurdle model in both linear and non‐linear forms. Employing a three‐wave panel dataset from Ethiopia, we use the household fixed effects and correlated random effects model with the control function approach. We find the adoption of IMVs to be significantly associated with both market participation and the extent of participation. This relationship is also true for fertilizers, where we show a positive association between fertilizer use and commercialization. Given the seeming complementarity in the use of both IMVs and fertilizers, we further estimate their joint adoption. We use the multinomial endogenous switching regression model where we show greater commercialization gains under joint adoption. These findings are in line with a growing literature supporting the bundling of agricultural technologies. Given these insights, we provide empirical and policy support to the scaling of agricultural technologies as they have the potential to induce agricultural transformation by unlocking market opportunities.

Beyond subsistence? The role of rural cooperatives in driving smallholder commercialization in Ethiopia

AbstractThe transition from subsistence to market‐oriented agriculture holds the potential to boost rural economic progress and improve the well‐being of the rural poor in developing countries. Despite this potential, there is limited understanding of the key drivers for smallholder commercialization. In this study, we utilize comprehensive three‐wave panel data collected from three major maize‐producing regions in Ethiopia to examine the role of agricultural cooperatives in promoting smallholder commercialization. Employing a double‐hurdle model, we smallholder commercialization as a two‐step decision process involving market participation and the extent of participation (sales quantity), conditional on market participation. Unobserved heterogeneity is accounted for using a correlated random effect procedure, and the potential endogeneity of cooperative membership is addressed through a control function approach. The findings reveal that cooperative membership increases the probability of market participation and the intensity of sales. However, further analysis demonstrates a heterogeneous relationship between cooperative membership and commercialization, underscoring the importance of targeted interventions to boost the contribution of cooperatives to rural development through commercialization. The main findings highlight that promoting smallholder commercialization through farmer groups necessitates implementing policies to increase cooperative membership, coupled with allocating resources that enhance the contribution of agricultural cooperatives [EconLit Citations: Q12, Q13, Q18].

How Agricultural Commercialization Impacts Migrants' Land Tenure: Unpacking Displacement and Tenurial Adaptations in Ghana's Agricultural Landscape

ABSTRACT Following green revolution ideologies, smallholder commercialization is promoted as a pathway to African economic transformation. Nonetheless, polices that incentivize commercial production in Ghana affect migrant groups negatively with respect to land tenure. While some migrants are displaced from rented lands, others offer their labour services in exchange for the right to "freely” intercrop on native’s cashew farms. The tenurial aspects of the new land–labour exchange relations cluster around labour tenancy without farmland or tree crop benefit sharing. A reversal to pre-historic non-capitalist tenure modes is favoured in land-abundant areas while market-based tenure is increasingly combined with food crop gifts.

Smallholder commercialisation and rural household welfare: panel data evidence from Ethiopia

Abstract This paper examines the relationship between smallholder commercialisation and rural household welfare. Employing a comprehensive three-wave panel dataset of smallholder maize farmers in Ethiopia, we find a positive association between commercialisation and household income which translates to wealth endowments through asset ownership and accumulation. We also show that commercialisation is associated with poverty reduction by reducing the prevalence of income poverty and the poverty gap. Deep diving into who benefits most from commercialisation, we find that agricultural commercialisation is inclusive and benefits all households. However, the greatest welfare gains accrue to income-poor households, suggesting some potential for reducing rural inequality. These insights support existing evidence that smallholder commercialisation is pro-poor and could be a significant entry point for stirring income growth and development in rural areas. Consequently, supporting poor and marginalised farmers with resources needed to boost agricultural production and commercialisation are relevant steps in the right direction of ensuring integrated rural development.

Adoption of climate-resilient groundnut varieties increases agricultural production, consumption, and smallholder commercialization in West Africa

As part of the climate-smart agriculture approach, the adoption of climate-resilient crop varieties has the potential to build farmers’ climate resilience but could also induce agricultural transformation in developing nations. We investigate the relationship between adoption of climate-resilient groundnut varieties and production, consumption, and smallholder commercialization using panel data from Ghana, Mali, and Nigeria. We find adoption of climate-resilient groundnut varieties to increase smallholder production, consumption, and commercialization. The biggest adoption impact gains are observed under the sustained use of these climate-resilient varieties. We show that adoption benefits all households, but the biggest gains are found among smaller producers, suggesting that adoption is inclusive. Furthermore, we provide suggestive evidence that yield increases could explain commercialization, although household consumption also matters. We conclude that adoption of climate-resilient groundnut varieties can at least partially reduce production constraints and promote smallholder consumption and commercialization, with implications for agricultural transformation.

