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 statistics
Variables 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, avg
prices, 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!!!