International Journal of Agricultural Economics

2021; 6(1): 12-20

http://www.sciencepublishinggroup.com/j/ijae
doi: 10.11648/j.ijae.20210601.12
ISSN: 2575-3851 (Print); ISSN: 2575-3843 (Online)

Market Participation of Smallholder Farmers and Food Crop

Productivity: Evidence from Burkina Faso
Sugrinoma Aristide Ouedraogo1, *, Pam Zahonogo2, Ramatu Mahama Al-Hassan3
1
Department of Economics and Management, University of Ouahigouya, Ouahigouya, Burkina Faso
2
Department of Economics and Management, Thomas Sankara University, Ouagadougou, Burkina Faso
3
Department of Agricultural Economics and Agribusiness, University of Ghana, Accra, Ghana

Email address:
*
Corresponding author

To cite this article:

Sugrinoma Aristide Ouedraogo, Pam Zahonogo, Ramatu Mahama Al-Hassan. Market Participation of Smallholder Farmers and Food Crop
Productivity: Evidence from Burkina Faso. International Journal of Agricultural Economics. Vol. 6, No. 1, 2021, pp. 12-20.
doi: 10.11648/j.ijae.20210601.12

Received: December 15, 2020; Accepted: December 29, 2020; Published: January 15, 2021

Abstract: Subsistence farming is frequently viewed as a low yielding and inefficient to ensure sustainable food security in
sub-Sahara Africa. Commercial agriculture induces profit maximization and promotes on-farm investment. However, for most
farmers in Burkina Faso, home consumption is the main objective of the agricultural production activities. Using survey data
collected over 1178 farm households, this paper analyses the effects of participation of smallholder farmers in the output market on
input use and food crop productivity in Burkina Faso. We estimate a Tobit model of the relationship between market participation
(measured by the proportion of crop sold) and fertilizer use. The results show that an increase in level of sale leads to an increase in
the level of fertilizer adoption. We also estimate a model of production using the instrumental variable regression approach to
correct for the endogeneity of the crop commercialization index. The findings indicate that agricultural commercialization has a
positive and significant effect on food crop productivity. This means that higher integration of farmers to markets increases their
incentives to adopt new technologies which results in yield growth. Therefore, the findings confirm the need for promoting market
participation of smallholders to induce technological change and productivity growth of agriculture in Africa.
Keywords: Commercial Agriculture, Market Participation, Technology Adoption, Productivity, Burkina Faso

through which agricultural commercialization can affect

1. Introduction productivity. First, orientation towards commercial farming
The prevalence of subsistence farming in developing enables farmers to acquire resources for food crop production
countries represents a key barrier for rural farm households to that otherwise will not be available. This is particularly frequent
sustainably adopt productivity enhancing technologies. Yet, in African countries where the failure of credit and input
based on comparative advantage theory, commercialization in markets makes the adoption of non-food cash crop farming the
agriculture is seen as having the potential to increase primary means for acquiring inputs which are also used in the
specialization at farm household level which can result in production of food crops. In addition, increased
gains in efficiency and farm households’ welfare [1]. commercialization in agriculture attracts more investment that
Furthermore, following the literature on international trade, would benefit all farmers in the region regardless of whether
the welfare gained through market participation is not only they have commercial objectives or not. This is because
static as stated in the comparative advantage theory, but may commercial crop producers tend to adopt productive
also result from a dynamic technological change due to technologies, thereby attracting investment in agricultural
increased competition and adoption and better use of innovations. Thus, Govereh and Jayne [3] find a strong
technology [2]. evidence of positive effect of cash crop production on food crop
The empirical literature generally identifies two channels productivity in Zimbabwe. Govereh, Jayne and Nyoro [4] also
note that farmers who are engaged in commercial agriculture
 International Journal of Agricultural Economics 2021; 6(1): 12-20 13

