Rural Infrastructure and Smallholders Commercialization: Analysis of Crop Input Market from Jimma Zone, South-West Ethiopia

Abstract

Commercial transformation of subsistence agriculture is vital towards transforming the sector, and the economy at large. Since agriculture accounts for the dominant role in terms of employment, foreign currency and source of staple food across developing countries, enhancing commercialization of smallholders’ agriculture is compelling policy choice among them. In this paper we examined the effect of rural infrastructure on smallholders’ crop input market participation with reference to Jimma zone. Censored Tobit approach was employed to model the relationships between degree of household market participation from input side and the provision of rural infrastructure. Distance to the nearest all-weather-road from the farm area was found important. Moreover, provision of rural credit services, communication services and rural market center have been significant contributors. Unfortunately, we estimated trivial coefficient for agricultural services in relation to rural commercialization. It seems surprising as various inadequacies in the provision of the services may be involved. The right approach for the future should consider efficiency as well as adequacy of the services being provided. It would be better to reach smallholders’ with necessary hard and soft infrastructures towards realizing multidimensional growth and transformational targets. Besides, interventions intensifying rural access to information are vital.