Antecedents of Participation in Collective Marketing and its Impact on Farmers’ Income: In the Case of Avocado Producers of Selam Fruit and Vegetable Development and Marketing Cooperative, Amhara Regional State, Ethiopia
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Date
2024-10-27
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A.A.U
Abstract
The agricultural sector is vital for economic development in Sub-Saharan Africa, particularly in Ethiopia, where smallholder farmers face significant challenges such as limited access to quality inputs and inadequate infrastructure. This study addresses the problem of smallholder avocado farmers' inability to penetrate high-value markets due to weak institutional frameworks and fragmented supply chains. Utilizing a sample of 115 farmers selected through non-probability sampling from four kebeles in the Amhara Regional State, both probit regression and endogenous switching regression analyses were employed to examine the relationship between farmers' participation in collective marketing and their income outcomes. The findings reveal that participation in collective marketing significantly enhances farmers' avocado income share. The Average Treatment Effect on the Treated (ATT) shows that farmers engaged in collective marketing enjoyed an average avocado income share of 34.985%. In contrast, if they had opted out, their income share would have dropped to 26.410%, resulting in an ATT of 8.574%, significant at the 1% level. This positive impact implies that collective marketing participation provides advantages such as improved market access, better pricing, and economies of scale. Furthermore, the Average Treatment Effect on the Untreated (ATU) indicates that non-participants currently have an avocado income share of 25.490%, but this could rise to 34.952% if they participated, leading to an ATU of 9.462%. The statistically insignificant heterogeneity effect (HE) of 0.033% suggests that income variations between participants and non-participants are not driven by unobservable factors but are primarily attributed to the structural advantages of the collective marketing system itself. Overall, these results underscore the importance of collective marketing in enhancing the economic outcomes of smallholder farmers by facilitating better market access and pricing. To bolster collective marketing participation, the study recommends promoting educational programs for farmers, enhancing infrastructure, strengthening cooperative benefits, increasing access to inputs, and improving marketing channels. These strategies aim to improve the economic outcomes for smallholder farmers and promote sustainable income growth within the avocado supply chain.