Abstract

Transforming the subsistence-oriented production system into a market-oriented production system as a way to increase the smallholder farmer’s income and reduce rural poverty has been in the policy spotlight of many developing countries, including Ethiopia. However, there are no adequate studies in Ethiopia, particularly, in study area of West Hararghe zone that focusing on the determinants of smallholder commercialization in horticultural crops. This study has identified household level determinants of the output side commercialization decision and level of commercialization in horticultural crops in Gemechis district, West Hararghe zone, Oromia National Regional State of Ethiopia. The study used cross-sectional data obtained from a sample of 160 smallholder horticultural farmers selected randomly from four peasant associations in the district. A double hurdle model was applied to analyze the determinants of the commercialization decision and level of commercialization. In first hurdle, the result of Probit Regression Model revealed that, gender, distance to the nearest market, and cultivated land played a significant role in smallholder commercialization decision. In the second hurdle, the result of Truncated Regression Model revealed that, household education, household size, access to irrigation, cultivated land, livestock, and distance to the nearest market were the key determinants of the level of commercialization. Synthesis of double hurdle model result showed that farm size and distance to the nearest market were cross-cutting determinants of smallholder horticultural crops commercialization. The study recommends the need for designing appropriate intervention mechanisms focusing on the abovementioned factors so as to improve the performance of horticultural crops commercialization.

Key words: Smallholder, commercialization, market participation, double hurdle.