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Factors affecting smallholder farmers' participation in agro-processing industry

T. Khoza, G. Senyolo, E. Nekhavhambe and V. Mmbengwa

No 284780, 2018 Annual Conference, September 25-27, Cape Town, South Africa from Agricultural Economics Association of South Africa (AEASA)

Abstract: The aim of the study was to identify smallholder farmers participating in agro-processing and factors influencing their choice of participation. The study was conducted in Gauteng Province on a randomly purposive selected sample of 102 smallholder farmers. Data was collected through a structured questionnaire that was administered face-to-face to respondents. A probit regression model was used to determine factors influencing farmers� participation in agro-processing. The results show that only 19% of the sampled respondents are participating in the agro-processing industry of Gauteng Province. The results also revealed that factors such as educational level, land tenure, agro-processing training and information have a positive influence on agro-processing participation. Yet, distance to market and off-farm income negatively influence the decision to participate in agro-processing. However, there are challenges that need to be addressed in order for them to participate to their potential (i.e. lack of access to infrastructure, transport, poor knowledge on agro-processing norms and standards, poor finance and high cost of production). The study recommended for development of strategies that could realistically increase access of friendly investment capital to potential smallholder farmers to start their own small-scale agro-processing businesses, intensification of awareness of farmers on micro-financing institutions, and building local agro-processing plants.

Keywords: Agro-processing industry; Smallholder; Probit regression; Challenges; Agribusiness (search for similar items in EconPapers)
Date: 2018-09-25
New Economics Papers: this item is included in nep-agr
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DOI: 10.22004/ag.econ.284780

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