CHALLENGES OF SMALL HOLDER FARMERS – A

CASE STUDY OF KAMISE KEBELE OF MATTU WOREDA

By

Shamsuddin Yassin

STUDENT ID-NUMBER: WU0008/13

SUPERVISED BY:

Mr. Shuramu T (MsC)

A dissertation submitted in partial fulfillment of the

requirement for the BA-Degree in Economics from mettu University

May 2015 EC

Mattu, Oromiya
 CHAPTER 1

INTRODUCTION

1.1.Backgrounds of the Study

This chapter offers information about the reasons that informed this study and facilitates

an understanding of the issues around smallholder farmers in Etiopia. It firstly

outlines the definition of key terms followed by a background of the study and the

problem statement. Objectives of the study and research questions also form part of

this chapter. In addition, the chapter discusses hypotheses and the anticipated

significance of the study, followed by the chapter outline of the research report.

1.1 Definition of key terms

1.1.1 Smallholder farmer

Smallholder farmers are defined in various ways depending on the country, context,

and ecological zone, for example, subsistence farmers, backyard farmers or upcoming

farmers (DAFF, 2012). One such definition simply describes smallholders in terms of

their inadequate resource availability in relation to other farmers in the sector (DAFF,

2012). In general, most smallholder farmers’ production methods are characterised by

out-dated technologies, low returns, high seasonal labour variations, and women

occupying an important role in the production system (DAFF, 2012). Smallholder

agriculture in Ethiopia has been identified as the vehicle through which poverty can

be alleviated and rural growth can be accomplished (Pienaar & Traub, 2015). General

descriptions of the smallholder sector include reference to the type of commodities

produced, use of family labour, farming as principal source of income, and lack of

access to operation funding. The United Nations declared 2014 the International Year

of Family Farming (IYFF) to recognize the importance of family farming in reducing

INTRODUCTION

1.1.Backgrounds of the Study

This chapter offers information about the reasons that informed this study and facilitates

an understanding of the issues around smallholder farmers in Etiopia. It firstly

outlines the definition of key terms followed by a background of the study and the

problem statement. Objectives of the study and research questions also form part of

this chapter. In addition, the chapter discusses hypotheses and the anticipated

significance of the study, followed by the chapter outline of the research report.

1.1 Definition of key terms

1.1.1 Smallholder farmer

Smallholder farmers are defined in various ways depending on the country, context,

and ecological zone, for example, subsistence farmers, backyard farmers or upcoming

farmers (DAFF, 2012). One such definition simply describes smallholders in terms of

their inadequate resource availability in relation to other farmers in the sector (DAFF,

2012). In general, most smallholder farmers’ production methods are characterised by

out-dated technologies, low returns, high seasonal labour variations, and women

occupying an important role in the production system (DAFF, 2012). Smallholder

agriculture in Ethiopia has been identified as the vehicle through which poverty can

be alleviated and rural growth can be accomplished (Pienaar & Traub, 2015). General

descriptions of the smallholder sector include reference to the type of commodities

produced, use of family labour, farming as principal source of income, and lack of

access to operation funding. The United Nations declared 2014 the International Year

of Family Farming (IYFF) to recognize the importance of family farming in reducing

Smallholder farmers are frequently regarded in terms of market orientation. Smallholder

farmers primarily produce for their own consumption. It is less customary for these

farmers to produce for the markets (in addition to consumption production) and even

less likely for them to produce mainly for the markets (Aid environment, 2013). In

developing countries, a distinction is made between producing for local, national, and

international markets. A further feature used to identify smallholder farmers is the

1.3 Problem Statement

The contribution of agriculture to economic development can be realized if smallholder farmers

are linked to high-value markets in the agricultural supply chain , have adequate agricultural

finance, adequate training in agriculture so that they can benefit from these lucrative markets. In

recent times, there has been high demand for high-value agricultural products, along with more

stringent food safety and quality requirements and the emergence of supply-chain integration.

