Determinants of Smallholder Farmers' Market Orientation for Small-Scale Crop Commercialization in West Gojjam Zone, Amhara Region, Ethiopia

Abstract

The study examines the determinants of smallholder farmers' market orientation considering agro-ecology and transaction costs. Multistage sampling procedure was used to collect quantitative data from 405 randomly selected smallholder farmers. Qualitative data were collected through key informant interview and focus group discussions.  Descriptive statistics, one-way ANOVA and zero-inflated beta regression were used to analyze quantitative data while narration data analysis used to analyze the qualitative data. The results have revealed that smallholder farmers in the lowlands and midlands are more market oriented than they are in the highlands. Education increases the probability and proportion of market orientation. Farmland size and farmland rental contracts positively influence the probability of market orientation. Distance from home to nearby markets negatively affect the proportion of smallholder farmers' market orientation. Mobile possession positively influences the probability of market orientation. Membership to farmers cooperatives enhances extent of market orientation. The findings have suggested that human capital, physical resource endowments and arrangement, transaction costs, cooperatives, and agro-ecological endowment affect smallholder farmers' market orientation. Therefore, education, farmland rental contracts, infrastructure development, and soil fertility improving technologies are needed to increase market orientation and promote small-scale commercialization.