WHAT DRIVES THE MARKET PARTICIPATION DYNAMICS OF SMALL-SCALE RICE FARMERS IN SOUTHEAST NIGERIA?

Abstract

Smallholders’ difficulty in gaining a significant market share can be attributed to poor market orientation and participation decisions. This highlights the importance of understanding market dynamics, including key push and pull factors, which are essential for successful commercialization, the advancement of rural livelihoods, and the strengthening of the local economy. This study explored the market participation dynamics of rice farming households, estimated the market participation index, and identified the key drivers influencing rice market participation.  A mixed-methods design was adopted in the study. Primary data were collected from 288 randomly selected smallholder rice farmers using a semi-structured questionnaire, supplemented by a focus group discussion. The collected data were analyzed using a market participation index and Heckman's two-stage model. The market participation result of 73% indicated that the farmers were semi-commercialized. Agricultural extension access (1.543), farm size (2.450), rice yield (0.005), market orientation (8.074), the cost of rice seed (-0.001), and distance to market (-0.074) influenced the decision to engage in the market. Similarly, the intensity of market participation was influenced positively by education (2.359), access to extension (30.378), rice yield (0.759), farm income (0.002), and market orientation (86204.8), while the price of output (-0.006) and ownership of transport facilities (39.551) had a negative effect. Access to agricultural extension services ranks among the critical factors driving smallholder rice commercialization in Nigeria. Therefore, to accelerate smallholder commercialization, boost household welfare, and develop the rural economy, there is an urgent need to strengthen agricultural extension services through the integration of market-oriented training, which will enhance the capacity of small-scale farmers to make informed, timely, and strategic market decisions.