adopt more productive technologies and achieve higher level of 2. Productivity of Smallholder’
productivity in Kenya than those engaged only in subsistence
farming. Numerous empirical studies that focused on a Agriculture in Burkina Faso
bi-directional relationship between agricultural productivity Agriculture is fundamental in the livelihood of rural
and farm productivity have also found a positive effect of households in Burkina Faso and represents a key sector that
commercialization on productivity [5–7]. can strongly stimulate a pro-poor economic growth. The
In Burkina Faso, agricultural productivity has always been sector contributes about 35% to the nation’s GDP and employs
subject to high fluctuation depending on climate conditions over 70% of economically active population. Being mainly
which is exacerbated by farmers’ limited access to markets rain fed, agricultural production is highly dependent on
and improved technologies. However, improving productivity climate conditions. Cereal staple crops, such as sorghum,
through sustainable adoption of technology in the context of millet and maize represent the dominant crops produced in the
subsistence farming is challenging. As argued by Binswanger country and occupy on average, about 65% of arable land [9].
[8], both agricultural commercialization and technological The average annual growth of cereal production was about 3%
change are closely related in such a way that while access to between 2001 and 2010 led by maize which experienced a
improved technologies is required to increase productivity and steady average annual growth of 10.17%. Sorghum and millet,
market surplus, the profitability of adopting productivity on the other hand, experienced the lowest performance with an
enhancing technologies is also linked to the accessibility of average growth of 1.63% 9. Cotton represents the major crops
farm households to markets and their level of produced for market but occupies only 11% of cultivated lands.
commercialization. Thus, the low modern input use and low As illustrated in Figure 1, cereal yield in Burkina Faso has
productivity in agricultural sector in Burkina Faso can be been very low and characterized by high volatility compared
linked to the persistence and pervasiveness of subsistence to average yield of cereal in Sub Sahara Africa.
farming among smallholder farmers. Empirical investigation Production growth has been more related to land expansion
into the link between agricultural commercialization and than to productivity gains. In fact, farm households in Burkina
productivity is then required to guide policy making to Faso use 10 kg/ha of fertilizer on average, which is lower than
sustainably raise agricultural productivity and farmers’ the average of 15-20 kg/ha used in Sub-Saharan Africa and
income. The objective of this paper is therefore to analyze the 70–150 kg/ha in the Caribbean and South-East Asian
effects of commercialization of smallholders in Burkina Faso countries. However, due to soil degradation, population
on their input use and food crop productivity. pressure and increase in opportunity costs of labor, production
The rest of paper is organized as follow: The next section growth based on land expansion is becoming a less sustainable
presents an overview of smallholder agriculture in Burkina option and adoption of productivity enhancing technology is
Faso. The third section is devoted to empirical methods and required to increase household agricultural production. This
data source. The fourth section presents and discusses the requires more integration of farmers into agricultural input
findings while the fifth section provides the conclusion and and output markets.
policy implications of the study.
14001200
Cereal yield
1000 800
600

1990 1995 2000 2005 2010 2015

Year

Burkina Faso Sub-Saharan Africa

Source: Constructed by the Author, based on FAO dataset (http://fao.org/faostat/en/#data)

Figure 1. Trend of cereal yield (kg/ha) in Burkina Faso and in Sub-Sahara Africa, 1990-2015.
14 Sugrinoma Aristide Ouedraogo et al.: Market Participation of Smallholder Farmers and Food
Crop Productivity: Evidence from Burkina Faso

