Commercialization of smallholder farmers in climate change and logistic challenges

Commercialization of Smallholder Farmers in light of climate change and logistic challenges: Evidence from central Ethiopia

Gutu Tesso

Assist. Professor at the Institute of Cooperatives and Development Studies, Ambo University

Global journal of Economics and Business Administration

Commercialization smallholder farmer has been taken as one of the frontline strategies to extricate the community out of poverty and distinguish the nation among the middle income economies for the past several decades. Investments have been geared toward the same with only little progresses in the endeavor. Market participation and degrees of commercialization still remains unsolved puzzle. This paper investigates smallholders’ market participation, degree of commercialization and factors determining commercialization level using a survey of 453 HH in central part of Ethiopia. Household Commercialization Index (HCI) approach was used to measure degree of commercialization, while a double hurdle regression model was employed to identify the key determinants for market participation and degree of commercialization. The result indicates that significant proportions of HHs were still out of a product market and the degree of commercialization still remains very low. The policy recommendation is that government should focus on the boasting of production and productivity through fertility enhancements, improve access to market information through improved agricultural logistics, increased livelihood diversification, and build resilience to climate change induced shocks and stresses.

Keywords: Degree of commercialization, market participation, double hurdle, Ethiopia

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