Analysis of Factors That Dictate Farmers to Sell Their Produces Early: Implication for Seasonal Price Fluctuation

In Ethiopia, agricultural markets are characterized by seasonal price fluctuations as price seasonality is a fact of life in any agrarian production system. Prices of agricultural crops typically fall immediately after harvest and rise gradually thereafter until the next harvest. This study was conducted to analyze the factors that dictate farmers to sell their produces immediately after harvest and thereby create price fluctuations. The study used household survey data to estimate Tobit model for the propensity and intensity to sell crops immediately after harvest. The econometric results indicates that the education of the head of the household, number of markets, input cost, labor cost, and credit are positively affecting quantity and intensity of early sales while family size and technology use affect intensity and propensity to sell early, negatively.