Determinants Of Smallholder Farmers’ Cattle Market Participation And Outlet Choices In Western Oromia, Ethiopia

This research attempts to examine factors influencing smallholder farmers’ cattle market participation and outlet choices in the three districts of western Oromia, Ethiopia. The specific objectives of the study were to identify major livestock production and marketing constraints in the study areas; investigate factors influencing smallholder farmers’ cattle market participation and volume of sale and assessing both domestic and cross border cattle marketing channel and outlet choices by smallholder producers in the study districts.To achieve these objectives a structured questionnaire was used to collect the primary data from randomly selected 150 sample households by face -to -face interviews to obtain information on variables related to households’ demographic characteristics, households’ physical assets, human capital, financial capital and different transaction costs. Relevant secondary information related to the study topic was also collected from respective Zonal and district level livestock development health and marketing agency to support the primary survey data.The survey data was analyzed using both descriptive statistics and Heckman two-stage econometric model with the help of SPSS for windows and STATA for window (version 10) to investigate factors affecting smallholder farmers’ cattle market participation decision and volume of sale.The survey result revealed that in the study areas only about 39 percent of sample households were participated in the cattle marketing and the maximum number of cattle sold by a typical household were 3 in the survey period. This shows cattle off-take rate in the study area is low compared to livestock population of the areas. This is due to the extensive and diversified importance attached to cattle keeping in the rural area may has its own contribution that cattle sell is not the primary objectives by the smallholder producers but they decide to sell their cattle when there is no other means of alleviating their immediate social obligations.This can be improved through participatory extension training to bring a behavioral shift from traditional farming to market oriented livestock production.Probit regression model was used to estimate using maximum likelihoods estimation procedure to identify explanatory variables that have significant influence on the probability of market participation decision. Among the hypothesized explanatory variables included in the probit estimation. Age of the household head, Number of cattle owned (TLU), and using the preferred channel by the farmers were positively and significantly influenced the probability of smallholder farmers cattle market participation decision, while family size, income from non-farm activities and possession of other livestock (shoats) negatively and significantly affected the decision of producers cattle market participation.According to the Heckman two-stage model, the study has identified the main determinants of volume of cattle sale. Among those variables farming experience, total herd owned, using channel of producers choice and season of the year found to be positively and significantly influence the volume of cattle sell, where as family size, distance from the market and income from crop sell,were found to be adversely affected the volume of cattle sell in the study areas.Major livestock production and marketing constraints identified and prioritized by the smallholder farmers’ were shortage of animal feeds especially during the dry season, animal diseases occurred in different time of the year and land shortage were the major problems respectively. The reason why the small holder farmers in the study area choose certain market channels and outlet of their own choice was also identified. Based on the survey results, development interventions and policy issues demanded in enhancing small holder farmers’ market participation and sale are also recommended.