Evaluating the commercialization of smallholder malt barley farmers via vertical coordination in Arsi highlands, Oromia region, Ethiopia

Figures & data

Figure 1. Map of the study area (Arsi and west Arsi zones).

Source: Oromia Finance and Economic Development Bureau (OFEDB; 2019).

Table 1. Effects of contract farming participation on farm household livelihoods

Author (year)	Location	Method	Result
Girma and Gardebroek’s (2015)	South Ethiopia	Instrumental variables	Contract farming found to affect a price increase of 23% due to the contractual arrangement in organic honey production.
Mulatu et al. (2017)	Central rift valley of Ethiopia	Propensity score matching (PSM)	Results show that contract farming has a significant positive effect on the incomes of participating households.
Flores, M., (2017)	Central and southwest Ethiopia	Mixed methods	Revealed positive effects of contract farming participation on malt barley, common bean, bamboo, honey, and vegetables input and output markets access and income of farmers
Mebrahatom, M. (2019)	Wolkayet, Ethiopia	Descriptive statistics	Qualitatively narrated farmers positively inclined to contract farming for positive livelihood advantages
Getachew and Engdawork (2019)	Oromia, region Ethiopia	Qualitative study	This study comes up with contract farming participation lead to productivity growth and positive household income through coping climate variability induced difficulties
Bezabeh et al. (2020)	Arsi & West Arsi zones, Ethiopia	Propensity score matching (PSM)	Contract farming participant had 28% more income advantage than their non-participant counterparts
Alemu et al. (2021)	Arsi & West Arsi Zones, Ethiopia	Probit model (PM)	The result of PM revealed that age, family size, livestock holding, distance to market, etc determine farmers side selling behaviour as defaulting contract farming agreement
Hirpesa et al. (2021)	North Showa zone, Ethiopia	Binary logistic regression (BLR)	The result of BLR model indicated that age of the household head, sex of the household head, time taken to a milk collection center: training on dairy farming, perception about price uncertainty, extension contact determined contract farming participation at various signs and level of significance.
Tefera and Bijman (2021)	Arsi and west Arsi, Ethiopia	Inverse probability-weighted egression Adjustment (IPWRA) and propensity score matching (PSM) techniques	This study estimated and found positive impact of contract farming participation on malt barley yield and quality, the share of produced malt barley that is commercialized and a higher farm gate price and finally household income.

Table 2. Selected study districts, Kebeles and sample household sizes (hhs)

Sample district	Total hhs	Sample hhs	Sample Kebeles	Total hhs	Sample hhs
Limu Bilbilo	21,457	89	Chiba Micheal	749	47
			Limu Dim	684	43
Tiyyo	20,234	84	Haro Bilalo	656	38
			Dosha	781	46
Kofele	21,952	92	Gurmicho	626	44
			Alkaso	672	48
Shashemene	28,643	119	Hursa Simbo	1037	63
			Gonde Kerso	946	57
Total	92,286	384		6,151	384

Source: OFEDB, 2019

Table 3. Description of variables and hypothesized influence on malt barley volume of sales

Variable	Description & measurement	Expected sign
Gender	Dummy = 1 if male; 0 otherwise	±
Age	Continuous measured in year numbers	±
Edu	Number of schooling years	+
Household size	Continuous number of persons	+
Total landholding size (ha)	Continuous in ha	+
Livestock	Continuous TLU	+
Malt barley farm size (ha)	Number of individuals	+
Malt barley yield (qt/ha)	Continuous	+
Distance to market (min.)	Continuous walking minutes	-
Price (Birr/qt)	Quintal	+
Quantity of fertilizer (Kg/ha)	Continuous	+
Contract farming	Dummy = 1 if Yes; 0 otherwise	+
Owning a mobile	Dummy = 1 if Yes; 0 otherwise	+
Access to credit	Dummy = 1 if accessed; 0 otherwise	+
Number extension visits	Continuous number of visits	+
Off-farm income	Total annual income earned in Birr	±

Source: Literature review (2019).

