IDEAS home Printed from https://ideas.repec.org/a/bla/agecon/v40y2009is1p773-787.html
   My bibliography  Save this article

Smallholders, institutional services, and commercial transformation in Ethiopia

Author

Listed:
  • Berhanu Gebremedhin
  • Moti Jaleta
  • Dirk Hoekstra

Abstract

This article examines the role of institutional services of credit, input supply, and extension in the overall commercial transformation process of smallholder agriculture in Ethiopia. Survey data collected in 2006 from 309 sample households in three districts of Ethiopia are used for the analyses. Tobit regression models are used to measure the effect of access to services on the intensity of inputs use for fertilizer and agrochemicals. A probit model is used to measure these effects on the adoption of improved seeds. Intensity of use of seeds is analyzed using an ordinary least squares model. Logarithmic Cobb–Douglass functions are estimated to analyze the effect of access to services on crop productivity. Heckman's two‐stage estimation is used to examine determinants of household market participation and the extents of participation. Results show that access to institutional support services plays a significant role in enhancing smallholder productivity and market orientation. Our results imply that expanding and strengthening the institutional services is critical for the intensification and market orientation of smallholder agriculture in Ethiopia. In particular, appropriate incentives and regulatory systems are urgently needed to encourage the involvement of the private sector in the provision of agricultural services.