All these changes forebode the potential exclusion of small-scale producers from the growing

markets. The inability of smallholder farmers to engage in lucrative markets is great cause for

concern. Bienabe, Coronel, Le Coq and Liagre (2004:6) contended that, “Agriculture is

becoming increasingly integrated and smallholder farmers are often disadvantaged, and actions

must be taken to help them draw profit from their integration into markets.”
Several studies have indicated how smallholder farmers can be linked to markets, but they have

failed to address the issue of how smallholder farmers can be empowered to benefit from highvalue
markets. It is easy to link farmers to markets, but it is difficult for a smallholder farmer to

satisfy the market, achieve consistency, and remain sustainable. Before linking farmers to

markets, there is a need to ensure that farmers are consistent in marketing their produce. The

essence of the research lies in identifying those factors that are currently preventing smallholder

farmers from benefiting from reliable markets and determining combinations of strategies that

can assist smallholder farmers to improve over their agricultural activities.

1.4 Purpose of the study

The persistent challenges of low agricultural productivity and related challenges associated with

smallholder farming household’s needs to be investigated so as to draw out lessons that could be

useful for addressing the financial challenges faced by small scale farmers.

1.5 Objectives of the study

1.5.1 General objectives

The main objective of this study was to assess the challenges smallholder farmers face in their

agricultural activities.
1.5.2 Specific objectives

 To assess Government policy on small holder farmers

 To assess whether small holder farmers have adequate farming skills

 To assess whether small holder farmers have adequate finance

 To assess whether small holder farmers have adequate capital in form of farming

equipment, land etc. .

 Assess whether small holder farmers have easy access to markets for their products.

 To assess whether small holder farmers prepare strategic plans with regards to farming

 To assess whether small holder farmers prepare financial statements

 To provide recommendations for improvements

1.6 Research questions

 Are small holder farmers aware of Government policy on agriculture?

 Do small holder farmers have adequate farming skills?

 Do small holder farmers have adequate finance?

 Do small holder farmers have adequate farming land, plant and equipment ?

 Do small holder farmers have easy access to markets for their produce ?
 How effective are the small holder farmers’ marketing efforts ?

 Do small holder farmers prepare strategic plans on farming?

1.7 Research Hypothesis

 Adequate land, finance , plant and machinery can increase agricultural output for small

holder farmers thereby improving their livelihoods

 Inadequate land, finance, plant and machinery can adversely affect agricultural output for

small holder farmers thereby decreasing their livelihoods.

1.8 Significance of the study

The research findings will:

 Assist small holder farmers and other agricultural entities to improve their

agricultural out puts

 Add to the body of knowledge and complement on what other researchers have

studied on the similar topic.

 It would also help other researchers who may intend to take further studies on the

same subject to build on the findings of this study and also to help provide solutions
on emerging issues in this area of study.

 The study is also critical as it forms the partial fulfilment of to the award a Bachelor

In Accountancy (BAC) Degree at Cavendish University

1.9 Methodology brief

This involves methods used to collect and analyze data. The methods are discussed in Chapter 3.

1.10 Scope of the study

 Government policy on small holder farmers

 Farming skills

 Agricultural finance

 Farming land , plant and machinery

 Access to markets

 Marketing efforts

 Strategic plans

 Financial statements

 Infrastructure development.
 Chapter Two

2 Literature Review

2.1 Introduction

Literature review is a text by someone to consider the critical points of current knowledge

including substance findings as well as theoretical mythological contributions to a particular

topic. Literature reviews are secondary sources and such; do not report any new or original

experimental work. The purpose of literature review is to briefly evaluate the state of the art in

the area under review.

This chapter involved the identification of various literature sources related to the problem being

investigated. It an area where various views from different authors are quoted and presented.

This chapter looked at researches carried out worldwide on small holder farmers.

