Recent changes in markets and market relationships and lessons for the design of effective support programmes - Institutional Constraints to Small Farmer Development in Southern Africa - page 266

Zimbabwe culminated in severe shortages of fertilizer. Major nitrogen, phosphorous and
calcium fertilizers were imported and this affected small scale agricultural producers who
were cash-constrained. The large scale farmers equally faced challenges in accessing foreign
currency from the Reserve Bank of Zimbabwe for purposes of importing fertilizers from
outside Zimbabwe. This situation had a negative impact on the productivity and total
output from the large scale commercial sector with the result that even the formal output
markets did not escape the scourge of the FTLRP.

11.3.1 The model

Although the Zimbabwean FTLRP has affected almost all segments of the economy, it is
possible to isolate the impact on agriculture in general and specifically on the marketing
activities as they have been affected by this programme. On the basis of the foregoing
discussion, it is safe to say that with respect to the agricultural sector, an important effect
has been on market participation of the domestic producers, be they small-scale or large
commercial producers. It is therefore possible to obtain some policy-relevant insights by
modelling this variable and examining what factors have been central to the observed trends.

Economic theory predicts direct relationships between a vast array of socio-economic and
community variables and the willingness or otherwise of economic actors to participate
in the process of exchange. It is therefore possible to it a simple linear model of the form:

Y = f ( x 1 , x 2 , ..., x n ) (1)

where:
Y is the dependent variable representing some measure of market participation for the
particular enterprise, while the x' s are the explanatory variables.

Following convention, the model can be specified as:

Y = β 0 + β 1 X 1 + β 2 X 2 + β 3 X 3 + ... + β n X n + μ i (2)

where:
β 0 = the intercept or constant term;
β 1 , β 2 , β 3 , ..., β n = slope or regression coefficient;
X 1 , X 2 , X 3 , ..., X n = explanatory or independent variables;
μ i = error or disturbance term.

The model was estimated to identify factors affecting the participation of new farmers in
formal and informal market channels.