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Determinants of smallholder farmers' participation in maize and pigeonpea markets in Tanzania

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  • Frank E. Mmbando
  • Edilegnaw Z. Wale
  • Lloyd J.S. Baiyegunhi

Abstract

This paper analyses factors influencing market participation decisions and the level of commercialisation among maize and pigeonpea smallholder farmers in Tanzania. The study utilises cross-sectional farm household-level data collected in 2010 from a randomly selected sample of 700 smallholder farming households. The two-step decision-making process was analysed using a Heckman selectivity procedure. The results showed that fixed transaction costs associated with market information and household characteristics such as gender and education level of the household head had a statistically significant influence on market participation. Proportional transaction costs (distance to market) and variables such as output prices, farm size, labour force, membership of farmer associations and geographical location of households influenced both market participation and intensity of participation. The results suggest that policies aimed at improving rural road infrastructure, market information systems, smallholder asset accumulation, human capital and promotion of farmer association could reduce transaction costs and enhance market participation and marketed supply by smallholder farmers.

Suggested Citation

  • Frank E. Mmbando & Edilegnaw Z. Wale & Lloyd J.S. Baiyegunhi, 2015. "Determinants of smallholder farmers' participation in maize and pigeonpea markets in Tanzania," Agrekon, Taylor & Francis Journals, vol. 54(1), pages 96-119, March.
    • Handle: RePEc:taf:ragrxx:v:54:y:2015:i:1:p:96-119
    DOI: 10.1080/03031853.2014.974630
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    References listed on IDEAS

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    1. Marcel Fafchamps, 2004. "Market Institutions in Sub-Saharan Africa: Theory and Evidence," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262062364, April.
    2. 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.
    3. 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.
    4. Barrett, Christopher B., 2008. "Smallholder market participation: Concepts and evidence from eastern and southern Africa," Food Policy, Elsevier, vol. 33(4), pages 299-317, August.
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    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. 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.
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    5. Hung, Pham Quoc & Khai, Huynh Viet, 2020. "Transaction Cost, Price Risk Perspective and Marketing Channel Decision of Small-Scale Chili Farmers in Tra VInh Province, Vietnam," Asian Journal of Agriculture and Rural Development, Asian Economic and Social Society (AESS), vol. 10(01), January.
    6. Tezera W. Meskel & Mengistu Ketema & Jema Haji & Lemma Zemedu, 2021. "Welfare Impact of Moringa Market Participation in Southern Ethiopia," Sustainable Agriculture Research, Canadian Center of Science and Education, vol. 9(3), pages 1-98, December.
    7. Gao, Yang & Niu, Ziheng & Yang, Haoran & Yu, Lili, 2019. "Impact of green control techniques on family farms' welfare," Ecological Economics, Elsevier, vol. 161(C), pages 91-99.
    8. Rajabu Joseph Kangile & Charles Peter Mgeni & Zena Theopist Mpenda & Stefan Sieber, 2020. "The Determinants of Farmers’ Choice of Markets for Staple Food Commodities in Dodoma and Morogoro, Tanzania," Agriculture, MDPI, vol. 10(5), pages 1-12, April.
    9. Pham Quoc Hung & Huynh Viet Khai, 2020. "Transaction cost, price risk perspective and marketing channel decision of small-scale chili farmers in Tra Vinh Province, Vietnam," Asian Journal of Agriculture and rural Development, Asian Economic and Social Society, vol. 10(1), pages 68-80, June.
    10. Christopher Ugochukwu Nwafor & Abiodun A. Ogundeji & Carlu van der Westhuizen, 2020. "Adoption of ICT-Based Information Sources and Market Participation among Smallholder Livestock Farmers in South Africa," Agriculture, MDPI, vol. 10(2), pages 1-13, February.
    11. 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.
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    13. Obed Owusu & Talan B. İşcan, 2021. "Drivers of farm commercialization in Nigeria and Tanzania," Agricultural Economics, International Association of Agricultural Economists, vol. 52(2), pages 265-299, March.

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