Determinants of smallholder wheat commercialization in Lemo District of Hadiya Zone, Ethiopia

Abstract

Agricultural commercialization stimulates the economic growth of developing nations like Ethiopia. Wheat commercialization in Ethiopia is seen as one way of implementing agricultural transformation strategies to enhance the livelihoods of smallholder households. Despite the production potential and importance of wheat, the level of wheat commercialization and its determinants in the Central Ethiopia region have been unheeded, with prior studies primarily focusing on the Oromia region and northern Ethiopia. Therefore, this study aims to analyze the determinants of smallholder wheat commercialization in Lemo district, Hadiya zone, Central Ethiopia region. Both primary and secondary data sources were used, and 155 wheat producers were interviewed. The descriptive and inferential statistics, household commercialization index, and Tobit regression model were used to analyze the data. The results of the study indicated that 11%, 57%, and 32% of respondents were subsistence, semi-commercialized, and commercialized farmers, respectively. The overall intensity of wheat commercialization in Lemo District was 48.92%, which indicates that wheat commercialization is semi-commercialized. Besides, the model result revealed that wheat commercialization was significantly determined by the sex of the household head, household size, landholding, technology adoption, access to market information regarding inputs and output prices, credit utilization, and membership in cooperatives. Hence, commercialization policies need to be crafted to incorporate the implementation of family planning, promote gender-inclusive and market-oriented production, support technology adoption among farmers, offer market intelligence services, ensure the establishment of agricultural credit schemes, and increase the participation of farmers in cooperatives to improve smallholder wheat commercialization and their living standards.

Keywords:

• Ethiopia
• household commercialization index
• smallholder
• Tobit regression model
• wheat commercialization

PUBLIC INTEREST STATEMENT

Agriculture is the mainstay of the Ethiopian economy. It serves as a livelihood for the majority of the country’s population. The sector generates income, employment, and foreign exchange earnings. Within the sector, cereal crops mainly contribute to households’ food security and income generation. Wheat is one of the major cereal crops growing in Ethiopia, serving as a staple food and source of income. Even though the country is one of the top wheat-producing countries in Africa, there has been a demand-supply gap over the past decades. The current government of Ethiopia places a special emphasis on cluster-based wheat commercialization to improve the livelihoods of smallholders. Despite this, the level of wheat commercialization among farmers is far below its potential in the country. Hence, studying smallholder wheat commercialization is imperative to improve the livelihood of farm households.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The data that support the findings of this study are available from the corresponding author upon reasonable request.

Supplemental data

Supplemental data for this article can be accessed online at https://doi.org/10.1080/23311932.2023.2289711

Notes

1. The smallest administrative unit in Ethiopia.

Additional information

Funding

The authors received no direct funding for this research

Notes on contributors

Mahadeo S. Deshmukh

Mahadeo S. Deshmukh (Ph.D.) is a Professor in Economics and Dean of Humanities, at Shivaji University, Kolhapur, India. He is well-recognized for his professional teaching, research, and leadership management affairs. His research interests are sustainable development, livelihood security, agricultural policy analysis, and organic farming.

Amanuel Ayele Gebre

Amanuel Ayele Gebre is an Assistant Professor in the Department of Agricultural Economics, at Wachemo University, Ethiopia. He obtained a B.Sc. Degree in Agricultural Resource Economics and Management from Hawassa University and an M.Sc. Degree in Agricultural Economics from Haramaya University, Ethiopia. He is currently pursuing a Ph.D. degree in Economics at Shivaji University. His research interests include production economics, agricultural commercialization, food security, efficiency analysis, agricultural finance, value chain analysis, and impact assessment.

Digvijay R. Patil

Digvijay R. Patil (Ph.D.) is an Assistant Professor in the Department of Economics, at Shivaji University, Kolhapur, India. His research interests in Agricultural Economics are agricultural sustainability and livelihood security analysis.