Table 4. Descriptive statistics of continuous variables (n = 384)

Variables	Min	Max	Mean	Std. Error
Age of household head (year)	23.00	80.00	44.49	0.57
Education level (schooling year)	0.00	12.00	6.10	0.18
Household size	1.00	14.00	7.34	0.16
Certificated land holding size (ha)	0.25	10.00	1.86	0.08
Cultivated malt barley farm size (ha)	0.13	5.00	0.76	0.03
Malt barley farming experience of (years)	1.00	24.00	6.04	0.24
Livestock holding (TLU)	0	33.75	7.30	0.22
Distance to FTC (walking minute)	5	90	30.96	0.86
Distance to coops office (walking minute)	5	120	31.27	0.95
Distance to the all-weather road (walking minute)	5	120	26.74	0.95
Distance to the main market (walking minute)	10	120	60.36	27.13
Off/non-farm income (Birr)	0	241,000	7,974.09	918.77

Source: Survey data analysis (2020).

Table 5. Descriptive statistics of categorical variables (n = 384)

Variables		Freq.	%	Mean HCI	Std. Dev.	/ t-test/
Sex	Male	368	95.00	61.75	23.11
	Female	18	5.00	60.33	23.64
Access to credit	Yes	57	14.76	54.46	22.57	0.0105
	No	329	85.24	62.92	23.00
Access to market info	Yes	295	76.42	63.08	23.43	0.0314
	No	91	23.58	57.12	21.50
Access to improved seed	Yes	370	95.85	62.23	23.04	0.0170
	No	16	4.15	48.20	20.99
Contract agreements	Yes	246	63.73	64.36	23.01	0.0024
	No	140	36.27	56.95	22.58
Access to mobile phone	Yes	339	87.82	62.75	23.04	0.0139
	No	47	12.18	53.92	22.29

Source: Survey data analysis (2020).

Table 6. Average malt barley produced, consumed or stored and sold (384)

Item	Average quantity (qt)	Value (Birr)
Quantity of malt barley produced (qt)	27.29	39,645.33
Quantity consumed (gifted, seed or saved) (qt)	9.34	13,568.22
Quantity sold (qt)	17.95	26,075.97

Source: Survey data analysis (2020).

Table 7. Distribution of respondents by level commercialization (384)

Category of HCI	Frequency	Percentage
Less than 30% output sold (low)	42	11.05
Between 30% and 65% of output sold (medium)	166	54.74
Above 65% of the output sold (high)	172	34.21
Total	384	100

Source: Survey analysis (2020).

Table 8. Parameter estimates of Tobit model for commercialization index

Variables	Coef.	Std. Err.	P>|t|	X
Sex of household head	−6.841	6.548	0.297	1.047
Age of household head	0.004	0.174	0.983	44.595
Educational status	0.398	0.473	0.401	6.020
Household size	−0.616	0.543	0.258	7.308
Landholding size (ha)	−4.764	1.276	0.000***	2.459
Malt barley farm size (ha)	5.359	3.212	0.096*	0.758
Malt barley yield (qt/ha)	0.246	0.121	0.043**	35.241
Distance to market	0.023	0.055	0.679	58.629
Unit price (Birr/qt)	0.046	0.008	0.000***	1456.310
Quantity of fertilizer applied	0.173	0.060	0.004***	32.092
Cooperative membership	5.160	2.864	0.073*	0.498
Owning a mobile	8.367	4.247	0.050**	0.870
Livestock holding (TLU)	−0.020	0.431	0.964	7.382
Non-farm income (Birr)	0.000	0.000	0.559	7049.580
Access to credit	10.020	3.773	0.008***	1.846
Number of extension contacts	5.015	1.460	0.001***	2.783
Constant	−47.119	16.622	0.005***	1.047
/sigma	22.372	1.121

LR chi² (16) = 136.69 Prob > chi² < 0.01 Log likelihood = −1207.4346

Pseudo R² = 0.536 Number of obs. = 299

Key: * p < 0.10; ** p < 0.05; and *** p < 0.01 represents significance levels respectively.

Source: Tobit regression output based on survey data (2020).

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