2.2 Theoretical framework

This is a process of identifying a core set of connectors within a topic and showing how they fit

together or are related in some way the subject. Theoretical framework is a foundation for the
parameters, or boundaries of a study. Once these themes are established, researchers can seek

answers to the topical questions, they have developed on broad subjects .

With a framework, researchers can resist getting off topic by digging into information that has

nothing to do with the topic. Often researchers are curious about broad subjects , but with a

theoretical framework they stay within the theme or topic .

2.2.1 Government policy on small holder farmers

As agriculture provides the main support for Zambia’s rural economy, growth in the agricultural sector is

one avenue through which poverty reduction can be achieved in Zambia. However, despite widespread

recognition of the strong connection between agricultural development and poverty reduction, there is
continuing under-provision of public investments for over a decade and small scale farmers have

continued to wallow in poverty for a very long period. Zambia’s primary policy objective of achieving

accelerated growth and competitiveness in the agricultural sector cannot be achieved unless adequate

public resources are committed towards catalysing the desired growth.

Long-term public investment in research and development, extension services, rural infrastructure, and

food safety and quality systems have high pay-offs and are among the most important drivers of

agricultural growth and competitiveness. The small-scale farmers are highly affected by challenges
inhibiting the commercialisation of their production. In this regard, there is a need to understand the

extent to which Zambia’s agriculture development framework is involving and helping small farmers and

producers to improve their production and eventually their livelihood.

Agriculture has been contributing positively to the national income and presently contributes about 21

percent to the gross domestic product (GDP) (Ngona, 2013). It is really a concern that despite the
country

experiencing good rainfall in the recent past, the performance has been static compared to its potential.

Having sustained growth in the agriculture sector enables the farmers to enjoy better incomes, and
hence

improved their livelihoods. The majority of the population are involved in agriculture, but despite the

agriculture sector being a positive contributor to the GDP, poverty levels still remain high. This can be

attested by the United Nations Development Programme (UNDP) Human Development Report of 2011

for Zambia as quoted by Ngona (2013), which indicated that:

 58.3 percent of the Zambian population lived in poor households in 2006, compared to 56.3

percent in 2004.

 The average poor person was deprived in 44 percent of the weighted indicators in 2006,
compared to 42.8 percent in 2004.

 The share of the population that is multi dimensionally poor1 (adjusted by the intensity of the

deprivations suffered) was 0.257 in 2006, compared to 0.241 in 2004. This showed that the

agriculture sector had not performed very well due to its failure to significantly create

employment opportunities and assure food security. This failure was mirrored by high poverty

levels, especially in rural areas, where most people derived their incomes from farming. This is an

indication that there is a lot that is needed to be done to improve the rate of equitable growth for

the Zambian economy.

Although the country has experienced growth in the production of maize as evidence with the bumper

harvest of 2014, this may have come at the cost of increased inequality, since pricing policies may

represent a de facto transfer of rent from the maize consuming population to the big commercial
farmers.

Areas critical for enhancing productivity, such as crop science, extension programmes, infrastructure

development, and a stable and supportive policy environment have not received the needed support.

Further and in terms of the contribution of the sector to food security and nutritional status, the recent

gains in crop production Zambia has experienced have been matched with improved food security, at
least
at the macro-level. On the other hand, the micro-level food security was however dependent on other

factors, such as rural household involvement in food and non-food crop production, the inclination to

export and the gender distribution of power at the household level and these factors have combined to

make micro-level food insecurity a major concern (Ngona, 2013).

Previous Studies

Smallholder farmers in Sub-Saharan Africa face many challenges and the per capita growth rate

of agricultural Gross Domestic Product (GDP) was negative during the 1980s and 1990s, though

improvements have been noted since 2000 (Besley, 1994). The challenges are due to a multitude

of factors which range from bio-physical (Basu & Srivastava, 2005), socio-cultural, economic

and institutional to macro-policy environments. Given the great diversity among smallholder

farming environments, the concomitant variations in agricultural systems and practices mean that

various groups of factors interact in a myriad ways. Despite the diversity, smallholder farming

systems are characterized by some common features and common challenges. Depletion of soil

fertility, along with the related problems of weeds, pests, and diseases, is a major bio-physical

cause of low per capita food production in Africa (Sogo-Temi & Olubiyo, 2004).

