SMALLHOLDER FARMERS CROP COMMERCILIZATION IN THE HIGHLANDS OF EASTERN ETHIOPIA

This paper sorts out the most important factors influencing crop market participation of smallholder farmers in the highlands of Eastern Ethiopia. The study used primary data collected from 385 smallholder farmers during the year 2015. Heckman two-stage and Tobit models were employed for the analyses. Heckman model of first-stage results indicated that households’ decision to participate in crop output markets were influenced by factors such as sex of household head, farming experience, livestock holding, cultivated land size, off/non-farm income, fertilizer used, on-farm income, market distance, and crop diversification. Moreover, the second-stage results revealed that farm households’ intensity of crop output market participation was influenced by different factors such as dependency ratio, cultivated land size, education status, chemical fertilizer, and distance to market. The Tobit model result also indicated that the extent of farm household’s participation in annual crop fertilizer market as buyer is influenced by the amount of cultivated land, land allocated to khat crop, off/ non-farm income (log), amount of manure used and distance to the main road. From policy perspective, we recommend that strategies aimed at improving commercial behaviour of smallholder farmers in the study area should be directed in addressing the determining factors of both crop input and output market participation.