Abstract

Across the world, sustained integration of smallholder farmers into commercial agriculture has empowered resource poor smallholder farmers to diversify their livelihoods into non-farm enterprises. The new enterprises have crystallized into socioeconomic development hubs. Associated with the growth of the agricultural sector in developed nations has been the development of highly market-integrated agribusinesses manned by few commercial farmers. However, developing nations have been committing a significant proportion of their budgets to smallholder agriculture development though the level of market participation by the smallholder farmers remains small. Limited research has been conducted to isolate the main factors blocking smallholder farmers’ decisions from participating in commercial livestock market. The objective of this paper was to investigate the factors that influence the smallholder livestock farmers’ decisions to participate in commercial livestock markets. A factor analysis model was used to isolate the main factors affect smallholder livestock farmers’ market participation in Okakarara constituency of the Otjozondjupa region in Namibia. Principal factors isolated were production and marketing dynamics, transaction costs, human capital, state of marketing infrastructure and level of business orientation of the smallholder livestock farmer.

Key words: Principal component analysis, smallholder farmers, market participation, livestock, commercial markets, Namibia.