3. Empirical Methods commercialization can be expressed as follows:

∑
= ∗ 100
3.1. Concept of Agricultural Commercialization

∑
Globally, agricultural commercialization refers to increased (1)
engagement of farmers with markets in terms of crops (cash
and food crops) and livestock production. On the input side,
agricultural commercialization refers to using markets to Where denotes the market price of the crop , and
obtain modern inputs, technical advice, as well as production represent respectively the quantities sold and harvested of
factors such as hired labor, land and capital investment. This crop by household .
means that commercialization is a process which involves 3.2. Agricultural Commercialization and Fertilizer Use
transformation from production for household subsistence to
production for markets implying an increased integration of 3.2.1. Tobit Regression Model
smallholder producers into regional, national and even the Following Govereh and Jayne [3] and Strasberg et al. [12],
world market economy. As argued by Pingali [10], aside to analyze the effect of farm households’ market participation
participation in output market, agricultural commercialization on fertilizer use, the model of fertilizer use is expressed as
refers to the extent to which household production choice and follows:
= + + +
input use are made based on the principle of profit
maximization. This means that agricultural commercialization (2)
can be analyzed in terms of proportion of output brought to Where is the quantity of fertilizer (in kilogram) used
market or inputs purchased from market. Jayne, Haggblade, by farm household per hectare of land under cultivation;
Minot and Rashid [11] defined agricultural commercialization represents the overall Crop Commercialization Index of
as “a virtuous cycle in which farmers intensify their use of farm household; and denote the vectors of parameters
productivity-enhancing technologies on their farms, achieve to be estimated and the error term. is a vector of other
greater output per unit of land and labor, produce greater farm variables likely to influence the use of fertilizer by farm
surplus (or transition from deficit to surplus producers), households.
expand their participation in markets, and ultimately raise Data on fertilizer use are censored because several farm
their incomes and living standards”. Thus, agricultural households in the sample do not use fertilizer in their
commercialization, also referred to as intensity of production system. Thus, it can be distinguished farm
smallholders’ market participation, can be quantitatively households with positive quantity of fertilizer use with
measured by the proportion of crop sale by farmers with households that did not use fertilizer and present zero values.
respect to crop produced. This paper uses this latter definition Therefore, a censored model is more appropriate to estimate
but focuses only on the intensity of farmers’ participation in the parameters of the equation. A Tobit regression method
rain-fed agricultural output markets as a measure of level of with zero as a lower bound is then applied in order to take into
crop commercialization. Therefore, crop commercialization account this issue.
index as measure of farm household level of agricultural
Table 1. Definition of variables and expected signs of model of fertilizer used.

Explanatory variables Measurement Expected signs

Crop commercialization index Percentage (%) +
Value of transportation asset 10,000 FCFA +
Agricultural credit received 10,000 FCFA +
Nonfarm income per adult 10,000 FCFA +/-
Distance to nearest markets Kilometer -
Existence of all-weather road Binary (1=yes) +
Household owns a communication asset Binary (1=yes) +
Age of household head Years +/-
Education level of household No education, Primary or Secondary +
Climate zonal dummy Binary (1=South-Sudan zone and 0 if not) +

expected to yield positive signs on the intensity of fertilizer

3.2.2. Explanatory Variables in the Model use. Accessibility to markets is also hypothesized to influence
Aside the variable of crop commercialization index, farm households’ access to fertilizer. Thus, increase in
numerous variables are likely to influence the adoption of distance to nearest market may reduce the intensity of
fertilizer. It is often argued that liquidity constraint represents fertilizer use while having transportation assets and existence
one of the key factors of low use of improved technologies in of all-weather roads would have a reverse effect. Thus, the
developing countries. Therefore, the amount of credit received total value of households’ transportation assets evaluated by
for agricultural activities and nonfarm income earned are the household head at the time of survey is included as an
included as explanatory variables. These variables are explanatory variable. Furthermore, holding communication
 International Journal of Agricultural Economics 2021; 6(1): 12-20 15

equipment may be a source of access to information on best produced is converted into sorghum equivalent (SE) according
agricultural practices and may influence the level fertilizer use. to the following formula:

2
Therefore, a dummy variable taking the value 1 if household

1 = 23 ∗ 45
head owns a communication asset (radio, TV, or phone) and 0
if not is included. Finally, age and education level of (5)
household head are included to control for the influence of

45 denotes the quantity of crop (in kg), 2

household characteristics on intensity of fertilizer use. All the

the price of crop and 23 the price of sorghum at village

explanatory variables included in the model, their unit of Where
measurement and expected signs are presented in Table 1.
level. Therefore, food crop yield for each household is
3.3. Agricultural Commercialization and Farm Productivity computed as:
64 7ℎ9: + ∑ 1 %?
= ;<=>
3.3.1. Specification of Productivity Model
The general formula of the productivity model to be (6)

