Abstract:
The transition of smallholders' farmers from subsistence to market-oriented agriculture is
meant to increase smallholder farmers’ income and overall rural economic progress. The
transition needs the assistance of rural development institutions such as multi-purpose
cooperatives (MPCs). The study was carried out to supplement the existing
insufficient empirical data in major crop-based studies on the factors that influence major
crop commercialization level and the impact of multipurpose cooperatives on smallholders'
level of crop commercialization and crop income. The assessment of smallholders’ crop
commercialization level and the determinants of smallholders’ major crop commercialization
level were the specific objectives of the study. Unlike previous studies on determinants of
agricultural commercialization, this one focused on major crops grown by smallholder
farmers in the area. A multistage sampling technique was employed. Purposive sampling
procedures were utilized to choose the two districts, whereas random sampling techniques
were used to choose the research kebele and sample household heads. Total of 212
household heads, of which 104 members and 108 non-member sample household heads were
selected as the study sample by using Cochran's sample size calculation formula. Both
primary and secondary data both quantitative and qualitative in nature were used for the
study. Descriptive statistics, the household commercialization index (HCI), Tobit, and the
Endogenous switching regression model were used for data analysis. Accordingly, the
average crop commercialization index was 44.04% for sample household heads, and it was
also computed for twelve crops. The Tobit model depicts that family size, total crop output
harvest, credit use, access to market information, and improved input use positively affect the
level of crop commercialization, whereas livestock holding and disease and pest occurrence
negatively affect the degree of crop commercialization. The impact evaluation result indicates
the significance difference between member and non member households in terms of both
outcome variables, the mean commercialization index for member household was 47.32 and
40.89 for non members. The mean crop income for member household was 39773.8 while it is
28453.7 for non members. The provision of loans, production inputs, and market knowledge
should be addressed in order to increase smallholder crop commercialization level.
