Agricultural Agglomeration Infrastructure and Agricultural market integration for emergent farmers

Sammanfattning: This thesis seeks to explain constraining effects of distance to markets on agricultural smallholder’s ability to commercialise, using Zambia as a case. Despite a growing consensus that inaccessible markets constrain the development of broad-based agricultural growth, creating socio-economic regional disparities, the exact nature by which distance and market access interact with agricultural producers remains under-examined. Inspired by theories of New Economic Geography, this thesis sets out to investigate one of such constraints. Agricultural inputs are regarded as paramount for production of goods. However, a combination of distance and poor physical infrastructure is suspected to increase the costs of inputs, generating either lower net incomes or making it not feasible to acquire, thus constraining smallholders’ opportunity to commercialise and enforcing regional disparities. The inputs that have been identified in this thesis as relevant are education, capital assets, credit and fertiliser. By using a combination of spatial and descriptive statistics as well as mixed model regression, this study has, to some extent, found support of the negative effects of distance to markets and input use. According to the mixed model regression, fertiliser use increased with distance travelled, however, mainly for the larger farm groups. Moreover, simple scatterplots did also indicate a relationship between higher prices for fertiliser and distance. Although only explaining a small fraction of the relationship, use of credit products decreased as distance increased. Further, a combination of descriptive and spatial statistics also indicates that there is a regional disparity in the level of education and amount of capital assets. Although that the author remains cautious of concluding on these results, it is suggested that greater market access, in terms of inputs, education and knowledge sharing for smallholders would increase their chances of engaging in commercial activities.