Research Journal of Economics & Business Studies - RJEBS - The ...

During the last season red onion farm gate price disparity ranged from Rs.40 to Rs.340. Simply this
alone stands as an evidence for the existence of poor market arrangement in Jaffna peninsula. Local
farmers are finding difficulty in predicting the future market prices which may help them to make a
decision on choosing a particular marketing channel and to perform the storage function. Choice of a
marketing channel plays a vital role in determining the producer margins. Availability of market
information and the right choice of a marketing channel are crucial in deciding the producer margins.
Hence it is important to identify the factors which have been influencing the farmers’ decision in
choosing the marketing channels. Therefore this research has taken effort to identify the demographic
and socioeconomic characteristics of the red onion farmers influencing the choice of marketing
channel in Jaffna district, Sri Lanka. Therefore the research has defined its objectives in the following
manner:
How far the socio economic characters such as age of the farmer, gender, educational level of
farmer, cropped land area and crop income influence the choice of a marketing channel.
How far the market infrastructures such as frequency of selling, information about the market
price, number of market information sources, preference for contract arrangement, availability
of own storage facilities, buyer terminate business, own a mobile phone and access to extension
services have been influencing the farmers choice of a marketing channel.
How far the investment decisions such as Investment during last season and investment for the
future season influence the choice of a marketing channel.
Materials and Methods
In Jaffna approximately 145,000 families are doing farming as their livelihood
(DOAE,2010/2009). The total population of the district is around 600,000. Agriculture and fisheries
have been the principal economic activities of the district. Over 60 percent of the work force in the
district depends on agriculture for their livelihood (DS,2010). Agriculture in the district contributes
substantially to the GNP of the country. The agriculture sector, including crop and livestock has
contributed around 65 percent of the total gross domestic product of the district. In terms of
production, major cash crops like chilli, onion, tobacco, potato and banana are produced in large extent
to meet the substantial portion of the local requirement. Total extent of high land available for
cultivation is 7,851 ha (DS,2010).
The study covered entire Jaffna district and the samples were selected by using purposive
random sampling technique. The total red onion farmers list was obtained from the department of
agricultural extension and then the respondents were selected randomly excluding two extremes of
those who are cultivating below 1 lachcham and above 20 lachchams. A structured questionnaire was
prepared and pretested prior to the data collection. Total sample size was 200, which was representing
the 10 percentage of the total commercial red onion producers in the district. The compiled data were
analyzed within the frame work of multinomial logit regression model by using the econometric
software STATA version 10. Here marketing channel1(Directly performing retailing) was considered
as a base channel for the analysis. Assuming the hederoscedastisity problem the outliers were removed
from the sample.
www.theinternationaljournal.org > RJEBS: Volume: 02, Number: 06, April-2013 Page 46