DETERMINANTS OF SMALLHOLDER COTTON COMMERCIALIZATION: THE CASE OF ARBAMINCH ZURIYA DISTRICT, GAMO ZONE, ETHIOPIA

Abstract

Cotton is an important cash crop that contributes significantly to the agricultural and industrial development of the Ethiopian economy, providing livelihood to hundreds and thousands of people engaged in its farming, processing, and marketing. However, lack of well organized commercialization of cotton discourages the producers to participate and enhance the level of production and productivity. The purpose of this study was to find out the factors affecting smallholder cotton commercialization in Arbaminch Zuriya district, Gamo zone, Ethiopia. A cross-sectional research design was employed. For the selection of 195 cotton producer farmers, a multi-stage sampling procedure was used. Both primary and secondary data were used in this study. Data were gathered using key informants interviews, focus group discussion, and a structured and semi-structured interview schedule. To explain the characteristics of the sampled respondents, were used descriptive statistics. The intensity of household commercialization was used to assess the levels of cotton market participation; the double hurdle model was used to identify the key factors influencing cotton commercialization. Opportunities for production and constraints are also discussed using narration and interpretations. The findings revealed that 60.77% of sampled farmers sold cotton during the 2020/2021 production year. The probit part of the double hurdle model regression analysis revealed that literacy status, cotton land allocation, distance to the nearest market, quantity of cotton produced, households perception of lagged cotton price, and frequency of extension contact had a significant influence on households' participation decision in cotton commercialization. The truncated regression part of the output of the double hurdle model revealed that land allocated to cotton, frequency of extension contact, quantity of cotton produced, and households perception lagged price of cotton had significant influence on the intensity of cotton commercialization. There are different constraints in cotton commercialization such as limited access to improved seed varieties, pest problems, price instability, and low selling price of seed cotton. Conducive agro-ecology and the establishment of integrated agro-industrial parks were opportunities in the study area. Therefore, attention should be given by the Arbaminch Zuriya District office of agriculture and rural development to major constraints that affect cotton farming activities to improve and sustain the positive impact of cotton production.