Although African soils present inherent difficulties for agriculture; analysts generally agree that a
fundamental contributing factor has been the failure by most farmers to intensify agricultural

production in a manner that maintains soil fertility (Meyer, 2011).

Dependence by smallholder farmers on erratic rainfall under a patchy mosaic of agro climates

and the vagaries of weather has prevented Sub-Saharan Africa (SSA) from experiencing the

Green Revolution (Ezeh & Anyiro, 2013) and climate change poses a considerable challenge

(AUC & MFW4A, 2012). The projected combined impacts of climate change and population

growth suggest an alarming increase in water scarcity for many African countries. This will

curtail the ability of irrigated agriculture to respond to the expanding food requirements of

tomorrow’s Africa and much greater emphasis will have to be given to increasing the

productivity of global rain-fed agriculture which currently provides 60% of the world’s food

(Nyirenda, 2007).

The seasonal nature of agricultural production causes peaks and troughs in labour utilization on

the farm, and creates food insecurity due to the mismatch between uneven farm income streams

and continuous consumption requirements (Meyer, 2011). Lean season or hunger periods, which

are periods of severe food shortages and low consumption levels, are common (Norton et al.,

2005). Low levels of mechanization, minimal use of external inputs such as hybrid seed, mineral
fertilizer, and herbicides, high transport costs and inadequate institutional support have precluded

productivity increases (UNCTAD, 2009). Ezeh & Anyiro (2013) noted that although large numbers

of high yielding crop varieties were released in SSA in the 1960s and 1970s, adoption by farmers

was low, and yield growth made only minor contributions to production growth. They attributed

this in part to the agro-ecological complexities of the region and a lack of irrigation facilities.

Generally, performance of irrigation projects has been disappointing globally (UNCTAD, 2009)

and SSA is not an exception.

Poor infrastructure and related high transport costs (for both inputs and surplus production),

inadequate institutional support (Nguleka, 2014), slow development of input and output markets

(UNCTAD, 2009), political instability, price shocks and limited financing options (Simtowe &

Zeller, 2006), diverse agro-ecological complexities (Sekabira et al, 2012), low fertilizer use, and

the limited availability of suitable high yielding varieties and other modern technologies have all

contributed to low agricultural productivity growth in Africa. In 2002, fertilizer nutrient

consumption in SSA was estimated at 8 kg ha-1, much lower than other developing regions

(Fletschner, & Kenney 2011). Dependence on simple manual tools for performing major farming

operations leads to drudgery (Basu & Srivastava, 2005), low yields and low incomes, and
perpetuates low productivity. Meyer (2011) summarized the smallholder African agriculture as a

vast and only slowly changing number of poor smallholders contributing most of agricultural

output, with low yields, limited commercialization, few signs of rapid productivity growth, and

population–land ratios that are not declining.

2.2.2 Agricultural Finance in Perspective

The agricultural sector in Zambia supports about 80% of the population that is exclusively

dependent on agricultural related livelihoods many of whom are poor people in the rural country

side. In order to improve the status of poverty and improve rural lives, access to rural finance and

intensity of smallholder participation in the financial markets are very important components.

Increased Access to rural finance therefore should focus on improving access to banking services

and credit in rural areas.

In 2011, the Agricultural sector contributed over 16% to GDP and continues to be the largest

employer of the Zambian labour force and Government targets over 500,000 new jobs in the

agriculture sector over the next 5 years (Budget, 2013). Agricultural finance refers to financial

services, including savings, transfers, insurance and loans, potentially needed to power and move

the agricultural sector, that is to say farming and farm-related activities including input supply,
processing, wholesaling, and marketing. Most of these activities are conducted in rural areas, in

addition to large processing facilities and agribusinesses, as well as largely subsistence-level

smallholders located in urban and peri-urban areas (Meyer, 2011).

