Influence of institutional factors on smallholder farmers’ marketing channel choices - Institutional Constraints to Small Farmer Development in Southern Africa - page 98

market penetration among smallholder farmers who find it difficult individually to gain
market access.
A positive and significant (0.031) relationship was found between informal marketing and
guidance from tradition and beliefs. These results are in contradiction with the a priori
expectations, where guidance from traditions and beliefs was expected to influence the
dependent variable negatively. The positive relationship between the variables may be
possibly explained by traditional wisdom and skills passed on in families and creation of
marketing links through traditions and beliefs. For instance, some households may prefer
to sell their produce (especially in cattle marketing) to people they are familiar with. On
the other hand, there is a negative and significant (0.007) relationship between formal
marketing and guidance from traditions and beliefs. The explanation to this relationship
may be that the marketing environment is ever changing (Kherallah and Kirsten, 2001);
therefore, if farmers are to be part of the formal markets, they have to be receptive to changes.
The goodness-of-fit test for a logistic regression model measures the suitability of the model
to a given data set. An adequate fit corresponds to a finding of non-significance for the tests
(Hill et al., 2001). The results for the goodness-of-fit test shown in Table 5.2 indicate that
the model fits the data well. Thus, the results for both Pearson and Deviance chi-squared
methods show that the multinomial logistic regression model is well suited to predict the
influence of independent variable on the dependent variable.
5.7.2 Summary of variables determining market participation choice
The previous section discussed the influence of the significant predictor variables on the
dependent variable. It can be concluded that the variables that have a higher probability
of shifting households from non-market participation to informal marketing are access
to market information, availability of good market infrastructure, existence of extensive
social capital, group participation and guidance from tradition. All of the five variables
positively influence informal marketing, implying that households are likely to shift from
non-marketing to informal market participation with an increase in any one of the variables.
The variables that are likely to shift households from non-market participation to formal
market participation include group participation, access to market information, expertise
on grades and standards, availability of contractual agreements and existence of extensive
social capital. Thus, an increase in each of the variables results in a higher probability
of households changing from not participating in produce marketing to formal market
participation. In addition, households willing to participate in the formal markets have to
be open to new marketing ideas rather than reliance on traditions.