Where 64 7ℎ9: indicates the quantity in kilograms of

estimated can be expressed as follows:
= , , "; $% + & (3) sorghum produced by the farmer and ;<=> the total land size
in hectare devoted to the production of food crops.
Where represents a vector of production factors
including household dependency ratio, farm size per worker, 3.3.2. Estimation Strategy: Instrumental Variable (IV)
livestock ownership and the quantity of fertilizer used per Approach
hectare and a set of other variables that are likely to influence Previous empirical studies have stressed that household
crop yield. These variables include age, gender and education crop commercialization index is likely to be endogenous in
level of household head. The variable ‘education’ used in this agricultural productivity model 5. The problem of endogeneity
regression is categorized into three levels: No formal is generally related to the omission of relevant explanatory
education (used as reference), primary level of education and variables, measurement errors or problem of simultaneity
finally secondary level. Thus, no education is used as basis of between the dependent variable and explanatory variables.

results. " represents a vector of dummy variables including

comparison and therefore does not appear in the estimation The latter seems to particularly characterize the endogeneity
issue in this model because some variables such as household
participation or not in nonfarm activities by household head, asset endowment and agro-climatic condition may affect both
adoption of soil conservation techniques and location productivity and the level of household commercialization. As
characteristics (agro-climatic condition). In Burkina Faso, argued by [2], a household’s decision to use modern inputs to
several farm households are facing high degradation of land
increase productivity and the quantity of market supply
due to severe climate conditions particularly drought. To
depend both on the opportunity of profit offered by the
control for the effects of these shocks on production, some
markets but also on the level of household’s assets. Thus, this
techniques are adopted to retain water on the farms and to
may cause a problem of simultaneity and failing to correct it
reduce soil erosion1. Adoption of these techniques is expected
to yield direct positive effect on the level of productivity. Thus, would lead to inconsistent estimates of the impact of
the productivity model is specified as follow: commercial farming on food crop productivity. To solve this

log %= $ +$ + ∑+* , $* log-.* / + 0" + & (4)

issue of endogeneity, this model will be estimated using the
instrumental variable approach as adopted by Govereh and
Jayne [3] and Govereh, Jayne and Nyoro [4].

of the household and $ and 0 are vectors of unknown

Where represents the crop commercialization index The choice of instrumental variables

parameters to be estimated and & the error terms.

The correction of endogeneity bias by instrumental variable
regression methods, requires finding instruments that affect
Measurement of food crop productivity productivity only indirectly through their effect on farm
The dependent variable represents the yield per hectare households’ market participation. Rios, Shively and Masters
of food crops. Food crops that are used in the computation of [5], in a similar work used ethnic group that the household
yield include maize, sorghum and millet which represent the belong to, ownership of transportation equipment, and road
most important staple crops produced by smallholder farmers accessibility as instrumental variables. The assumption is that
in Burkina Faso. In numerous studies, the value of crops per these variables facilitate crop sale because belonging to the
hectare is used as measure of yield. This study follows Carter same tribe facilitates cooperation and communication while
[13] and adopts instead a weighted measure of output to
owning transportation assets and the quality of roads reduce
compute farm yield per hectare in sorghum equivalent. Based
marginal cost of movement. In this study, the selected
on the market price of the different crops, maize and millet are
instruments include distance to nearest market, population in
converted into sorghum equivalent. The quantity of crop
the village, household’s ownership of communication
equipment and household’s market orientation index. The
1 The common techniques used and identified in the survey include “Zaï”,
Diguettes or cordon pierreux, Demi-Lune, Haies vives. The variable, adoption of
distance to nearest market increases transaction costs and may
soil conservation techniques takes a value one if the farmer adopts any one of these affect the intensity of the household’s crop supply. Thus,
techniques.
16 Sugrinoma Aristide Ouedraogo et al.: Market Participation of Smallholder Farmers and Food
Crop Productivity: Evidence from Burkina Faso

