Impact Of Agricultural Market Reforms On Smallholder Farmers In ...
Impact Of Agricultural Market Reforms On Smallholder Farmers In ... Impact Of Agricultural Market Reforms On Smallholder Farmers In ...
5.1.9 Agricultural marketing Marketed surplus Tables 5.34 and 5.35 show the crop disposal patterns of households by crop. Except for cash crops such as tobacco and cotton, which are grown for sale, most food crops are mainly produced for subsistence. For example, only 12 percent of the households sell any maize and the total marketed surplus for maize is only 6 percent. Maize is considered the most important subsistence crop for small farmers in Malawi. For other food grain crops (except sorghum), between 20 and 60 percent of the producers (i.e. those that grow the crop) sell some amounts. However, the proportion sold is quite small; the marketed surplus for most food grain crops is less than 45 percent. Vegetables and soybeans are mainly grown as cash crops in Malawi and the percentage marketed is about 70 to 80 percent. The category “other crops” is also highly commercialized because it consists mainly of cash crops such as sunflower, coffee, chillies, and paprika. As expected, tobacco represents about 50 percent of the value of all crop sales. All other crops represent each less than 10 percent of the total value of sales. Another way to examine marketing patterns is to consider the distribution of farm household by the market surplus ratio, defined as the value of crop sales as a percentage of the value of crop production. Table 5.36 highlights the fact that farms in Malawi produce mainly for own consumption. Only 18 percent of the farm households sell more than half their output and fortysix percent sell less than 10 percent. This presents a sharp contrast with the marketing patterns in Benin, where 54 percent of the farms sell more than half their output. In general, male-headed households are more commercialized than female-headed ones. Maleheaded households sell about 26 percent of their output compared to 15 percent for femaleheaded households. Not surprisingly, the share of output sold also increases with farm size and expenditure category. In about 80 to 90 percent of the households, the household heads makes the crop disposal decision for both cotton and tobacco. For maize, on the other hand, in 25 percent of the households, either the spouse or both the spouse and the head make the decision regarding crop distribution. For the other crops such as potatoes, beans, sorghum, the crop disposal decisions are made by either the spouse or both in about 33 percent of the households. Therefore, one can deduce that for the most lucrative crops such as tobacco, crop disposal is more 253
heavily controlled by household heads. Household heads are also three times as likely as other household members to be the ones selling the crop in the market . The average quantity sold of each crop per selling household, the number of transaction per year, and the average price received per kg are shown in Table 5.37. The average quantity sold of any crop is about 280 kgs. The crop with the largest volume sold is sweet potato (570 kg) followed by maize (350 kgs). The average number of sale transactions per year for any one crop is two. Most crops are sold at harvest time, around June and July. Regression analysis of marketed surplus. In this section, we analyze the factors that change the market orientation of the household. The dependent variable is measured as the share (in value terms) of total production that is marketed (see Table 5.38). The results from the ordinary least squares regression analysis show an adjusted R 2 of 0.39, which means that about 40 percent of the variation in marketed surplus is explained by the variables included in the regression equation. The remaining results are as follows: The greater the number of children under 15, the lower the marketed surplus of the household. This is expected since households with more dependent children have more consumption needs, and therefore less output can be sold to the market. Although only significant at the 10 percent level, each additional child is associated with a 6 percentage point decline in marketed surplus. Not surprisingly, farm size is positively associated with marketed surplus. Households with larger farms have more production beyond and above subsistence consumption that can be sold to the market. However the effect is small, increasing marketed surplus by only about 2.6 percent. The variable with the most important effect on marketed surplus is whether the households grows tobacco or not. Tobacco growers have a marketed surplus that is 30 percent higher than non-tobacco growers. This is expected since all the tobacco that is produced is usually sold and the value of tobacco, compared to other crops, is fairly high. Therefore, being a tobacco grower significantly increases the market orientation of the household. 254
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heavily controlled by household heads. Household heads are also three times as likely as other<br />
household members to be the ones selling the crop in the market .<br />
The average quantity sold of each crop per selling household, the number of transaction per year,<br />
and the average price received per kg are shown in Table 5.37. The average quantity sold of any<br />
crop is about 280 kgs. The crop with the largest volume sold is sweet potato (570 kg) followed<br />
by maize (350 kgs). The average number of sale transactions per year for any one crop is two.<br />
Most crops are sold at harvest time, around June and July.<br />
Regression analysis of marketed surplus. <strong>In</strong> this section, we analyze the factors that<br />
change the market orientation of the household. The dependent variable is measured as the share<br />
(in value terms) of total production that is marketed (see Table 5.38). The results from the<br />
ordinary least squares regression analysis show an adjusted R 2 of 0.39, which means that about 40<br />
percent of the variation in marketed surplus is explained by the variables included in the<br />
regression equation. The remaining results are as follows:<br />
<br />
The greater the number of children under 15, the lower the marketed surplus of the<br />
household. This is expected since households with more dependent children have more<br />
consumption needs, and therefore less output can be sold to the market. Although only<br />
significant at the 10 percent level, each additional child is associated with a 6 percentage<br />
point decline in marketed surplus.<br />
<br />
Not surprisingly, farm size is positively associated with marketed surplus. Households<br />
with larger farms have more production beyond and above subsistence consumption that<br />
can be sold to the market. However the effect is small, increasing marketed surplus by<br />
only about 2.6 percent.<br />
<br />
The variable with the most important effect on marketed surplus is whether the<br />
households grows tobacco or not. Tobacco growers have a marketed surplus that is 30<br />
percent higher than non-tobacco growers. This is expected since all the tobacco that is<br />
produced is usually sold and the value of tobacco, compared to other crops, is fairly high.<br />
Therefore, being a tobacco grower significantly increases the market orientation of the<br />
household.<br />
254
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