Cereal Crops Commercialization Decisions of Smallholder Farmers: A Case Study of Horro District, Western Ethiopia

Abstract

This study aimed at identifying and analysing factors affecting commercialization decisions of smallholder farmers on major cereal  crops in Horro District, Oromia, Ethiopia. A multi-stage sampling approach was employed to choose the district, kebele and sample households. A total of 144 farm households were considered in this study. Focus group discussions, key informant interviews and field observations were held to generate qualitative data. This was supplemented by secondary data collected from different published and unpublished sources. Descriptive statistics and logit model were used to identify determinants of commercialization decisions of smallholder farmers and effects of explanatory variables on their decision. The results of the study indicated that 16 per cent of the sampled farm households were in commercialized category, whereas the majority (84%) fell in non-commercialized category. Access to credit service, storage methods, extension access, oxen resource endowment, farming equipment endowments and total harvest were important in affecting commercialization decisions of smallholder farmers, focusing on wheat, barley, maize and teff. To accelerate agricultural commercialization in the area, there is need to encourage market infrastructure, credit services, extension service, and
improved crops storage facilities.

Keywords: smallholder farmers, cereal crop, commercialization decision, Horro district, western Ethiopia