households that are closer to market are likely to bear low costs model described.
and thus have more incentive to increase their market Test of endogeneity of household level of crop
participation. In addition, ownership of communication assets commercialization
and the number of inhabitants in the village may greatly The issue of choice between OLS and IV regression is
influence the intensity of market supply but may not have a generally discussed using Durbin-Wu-Hausman (DWH) tests.
direct impact on productivity. These tests basically consist of estimating the model by OLS
Finally, the last instrument used is a computed index of and IV and comparing the vector of coefficients obtained
market orientation of the various crops. In fact, it is evident through these regressions. The objective is to test whether a
that there is some difference in the level of tradability of crops variable presumed to be endogenous could be treated as
produced by farmers. For instance, cotton is more highly exogenous or not. If the assumed endogenous regressors are
marketable than cereals. Among cereal crops, maize is more revealed as exogenous by the test, then the OLS estimator will
market oriented than sorghum and millet. Thus, difference in be more efficient and there will be no need to adopt IV
households’ level of commercialization may depend on the regression approach. Hausman tests of endogeneity is then
extent to which resources such as land, labor and capital are performed to check if the intensity of household level of
allocated to the commodities that are highly market oriented. commercialization is exogenous.
However, this cropping pattern per se does not influence Test of Validity and Relevance of Instruments
cereal yield but would necessarily influence the intensity of The validity and relevance of instruments used are crucial
households’ market participation. For instance, allocation of for the quality of the estimation. Valid instrumental variables

instruments E (distance to nearest market, population in the

more land to cotton, which is highly market oriented will must satisfy two requirements. Firstly, the vector of
necessarily result in the increase in a household’s level of
commercialization. However, this allocation of resource does village, household’s ownership of communication equipment
not have a direct effect on the yield of food crop. Therefore, and household’s market orientation index) must be strongly

F4G ; E%% ≠ 0. This means that E must be statistically

following Gebremedhin and Jaleta [14], an index of household correlated with the endogenous variables, that is
market orientation is computed and will be used as one of the
and E . Secondly, the instruments
instruments for crop commercialization index. For each crop, different from zero in the first stage regression of on the

must be orthogonal to the error terms & in the productivity

a crop-specific commercialization index is first estimated as exogenous variables

model in Equation (4), that is 1 E&% = 0 . The first

the ratio of a given crop sold to total quantity of this crop
produced by households. Let denote the crop-specific
requirement is called the relevance condition and the second is
commercialization index:
∑@
the exogeneity or validity condition of instruments.

= *
∑@
The F-test of excluded instruments and KP LM statistics of
*
*
(7) weak identification test are used to assess the relevance of the
instruments used. Concerning the second condition of
Where * and * represent respectively the quantity of
independence between error terms and the instruments, the

crop A harvested and sold by the household . * will tend

Hansen’s J statistics of over identification of instruments is

to one if the crop A is essentially produced for market while

used to check this requirement. The null hypothesis states that
the model is over-identified, meaning that it contains at least
for those mainly produced for consumption * will have as many valid instruments as the number of endogenous
values that are closer to zero. A more market oriented farm variables. Therefore, failing to reject this hypothesis means
household is then likely to allocate a significant share of its that the instruments used are valid.
resources to the more commercialized crops in the country.
Therefore, using crop-specific commercialization index, 3.4. Data Source and Descriptive Statistics
market orientation index is here constructed in terms of
household land allocation pattern weighted by the Data used in this study come from a survey undertaken in
commercialization index of each crop as follows: rural Burkina Faso in 2011 by the Department of Economics

∑+* * D*
of University Thomas Sankara on a sample of 1178 farm
BC = D
households selected across the country. Two-stage and
(8)
randomized sampling approaches were used to select the

