Factors Affecting Smallholder Farmers’ Marketing Channel Choice in China with Multivariate Logit Model

Abstract

Facing the changes in China’s agricultural products marketing channel, smallholder farmers with different characteristics choose various strategies to obtain more benefits. To analyze factors affecting smallholder farmers’ marketing channel choice, we classify four types of channels—Broker Channel, Farmers’ Retailing Channel, Wholesale Market Channel, and Cooperative Channel—and inspect 14 variables based on the survey data of 317 households from four provinces. We use a principal components analysis (PCA) to simplify these 14 variables into seven common factors and a multivariate logit model to study how the factors influence smallholder farmers’ choices. We find that compared with the Broker Channel, the Farmers’ Retailing Channel is mainly affected by the logistics factor, skill factor, risk factor, and size factor; the Wholesale Market Channel is influenced by the logistics factor and age factor; and the Cooperative Channel is mainly influenced by the age factor, logistics factor, and price factor. In conclusion, the logistics factor has a significant positive effect on each channel choice, and the improvement of the market and transportation conditions has a general promoting effect.