MARKET PARTICIPATION DECISION OF SMALLHOLDER FARMERS AND ITS DETERMINANTS IN BANGLADESH
DOI:
https://doi.org/10.5937/ekoPolj1501163GKeywords:
Bangladesh, agricultural commercialization, market participation, Probit regression, marketing incentives.Abstract
This paper explores the market participation decision of smallholder farmers in Bangladesh and tries to sort out the most important factors that influence smallholder farmers decision to participate in the output market to sell their produce in Bangladesh. To examine the relationship between the smallholder farmers decision to participate in the market and the factors that affect these farmers decision, a Probit regression model is employed. For this purpose this study uses primary data collected from 100 smallholder farmers of Durgapur Upazila under Rajshahi District. Main findings of this study indicate that there is moderate level of market participation by the households who decide to participate in the market with 57% sales of their produced crops. It is found that farm size, household labour, income from livestock and farm income might be the main factors that affect the smallholder farmers decision to participate in the output market. These findings also suggest that the smallholder farmers would participate more and more in the output market, if farm size, household labour and farm income are increased in one hand and income from livestock is decreased on the other hand. The originality of this paper is that it examines the phenomenon of smallholder farmers commercialization in Bangladesh from the perspectives of market participation, which may create an opportunity for further constructive debate. Finally, development market infrastructure, provision of marketing incentives to smallholder farmers and development of an institutionalized marketing information service are recommended to enhance commercialization of agriculture in Bangladesh.
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References
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23.Ohen, S. B., Etuk, E. A., Onoja, J. A. (2013): Analysis of Market Participation by Rice Farmers in Southern Nigeria, Journal of Economics and Sustainable Development, vol. 4, no. 7, pp. 6-11.
24.Okezie, C. A., Sulaiman, J., Nwosu, A. C. (2012): Farm – Level Determinants of Agricultural Commercialization, International Journal of Agriculture and Forestry, vol. 2, no. 2, pp. 1-5.
25.Olwande, J., Mathenge, M. (2012): Market Participation among the Poor Rural Households in Kenya, A paper prepared for presentation at the International Association of Agricultural Economists (IAAE) Triennial Conference, Foz do Iguaçu, Brazil, available at: http://ageconsearch.umn.edu/bitstream/126711/1/Olwande.pdf
26.Omiti, J. M., Otieno, D. J., Nyanamba, T. O., McCullough, E. (2009): Factors Influencing the Intensity of Market Participation by Smallholder Farmers: A Case Study of Rural and Peri-Urban Areas of Kenya, African Journal of Agricultural and Rural Economics, vol. 3, pp. 57-82.
27.Onoja, O., Usoroh, B. B., Adieme, D. T., Deedam N. J. (2012): Determinants of Market Participation in Nigerian Small Scale Fishery Sector: Evidence from Niger Delta Region, Journal of Sustainable Development, vol. 9, no. 1, pp. 69–84.
28.Osmani, M.A.G., Hossain, E. (2013): Household survey-2013: Commercialization of smallholder farmers and its welfare outcome, Department of Economics, University of Rajshahi, Rajshahi-6205, Bangladesh.
29.Pender, J., Ehui, S., Place, F. (2006): Conceptual framework and hypothesis, In: Pender, J., Place, F., Ehui, S. (Eds.), Strategies for sustainable land management in the East African highlands, IFPRI (International Food Policy Research Institute), Washington DC, USA.
30.Pender, J., Alemu, D. (2007): Determinants of smallholder commercialization of food crops: Theory and evidence from Ethiopia, IFPRI (International Food Policy Research Institute), Discussion Paper No. 75, Washington DC, USA.
31.Pingali, L. P., Rosegrant, M. W. (1995):Agricultural commercialization and diversifcation: Process and polices, Food Policy, vol. 20, no. 3, pp. 171–185.
32.Pingali, P. (1997):From subsistence to commercial production System: The transformation of Asian agriculture, American Journal of Agricultural Economics, vol. 79, no. 2, pp. 628– 634.
33.Rahut, D. B., Castellanos, I. V., Sahoo, P. (2010): Commercialization of Agriculture in the Himalayas, Institute of Development Economics (IDE), discussion Paper No. 265, Chiba, Japan.
34.Randela, R., Alemu, Z. G., Groenewald, J. A. (2008): Factors Enhancing market participation by small scale farmers, Agrekon, vol. 47, no. 4, pp. 451-469.
35.Razzaque, M. A., Hossain, M. G. (2007): Country Report on the State of Plant Genetic Resources for Food and Agriculture, Ministry of Agriculture Bangladesh.
