Document Type : Research Paper

Extended Abstract

Introduction

Economic development in developing countries is heavily reliant on the growth of the agricultural sector, as this sector significantly contributes to the livelihoods of a considerable portion of the population. Agriculture accounts for a major share of the economy and labor employment, and its stability in rural areas can help reduce social inequality. Small-scale farmers face challenges such as limited access to markets and information, which impact their participation in the market. The commercialization of agricultural activities and the improvement of production and marketing practices are essential for increasing income. However, participation of farmers in the market is low due to high transaction costs and information asymmetry. The choice of marketing channels for smallholder farmers is a crucial and complex decision influenced by economic, social, and infrastructural factors. Guilan Province, with its significant production of citrus fruits, olives, and kiwis, holds special importance in the country's agriculture, with buyers including wholesalers and middlemen. This article analyzes the factors influencing the choice of marketing channels for citrus fruits in Guilan. Therefore, the main objective of this paper is to elucidate the components influencing the selection of marketing channels for citrus fruits in Guilan Province.

Material and Methods

In this study, the selection of various marketing channels for selling citrus fruits by farmers in Guilan Province, as well as the simultaneous correlation of these channels, was examined using a Multivariate Probit Model. Such correlations are typically absent and are often overlooked in univariable models. Therefore, utilizing this model can retain the data related to farmers' choices across different marketing channels. The dependent variable is the selection of five different marketing channels. Choosing one or more channels yields a value of 1, while not choosing any yields 0. The independent variables include demographic variables and market-related variables such as awareness and access to market price information, bargaining power, buyer recognition, selling price in each marketing channel, time spent obtaining market price information, time spent stabilizing prices and transaction locations, transportation costs, access to credit, and more. Data were collected through questionnaires and convenience sampling in 2022, with citrus farmers in Guilan Province constituting the sample of this study. The attribute in question was the selection of the number of marketing channels. In total, 100 questionnaires were completed, forming the sample of this study, and the Cochran formula was used to determine the sample size.

Results and Discussion

Based on the results of the multivariate regression model and the use of the Likelihood Ratio Test, the null hypothesis is rejected. Therefore, the model is confirmed. Furthermore, the null hypothesis stating that the coefficients of the non-diagonal elements of the error covariance matrix in the marketing channels are zero is also rejected. Thus, the use of the Multivariate Probit Model is justified given the correlation between the simultaneous selections of marketing channels by citrus farmers. In other words, the selection of one marketing channel by a citrus farmer influences the selections of other marketing channels. All correlation coefficients in this study are positive, indicating that the various channels complement each other and are not in competition. Consequently, the farmer considers all five channels simultaneously when selling citrus products.

Conclusion and Suggestions

The multivariate probit model (MVP) illustrates the interdependencies among the selection of marketing channels and identifies the impact of various factors such as education, product quantity, and access to transportation on channel selection. It is recommended that the government enhance market information accessibility by establishing information platforms, conducting training programs, and improving transportation infrastructure. Additionally, facilitating access to credit and promoting local product consumption can contribute to increasing farmers' income and improving their quality of life. These measures will lead to enhanced market efficiency and the overall economic status of farmers.

Author Contributions

This article is an extract from a doctoral dissertation. The role and contribution of the first author were as the primary author, and the role of the second author were as the corresponding author and supervisor.

Data Availability Statement

Not applicable

Ethical considerations

The study was approved by the Ethics Committee of the University of Tehran. The authors avoided data fabrication, falsification, plagiarism, and any form of scientific misconduct.

Conflict of interest

The author declares no conflict of interest.