Drivers of rural household participation and intensity of engagement in agricultural commercialization clusters in Basketo Zone South Ethiopia

Abstract

The promotion of agricultural commercialization clusters (ACC) has become essential in driving agricultural transformation and improving the market integration of smallholders in low-resource settings. The objective of this study was to identify the derivers of participation by households in ACC, as well as to examine their intensity of participation. The study utilizes a randomly selected sample of 355 rural farm households from the Basketo Zone (South Ethiopia Region) onto which a structured household survey was administered. To account for sample selection bias that could create a correlation between the participation decision and level of participation intensity, the Heckman two-stage selection model is used. In the first phase the probit model indicates that there are statistically significant positive effects of farm land size and education level on households’ decisions to participate in ACC. In the second stage the outcome equation shows that access to training and total livestock unit (TLU) are both significantly associated with intensity of participation ( p ≤ 0.001). Additionally, institutional and market-related factors, including access to extension services, availability of credit, market information, membership in a cooperative, and rural infrastructure; all play a significant role in enhancing total commercialization outcomes. The findings suggest that institutional support, improved rural infrastructure, and enhanced access to financial and extension services are critical for strengthening smallholder integration into commercialization clusters. These results provide important policy insights for designing targeted interventions that promote inclusive agricultural commercialization and enhance rural economic transformation in Ethiopia.