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Transaction costs and cattle farmers’ choice of marketing channel in North-Central Namibia

Author

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  • T. Shiimi
  • P.R. Taljaard
  • H. Jordaan

Abstract

About 70 per cent of the Namibian population depends on agricultural activities for their livelihood. Moreover, agriculture remains an important sector in Namibia owing to the fact that its national economy is widely dependent on agricultural production. Cattle producers in the Northern Communal Areas (NCAs) have an option to market their cattle via the formal or informal market. Efforts have been made to encourage producers to market their cattle through the formal market; however, these proved to be futile as the strategy yielded limited improvements. In this study, a number of variables have been analysed to determine factors that influence cattle marketing decisions. Factors influencing the marketing decision on whether to sell or not sell through the formal market have been analyzed using the Probit model. Factors influencing the amount of cattle sold through the formal market, assuming that a producer uses the formal market to sell cattle, were analysed using the Truncated model. Testing the Tobit model against the alternative of a two-part model was done using Cragg's model. Results from empirical research suggest that problems with transportation to MeatCo, marketing experience and the age of cattle producers are some of the factors that significantly influence the decision whether or not sell through the formal market. The accessibility of marketingrelated information, accessibility of new information technology, the age of respondents and a lack of improved productivity are some of the factors that influence the proportional number of cattle sold through the formal market. The results suggest that substantially more information is obtained by modelling cattle marketing behaviour as a dual decision-making framework instead of a single decision-making framework.

Suggested Citation

  • T. Shiimi & P.R. Taljaard & H. Jordaan, 2012. "Transaction costs and cattle farmers’ choice of marketing channel in North-Central Namibia," Agrekon, Taylor & Francis Journals, vol. 51(1), pages 42-58.
    • Handle: RePEc:taf:ragrxx:v:51:y:2012:i:1:p:42-58
    DOI: 10.1080/03031853.2012.649543
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    Cited by:

    1. Song, Ying & Yang, Lu & Li, Lu, 2024. "A study on the impact mechanism of internet embedding on rural E-commerce entrepreneurship," Research in International Business and Finance, Elsevier, vol. 68(C).
    2. 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.
    3. repec:ags:ijag24:345261 is not listed on IDEAS
    4. Abdul Quddus & Jaclyn D. Kropp, 2020. "Constraints to Agricultural Production and Marketing in the Lagging Regions of Bangladesh," Sustainability, MDPI, vol. 12(10), pages 1-24, May.
    5. D. Layne Coppock & Lucas Crowley & Susan L. Durham & Dylan Groves & Julian C. Jamison & Dean Karlan & Brien E. Norton & R. Douglas Ramsey, 2021. "Cooperation in the Commons: Community-based Rangeland Management in Namibia," NBER Working Papers 29469, National Bureau of Economic Research, Inc.
    6. Antia-Obong, Essien Akpan & Hubbard, Carmen & Garrod, Guy, 2016. "My lived experience should also explain my market choice: Mixing methods to examine the influence of transaction cost on live chicken sales in Nigeria," 90th Annual Conference, April 4-6, 2016, Warwick University, Coventry, UK 236335, Agricultural Economics Society.
    7. repec:ags:ijag24:345271 is not listed on IDEAS
    8. Maspaitella, Marcus & Garnevska, Elena & Siddique, Muhammad I. & Shadbolt, Nicola, 2018. "Towards high value markets: a case study of smallholder vegetable farmers in Indonesia," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 21(1).
    9. Nsakilwa, Musowe & Kalaba, Mmatlou, 2021. "Effects of Drought and Animal Diseases on Smallholder Farmers' Participation in the South African Livestock Market," 2021 Conference, August 17-31, 2021, Virtual 315283, International Association of Agricultural Economists.
    10. Mohd Suhaimi, Nurul Aisyah & de Mey, Yann & Oude Lansink, Alfons, 2017. "A transaction cost analysis of Malaysian dairy farmers' marketing channel selection," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 261436, European Association of Agricultural Economists.
    11. 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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