Abstract:
Unlike a range of problems, poor market linkages is a leading factor in plight of small farmers. Production behaviors and transaction costs are the key factors that affect the sales of agricultural products and effecting the access and connectivity of small scale fruit farmers to the big markets. To this end, a survey of small scale peach farmers was conducted in Jiangsu Province to examine their preferences in choosing different marketing channels considering transactions costs and production behaviors as the key factors. Multinomial logit model was employed to test the marginal effects of transaction costs and productions behaviors on different marketing channels. Descriptive analysis showed that average age of peach growers was quite higher (57.26 years). On the other hand, most of the peach grower’s still using retail channels instead of adopting the advanced marketing channels to approach and sell in the big markets. Further, results of empirical model suggest that transaction costs have significant impacts on marketing channels. Among different transection costs, information costs viz; market price and consumer preferences have significant negative impacts on choosing wholesale markets, cultivar information show significant positive impacts on selecting organizational agencies. Similarly, negotiation costs (considering quality grade and attrition rate) show significant positive impacts on different marketing channels, whereas among the execution costs, farmers are more concerned with transportation cost, delivery time and packing costs. For production behaviors, the scale management showed a significant influence on marketing channels. Moreover, results revealed that at certain extent, the organizational agency channel could reduce the frequency of pesticide application and regulate the cultivar plantation combination and harvest maturity. From the results, significant differences exist in channel selection among different fruit growers with different resource endowments. Findings suggest that higher the level of risk preference and longer the growing years, lower the probability of choosing modern fruit marketing channels. In view of the findings, this study suggest some policy interventions to facilitate better uptake of advanced marketing channels among peach growers are: 1) provision of short trainings to seed entrepreneurial skills among peach growers, 2) stabilization of contract-type fruit value chain, 3) improvement in existing infrastructure and information platforms in key peach producing regions, 4) spur connectivity and linkages between market stakeholders and fruit farmers through contracts, and 5) advancement of risk assessment and warning mechanism for agricultural products.