Determinants of marketing outlet choices of irrigated onion (Allium cepa L.) producers in Northwest Ethiopia: A multivariate probit regression analysis approach

Abstract

Vegetable farming plays a vital role in generating income for a significant portion of rural households in Ethiopia. However, facilitating access to markets and ensuring active market participation remains a key challenge for onion producers. Given the perishable nature of onions, selecting appropriate marketing outlets is essential. This study aimed to examine the factors influencing onion producers' choices of marketing outlets. A multistage random sampling technique was employed to select kebeles and farm households, resulting in a sample of 155 respondents. Both primary and secondary data were collected to fulfil the study’s objectives. The data were analyzed using descriptive statistics and a multivariate probit regression model. The analysis showed that 77.42% of households were sold to wholesalers, 25.51% to rural collectors, 67.74% to retailers, and 74.19% to consumers. Statistical results indicated that choices between wholesaler and rural collector, consumer and rural collector, and retailer and wholesaler outlets were negatively and significantly correlated, suggesting competitive relationships. In contrast, the choice between retailer and rural collector outlets exhibited a positive and significant correlation, indicating a complementary relationship. The results from the multivariate probit model revealed that decisions regarding market outlet selection were significantly influenced by several factors, including the quantity of onions produced, household head’s education level, family size, cooperative membership, past onion prices, market distance, frequency of extension service contact, and access to credit. Based on these findings, the study recommends that policymakers and stakeholders prioritize the development of rural-urban infrastructure, improve access to agricultural credit, and enhance both formal and informal education to better support onion producers’ market participation.