BC represents household market orientation index, D*

sample to be surveyed. In the first stage, villages were selected

denotes the quantity of land devoted to crop A and D the total

across the 13 regions according to the representativeness of
each regions in the country making a total of 270 villages.
land size of household farms. This index refers to the extent to Within each village, households were stratified according to
which households’ resource allocation (especially land) is their ownership and use of animal traction and randomly
towards more marketed crops. The higher ratio of land the selected within each stratum. The final total sample size was
farmer devotes to the more tradable crops, the more market 1178 households, distributed across 270 villages of the 13
oriented is the household. regions of the country. Further description of the data can be
Various tests will be conducted to assess the validity and found in Ouedraogo et al. [15].
relevance of these instruments that will be used to estimate the The descriptive statistics show that the average level of
 International Journal of Agricultural Economics 2021; 6(1): 12-20 17

commercialization is 16.97%. This means the production is to invest in farm production. This finding corroborates the
predominantly oriented toward home consumption. In addition, point of Barrett [2] and Binswanger [8] who argue that there
the average farm size is estimated at 1.15 ha meaning that the exists a positive relationship between agricultural
majority are smallholder farmers. However, many are involved commercialization and technological change, sustaining the
in non-farm income and gain on average 74 000 FCFA per year. importance of promoting farm households’ commercial
The distance to the nearest market is about 7.18 km. Even if this orientation for sustainable technological change. Similar
distance seems not to be high, some farmers may still results are also found by Strasberg et al. [12] on food
experience some difficulties in accessing to markets due to the production among smallholders in Kenya.
poor road conditions or the lack of means of transportation. The results show also that the value of transportation assets
affects positively and significantly the quantity of fertilizer used
Table 2. Descriptive statistics of the variables. by farmers as well as the existence of good roads. Thus, the
Variables Mean Standard Deviation quantity of fertilizer used is higher among farm households
Crop commercialization index 16.97 22.87 located in villages that are accessible compared to those located
Household size 8.805 4.024 in less accessible areas. In addition, owning valuable
Dependency ratio (dependent/active) 1.563 0.846
transportation assets can help mitigate the negative effect of
Farm size per worker (ha/adult) 1.158 0.584
Fertilizer use (kg/ha) 11.24 34.50 remoteness by facilitating households’ accessibility to markets.
Per capita food expenditure (1000 FCFA) 10.99 0.018 This means that by reducing the cost of access to fertilizer,
Food crop yield (kg/ha) 540.59 9.901 improved market access affects indirectly productivity through
Per capita non-farm income (1000 FCFA) 74.54 15.27 its positive effect on input use. This is similar to the findings of
Distance to nearest market (km) 7.186 6.235
Damania et al. [16] who showed for the case of Nigeria that
Cereal price (FCFA/kg) 131.7 18.41
Observations 1178 improved market access (i.e. decreasing transport costs)
increases the production of crops using high input leading to
increase in the intensity of input use. Alene et al. [17] also
4. Results and discussion found that among smallholder maize farmers in Kenya, the
4.1. Effect of Agricultural Commercialization on Fertilizer likelihood of fertilizer demand increases with closeness to
Use market and ownership of transportation equipment.
Furthermore, the effect of ownership of communication
Table 2 reports the Tobit regression results of the effect of equipment on fertilizer use is positive and significant. This
agricultural commercialization on fertilizer used by suggests that households that own communication equipment
smallholders in rural Burkina Faso. The findings show that, at would be better informed about the price and accessibility of
1% level of significance, an increase in the level of modern inputs and therefore more likely to adopt inputs
agricultural commercialization increases the quantity of intensively. The amount of credit received by farm households
fertilizer use. Therefore, agricultural commercialization has a positive effect on fertilizer use, at 1% level of significance.
represents a pathway to improved farm performance through Lack of credit access is frequently identified in the literature as
technological change. Indeed, commercialization directly a major constraint of low adoption of new technology among
increases farm households’ income and, therefore, their ability smallholder farmers [18, 19].
Table 3. Results of Tobit regression of effect of agricultural commercialization on intensity of fertilizer Used.