Dupas & Robinson (2010) made a distinction between access to credit and participation in credit

programs when they defined credit access as when a household is able to borrow from a

particular source although it may not borrow at all and the extent of access measured by the

maximum amount it can borrow in Kenya. However, a household is said to be participating if it

is borrowing from a source of credit. The authors clarified that it is possible for a household

living in a risky environment to benefit from mere access to credit even when it is not actually

borrowing. Zeller and Sharma (1998) refuted the myth that poor households in developing

countries, who often earn less than a dollar a day, are not creditworthy or able to save that has

been firmly put forward in recent years. The authors argued that Poor households place special

value on reliable and continued access to different types of financial services, available at

reasonable cost and catering for their specific needs and added that microfinance facilities can

enable farmers to invest in land improvements or agricultural technology such as high-yielding

seeds and mineral fertilizers that increase incomes while sustaining the natural resource base.
Dupas & Robinson (2010) also noted that in many African countries, the majority of

smallholders are left out of rural financial system. These smallholder farmers’ households,

characterized by average landholdings of less than one hectare, do not grow enough food to feed

themselves even though they concentrate almost exclusively on the production of maize or

cereals, the major staple foods. Consequently, as land is a binding constraint in most areas,

increases in agricultural productivity, in particular in the growing of maize or cereals, and

increased diversification into other food and cash crops as well as nonfarm enterprises are key

requirements for poverty alleviation.

2.2.3 Agricultural Finance in Zambia

Zambia, like many developing countries faces a challenge of high interest rates (Budget, 2013).

The high interest rates in the end affect access to agricultural finance negatively with the number

of borrowers reducing with reducing amounts borrowed especially from the formal financial

sector. Mrak (1989) reported that commercial banks in Zambia are concentrated in urban areas

(Lusaka and Copper belt) and in provincial centers and that they collect a major part of their

savings in these areas, while their savings mobilization role in rural areas is rather negligible.

In 1992/93, Zambia under took financial sector reforms which saw a marked increase in the
number of Microfinance Institutions (MFIs) and by 1999 there were about thirty MFIs

(Nyirenda, 2007). Nyirenda (2007) also highlighted that Zambia’s market for agricultural finance

is fundamentally dysfunctional. From the farmers’ perspective, credit is scarce and expensive

and heavily skewed towards the larger, corporate sector and that Loan terms are often too short

to accommodate the long term nature of agriculture, and the processing of loan applications by

banks often takes too long.

The whole purpose of accessing agricultural finance for smallholder farmers would be to

facilitate operational and capital investment where farmers get credit to buy seed, fertilizer and

other equipment during the planting season. However, in many cases this is not the case, to the

extent that many interventions aimed at facilitating farmers’ access to credit have faile

2.2.4 Determinants of Farmer Access to Agricultural Finance

Farmer access and efficient utilization of credit finance is very vital in increasing farm

productivity, increasing rural household incomes and reducing poverty levels in agrarian

societies. However, in Zambia in particular and Africa in general, farmer access to agricultural

finance is still low. Meyer (2011) and AUC and MFW4A (2012) stated that the reasons why

agricultural finance has not been able to meet the needs and expectations of clients. This the
authors reported was in terms of both sustainable access and suitability of financial products and

services are mainly; reluctance of financial institutions to lend to the agricultural sector, high

risks associated with lending to the agricultural sector especially smallholder farmers who lack

collateral and production and political risks prevalent in Africa.

Schrieder and Sharma (1999) noted that availability of appropriate finance to women can lead to

better income distribution among household members which essentially means that women are

enabled not only to protect their own well-being, but also the well-being of their children.

