Technology and market access via contracts and cooperatives for smallholders: Evidence from honey producers in Ethiopia

Abstract

Smallholders in developing countries are facing high transaction costs and difficulties in accessing technology to improve productivity. This paper aims at exploring how technology acquisition and market access have driven smallholder honey farmers to contract participation or cooperative engagement by taking evidence from a sample of 412 honey producers in northern Ethiopia. A multinomial logistic regression model was employed. Both the descriptive and the empirical model suggest that market access, credit and technology constraint, an institutional void, household wealth and farmers’ networks are the driving forces for smallholders’ participation in contract and cooperative engagements. In addition, high value products are calling for contracts. Creation of access to credit, technology and market linkages to smallholders appear to be areas of intervention to upgrade the honey value chain and to mitigate high transaction costs and technology constraints.