Dependent variable: fertilizer used (kg/ha)

VARIABLES Coefficients Robust Std. err P-Value
Crop commercialization index 1.021*** 0.157 0.000
Agricultural credit received 1.475*** 0.431 0.001
Nonfarm income per adult -0.002 0.013 0.902
Value of transportation assets 0.326*** 0.096 0.001
Distance to nearest market -0.638 0.432 0.141
Existence of all-weather road 16.983*** 5.109 0.001
Own Communication assets (1=yes) 18.001** 7.351 0.014
Age of household head (HH) -0.281** 0.143 0.049
Education level of HH (ref: None)
Primary -7.538 6.615 0.255
Secondary 2.273 10.582 0.830
Climatic zone (1=South-Sudan) 11.713** 5.093 0.022
Constant -65.804*** 16.567 0.000
Observations 1,178
Log pseudo likelihood -2485.414
F (11, 1167) 8.97
Prob > F 0.000
Sigma 57.448*** 11.604

Note: (∗), (∗∗) and (∗∗∗) indicate the levels of significance of the corresponding coefficients at 10%, 5% and 1% respectively. Robust Standard Errors are
adjusted for the 217 village clusters.
18 Sugrinoma Aristide Ouedraogo et al.: Market Participation of Smallholder Farmers and Food
Crop Productivity: Evidence from Burkina Faso

In the case of Burkina Faso, access to credit remains of of OLS regression in the first column indicate a positive effect
crucial importance to purchase fertilizer, since there are of market participation on food crop productivity, significant
numerous constraints for smallholders to obtain subsidized at 1%. However, these results may be biased because the
fertilizer. In addition, even where the subsidized fertilizer intensity of households’ market participation measured by
exists, smallholders in many cases are still unable to afford crop commercialization index is potentially endogenous in
because of liquidity constraints. Finally, household this regression and this is confirmed by Hausman test of
characteristics such as age of household head significantly endogeneity at 1% level of significance. To solve the issue of
affect the quantity of fertilizer used. Thus, the older the inconsistency of the estimate due to endogeneity, instrumental
household head, the lower the quantity of fertilizer is used. variable (IV) regression approach is then adopted and the
This suggests that households headed by the aged are less estimation results are reported in the second column (Table 3).
innovative than those headed by the youth. In the next The tests performed and reported in Table 4 assess the
sub-section, the results and discussion on the findings on the relevance and the validity of instruments used. The F-test of
relationship between agricultural commercialization and yield excluded instruments is greater than 10 and significant at 1%.
of food crops are presented. Therefore, the null hypothesis that the excluded instruments
used are not correlated with the endogenous variable is
4.2. Effect of Agricultural Commercialization on Food Crop rejected, meaning that the instruments used are relevant. In
Productivity addition, the KP LM statistic rejects the hypothesis of weak
The results of the effect of agricultural commercialization identification of instruments. Thus, the instruments used have
on food crop productivity are reported in Table 3. The results a strong explanatory power over the endogenous variable.
Table 4. Regression Results of Effect of Agricultural Commercialization on Food Crop Yield.

Dep. variable: Log of staple yield (kg/ha) OLS regression (1) IV regression (2)
VARIABLES Coefficients Robust SE Coefficients Robust SE
Crop commercialization Index 0.0018** 0.001 0.0065*** 0.001
Log of Fertilizer use per hectare (kg) 0.1028*** 0.012 0.0799*** 0.013
Log of Farm size per adult (ha) -0.8251*** 0.061 -0.8178*** 0.062
Log of Livestock ownership (TLU) 0.1518*** 0.023 0.1355*** 0.024
Nonfarm income per adult 0.0004 0.0001 0.0003 0.0002
Dependency ratio 0.1106*** 0.020 0.1111*** 0.020
Adoption of conservation techniques (1=yes) 0.0623* 0.036 0.0829** 0.036
Age of Head of Household (HH) -0.0009 0.001 -0.0003 0.001
Gender of Head of Household (1=man) -0.0264 0.076 -0.0265 0.075
Education (reference: None)
Highest education level of HH (1=Primary) 0.1203** 0.050 0.0903* 0.051
Highest education level of HH (1=Secondary) 0.0750 0.109 0.0426 0.112
South-Sudan climate zone (1=yes) 0.1353*** 0.032 0.1040*** 0.034
Constant 6.1164*** 0.104 6.0448*** 0.104
Observations 1,178 1,178
F (12, 1165) 37.71 39.44
Prob>F 0.000 0.000
R-squared 0.249 0.222
Tests of Validity and relevance of instruments used in the IV regression
Test stat P-Value
Relevance test of excluded instruments:
Sanderson-Windmeijer F test, F (4, 1145) 176.41 0.000
Weak identification test
Kleibergen-Paap rk LM statistic 183.11 0.000
Cragg-Donald Wald F statistic 215.27
Over identifying tests: Hansen J stat 2.378 0.497
Hausman tests of endogeneity: Score chi2 (1) 27.239 0.000

Note: (∗), (∗∗) and (∗∗∗) indicate the levels of significance of the corresponding coefficients at 10%, 5% and 1% respectively.