36.Sadoulet, E., de Janvry, A. (1995): Quantitative development policy analysis, The Johns Hopkins University Press, Baltimore, Maryland, USA.
37.SFB (2015): Improving the Livelihood of Smallholder Farmers, Syngenta Foundation Bangladesh, available at: www.syngentafoundation.org/index.cfm?pageID=579
38.Sharma, V. P., Jain, D., Sourovi, D. (2012): Managing agricultural commercialization for inclusive growth in South Asia, Agriculture Policy Series, Briefng Paper No. 6/2012, GDN, New Delhi, India.
39.Siziba, S., Nyikahadzoi, K., Diagne, A., Fatunbi A. O., Adekunle, A. A. (2011): Determinants of cereal market participation by sub-Saharan Africa smallholder farmer, Journal of Agriculture and Environmental Studies, vol. 2, no. 1, pp. 180-193.
40.Stephens, E. C., Barrett, C. B. (2011):Incomplete credit markets and commodity marketing behaviour, Journal of Agricultural Economics, vol. 62, no. 1, pp. 1–24.
41.Thapa, G., Gaiha, R. (2011): Smallholder Farming in Asia and the Pacifc: Challenges and Opportunities, Paper presented at the IFAD Conference on New Directions for Smallholder Agriculture, IFAD, Rome, Italy.
42. von Braun, J., de Haen, H., Blanken, J. (1991): Commercialization of agriculture under population pressure: Effects on production, consumption and nutrition in Rwanda, Research Report 85, IFPRI (International Food Policy Research Institute), Washington, DC, USA.
43.von Braun, J., Immink, M. D. C. (1994): Non-traditional vegetable crops and food security among smallholder farmers in Guatemala, In: von Braun J and Kennedy E (eds), Agricultural commercialization, economic development, and nutrition, Johns Hopkins University Press, Baltimore, Maryland, USA, pp. 189–203.
44.World Bank (2007): World Development Report 2008: Agriculture for development: Overview, Washington, DC, USA. available at: http://siteresources.worldbank.org/INTWDR2008/Resources/WDR_00_book.pdf
45.World Bank (2015): Pairing Agriculture with Technology in Bangladesh, Washington, DC, USA, World Bank Group, available at: www.worldbank.org/en/news/feature/2014/06/23/pairing-agriculture-with-technology-in-bangladesh
2. BBS (2010): Labour Force Survey, Bangladesh Bureau of Statistics, Ministry of Finance, Government of the Peoples Republic of Bangladesh, available at: www.bbs.gov.bd/userfiles/Image/Survey%20reports/Labour%20Force%20Survey%202010.pdf
3. BBS (2011): Bangladesh Population Census, Bangladesh Bureau of Statistics, Ministry of Finance, Government of the Peoples Republic of Bangladesh, available at: www.bbs.gov.bd/RptPopCen.aspx?page=/PageReportLists.aspx?PARENTKEY=41
4. BBS (2013): Macroeconomic indicators, Bangladesh Bureau of Statistics, Ministry of Finance, Government of the Peoples Republic of Bangladesh, available at: http://bbs.gov.bd/WebTestApplication/userfles/Image/GDP/GDP_2013-14.pdf
5. Cadot, O., Dutoit, L., Olarreaga, M. (2006): How Costly Is It for Poor Farmers to Lift Themselves Out of Subsistence?, Policy Research Working Paper 3881, World Bank, Washington, USA, available at: http://my.unil.ch/serval/document/BIB_BC066A337035.pdf
6. Chirwa, E. W., Matita, M. (2012): From Subsistence to Smallholder Commercial Farming in Malawi: A Case of NASFAM Commercialization Initiatives, Future Agricultures, Brighton, UK, Working Paper 037, pp. 1-20.
7. Egbetokun, O. A., Omonona, B. T. (2012): Determinants of Farmers Participation in Food Market in Ogun State, Global Journal of Science Frontier Research Agriculture and Veterinary Sciences, vol. 12, no. 9, Version 1.0, pp. 24–30.
8. Ele, I. E., Omini, G. E., Adinya, B. I. (2013): Assessing the Extent of Commercialization of Smallholding Farming Households in Cross River State, Nigeria, IOSR Journal of Agriculture and Veterinary Science (IOSR-JAVS), vol. 4, no. 2, pp. 49-55.
9. Eskola, E. (2005): Commercialization and Poverty in Tanzania: Household-Level Analysis, Discussion Paper, Department of Economics, University of Copenhagen, Copenhagen.
