Crop-Livestock Interactions in Smallholders’ Market Participation: Evidence from Crop-Livestock Mixed Systems in Ethiopia

Moti Jaleta () and Berhanu Gebremedhin

No 96168, 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa from African Association of Agricultural Economists (AAAE)

Abstract: Most studies on smallholder market participation decisions analyze crop or livestock market participation separately. However, in mixed crop-livestock farming systems, smallholders’ participation decisions in crop and livestock markets may not be separate as a household’s position in one market may be influenced by its position in the other. Where there is limited income from off-farm and/or non-farm activities, household cash requirements for crop production or household consumption are usually met by selling livestock. Similarly, livestock purchase is usually financed by income from crop sales. However, to what extent the position in one market influences the other is still not well explored in the literature. The aim of this paper is to investigate the interactions of crop and livestock output market participation of smallholders, by analyzing the determinants of household market participation positions in both commodities simultaneously. Household level data collected in 2009 from 1075 sample households in ten districts of the four major regions of Ethiopia is used for the analyses. Using simultaneous equation models, we test whether the position of being a net seller in crop market is affected by the position of being a net buyer in the livestock market, and vice versa. Results show that the decision to be a net buyer in crop market is associated positively with the decision to be a net seller in livestock market. Similarly, the decision to be a net seller in crop market is associated positively with the decision to be a net buyer in livestock market. This implies that crop purchase is financed by livestock sale and excess income from crop sale is saved in the form of livestock asset. Thus, policies/strategies enhancing smallholders’ participation in crop and livestock markets in mixed crop-livestock system should pay attention to the production and marketing of both commodities simultaneously.

Keywords: Farm; Management (search for similar items in EconPapers)
Pages: 20
Date: 2010-09
New Economics Papers: this item is included in nep-afr and nep-agr
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaae10:96168

DOI: 10.22004/ag.econ.96168

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