Nyirenda (2007) argued that agricultural finance can be profitable – even in a country like

Zambia – as banks in other countries have demonstrated. But the agricultural sector demands a

specialised, innovative approach and that loan terms must be matched to the agricultural cash

cycle, for example, and mechanisms must be built in to guard against the risk of unforeseen

changes in prices giving examples of such developments as: the use of non-traditional forms of

security, agricultural equipment leasing, developing the agricultural insurance market,

developing hedging mechanisms and exploring the use of international lines of credit and risk

mitigation.

Simtowe & Zeller (2006) noted that increasing cost of labour and farm size are significant
factors that drive farmers to demand and seek for agricultural credit. The authors explained that

this kind of demand for agricultural credit is a result of the ever growing need to sustain the farm

business by the investing farmer. However, Nyirenda (2007) differed by stating that smallholder

agriculture, characterized by subsistence production, does not exhibit effective demand for

credit, and funding it therefore requires means other than the competitive credit market. Ezeh and

Anyiro (2013) found a significant difference between women farmers who accessed credit and

their counterparts who had no access. The authors stated that the former group performed better

than the latter when it came to annual farm income, farm size and fertilizer use levels. Reardon et

al. (1994) argued that nonfarm as collateral and thus facilitate access to credit. The authors added

that the practical implication is that programs that provide credit for nonfarm activities during the

dry season (to help farmers build up their own liquidity), or that spread risk by lending for both

farm and nonfarm activities, will be more effective than those focusing only on traditional

agricultural credit.

Smallholder farmers in many parts of Africa and in Zambia in particular access agricultural

finance or credit through a number of channels. Some of these channels are formal while others

are informal. The same farmers have a wide range of ways of utilising the agricultural finance
once it is accessed. Burritt (2006) reported that the majority of households in Malawi lacked

access to finance from either formal (Banks, NGOs, etc.) or informal sector sources (money

lenders, family and friends, Rotating Savings and Credit Associations, etc.). Burritt (2006)

further added that in many economies households rely on a combination of formal and informal

sector suppliers of finance, often making trade-offs in terms of convenience (informal sector

players tend to be better positioned) and depth of services offered (formal sector players tend to

offer a wider variety and more stable sources of finance). In the absence of formal

intermediaries, however informal suppliers provide deposit, credit and transfer services that

provide value to clients for which clients are often willing to pay dearly to access.

Wichern et al. (1999) identified the main sources of agricultural finance for Zambian smallholder

farmers as Zambia Co-operatives Federation Finance Services (ZCF-FS), Credit Union and

Savings Association (CUSA) and Lima Bank which were issuing credit mainly in the form of

short-term (seasonal) loans to smallholders. The authors however highlight that the economic

reforms later led to the collapse of credit to smallholders after banks were liquidated, leaving

only 11% of them receiving credit in the 1990s.

Burritt (2006) classified agricultural finance utilisation by smallholders into three broad
categories; production credit (for seed, pesticides, fertilisers, animal traction/tractor services and

credit for field production); commercialisation credit (for warehouse credit, fixed term credit and

overdraft facility) and lastly transformation credit utilised for processing purposes and usually by

processing companies. Nyirenda (2007) highlighted and recommended that the risk of drought in

much of rain-fed Sub-Saharan Africa and other countries constitutes a considerable challenge for

developing sustainable rural financial institutions. In such environments, a strategy providing for

greater diversification of the portfolio of assets and liabilities of the rural financial institutions, as

well as adequate provisions for loan defaults is a necessary precondition for rural financial

institutions to be able to offer their clientele reliable access to future credit and savings services.

Dupas and Robinson (2010) reported that the level of interest rates charged on loans seemed not

to be an important factor for households in deciding in which microfinance institution to

participate. Non-price attributes of credit institutions and their services such as the types of loans

provided and the restrictions on their use, as well as the types of nonfinancial services provided

such as training in the management of microenterprises play a larger role.