10.Gebremedhin, B., Jaleta, M. (2010a): Commercialization of Smallholders: Is Market Participation Enough?, Joint 3rd African Association of Agricultural Economists (AAAE) and 48th Agricultural Economists Association of South Africa (AEASA) Conference, Cape Town, South Africa.
11. Gebremedhin, B., Jaleta, M. (2010b): Commercialization of smallholders: Does market orientation translate into market participation?, International Livestock Research Institute (ILRI), Improving Productivity and Market Success (IPMS) of Ethiopian farmers project Working Paper no. 22, Nairobi, Kenya.
12.Gebreselassie, S., Ludi, E. (2008): Agricultural Commercialisation in Coffee Growing Areas of Ethiopia, Future Agriculture, University of Sussex, Brighton, UK, available at: http://r4d.dfd.gov.uk/PDF/Outputs/Futureagriculture/coffee_paper.pdf
13. Gebreselassie, S., Sharp, K. (2008): Commercialisation of Smallholder Agriculture in Selected Tef-growing Areas of Ethiopia, Future Agricultures Consortium, A discussion paper, University of Sussex, Brighton, UK, available at: www.future-agricultures.org/publications/research-and-analysis/discussion-papers/26-commercialisation-of-smallholder-agriculturein-selected-tef-growing-areas-of-ethiopia/fle
14.Government of Bangladesh (GoB), (2008): e.Krishi Vision 2025: Service at Farmers Doorsteps, A report prepared by "Access to Information"(A2I) Programme, Prime Ministers Offce in collaboration with Ministry of Agriculture and concerned agencies with assistance from MDGs and Pro-Poor Development Programme, UNDP, Prime Ministers Offce Old Sangshad Bhaban Tejgaon, Dhaka1215 Bangladesh, available at: www.a2i.gov.bd/sites/default/fles/resource_docs/eKrishi%20Vision-2021.pdf
15.GoB (2014): Bangladesh Economic Review, Department of fnance, Ministry of Finance and Planning, Government of the Peoples Republic of Bangladesh, Dhaka, pp. 71.
16.Goletti, F. (2005): Agricultural Commercialization, Value Chains and Poverty Reduction, Making Markets World Better for the Poor Discussion Paper no.7, Hanoi: Asian Development Bank.
17.Goshu, D., Kassa, B., Ketema, M. (2012): Measuring Smallholder Commercialization Decision and Interaction in Ethiopia, Journal of Economics and Sustainable Development, vol. 3, no. 13, pp. 150-160.
18.Gujarati, D. N. (2003): Basic Econometrics, 4th Edition, Tata Mc-Graw-Hill Publishing Company Limited, New Delhi, India.
19.IFAD (2001): The Challenge of Ending Rural Poverty, Rural Poverty Report-2001, Oxford University Press Inc., NY, USA.
20.Martey, E., Al-Hassan, R. M., Kuwornu, J. K. M. (2012): Commercialization of smallholder agriculture in Ghana: A Tobit regression analysis, African Journal of Agricultural Research, vol. 7, no. 14, pp. 2131-2141.
21.MoA (2013): Annual report 2012-13, Ministry of Agriculture, Government of the Peoples Republic of Bangladesh, available at: www.moa.gov.bd/site/view/annual_reports
22.Moyo, T. (2010): Determinants of Participation of Smallholder Farmers in the Marketing of Small Grains and Strategies for Improving Their Participation in the Limpopo River Basin of Zimbabwe, Unpublished MSc. thesis, University of Pretoria, Pretoria, South Africa.
23.Ohen, S. B., Etuk, E. A., Onoja, J. A. (2013): Analysis of Market Participation by Rice Farmers in Southern Nigeria, Journal of Economics and Sustainable Development, vol. 4, no. 7, pp. 6-11.
24.Okezie, C. A., Sulaiman, J., Nwosu, A. C. (2012): Farm – Level Determinants of Agricultural Commercialization, International Journal of Agriculture and Forestry, vol. 2, no. 2, pp. 1-5.
25.Olwande, J., Mathenge, M. (2012): Market Participation among the Poor Rural Households in Kenya, A paper prepared for presentation at the International Association of Agricultural Economists (IAAE) Triennial Conference, Foz do Iguaçu, Brazil, available at: http://ageconsearch.umn.edu/bitstream/126711/1/Olwande.pdf
26.Omiti, J. M., Otieno, D. J., Nyanamba, T. O., McCullough, E. (2009): Factors Influencing the Intensity of Market Participation by Smallholder Farmers: A Case Study of Rural and Peri-Urban Areas of Kenya, African Journal of Agricultural and Rural Economics, vol. 3, pp. 57-82.