The new normal? Cluster farming and smallholder commercialization in Ethiopia

AbstractCluster farming is increasingly recognized as a viable means of improving smallholder economic integration and commercialization in many developing countries. However, little is known about its impact on smallholder welfare and livelihoods. We examine the relationship between cluster farming and smallholder commercialization using a large‐scale survey of 3969 farm households in Ethiopia cultivating high‐acreage crops such as teff, wheat, maize, barley, and sesame. Using switching regressions and instrumental variable estimators, we show that cluster farming is associated with commercialization measured as commercialization index, market surplus value, and market price. To further deal with endogeneity concerns, we also employ some pseudo‐panel models where we observe similar insights. Beyond this, we account for heterogeneities by disaggregating households based on farm scales and crops cultivated. Our findings show that cluster farming is positively associated with commercialization for all farms and crop types despite this disaggregation. However, the related gains are higher among medium and large farms and vary per crop type. These findings imply that cluster farming is crucial in improving smallholder commercialization and may be a critical entry and leveraging point for policy. We thus lend support to initiatives and plans that seek to upscale cluster farming as they can potentially improve smallholder commercialization with ensuing impacts on rural livelihoods and welfare.

Market participation of smallholder groundnut farmers in Northern Ghana: Generalised double-hurdle model approach

Market participation is both a cause and a consequence of economic development. Markets offer households the opportunity to specialize according to comparative advantage and thereby enjoy welfare gains from trade. The current literature on product marketing in Ghana is inadequate for designing and implementing effective policies to overcome problems in the marketing system, especially leguminous crops. Based on this, the study analyses the determinants of groundnut farmers’ decision to participate and the level of market participation in Northern Ghana using cross-sectional data from 250 smallholder farmers. We employed the generalized double hurdle model to analyse the objectives of this study. On average, the study found that 62% of groundnut output harvested by farm households in Northern Ghana was sold on the market. The most significant determinants of market participation decision and intensity of participation in the groundnut market include extension service, distance to output market, farmer-based organization, off-farm income, output price, use of improved groundnut variety, and access to transport. We recommend that strategies and policies aiming at promoting smallholder commercialization should focus on providing rural infrastructure, market-oriented extension services, and forming farmer groups for collective marketing.

Gendered dynamics of state‐led smallholder commercialisation in Ghana. The case of Nkoranza traditional area

AbstractCommercial smallholder production is touted as a mechanism for reducing rural poverty and transforming African agriculture. In line with this ideology, the Ghanaian state introduced two policies to provide incentives for commercial food and tree crop cultivation among smallholder farmers. Policy implementation is done in a blanket manner without considerations of gendered differences in agricultural asset distribution, such as land, and the particular sociocultural opportunities and constraints men and women face in undertaking commercial production. The paper investigates these gendered trajectories using a qualitative methodology. Results reveal the varied nature of women's constraints and related levels of vulnerability. Although native women are structurally disadvantaged in commercial food crop production, tree crop commercialisation presents an opportunity for them to reclaim dormant land rights safeguarded by their male kin. These results provide perspective for considering gender‐sensitive agricultural incentives as well as potential for leveraging on the tree crop sector for attaining gender neutrality.

Impact of agricultural commercialization on child nutrition in Ethiopia

Smallholder commercialization as nutrition-sensitive agricultural policy has been advocated by many researchers and policy makers though its effect on reducing child undernutrition remains inconclusive. Generalized Propensity Score model which allows for continuous treatments, capture selection bias and observed confounders was applied to estimate the causal relationship between smallholder crop commercialization levels and child undernutrition. Fixed effects model was used to control for the unobserved time-invariant confounders. Impact transmission channels were analyzed by looking at the role of income, gender and the possible substitution effects between the consumption of own-produced and purchased foods. Results provide strong evidence of heterogeneous child undernutritional impacts of smallholder commercialization. Estimates of the dose–response functions reveal that the average levels of underweight and wasting increase with lower and higher intensities of commercialization, but decreases with medium commercialization intensities, with the overall significant beneficial effects. On the other hand, the average level of stunting increases with lower and higher levels of commercialization, but declines with the medium commercialization doses with the overall effect remaining insignificant. Results also provide significant differentials in the estimated effects across time and space, commercialization doses, age, asset ownership and gender. Hence, regional, locational, infrastructural, temporal, gender and age sensitive policies need to be designed to increase smallholder farmers’ commercialization and reduce child undernutrition which is prevalent in the country.

