Factors Influencing Farmer Participation in Auction Tobacco Marketing in Wedza District, Zimbabwe

Abstract

The purpose of this study was to assess factors that influence farmer participation in tobacco auction markets in Wedza district using data from a random sample of 193 farmers who were interviewed using telephone interviews due to the Covid pandemic. A Probit regression model was used to analyze the data to identify the factors affecting auction tobacco market participation. The estimated coefficients (values), the standard errors and the marginal effects of the independent variables in the model were derived. Findings from the study pointed out that the contract and auction markets are both active in the study area though contract growers dominated as compared to auction growers with a ratio of 70: 30. Factors found to significantly impact participation of growers in auction are gender, household size and employment. Also, access to United States Dollar payments, hectares and distance to floors have an impact on grower’s participation in the auction markets. A grower’s ability to sell with all markets, the overall costs of selling in a market and the number of buyers participating in a market are the other factors identified to impact grower participation in auction tobacco markets. Variables that did not to affect auction participation significantly are farming experience, non-agriculture income, number of extension visits and ownership of transport. The key conclusion from study is that utility deriving through cheaper avenues drives farmer participation in auction markets and the key recommendation for auction market participation is through reduction of cost related in market participation. Grower participation in auction markets is sensitive to the grower yielding maximum benefits and very minimal losses which policy makers should remember when coming up with policy for the farmers in the tobacco sector.