ANALYSIS OF MARKET DECISION AND LEVEL OF PARTICIPATION OF SMALLHOLDER WHEAT FARMERS: THE CASE OF ADOLA REDE DISTRICT OF GUJI ZONE, OROMIA REGIONAL STATE, ETHIOPIA

Abstract

In Ethiopia, agricultural transformation is taken as a pathway to transition from a traditional subsistence orientation to one that is market focused and commercialized. In this regard, efforts to enhance smallholders’ participation in cereal market in general and wheat in particular, through surplus production have been made, but there is dearth of information on the status of market participation particularly in Adola Rede district. The aim of this study was to analyze market participation of smallholder wheat farmers in Adola Rede district. The study used cross sectional data collected in 2016/17 from a sample of 150 smallholder farmers selected through two stage sampling technique. To identify factors affecting market participation decisions and level of market participation, double hurdle model was used. The study shows that, households in the study area sold 39% of their wheat to the market. Double hurdle model regression result showed that, perception on lagged wheat price, quantity of wheat produced, size of land allocated for wheat and education level of household head had significant positive effect on market participation decision, while distance to nearest market, distance to extension service and size of land allocated for other crops had significant negative effect. Level of market participation affected positively and significantly by perception on lagged wheat price, and quantity of wheat produced, while it was affected significantly and negatively by family size. The study result indicated that, provision of training on contract farming, increasing of productivity and production of wheat, strengthening of farmers’ education through adult education, rural infrastructural development and transportation system, increase in farmers training centers, and strengthening of family planning education through rural health extension as a means to enhance wheat market participation and level of participation of smallholders.