Factors enhancing market participation by small-scale cotton farmers

Abstract

This paper uses data collected from 177 small-scale farming households in Mpumalanga in an effort to identify factors that significantly influence the degree of commercialisation or market participation. A logistic regression model was applied within the transaction costs framework. Results support the hypothesis that transactions costs rank among the main determinants of commercialisation. The following variables were statistically significant: age, ability to speak/understand English, region, ownership of transport, access to market information, distance to market, dependency ratio, trust, land size and ownership of livestock. Increases in the latter four have negative effects on commercialisation. The negative relationship between land size and commercialisation probably indicates that increased market participation is also afunction of input (land) productivity.

Keywords:

• Market participation
• household commercialisation
• logistic regression
• transaction costs