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Does Agricultural Commercialisation Increase Asset and Livestock Accumulation on Smallholder Farms in Ethiopia?

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  • Martin Paul JR. Tabe Ojong
  • Michael Hauser
  • Kai Mausch

Abstract

The transition of farmers from subsistence to market-oriented agriculture is meant to reduce hunger, increase wellbeing and accelerate rural economic progress. While an impressive extant literature has analysed agricultural commercialisation effects on welfare from an income, expenditure and consumption perspective, authors place less attention on the implications on asset holdings, which is a more robust long-term measure of welfare. Using chickpea production in Ethiopia as a case, we assess the effects of chickpea commercialisation on household asset ownership and livestock holdings of smallholder farmers. We employ a household fixed-effects estimator to control for time-invariant unobserved heterogeneity and account for possible endogeneity using an instrumental variable approach. For comparison purposes, we also evaluate the income effects of chickpea and examine impact heterogeneity using quantile regressions. Our results indicate a positive impact of agricultural commercialisation on assets, livestock ownership and income. We found commercialisation to benefit all farmers in terms of impact heterogeneity, though with higher gains for asset-rich households. Despite this rising asset inequality, we conclude that increased agricultural commercialisation can contribute to economic development of households and reduce rural poverty.

Suggested Citation

  • Martin Paul JR. Tabe Ojong & Michael Hauser & Kai Mausch, 2022. "Does Agricultural Commercialisation Increase Asset and Livestock Accumulation on Smallholder Farms in Ethiopia?," Journal of Development Studies, Taylor & Francis Journals, vol. 58(3), pages 524-544, March.
  • Handle: RePEc:taf:jdevst:v:58:y:2022:i:3:p:524-544
    DOI: 10.1080/00220388.2021.1983170
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    Cited by:

    1. Girma Mulugeta Emeru, 2022. "The perception and determinants of agricultural technology adaptation of teff producers to climate change in North Shewa zone, Amhara Regional State, Ethiopia," Cogent Economics & Finance, Taylor & Francis Journals, vol. 10(1), pages 2095766-209, December.
    2. Kilimani, Nicholas & Buyinza, Faisal & Guloba, Madina, 2022. "Crop commercialization and nutrient intake among farming households in Uganda," Food Policy, Elsevier, vol. 113(C).
    3. Martin Paul Jr Tabe‐Ojong & Guyo Godana Dureti, 2023. "Are agro‐clusters pro‐poor? Evidence from Ethiopia," Journal of Agricultural Economics, Wiley Blackwell, vol. 74(1), pages 100-115, February.
    4. Eliaza Mkuna & Edilegnaw Wale, 2022. "Explaining Farmers’ Income via Market Orientation and Participation: Evidence from KwaZulu-Natal (South Africa)," Sustainability, MDPI, vol. 14(21), pages 1-16, October.
    5. Changjun Zheng & Sinamenye Jean-Petit, 2023. "The Effects of the Interactions Between Agro-Production, Economic, and Financial Development on Bank Sustainability," SAGE Open, , vol. 13(2), pages 21582440231, June.
    6. Martin Paul Jr Tabe-Ojong & Jourdain C. Lokossou & Bisrat Gebrekidan & Hippolyte D. Affognon, 2023. "Adoption of climate-resilient groundnut varieties increases agricultural production, consumption, and smallholder commercialization in West Africa," Nature Communications, Nature, vol. 14(1), pages 1-11, December.
    7. Martin Paul Jr. Tabe‐Ojong & Thomas Heckelei & Sebastian Rasch, 2023. "Aspirations and investments in livestock: Evidence of aspiration failure in Kenya," Agricultural Economics, International Association of Agricultural Economists, vol. 54(5), pages 674-696, September.
    8. Yitayew, Asresu & Kassie, Girma T. & Yigezu, Yigezu A., 2023. "Market participation and pastoral welfare in drought-prone areas: A dose-response analysis," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1415-1429.
    9. Guyo Godana Dureti & Martin Paul Jr. Tabe‐Ojong & Enoch Owusu‐Sekyere, 2023. "The new normal? Cluster farming and smallholder commercialization in Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 54(6), pages 900-920, November.
    10. Zheng, Hongyun & Ma, Wanglin, 2023. "Impact of agricultural commercialization on dietary diversity and vulnerability to poverty: Insights from Chinese rural households," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 558-569.

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