Determinants of commercialization and the choice of market outlets among small-scale groundnut framers in Capricorn District, Limpopo Province, South Africa

Abstract

Groundnut is one of the most important agricultural crops in South Africa. It provides economic and health benefits to the society. Its production, processing and marketing provides employment to several individuals in South Africa. The objectives of the study were: to identify and describe the socio-economic characteristics of small-scale groundnut farmers, analyse the determinants of commercialization and the factors influencing the choice of market outlet in Capricorn district. The study was conducted in three villages (Ga-Maja, Ga-Mphahlele and Moletjie). Purposive sampling technique was used to select 110 small-scale groundnut farmers. Semi-structured questionnaires were used to collect data from the small-scale groundnut farmers through face-to-face interviews. The data was analysed using the descriptive statistic, Logistic Regression and Multinomial Logit model. SPSS and STATA software were used to process the data. The results indicated that quantity of groundnut produced, occupation, marital status, household size, land size, vehicle ownership, access to credit and extension contact significantly influenced the commercialization and the choice of market outlet of the small-scale groundnut farmers in the study area. The study recommends that the government in collaboration with universities and agricultural colleges as well as the private sector initiate an extension programme that will focus on small-scale farmers, rather than on emerging and commercial farmers only. This will enable the small-scale famers to get access to information on the market, production, price and other agricultural related activities. It further recommends that the Department of Agriculture visit areas where farmers produce the same type of crops and offer them incentives to pool their resources and market their produce collectively. This will improve the bargaining position of the small-scale farmers as well as the means of lowering transaction costs.