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Effect of transaction costs on market participation among smallholder cassava farmers in Central Madagascar

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  • B.C. Okoye
  • A. Abass
  • B. Bachwenkizi
  • G. Asumugha
  • B. Alenkhe
  • R. Ranaivoson
  • R. Randrianarivelo
  • N. Rabemanantsoa
  • I. Ralimanana

Abstract

High transaction costs deter entry of small farmers into the market. With the data from 240 smallholder cassava farmers in Central Madagascar, this study identified strategies to promote successful smallholder commercialization. The coefficients for membership of cooperatives, native of community and farming experience, have a direct relationship with decision to participate in the market and which is significant at 1% level and road condition to the nearest town is good at 10% level. The coefficients for age, distance to the nearest town and distance from the farm to the market have an indirect relationship with decision to participate in the market and significant at 5, 10 and 1% levels, respectively. The results also show that the coefficients for personal means of transportation and marketing experience have a direct relationship with decision to sell cassava off-farm and at 10 and 1% level of significance, respectively, while distance to the nearest town and distance from the farm to the market had an indirect relationship with decision to sell off-farm at 5% level of significance each and cost of transportation at 1% level. The study raises policy issues which might reduce these transaction costs by providing more market outlets, better rural infrastructure and also bulking centres.

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  • B.C. Okoye & A. Abass & B. Bachwenkizi & G. Asumugha & B. Alenkhe & R. Ranaivoson & R. Randrianarivelo & N. Rabemanantsoa & I. Ralimanana, 2016. "Effect of transaction costs on market participation among smallholder cassava farmers in Central Madagascar," Cogent Economics & Finance, Taylor & Francis Journals, vol. 4(1), pages 1143597-114, December.
    • Handle: RePEc:taf:oaefxx:v:4:y:2016:i:1:p:1143597
    DOI: 10.1080/23322039.2016.1143597
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    2. Yao, B. & Shanoyan, A., 2018. "The Use of Mobile Money Application and Smallholder Farmer Market Participation: Evidence form Cote d Ivoire and Tanzania," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277259, International Association of Agricultural Economists.
    3. Yohana James Mgale & Yan Yunxian, 2020. "Marketing efficiency and determinants of marketing channel choice by rice farmers in rural Tanzania: Evidence from Mbeya region, Tanzania," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(4), pages 1239-1259, October.
    4. Mwema, C. & Crewett, W. & Lagat, J. & Bokelmann, W., 2018. "Social Networks and Extent of African Leafy Vegetables Commercialization among Kenyan Smallholders: A Double Hurdle Approach," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277049, International Association of Agricultural Economists.
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    6. Shiladitya Dey & Piyush K. Singh, 2023. "Role of market participation on smallholder vegetable farmers' wellbeing: Evidence from matching approach in Eastern India," Agribusiness, John Wiley & Sons, Ltd., vol. 39(4), pages 1217-1237, October.
    7. Chauhan, Sonalee & Varma, Poornima & Singh, Sukhpal, 2024. "What drives smallholder market participation and channel choice decision? Insights from paddy markets in India," IAAE 2024 Conference, August 2-7, 2024, New Delhi, India 344325, International Association of Agricultural Economists (IAAE).

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