Suggested Citation

  • Berhanu Gebremedhin & Moti Jaleta & Dirk Hoekstra, 2009. "Smallholders, institutional services, and commercial transformation in Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 40(s1), pages 773-787, November.
    • Handle: RePEc:bla:agecon:v:40:y:2009:i:s1:p:773-787
    DOI: 10.1111/j.1574-0862.2009.00414.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1574-0862.2009.00414.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1574-0862.2009.00414.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Colin Poulton & Andrew Dorward & Jonathan Kydd, 1998. "The revival of smallholder cash crops in Africa: public and private roles in the provision of finance," Journal of International Development, John Wiley & Sons, Ltd., vol. 10(1), pages 85-103.
    2. Nigel Key & Elisabeth Sadoulet & Alain De Janvry, 2000. "Transactions Costs and Agricultural Household Supply Response," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 245-259.
    3. Crawford, Eric & Kelly, Valerie & Jayne, T. S. & Howard, Julie, 2003. "Input use and market development in Sub-Saharan Africa: an overview," Food Policy, Elsevier, vol. 28(4), pages 277-292, August.
    4. Hazell, P.B.R. & Poulton, Colin & Wiggins, Steve & Dorward, Andrew, 2007. "The future of small farms for poverty reduction and growth:," 2020 vision discussion papers 42, International Food Policy Research Institute (IFPRI).
    5. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    6. Steven Were Omamo, 1998. "Transport Costs and Smallholder Cropping Choices: An Application to Siaya District, Kenya," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 116-123.
    7. Jayne, T.S. & Yamano, Takashi & Nyoro, James, 2004. "Interlinked credit and farm intensification: evidence from Kenya," Agricultural Economics, Blackwell, vol. 31(2-3), pages 209-218, December.
    8. Anjini Kochar, 1997. "Does Lack of Access to Formal Credit Constrain Agricultural Production? Evidence from the Land Tenancy Market in Rural India," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 754-763.
    9. Andrew Dorward, 1999. "Farm size and productivity in Malawian smallholder agriculture," Journal of Development Studies, Taylor & Francis Journals, vol. 35(5), pages 141-161.
    10. Kelly, Valerie & Adesina, Akinwumi A. & Gordon, Ann, 2003. "Expanding access to agricultural inputs in Africa: a review of recent market development experience," Food Policy, Elsevier, vol. 28(4), pages 379-404, August.
    11. Lipton, Michael, 1993. "Land reform as commenced business: The evidence against stopping," World Development, Elsevier, vol. 21(4), pages 641-657, April.
    12. Stephan J. Goetz, 1992. "A Selectivity Model of Household Food Marketing Behavior in Sub-Saharan Africa," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(2), pages 444-452.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Larson, Donald F. & Gurara, Daniel Zerfu, 2013. "A conceptual model of incomplete markets and the consequences for technology adoption policies in Ethiopia," Policy Research Working Paper Series 6681, The World Bank.
    2. Emily Ouma & John Jagwe & Gideon Aiko Obare & Steffen Abele, 2010. "Determinants of smallholder farmers' participation in banana markets in Central Africa: the role of transaction costs," Agricultural Economics, International Association of Agricultural Economists, vol. 41(2), pages 111-122, March.
    3. Cuevas, Agham C., 2014. "Transaction Costs of Exchange in Agriculture: A Survey," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 11(1), pages 1-18, June.
    4. Jagwe, John & Machethe, Charles Lepepeule & Ouma, Emily, 2010. "Transaction costs and smallholder farmers’ participation in banana markets in the Great Lakes Region of Burundi, Rwanda and the Democratic Republic of Congo," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 5(2), pages 1-16, December.
    5. Alberto Zezza & Paul Winters & Benjamin Davis & Gero Carletto & Katia Covarrubias & Esteban Quinones & Kostas Stamoulis & Takis Karfakis & Luca Tasciotti & Stefania DiGiuseppe & Genny Bonomi, 2007. "Rural Household Access to Assets and Agrarian Institutions; A Cross Country Comparison," Working Papers 07-17, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    6. Wang, Xiaobing & Herzfeld, Thomas & Glauben, Thomas, 2007. "Labor allocation in transition: Evidence from Chinese rural households," China Economic Review, Elsevier, vol. 18(3), pages 287-308.
    7. Momanyi, Denis & Lagat, Prof. Job K. & Ayuya, Dr. Oscar I., 2016. "Analysis of the Marketing Behaviour of African Indigenous Leafy Vegetables among Smallholder Farmers in Nyamira County, Kenya," MPRA Paper 69202, University Library of Munich, Germany, revised 27 Jan 2016.
    8. Oliver Schulte & Trung Thanh Nguyen & Ulrike Grote, 2022. "The Effect of Renting in Cropland on Livelihood Choices and Agricultural Commercialization: A Case Study from Rural Vietnam," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(6), pages 2878-2898, December.
    9. Muriithi, Beatrice W. & Matz, Julia Anna, 2014. "Smallholder Participation in the Commercialisation of Vegetables: Evidence from Kenyan Panel Data," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 53(2), pages 1-28, May.
    10. Takeshima, Hiroyuki & Adeoti, Adetola I. & Salau, Sheu, 2011. "Measuring the effect of transaction costs for investment in irrigation pumps: Application of the unobserved stochastic threshold model to the case of Nigeria," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 6(2), pages 1-26, September.
    11. Zezza, Alberto & Llambi, Luis, 2002. "Meso-Economic Filters Along the Policy Chain: Understanding the Links Between Policy Reforms and Rural Poverty in Latin America," World Development, Elsevier, vol. 30(11), pages 1865-1884, November.
    12. Poulton, Colin & Dorward, Andrew & Kydd, Jonathan, 2010. "The Future of Small Farms: New Directions for Services, Institutions, and Intermediation," World Development, Elsevier, vol. 38(10), pages 1413-1428, October.
    13. CAMARA, Alhassane, 2017. "Market participation of smallholders and the role of the upstream segment: evidence from Guinea," MPRA Paper 78903, University Library of Munich, Germany, revised May 2017.
    14. Kabeto, Agete Jerena, 2014. "An Analysis Of Factors Influencing Participation Of Smallholder Farmers In Red Bean Market In Halaba Special District, Ethiopia," Research Theses 276425, Collaborative Masters Program in Agricultural and Applied Economics.
    15. Olwande, John & Mathenge, Mary K., 2011. "Market Participation Among Poor Rural Households in Kenya," Working Papers 202599, Egerton University, Tegemeo Institute of Agricultural Policy and Development.
    16. Sibande, Lonester & Bailey, Alastair & Davidova, Sophia, 2017. "The impact of farm input subsidies on maize marketing in Malawi," Food Policy, Elsevier, vol. 69(C), pages 190-206.
    17. Takeshima, Hiroyuki, 2008. "Behavior of subsistence producers in response to technological change- The elasticity of cassava production and home consumption in Benin," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6108, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    18. Gáfaro, Margarita & Pellegrina, Heitor S., 2022. "Trade, farmers’ heterogeneity, and agricultural productivity: Evidence from Colombia," Journal of International Economics, Elsevier, vol. 137(C).
    19. Tesfaye Woldeyohanes & Thomas Heckelei & Yves Surry, 2017. "Effect of off-farm income on smallholder commercialization: panel evidence from rural households in Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 48(2), pages 207-218, March.
    20. Mohammad Khaledi & Simon Weseen & Erin Sawyer & Shon Ferguson & Richard Gray, 2010. "Factors Influencing Partial and Complete Adoption of Organic Farming Practices in Saskatchewan, Canada," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(1), pages 37-56, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:agecon:v:40:y:2009:i:s1:p:773-787. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/iaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.