Determinants of market participation by smallholder cattle
farmers and the institutional constraints to market
participation in Botswana: Case study of Kweneng West
Kgosikoma R.K. and Malope, P.
Conference on Policies for Competitive Smallholder Livestock Production
Gaborone, Botswana, 4-6 March 2015

Introduction
 Livestock production in Botswana
accounts for over 80% of agricultural
GDP.
 The beef sector dominates livestock
sector in terms of both output and
employment.
 The communal grazing system
accounts for 88% of the national herd
(Statistics, Botswana, 2012).

Introduction
 However, the off-take rates in
communal areas through formal
markets remain relatively low at 8.26%
compared to 15.79% from commercial
farming.
 Low off-take rates attributed to:
◦ Alternative income sources
◦ Institutional constraints
◦ Transaction costs
◦ Availability of marketable surplus

Introduction
 Marketing channels:
◦ formal (butcheries, BMC)
◦ Informal (sale to individuals for home
ceremonial purposes)
 Constraints to formal market
participation for smallholder farmers:
◦ Socio-economic
◦ Technical
◦ Institutional

Methods
 Study area: Kweneng West
◦ Main economic activity: livestock farming
◦ 8 livestock extension areas
 Study design: cross sectional survey
using the face-to-face administration
method.
 Sampling: multi-stage sampling
procedure used to select a sample of
132 livestock farmers in the Kweneng
West sub-district.
 Data collection: 3-part structured

Theoretical Framework
 Following Uchezumba et. al. (2009) and
Gujarati (2003), a logistic regression
model is specified as:
 𝑃𝑖 = 𝐸 𝑌𝑖 = 1 𝑋𝑖 =
1
1+𝑒
− 𝛼 𝑖+ 𝑖=1
𝐾 𝛽 𝑖 𝑋 𝑖
(1)
◦ Pi is the probability of household i
participating in the market for cattle.
◦ Yi is the level of participation household i.
◦ Xi is a set of explanatory variables
influencing the participation of household i in
the cattle market.
◦ βi’s are the parameters to be estimated.

Empirical Model
 The empirical model, with the explanatory variables
selected based on theory, is presented as:
 ln 𝑃𝑖 1 − 𝑃𝑖 = 𝛽0 + 𝛽1 𝐻𝐸𝑖 + 𝛽2 𝑇𝐶𝑖 + 𝛽3 𝐻𝐶𝑖 + 𝛽4 𝑆𝑆𝑖
(9)
◦ household endowment (HE) variables,
◦ transaction costs (TC) variables,
◦ household characteristics (HC) variables,
◦ Supply shock (SS) variable.

Results
Table 1: Summary Statistics of the Explanatory
Variables
Variable Mean Minimum Maximum Std. Dev.
Household endowment
ARAB
HERD
NONFARMINC
OWNTRANS
SMLSTCK
10.18
57.36
0.856
0.379
0.583
0
2
0
0
0
70
979
1
1
1
10.26
99.06
0.352
0.487
0.495
Transaction costs/ Information
Access
DISTMKT
DISTRD
PRICEINFO
MRKTNCRS
124.23
14.15
0.735
0.053
1
0
0
0
390
120
1
1
123.38
15.22
0.443
0.225
Household characteristics
GENDER
HHSIZE
AGEHH
EDU
YRSFARM
CROPS
0.818
3.33
56.40
2.20
2.62
0.614
0
1
32
1
1
0
1
11
89
7
3
1
0.387
1.94
14.46
1.77
0.648
0.489
Market Shock
DIED 4.57 0 30 5.55
Dependent Variable
CTSOLD12 0.818 0 1 0.387

Results
Table 2: Factors Influencing Participation in the Cattle
Market
Variable Parameter Estimate Odds Ratio
AGEHH -0.065 (0.033)** 0.937
EDU
None (reference)
Some primary
Diploma
Other
-2.754(1.249)**
-7.107 (3.676)*
-3.614 (2.063)*
0.064
0.0008
0.027
CROPS 1.855 (0.849)** 6.390
HERD 0.022 (0.013)* 1.022
DISTMKT 0.007 (0.003)** 1.007
PRICEINFO 1.570 (0.748)** 4.806
MRKTCRS -3.300 (1.608)** 0.037
DIED 0.232 (0.126)* 1.261
CONSTANT 2.177 (2.400)

Institutional Constraints
Table 3: Institutional Constraints to Market Participation
Table 4: Frequency of Difficulties in Meeting BMC
Requirements
Frequency/Variabl
e
Bolus DVS-permit Police Permit BMC Quota Total
More frequent 7 1 2 4 14
Frequent 6 5 6 0 17
Less frequent 21 12 10 0 43
Total 34 18 18 4 74

Conclusions
 Important determinants of cattle
market participation: age, education,
mixed cropping, herd size, distance to
the market, access to price
information and market shock.
 Bolus requirement most problematic
institutional constraint.
 Farmers advocate for efficiency in the
provision of services to meet
institutional requirements in cattle
markets.

Recommendations
 Continued investment in agricultural
youth programs.
 Mixed agricultural practices should
also be encouraged.
 Publishing agricultural commodity
prices by the Ministry of Agriculture
and cattle marketing channels should
be maintained.
 Efficient service provision in the
supply and use of cattle identification