Determinants of smallholder maize farmers’ innovative market channel choices: chief Albert Luthuli local municipality.

Abstract

In sub-Saharan Africa (SSA), maize is a vital crop that provides essential nutrients, supports smallholder maize farmers (SHMFs) in their efforts to overcome poverty, and contributes to enhanced food security. However, yield remains low due to socio-economic limitations and inadequate Agricultural Extension Services (AES). This restricts SHMFs' access to essential market information, thereby diminishing their ability to engage successfully in innovative markets and achieve sustainable production. Therefore, the aim of the study was to investigate the determinants of innovative market channel choices among 272 registered SHMFs, using a multistage sampling process and structured questionnaires. The study was conducted in Chief Albert Luthuli Local Municipality, Gert Sibande District, Mpumalanga, South Africa. Descriptive statistics, Multinomial Logistic Regression (MNL), and Propensity Score Matching (PSM) were used to analyse demographic factors and constraints, innovative market channels, and the effects of AES, using Statistics and Data (STATA). Furthermore, the study adopted the Random Utility Maximisation (RUM) theory as a fundamental framework for choice-making. The smallholder maize production in Chief Albert Luthuli Local Municipality is primarily dominated by SHMFs aged 35 to 55 years. The results further show that women are represented at 51.09%, resulting in a slightly balanced gender distribution. The distribution of land ownership indicates that communal land is predominantly used by sampled SHMFs, accounting for 43.01%. The farm size distribution shows that most of the sampled respondents produce maize on areas of 3 to 10 hectares, accounting for 57.72%. The study's key findings on age distribution indicate that 51.09% of sampled SHMFs are women, 18.8% are youth, and 57.7% have 3-10 years of farm experience. This underlines the importance of gender roles in decision-making. Contract market channels are used by 34.9% (n = 95), while 3.7% (n = 10) do not sell. These results are followed by collective market channels at 32.4% (n = 88), the least prevalent among e-commerce market channels at 25.4% (n = 69). Technological advancements are crucial in expanding rural economic development. Gender, age and educational level were statistically significant across the three innovative market channels. Gender was significant for contract, collective, and e-commerce market channels at p = 0.069, 0.094, and 0.031, respectively; age at p = 0.022, 0.011, and 0.018, respectively; and education at p = 0.033, 0.024, and 0.026, respectively. Receiving AES significantly influences innovative market choices, with farm experience (P = 0.049), land ownership (P = 0.037), and hired farm implements (P = 0.055) showing statistical significance at the 5% level in probit regression analyses. Kernel, nearest neighbour, and radius matching methods were used to estimate the Average Treatment Effect on the Treated (ATT). The treatment group (n = 168) exhibited higher propensity scores (mean = 0.85, Standard Deviation (SD) = 0.20), while the control group (n = 104) had lower, more variable scores (mean = 0.24, SD = 0.29), indicating differing likelihoods of receiving AES based on socioeconomic characteristics. Radius matching revealed a statistically significant ATT of 4.65 (SE = 1.79, T = 2.61), indicating that AES influence the choice of innovative market channels. The majority of the participants reported facing obstacles in implementing innovative marketing channels, as revealed through the Sustainable Livelihood Framework (SLF) five assets: human, social, financial, natural and physical. The highest minimum percentage of respondents affected by constraints within the sustainable livelihood framework was for both financial and natural assets, both of which exceeded 80%. Subsequently, physical and human assets accounted for 60%, whilst social assets exhibited the least influence at 50%. To overcome these constraints, extension practitioners should play a pivotal role in disseminating information and providing training on ICT-driven e-commerce to enhance SHMFs' digital literacy and market access. The study highlights the significant effect of socio-economic factors, including access to AES, gender roles, and financial constraints, on SHMFs' market channel choices, with implications for enhancing their productivity and informed market channel choices. Therefore, it is recommended that SHMFs’ access to innovative marketing channels be enhanced, and that the issues identified by the SLF, AES, market information systems, and market structures be addressed. Extension practitioners are among the key actors in spreading information and providing training on ICT-based e-commerce platforms. Enhancing digital infrastructure, equipping extension practitioners with necessary digital skills and encouraging collaborative e-commerce platforms to help lower costs, save time and boost SHMFs’ choice of innovative market channels. Furthermore, the DOA should strengthen the AES by digitalising their operations to deliver real-time market information, including current prices, weather forecasts and demand fluctuations. Leveraging public-private partnerships, the DOA and industry stakeholders can co-develop an interactive advisory tool that recommends the most suitable marketing channels based on market trends and farmers’ production capacity. Integrating the Smallholder Horticulture Empowerment and Promotion (SHEP) approach into this system would further enhance SHMFs’ ability to make innovative choices about market channels. Thus, empowering them to become market-oriented, understand consumer needs and strategically align their production with market opportunities.