Can medium‐scale farms support smallholder commercialisation and improve welfare? Evidence from Nigeria

AbstractIn spite of mounting evidence about the growth of medium‐scale farms (MSFs) across Africa, there is limited empirical evidence on their impact on neighbouring small‐scale farms (SSFs). We examine the relationships between MSFs and SSFs, with particular focus on the specific mechanisms driving potential spillover effects. First, we develop a theoretical model explaining two propagating mechanisms: learning effects (training) and cost effects (reduced transactions cost). An empirical application to data from Nigeria shows that SSFs with training from MSFs tend to use higher levels of modern inputs (have higher productivity), and receive higher prices and income. The results also show that purchasing inputs from MSFs reduces the costs of accessing modern inputs and is associated with higher inorganic fertiliser use by SSFs. Our results suggest that the benefits of receiving training and purchasing inputs from MSFs are particularly important for very small‐scale producers, operating less than 1 hectare of land. This implies that policies which promote the efficient operation of MSFs and encourage their interaction with SSFs can be an effective mechanism for improving the productivity and welfare of smallholder farms, hence reducing their vulnerability to extreme poverty.

Profit efficiency in family-owned crop farms in Eastern Cape Province of South Africa: a translog profit function approach

BackgroundFarm productivity on smallholder family-owned crop farms remains low despite several interventions to transform agriculture especially in developing countries. Farmers in rural areas face serious constraints that impede their productive capacities for the principal dietary staple, notably maize. Smallholder farmers have access to unprofitable markets that in turn make their enterprises less profitable. Efforts to commercialise smallholder maize production have not yielded desired results. This study, therefore, estimates profit efficiency and its determinants in the smallholder cropping systems in the Eastern Cape Province of South Africa.MethodologyA random sample of 158 smallholder maize farmers was selected. A normalised translog profit function was then fitted by means of a one-step estimation of technical efficiency and its determinants using the STATA software.ResultsThe results indicate that cost of fertiliser and area under cultivation for maize were the positive drivers of profitability. Complementarities among resources were very important determinants of profit.ConclusionThe study concludes that family-owned farms have a positive effect on crop production. Farm profits rise with cultivated area in maize farms. Therefore, the study recommends that policy favouring smallholder commercialisation would improve farm profits.

Beyond Least Squares Assumptions: Quantile Regression Estimates of the Heterogeneity in Commercialization–The Case of Sunflower-Producing Households in North West Province, South Africa

The seamless, strong positive relationship across numerous nations, years, livestock, and crops on the welfare effects of commercialization highlights its importance in achieving the United Nations food security goals. This article examines the drivers of commercialization and heterogeneities existing at household levels. Here, the benefit of using a quantile regression technique is compared with the ordinary least square estimate to examine the relationships between smallholder commercialization and predictors. Using 177 observations from a single district in North West Province, South Africa, this paper empirically investigates the auxiliary benefit of the quantile regression technique as a strategic policy instrument to assess determinants and variations of agricultural commercialization. The principal finding of this study indicates that the degree of sunflower commercialization differs significantly across households in the study area. In addition, sunflower commercialization, at mean, is uniquely associated with hectares cultivated for sunflower production, household head, and market outlet. However, the emphasis of the ordinary least square is whether variation counts on average. This supposition may inaccurately depict the response distribution. For this reason, bootstrap quantile regression (QR) was implemented to tackle this limitation. The results of the QR indicate that heterogeneity in sunflower commercialization cannot be disregarded for the case of household size, market outlet, hectares cultivated for sunflower production, education, access to information, and gender. In addition, the market outlet and farming system appear to maintain their significant impact, although with varying magnitudes across all quantiles. Finally, the findings indicate that those in policy space promoting smallholder commercialization should be cognizant of the heterogeneity and potential benefits of efficacious sunflower promotion in South Africa and other African nations.

Insights into smallholder capacity for agricultural commercialisation: Evidence from four African contexts

Over the last 15 years, the agricultural economics and development literature has amply highlighted success stories of smallholder farmers in developing countries, illustrating their increased engagement and integration with markets, in other words, higher rates of commercialisation. Yet, this seeming ‘success’ should not detract from the large proportion of farmers who, through engaging in high-value market chains, face high risks that often limit the extent of their engagement. This study, across four African contexts in Ghana, Tanzania, Nigeria and Zimbabwe, strives to better understand smallholder participation in agricultural commercialisation. Using new detailed cross-sectional household-level data, from the Agricultural Policy Research in Africa (APRA) consortium, collected over 2017–2018, we analyse assets as a determining factor for localised patterns smallholder commercialisation. Applying asset-based thresholds, we capture commercialisation ‘capacity’—an indicator of the household’s commercialisation potential and ability to respond to risks. Despite the possibility to increase commercialisation as well as institutional arrangements that may reduce risk, such as contract farming, benefits from linkages with medium-scale farmers or returns from specific crop types, we find that households may yet be constrained by lower capacity. Hence, the need for targeted support for those at the margins and with limited assets; with the most pronounced and significant constraints for lower capacity households in study areas in Tanzania. These results can better inform development policies for agriculture where it is important to be able to specifically target households rather than a one size fits all approach.

