SMALLHOLDERS MARKET PARTICIPATION OF RICE PRODUCTION IN FOGERA PLAIN, SOUTH GONDER ZONE, ETHIOPIA

Agriculture is the most important sector in the economy of Ethiopia. The growth of the sector depends upon the current subsistence-oriented production system is transformed into a market-oriented production system. However, in most cases, smallholder farmers find it difficult to participate in the market sufficiently because of numerous factors. This study was undertaken with the objectives of identifying the degree of market participation and the determinant factors of the different levels of market participation of smallholder rice farmers’ in Fogera plain, South Gonder Zone, Ethiopia. The study used cross-sectional data collected from 205 randomly selected smallholder rice producer farmers from eleven kebeles through structured household questionnaires.The degree of market participation of the study area result reveals, on average 42% of the total rice produced was supplied to the market and it is much higher than the national average which is 38%. A multinomial probit regression model was used to analyze the determinant factors of the three categories of rice market participation by smallholder farmers. The result reveals the probability of being a subsistence farmer had affected positively and significantly by sex, age, lack of access to market information, and distance to the output market. Livestock ownership except oxen, education level, and hired labor expenditure had significantly affected with a negative sign. The probability of being a transitional farmer negatively influenced by age and lack of access to market information whereas the probability of being commercial farmers was positively influenced by educational status and number of oxen owned and negatively affected by household size and distance to the output market. The predicted probability result indicates that the majority of the sample household categorized under transition farmers which were 40 percent. Thus, strengthening institutions, market information delivery system and access to market have paramount implications to speed up the move of smallholder rice farmers’ from subsistence and transitional towards commercial level of market participation.