Marketing patterns of rainfed and irrigated systems: Are there differences?

Fistum Hagos, IWMI/LIVES

LIVES Seminar, ILRI, Addis Ababa, 4 February 2015

Outline of the content

1. Motivation

2. Research questions

3. Results and discussions

4. Conclusions and implications

5. Overall conclusions/implications

Market orientation and market participation

Motivation

• GoE strives to promote market-oriented agriculture

• Irrigation development is perceived as one of the tools – plan to develop 15 percent of the irrigated potential (in 2015/16)

Research questions

• Does market-orientation systematically vary by household productive assets, by access to irrigation, market access, capital markets and extension support? And

• Do the same factors affect market participation?

Summary statisticsVariables Rainfed Irrigate Std. Err.

Value of output per timad (in ETB) 6414.52 267911.

50

82150.33

***

Vale of sold output per timad (in ETB) 3066.51 75419.3 43884.2*

Own seed used per timad (in kg) 15.35 24.11 1.86***

Purchased seed per timad (in kg) 4.68 28.63 2.63***

Own improved seed per timad (in kg) 1.023 0.466 0.232**

Own improved cuttings/seedlings per

timad (in no)

0.673 136.74 25.93***

Purchased improved seed per timad (in kg) 3.92 29.66 17.88

Purchased improved

bulbs/cuttings/seedlings per timad (in no)

2.078 59.31 31.71*

DAP application per timad (in kg) 16.20 20.03 1.48**

Urea application per timad (in kg) 13.42 24.33 1.517***

Herbicide application per timad (in lt) 0.052 0.033 0.010*

Pesticide application per timad (in lt) 0.072 0.469 0.112***

Determinants of market-orientation (OLS)

Dependent variable: market-orientation Coef. S. Error

Household factors

Age of the household head (In yrs) -1.420 0.286***

Literacy of household head 1= illiterate or 2=

literate

-16.667 6.812**

Household size -4.379 1.760**

Asset holdings

Total land owned -6.710 3.167 **

Agricultural tools 15.38 5.30 ***

Continued…

Own labor 4.49 1.42***

equines 42.88 23.88*

oxen 81.78 17.43 ***

Continued …

Services and market access

Access to irrigation 1186.44 134.66***

Not using crop store -102.04 62.97 *

irrigcropstore2 Yes=1, no=0 165.49 68.31***

Distance to crop market -20.46 2.69***

Distance to all weather road -9.71 1.89***

Determinants of market participation (tobit)

Variables Coefficient Adjusted St.

Error

Marginal effect (St.

error in Parenthesis)

Irrigation access 13953.37 3421.14*** 3775.17 ( . 27***)

Use da post 1658.87 2212.13** 1630.49 ( 768.66**)

Not use crop store -3823.78 2074.74* -3623.46 (2170.9*

Conclusions and implications

Market orientation is determined:

• household characteristics and asset holdings -labor, oxen, productive tools, equines

• Access to Irrigation

• Access to market – distance to crop market, distance to all weather roads

Market participation is determined:

• Access to irrigation, extension services, storage facilities

Determinants of outlet choices

Motivation

• Irrigation enables smallholders to diversify cropping patterns and to switch from low-value subsistence production to high-value crops

• New challenges to the existing marketing pattern

Research questions

• Do types of crops grown under rainfed and irrigated systems vary?

• What are the determinants of outlet choices?

• Do they vary under for rainfed and irrigation systems?

Summary statistics

71%

17%

9%

0%

2%

0% 1%

Crop category under rainfed system

Cereals

Pulses

Vegetables

Fruits

Oil crops

Fodder crops

Other prennials

Results & discussions

21%

4%

43%

16%

0%

16%

Crop category under irrigated system

Cereals

Pulses

Vegetables

Fruits

Oil crops

Other prennials

Proportion sold when

Sold when Rainfed

crops

Irrigated

crops

September to December 23.50 15.40

January to April 44.90 48.35

May to August 31.60 36.30

Source: Baseline survey 2014

Proportion sold at respective market places

Market places Rainfed Irrigated

Farm gate 4.92 17.20

Market in the PA 22.90 19.10

Market in the other PA 27.90 23.03

Market in district capital 40.57 33.90

Market in the zonal capital 3.20 5.70

Market in the regional

capital

0.60 1.14

Source: Baseline survey 2014

Proportion purchase by each market actor

Type Rainfed crops Irrigated crops

Farmer 9.81 9.21

Assembler 24.03 16.46

Wholesaler 29.52 17.81

Retailer 17.27 30.20

Processor 3.10 1.53

Urban consumer 14.42 23.20

Cooperative 1.83 1.65

Source: Baseline survey 2014

Significant determinants of outlet choice - rain fed system (MVP)

Variables Farm gate assembler wholesale retailer

Household characteristics

Household size - - -

Agro-ecology

Altitude +

Commodity characteristics

Average price (Birr/kg) - - - -

Quantity sold (in kg) - - - -

Pulses (reference cereals) - - - -

Vegetables (reference cereals) - - - -

Fruits (reference cereals) - - - -

Oil seeds (reference cereals) +

Other perennials (reference cereals) - +

Not use cooperatives (reference use) - -

Asset holdings

Labor holding - - - -

Equines - -

Services and institutional factors

Not use FTC (reference use) +

Not use irrigation crop store (reference use) - - - -

Not use fixed phone provider (reference use) - - - -

Not use cooperatives (reference use) - -

Not use mobile phone provider (reference use) -

Market access conditions

Distance to crop market + -

Distance to all weather road + + +

Significant determinants of outlet choice –irrigated system (MVP)

Variables Farm gate assembler wholesale

Household characteristics

Household size + +

Agro-ecology

Altitude - -

Commodity characteristics

Average price (Birr/kg) - - -

Quantity sold (in kg) - -

Vegetables (reference

cereals)

- -

Fruits (reference cereals) + +

Spices (reference cereals) - - -

Other perennials (reference

cereals)

+

Institutional factors

Not use cooperatives

(reference use)

+

Not use credit access

(reference use)

-

Asset conditions

Labor holding +

Market access conditions

Not use market town

(reference use)

- -

Distance to crop market +

Distance to all weather road +

Conclusions & implications

• Determinants of outlet choice under rainfed

• Household characteristics – household size,

• Commodity characteristics - qty sold, avgprices, pulses, veg, fruits, oil seeds and other perennials

• Asset holdings – labor, equines

• Services – not use FTCs, not use irrigation store, not use fixed and mobile phone

• Institutional factors – not use coop

• Market access conditions - distance to crop market, all weather road

Determinants of outlet choice under irrigation

• Household characteristics – household size

• Commodity characteristics - qty sold, avg prices, vegt, fruits, spices, other perennials

• Institutional factors – not to use cooperatives, not use credit access,

• Market access conditions – not use market town, distance to crop market, all weather road

Overall conclusions/implications

• Infrastructure development to improve to market and storage facilities,

• Development of irrigation, and

• Enhance market information and strengthen cooperatives.

Overall conclusions/implications

• Infrastructure development to improve to market and storage facilities,

• Development of irrigation, and

• Enhance market information and strengthen cooperatives.

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Merci!!!