Recognizing Determinants to Smallholders’ Market Orientation and Marketing Arrangements: Building on a Case of Dairy Farming in Rural Kenya

Smallholder commercialization is central to international development policy and practice. As a result, several arrangements to foster market linkages are being implemented. Especially popular are farmers’ organizations, which are believed to be owned, controlled, and financed by smallholders. As such, their design is considered inclusive given every household in a community is theoretically allowed to become a member, and the governance and management structure encourage participatory decision-making. However, even in the context in which farmers’ organizations are actively promoted, a notable proportion of smallholders may not be able to engage in market-oriented production or may opt for the existing alternative marketing arrangements, as dictated by individual households’ socioeconomic characteristics. Focusing on the case of smallholder farming in Olenguruone, Nakuru county, Kenya, where a donor funded dairy farmers’ cooperative marketing arrangement is promoted alongside existing marketing opportunities, the present research investigated the factors that determine smallholders’ commercial farming orientation and marketing arrangements. It employed a case study approach, combining both quantitative and qualitative research methods for a more complete empirical inquiry. The findings demonstrate that irrespective of the external support provided through marketing opportunities such as farmer organizations, smallholders’ engagement in commercial farming and marketing is dictated by the socioeconomic attributes and market perceptions that are heterogeneous among households in a smallholder community.

Three hurdles towards commercialisation: integrating subsistence chickpea producers in the market economy

Abstract Enhancing agricultural productivity through the adoption of improved technologies presents a credible pathway to economic development and poverty reduction especially through increased commercialisation of production. We used a triple hurdle (TH) model to estimate the production and commercialisation of smallholder farmers in Ethiopia. In doing so, we account for the adoption of improved Cicer arietinum (chickpea) varieties on commercialisation using a three-wave panel data set. We estimate a correlated random effect model with a control function and find the adoption of improved chickpea to have a significant positive effect on smallholder commercialisation. Our findings that are robust over different specifications and identification strategies also support the role of transaction cost in driving market participation (MP). Finally, we argue that the TH model is a better fit to the commonly used double hurdle model for MP, when not all households in a population produce a particular crop.

Determinants of Smallholder Crop Commercialization: The Case of Agarfa and Sinana Districts of Bale Zone, Southeastern Ethiopia

Smallholder crop commercialization entails enhancing market participation and product choice decision of smallholders based on market signal. The study was initiated to identify the current level and determinants of smallholder crop commercialization in Agarfa and Sinana districts of Bale zone. Unlike the previous studies, this study focused on all crops produced by the households. The study used multistage random sampling techniques to select 188 respondents. Primary data was collected using interview schedule, focus group discussion and key informant interview while secondary data was collected from different sources such as records of line offices, Central Statistical Agency and other publications. Both quantitative and qualitative data were collected for the study. Descriptive statistics, household commercialization index (HCI) and truncated regression model were used for data analysis. Accordingly, HCI shows 16% of households in the sample were fully subsistence oriented while 5.9% of them categorized as low, 30.9% medium, 36.7% high and 10.6% very high levels of commercialization. Truncated regression depicts that level of education, equine holding (TLU), application of fertilizer, irrigation use, frequency of extension contact, use of credit, membership to cooperatives and social network affected level of commercialization positively and significantly while household size, distance from all-weather road and market center affected negatively and significantly. Therefore, to enhance smallholder commercialization, improving and expanding utilization by smallholders to strong institutions such as credit use, adult education, use of irrigation, effective use of production inputs and market oriented extension services should be the key tasks of policy makers and development planners. Keywords: Commercialization, crop, determinants, subsistence production, truncated model DOI: 10.7176/RHSS/11-9-05 Publication date: May 31 st 2021

The rise and fall of the New Alliance for Food Security and Nutrition: a tale of two discourses

The New Alliance for Food Security and Nutrition (NAFSN) was launched in 2012 by the G7 countries as a major initiative to fight hunger in Africa. It promised to raise 50 million people out of poverty over the next 10 years by brokering pro-market reforms and flows of private capital to African agriculture. However, it failed to fulfil its promises and disappeared quietly from the public arena before the end of the 10-year period. This article applies critical discourse analysis to official US and French documents to examine the rise and fall of the initiative by confronting the discourses of the NAFSN and food security in the official US and French documents. The USA was the leading country, whereas France was a reluctant supporter and withdrew in 2018. The US discourse strongly promoted the neo-productivist food security paradigm embedded in techno-optimist and neoliberal solutions. By contrast, French framing leaned towards the agroecology paradigm, admittedly combined with the smallholder commercialisation perspective, which is itself remarkable for discourse at such a high policy level. We relate these divergences to the dialectical contradictions in the current global food system in terms of the tensions within the corporate/neoliberal food regime. Supplemental data for this article is available online at https://doi.org/10.1080/01436597.2021.1917355 .