Internationale Zeitschrift für Wirtschafts- und Managementwissenschaften

Determinants of Smallholder Farmer’s Wheat Production and Commercialization: The Case Study of Jeldu District, West Shoa Zone, Oromia National Region, Ethiopia

Abstract

Bikila Tolasa, Oromo Tadesse and Bacha Gebissa*

Wheat is the most important grain crop for food security and is used as a source of income for developing countries. It is one of the most commonly grown crops in Ethiopia in general and in one study area in particular. The government of Ethiopia recognizes the importance of wheat for economic development and emphasizes its production and commercialization in strategies and policies for agricultural transformation. However, wheat production is mainly a subsistence crop and the proportion commercialized has been very small. Therefore, this study should measure the degree of commercialization of wheat, analyze the determinants of wheat production and determine the decision to participate in the commercialization of wheat in Jeldu district. A sample of 369 wheat-producing households was drawn by means of a multi-level sample of producers. The data for the production year 2020/21 was collected in sample households using structured questionnaires. Econometric models were used for data analysis. Under econometrics, Cobb-Douglas production and a double hurdle model were applied. The result of the Cobb- Douglas production using the log-linear model showed that other significant variables such as the age of the head of household, level of education, country size, number of oxen and access to improved seed far from the nearest market and family size a positive effect on the wheat produced was to be expected. The result of the double hurdle model indicated this; expect the distance to the nearest market and family size. Other important variables such as wheat country, number of oxen owned, educational level of household head, access to credit and age of household head initially had a positive effect on the decision to commercialize the hurdle. The intensity of wheat sales is positively influenced by the age of the head of household, the land allocated for wheat production and the number of oxen owned, while family size is negatively influenced in the second hurdle outcome. The study showed that the degree of commercialization of wheat production in the study area was very low. Therefore, strategies and policies to promote the commercialization of smallholders in wheat production should focus on providing rural infrastructure, strengthening adult education, improving agricultural advisory services, improving the provision of inputs, strengthening institutional arrangements, strengthening to improve commercialization and focus on generating excess wheat spend and increase sales.