Smallholder Agricultural Commercialization for Income Growth and Poverty Alleviation: A Review from Ethiopian Context

Abstract

This review paper explores the concept of smallholder agricultural commercialization highlighting cases from Ethiopia. With most of Ethiopia’s rural poor primarily depending on agriculture for livelihoods, shifting production from current subsistence towards market orientation (commercializing) can significantly increase the income and welfare of small farmers (smallholders) as well as contribute to economic growth and poverty alleviation. Smallholders face many environmental and individual constraints to commercialize. However, the changing environment driven by growing population, urbanization, income, global interconnectedness, policy reforms, technology, food industry restructuring and climate change presents opportunities for smallholder market participation. Efforts made in the country produced varying degrees of success depending on contexts and strategies, but collaborative efforts have been the most successful. While some negative effects can emerge, the expected income-mediated positive results at household and societal level are greater. The key components of commercialization are its drivers, determinants, processes, strategies, indicators and effects - which can be synthesized into a conceptual model useful in planning, implementation and review of commercialization programs. Future research needs to comprehensively define and measure commercialization and develop models which stimulate multi-stakeholder support for smallholders, joint investments, attitude change and entrepreneurship to succeed in smallholder commercialization.

Keywords: Smallholder, agricultural commercialization, income growth, poverty alleviation, Ethiopia.