Journal of
Development and Agricultural Economics

  • Abbreviation: J. Dev. Agric. Econ.
  • Language: English
  • ISSN: 2006-9774
  • DOI: 10.5897/JDAE
  • Start Year: 2009
  • Published Articles: 527

Full Length Research Paper

Transaction costs and smallholder household access to maize markets in Zambia

Richard Bwalya
  • Richard Bwalya
  • Institute of Economic and Social Research, University of Zambia, Lusaka, Zambia
  • Google Scholar
Johnny Mugisha
  • Johnny Mugisha
  • Department of Agribusiness and Natural Resource Economics, School of Agricultural Sciences, Makerere University, P. O. Box 7062, Kampala Uganda.
  • Google Scholar
Theodora Hyuha
  • Theodora Hyuha
  • Department of Agribusiness and Natural Resource Economics, School of Agricultural Sciences, Makerere University, P. O. Box 7062, Kampala Uganda.
  • Google Scholar


  •  Accepted: 02 July 2013
  •  Published: 30 September 2013

Abstract

 

After liberalization of the Zambian economy, farmers were faced with the responsibility of finding the right buyers, negotiating prices and delivering produce leading to them incurring transaction costs. This study aimed at identifying and quantifying transaction costs factors and their impact on maize market participation for small holder farmers in Zambia. The study used primary data collected from a sample of 240 randomly selected households from Zambia’s central Province. The Heckman’s procedure was used to analyze factors affecting the likelihood and extent of participation in maize markets. The logit results (from the Heckman’s two-stage process) show that ownership of assets such as radios and having access to alternative marketing channels increased the likelihood of market participation while the heckit results (OLS corrected for selectivity bias) shows that ownership of ox-carts, increased family size and experience in maize marketing were the factors that increased quantities of maize marketed. The study recommends provision of market information, improving accessibility to markets as well as increasing access to productive assets as means of alleviating impact of transaction costs.

 

Key words: Transaction costs, maize, market access, Zambia.