27.Onoja, O., Usoroh, B. B., Adieme, D. T., Deedam N. J. (2012): Determinants of Market Participation in Nigerian Small Scale Fishery Sector: Evidence from Niger Delta Region, Journal of Sustainable Development, vol. 9, no. 1, pp. 69–84.
28.Osmani, M.A.G., Hossain, E. (2013): Household survey-2013: Commercialization of smallholder farmers and its welfare outcome, Department of Economics, University of Rajshahi, Rajshahi-6205, Bangladesh.
29.Pender, J., Ehui, S., Place, F. (2006): Conceptual framework and hypothesis, In: Pender, J., Place, F., Ehui, S. (Eds.), Strategies for sustainable land management in the East African highlands, IFPRI (International Food Policy Research Institute), Washington DC, USA.
30.Pender, J., Alemu, D. (2007): Determinants of smallholder commercialization of food crops: Theory and evidence from Ethiopia, IFPRI (International Food Policy Research Institute), Discussion Paper No. 75, Washington DC, USA.
31.Pingali, L. P., Rosegrant, M. W. (1995):Agricultural commercialization and diversifcation: Process and polices, Food Policy, vol. 20, no. 3, pp. 171–185.
32.Pingali, P. (1997):From subsistence to commercial production System: The transformation of Asian agriculture, American Journal of Agricultural Economics, vol. 79, no. 2, pp. 628– 634.
33.Rahut, D. B., Castellanos, I. V., Sahoo, P. (2010): Commercialization of Agriculture in the Himalayas, Institute of Development Economics (IDE), discussion Paper No. 265, Chiba, Japan.
34.Randela, R., Alemu, Z. G., Groenewald, J. A. (2008): Factors Enhancing market participation by small scale farmers, Agrekon, vol. 47, no. 4, pp. 451-469.
35.Razzaque, M. A., Hossain, M. G. (2007): Country Report on the State of Plant Genetic Resources for Food and Agriculture, Ministry of Agriculture Bangladesh.
36.Sadoulet, E., de Janvry, A. (1995): Quantitative development policy analysis, The Johns Hopkins University Press, Baltimore, Maryland, USA.
37.SFB (2015): Improving the Livelihood of Smallholder Farmers, Syngenta Foundation Bangladesh, available at: www.syngentafoundation.org/index.cfm?pageID=579
38.Sharma, V. P., Jain, D., Sourovi, D. (2012): Managing agricultural commercialization for inclusive growth in South Asia, Agriculture Policy Series, Briefng Paper No. 6/2012, GDN, New Delhi, India.
39.Siziba, S., Nyikahadzoi, K., Diagne, A., Fatunbi A. O., Adekunle, A. A. (2011): Determinants of cereal market participation by sub-Saharan Africa smallholder farmer, Journal of Agriculture and Environmental Studies, vol. 2, no. 1, pp. 180-193.
40.Stephens, E. C., Barrett, C. B. (2011):Incomplete credit markets and commodity marketing behaviour, Journal of Agricultural Economics, vol. 62, no. 1, pp. 1–24.
41.Thapa, G., Gaiha, R. (2011): Smallholder Farming in Asia and the Pacifc: Challenges and Opportunities, Paper presented at the IFAD Conference on New Directions for Smallholder Agriculture, IFAD, Rome, Italy.
42. von Braun, J., de Haen, H., Blanken, J. (1991): Commercialization of agriculture under population pressure: Effects on production, consumption and nutrition in Rwanda, Research Report 85, IFPRI (International Food Policy Research Institute), Washington, DC, USA.
43.von Braun, J., Immink, M. D. C. (1994): Non-traditional vegetable crops and food security among smallholder farmers in Guatemala, In: von Braun J and Kennedy E (eds), Agricultural commercialization, economic development, and nutrition, Johns Hopkins University Press, Baltimore, Maryland, USA, pp. 189–203.
44.World Bank (2007): World Development Report 2008: Agriculture for development: Overview, Washington, DC, USA. available at: http://siteresources.worldbank.org/INTWDR2008/Resources/WDR_00_book.pdf
45.World Bank (2015): Pairing Agriculture with Technology in Bangladesh, Washington, DC, USA, World Bank Group, available at: www.worldbank.org/en/news/feature/2014/06/23/pairing-agriculture-with-technology-in-bangladesh
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Published
2015-01-31
How to Cite
Gani Osmani, A., & Hossain, E. (2015). MARKET PARTICIPATION DECISION OF SMALLHOLDER FARMERS AND ITS DETERMINANTS IN BANGLADESH. Economics of Agriculture, 62(1), 163–179. https://doi.org/10.5937/ekoPolj1501163G
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