Determinants of Crop Commercialization in Irrigation Areas of Ethiopia: The Case of North Wollo and West Gojjam Zones of Amhara Region

Abstract

The study was carried out to identify factors affecting crop input and output commercialization among smallholder crop-producing farmers in irrigated areas of Amhara region, Ethiopia. primary data was collected from 544 randomly selected households Using three-stage sampling procedures. The data were analyzed using descriptive and inferential statistics to describe the input and output market participation and difference. Input and output commercialization indices were derived for all the participating farmers. two-limit Tobit model was employed to find determinants of agricultural market participation and commercialization of smallholder farms. The study found that the farmers were semi-commercialized for output side but poorly commercialized for input side. In addition, factors which found significantly determining output market participation and commercialization were age of the household head, distance to the nearest market, distance to the nearest town, irrigation experience, share of crop income, livestock ownership measured in TLU, membership in Water Users Association (WUA) and cooperative, proportion of irrigated land and agroecology being in lowland. Similarily, factors which found significantly determining input market participation and commercialization were distance to nearest seed and agrochemical market, irrigation experience, membership in cooperative, share of crop income, TLU and agroecology. The study suggests that the public and private sectors contribute more to commercialization through providing training, improving institutional service, skill and expertise, and infrastructure facilities. Thus, if policies to address these problems such as outgrower schemes, contract farming and Agricultural One Stop Shoping (AOSS) for input supply are implemented in irrigation scheme users. Specifically,  improve the inclusiveness of these type of interventions for smallholder farmers like female headed or small land size farmers in irrigated agriculture have a high potential for commercialization.