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Transactions costs and smallholder participation in the maize market in the northern province of South Africa

By: Makura, M.N | Centro Internacional de Mejoramiento de Maiz y Trigo (CIMMYT) Kenya | 7. Proceedings of the Eastern and Southern Africa Regional Maize Conference Nairobi (Kenya) 5-11 Feb 2002.
Contributor(s): Delgado, C [coaut.] | Friesen, D.K.|Palmer, A.F.E [eds.] | Kirsten, J [coaut.].
Material type: materialTypeLabelBookAnalytics: Show analyticsPublisher: Nairobi (Kenya) KARI|CIMMYT : 2002Description: p. 463-467.ISBN: 970-648-120-6.Subject(s): Cost analysis | Economic policies | Farmers | Maize | Market economies | Market information | Small enterprises | South Africa | CIMMYT | KARIDDC classification: 338.16 Summary: Smallholder maize farming is characterised by low levels of market participation. The objective of the paper is to determine the role of transaction costs in participation of smallholder farmers in maize markets. Transaction costs differ among households due to asymmetries in access to assets, market information, extension services and remunerative markets. The selectivity procedure is applied to determil1e the factors (related to fixed and variable transaction costs) influencing the decision and level of participation in maize markets by a sample of 157 smallholder farmers in the Northern Province of South Africa. The results support previous studies that existence of transaction costs constrains households from selling. The results suggest that an increase in the arable land by a hectare will lead to al1 increase in maize sales by R52. However, the sales would decrease by about R77 for every additional household member in the household. The results also suggest that an increase in livestock value by R 100 leads to al1 increase in maize sales by about R 1.56. The other positive factors include pension earnings, average education, ownership of a tractor or vehicle, proximity to markets, conditions of the road and contacts with extension officers. The non-farm income, the gender and age of the household head, as well as the combined effect of proximity to town and road conditions were negative but not significant in terms of influencing participation in maize markets. The study recommends the need for policy and institutions to support access to productive assets (such as land) and markets.Collection: CIMMYT Publications Collection
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Book CIMMYT Knowledge Center: John Woolston Library

Lic. Jose Juan Caballero Flores

 

CIMMYT Publications Collection 338.16 FRI (Browse shelf) 1 Available 2D630188
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Smallholder maize farming is characterised by low levels of market participation. The objective of the paper is to determine the role of transaction costs in participation of smallholder farmers in maize markets. Transaction costs differ among households due to asymmetries in access to assets, market information, extension services and remunerative markets. The selectivity procedure is applied to determil1e the factors (related to fixed and variable transaction costs) influencing the decision and level of participation in maize markets by a sample of 157 smallholder farmers in the Northern Province of South Africa. The results support previous studies that existence of transaction costs constrains households from selling. The results suggest that an increase in the arable land by a hectare will lead to al1 increase in maize sales by R52. However, the sales would decrease by about R77 for every additional household member in the household. The results also suggest that an increase in livestock value by R 100 leads to al1 increase in maize sales by about R 1.56. The other positive factors include pension earnings, average education, ownership of a tractor or vehicle, proximity to markets, conditions of the road and contacts with extension officers. The non-farm income, the gender and age of the household head, as well as the combined effect of proximity to town and road conditions were negative but not significant in terms of influencing participation in maize markets. The study recommends the need for policy and institutions to support access to productive assets (such as land) and markets.

English

0410|AGRIS 0401|AL-Maize Program

Juan Carlos Mendieta

CIMMYT Publications Collection

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