Wheat commercialisation level among smallholder farmers in Northwestern Ethiopia

Abstract

To enhance food security and reduce poverty, Ethiopian agriculture needs to shift from subsistence production toward a more commercialized system that supports smallholder rural households. In Ethiopia, the commercialisation of staple crops such as wheat remains low despite its strong potential. This study aimed to evaluate the degree of wheat commercialisation among rural households in Northwestern Ethiopia and identify the major factors affecting it. A cross-sectional survey was conducted among 395 wheat-producing households selected using a multistage sampling technique. Primary data were collected using a structured questionnaire. The Household Commercialisation Index (HCI) was used to measure the degree of commercialisation, while a fractional logit regression model was employed to identify factors affecting wheat commercialisation. The findings revealed that the average wheat commercialisation index was 0.522, indicating that households sold about 52.2% of their wheat output. The results of the fractional logit model showed that irrigation access, education level, livestock ownership, landholding size, off-farm income, fertilizer use, all-weather road access, and participation in cluster farming positively and significantly influenced wheat commercialisation. In contrast, household size, exposure to production shocks, and access to credit negatively affected the level of commercialisation. Wheat commercialisation in Northwestern Ethiopia remains at a moderate level and is influenced by socioeconomic, institutional, production, and infrastructure-related factors. Strengthening irrigation development, improving rural road infrastructure, promoting cluster farming, expanding productive credit services, and enhancing risk management interventions are important policy measures for increasing wheat commercialisation among smallholder farmers.