Socio-economic factors influencing smallholder farmers’ decision to participate in agro-processing industry in Gauteng province, South Africa

Smallholder farmers in South Africa have not been linked successfully to sustainable agro-processing value chains. This study aimed to identify factors influencing smallholder farmers’ decision to participate in the agro-processing industry, as well as the extent of their participation in the Gauteng Province. Data was collected through a structured questionnaire that was administered face-to-face to respondents in a randomly purposive selected sample of 102 smallholder farmers. A double-hurdle model was used to analyse factors influencing the decision to participate and the level of participation in agro-processing. The results show that very few (19%) smallholder farmers participate in the agro-processing industry of the Gauteng Province. The results also revealed that factors such as educational level, land tenure, agro-processing training and information have a positive influence on the decision to participate. Distance to market and off-farm income negatively influence the decision to participate. The level of participation is influenced by socio-economic factors such as age, household size, level of education, grain and livestock producers, farm size and access to training. The study recommends that smallholder agro-processing policy instruments be adjusted to facilitate effective participation in the agro-processing industry and participation in other high market value chains. There is a need to build up local agro-processing plants as a strategy of lowering the costs of transportation and storage when farmers take their farm produce to distant manufacturers or processors.