Furthermore, the F statistic of Cragg-Donald Wald which is instrument cannot be rejected which means that the
significant at 5% according to Stock-Yogo’s table suggests instruments used are not correlated with the error terms of the
that at least 95% of OLS bias is corrected by the IV regression structural model of productivity.
which is highly acceptable. Finally, for the instruments to be Therefore, the instruments used in the regression are valid.
valid, they must be orthogonal to the error terms of As the model passes all the tests of validity and relevance of
productivity model. Thus, the Hansen J test of instruments, the adoption of IV regression provides more
over-identification is performed to check this requirement. robust estimates of the effect of market participation on food
The P-value of the J statistic is equal to 49.7%, greater than crop productivity than the OLS estimation. Finally, robust
10%. Therefore, the null hypothesis of over-identification of standard errors are reported to correct the existence of possible
 International Journal of Agricultural Economics 2021; 6(1): 12-20 19

heteroskedasticity in the model. yield. The results indicate that the intensity of fertilizer use per
The results of IV estimation show a positive effect of hectare increases with the level of smallholders’ agricultural
commercialization on food crop productivity, significant at 1% commercialization. Other variables that positively influence
level. Moreover, the magnitude of the estimate is higher in this farm household access to fertilizer include the value of
regression than in the OLS regression. This means that failing transportation assets, the amount of credit received for farm
to control for the endogeneity underestimates the parameters of activities, the existence of all-weather road that link
commercialization effect. In fact, an increase of one unit in the households to urban areas and the household head ownership
intensity of farm households’ level of crop commercialization of communication assets. Moreover, estimating a productivity
improves food crop productivity by 0.65%. Similar results were function using instrumental variables regression approach, the
found by Govereh and Jayne [3] in Northern Zimbabwe, results showed that farm households’ crop commercialization
Bekele et al. [20] in Ethiopia and Ochieng et al. [7] in a study index has a significant and positive effect on crop yield.
on Central Africa (Rwanda and DRC). Therefore, promoting agricultural commercialization will
This suggests that one of the benefits of commercial lead to a positive technological change in agricultural sector
orientation of smallholders is its great potential to transform and an increase in food crop productivity. To promote
agricultural sector and raise yield of food crops. The finding structural transformation of agricultural sector and increase
also suggests that increase in agricultural commercialization farm productivity, public policy should provide incentives to
does not necessarily compete with food crop productivity but increase smallholders’ market integration. Thus, enhancing
rather induces an important technological change and increase farmers access to credit and transportation facilities can
in farm yield. This is also reinforced by the positive and enhance access to markets, input use and productivity.
significant effect of fertilizer used by farmers on crop yield The structure of agricultural markets in Africa has
Other factors that influence the level of food crop yield important implications on farmers’ investment and crop
include the ownership of livestock, adoption of land choice. Well-functioning markets can stabilize output price
conservation techniques, and the agro-climatic conditions in and improve farmers’ income. Thus, increasing farmers’
which farm households are located. The adoption of good participation in markets represents a great avenue to achieving
practices such as soil conservation techniques significantly these goals. Thus, policy makers in Africa need to provide
increases the yield of food crops. Land degradation due to support to overcome agricultural markets imperfection.
population pressure and climate change is frequently cited as a Improving rural infrastructure can improve farmers’
key challenge of agricultural productivity growth in many accessibility to markets and increase their incentive to invest
semi-arid African countries. In Burkina Faso, most farmland in agriculture.
is becoming less fertile and farm households are often
constrained to adopt land conservation and restoration
practices. Our results show a positive and significant effect of References
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