An analysis of factors influencing market participation among smallholder rice farmers in western province, Zambia

Abstract

Increasing market participation among smallholder producers has the potential to lift them to better income levels through increased productivity and surplus production. Nowhere in the Zambian agricultural sector is increased market participation more sought after than in the rice sub-sector as the government endeavors to promote the crop's commercialization and to tap into the Southern African Development Community (SADC) regional market. It is estimated that 56 percent and 50 percent of rice producers participated (sold) in the rice market during the 2010/11 and 2011/12 marketing seasons respective. In addition region such as Western Province which has the highest number of rice producers showed that 40.9 percent sold rice during the 2011/12 marketing season. This study used data from a survey of 390 smallholder rice producers, conducted in 2013, and a Heckman two-stage econometric model to identify the factors that affect the rice producers' participation in rice markets. The results suggest that the decision to enter the rice market is positively influenced by the household's asset endowment (such as livestock), membership in farmer organizations, access to knowledge about output prices prior to sell, output price and quantity of rice produced. The results further suggest that intensity of market participation is directly influenced by ownership of assets such as (size of land owned), access to credit and output produced. These findings provide useful insight on what factors need to be target to stimulate market participation and intensity among rice farmers. Policies that facilitate ownership of productive assets such as livestock restocking should be implemented, access to price information prior to selling should be enhanced and being a member to a farmer organization should be promoted among rice farmers for the purpose of collective marketing. Pricing and productivity enhancing policies should be implemented to stimulate production for the market and also increase output produced which will in turn increase quantities sold among farmers. In addition access to credit should be enhanced as it facilitates farmers to access inputs and other productive assets which increase output produced leading to more sales. Other stakeholders should encourage bulk marketing through farmer organization and also farmers should be encouraged to be members of farmer organization as it improves market participation. Implementation of the stated policies will increase market participation and ultimately improve the livelihood among rice farmers in Western Province of Zambia.