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Determinants of market outlet choices by smallholder teff farmers in Dera district, South Gondar Zone, Amhara National Regional State, Ethiopia: a multivariate probit approach

Author

Listed:
  • Tadie Mirie Abate

    (University of Gondar)

  • Taye Melese Mekie

    (University of Gondar)

  • Abebe Birara Dessie

    (University of Gondar)

Abstract

In Ethiopia, teff is an important cereal crop, particularly in Dera district. It is a source of food and provides cash income for majority of smallholder farmers. To commercialize teff producers, selecting an appropriate market channel is mandatory. However, selecting an appropriate market channel is not an easy task because there are different factors that influence market outlet choices. Therefore, this study aimed to identify factors that influence teff market outlet choices. A two-stage random sampling procedure was used and a total of 154 smallholder farmers were randomly and proportionally selected to collect primary data. Multivariate probit model was employed to identify factors affecting teff market outlet choices. The result of the study shows that the probability of teff producers to choose wholesaler, retailer, consumer and cooperative market outlets was 31.82%, 35.71%, 37.01% and 16.88%, respectively. This shows that consumer was the most likely chosen market outlet while cooperative was the less likely chosen market outlet. The joint probability of farmers to choose the four market outlets is (0.1%) lower than the likely of no choosing four market outlets (19.5%). The result of multivariate probit model revealed that age of household head, land size, quantity of teff produced, lagged price of teff, family size (AE), membership of cooperatives and distance to the nearest market were found to be statistically and significantly affecting the market outlet choice behavior of teff producers. This implies that improving the production capacity of farmers and invests on rural cooperatives would help smallholder farmers to choose the rewarding market outlet. Therefore, the study suggested that improving the existing production system, farmers relying on intensive cultivation; giving better price for farmers and being membership of cooperative are important strategies to select the appropriate market channel.

Suggested Citation

  • Tadie Mirie Abate & Taye Melese Mekie & Abebe Birara Dessie, 2019. "Determinants of market outlet choices by smallholder teff farmers in Dera district, South Gondar Zone, Amhara National Regional State, Ethiopia: a multivariate probit approach," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 8(1), pages 1-14, December.
    • Handle: RePEc:spr:jecstr:v:8:y:2019:i:1:d:10.1186_s40008-019-0167-x
    DOI: 10.1186/s40008-019-0167-x
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    References listed on IDEAS

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    1. Muricho, Geoffrey & Kassie, Menale & Obare, Gideon, 2015. "Determinants of Market Participation Regimes among Smallholder Maize Producers in Kenya," 2015 Conference, August 9-14, 2015, Milan, Italy 212515, International Association of Agricultural Economists.
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    Cited by:

    1. Surendran Arumugam & Ramu Govindasamy & James E. Simon & Emil Wyk & Burhan Ozkan, 2022. "Market outlet choices for African Indigenous Vegetables (AIVs): a socio-economic analysis of farmers in Zambia," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 10(1), pages 1-13, December.
    2. Mugenzi, Patrice & Owour, George & Bett, Hillary K., 2021. "Factors Influencing Smallholder Potato Farmers’ Choice Decisions of Market Outlets in Musanze and Nyabihu Districts, Rwanda: A Multivariate Probit Model," 2021 Conference, August 17-31, 2021, Virtual 315163, International Association of Agricultural Economists.

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