Farmers' Choice of Cattle Marketing Channels in Rural South Africa: A Transaction Cost Economics Perspective

Jorine Ndoro, Maxwell Mudhara, Michael Chimonyo and Patrick Hitayezu

No 212526, 2015 Conference, August 9-14, 2015, Milan, Italy from International Association of Agricultural Economists

Abstract: This study empirically tests the hypotheses that information, negotiation, and monitoring costs influence the decision to sell to private buyers, speculators, or at the auction pens among smallholder farmers in KwaZulu-Natal, South Africa. Based on survey data, the results of a Multinomial Logit regression reveal that the probability of selling at the auction vs. selling at farm gate increases during the end-of-year festive season, indicating the scope of market uncertainty surrounding auctions. They also show that the probability of selling at the auction vs. selling to speculators increases with proximity to the auction marketplace and decreases with knowledge of the buyer, suggesting higher opportunity costs of time and efforts associated with selling at the auction, and considerable negotiation and monitoring costs incurred when selling to speculators. Other significant predictors of auction channel selection are volume supplied and farmer’s age. This study concludes with some policy implications.

Keywords: Livestock Production/Industries; Marketing (search for similar items in EconPapers)
Pages: 25
Date: 2015
New Economics Papers: this item is included in nep-dcm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://ageconsearch.umn.edu/record/212526/files/N ... uth%20Africa-742.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae15:212526

DOI: 10.22004/ag.econ.212526

Access Statistics for this paper

More papers in 2015 Conference, August 9-14, 2015, Milan, Italy from International Association of Agricultural Economists Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search (aesearch@umn.edu).