2.2.5 Other challenges faced by small holder farmers

Smallholder farmers in Sub-Saharan Africa face many challenges and the per capita growth rate
of agricultural Gross Domestic Product (GDP) was negative during the 1980s and 1990s, though

improvements have been noted since 2000 (Besley, 1994). The challenges are due to a multitude

of factors which range from bio-physical (Basu & Srivastava, 2005), socio-cultural, economic

and institutional to macro-policy environments. Given the great diversity among smallholder

farming environments, the concomitant variations in agricultural systems and practices mean that

various groups of factors interact in a myriad ways. Despite the diversity, smallholder farming

systems are characterized by some common features and common challenges. Depletion of soil

fertility, along with the related problems of weeds, pests, and diseases, is a major bio-physical

cause of low per capita food production in Africa (Sogo-Temi & Olubiyo, 2004).

Although African soils present inherent difficulties for agriculture; analysts generally agree that a

fundamental contributing factor has been the failure by most farmers to intensify agricultural

production in a manner that maintains soil fertility (Meyer, 2011).

Dependence by smallholder farmers on erratic rainfall under a patchy mosaic of agro climates

and the vagaries of weather has prevented Sub-Saharan Africa (SSA) from experiencing the

Green Revolution (Ezeh & Anyiro, 2013) and climate change poses a considerable challenge

(AUC & MFW4A, 2012). The projected combined impacts of climate change and population
growth suggest an alarming increase in water scarcity for many African countries. This will

curtail the ability of irrigated agriculture to respond to the expanding food requirements of

tomorrow’s Africa and much greater emphasis will have to be given to increasing the

productivity of global rain-fed agriculture which currently provides 60% of the world’s food

(Nyirenda, 2007).

The seasonal nature of agricultural production causes peaks and troughs in labour utilization on

the farm, and creates food insecurity due to the mismatch between uneven farm income streams

and continuous consumption requirements (Meyer, 2011). Lean season or hunger periods, which

are periods of severe food shortages and low consumption levels, are common (Norton et al.,

2005). Low levels of mechanization, minimal use of external inputs such as hybrid seed, mineral

fertilizer, and herbicides, high transport costs and inadequate institutional support have precluded

productivity increases (UNCTAD, 2009). Ezeh & Anyiro (2013) noted that although large numbers

of high yielding crop varieties were released in SSA in the 1960s and 1970s, adoption by farmers

was low, and yield growth made only minor contributions to production growth. They attributed

this in part to the agro-ecological complexities of the region and a lack of irrigation facilities.

Generally, performance of irrigation projects has been disappointing globally (UNCTAD, 2009)
and SSA is not an exception.

Poor infrastructure and related high transport costs (for both inputs and surplus production),

inadequate institutional support (Nguleka, 2014), slow development of input and output markets

(UNCTAD, 2009), political instability, price shocks and limited financing options (Simtowe &

Zeller, 2006), diverse agro-ecological complexities (Sekabira et al, 2012), low fertilizer use, and

the limited availability of suitable high yielding varieties and other modern technologies have all

2.3 Research gaps

Smallholder farmers in Zambia face many challenges in accessing financial services including

limited access to financial markets. Despite the numerous reforms undertaken by the Zambian

Government and the donor community, including financial sector reforms, many rural farmers

have remained in poverty with limited capacity to access safety nets like loans to militate against

hunger and disease. The researcher became curious to know what should be done to overcome

financial constraints faced by small scale farmers in the agriculture sector in Zambia. Searching

through books, articles and internet did not solve the problem and it is then the researcher

thought of constructing a methodology that would determine the factors that can help to cover

constraints faced by small scale farmers.

A variable is any observation that can take different values. There are two types of variables,

independent variables and dependent variables . Independent variables involve the actions and

interventions, while dependent variables include results and outcomes (Dr Southard 2006) . With

regard to this study policies, agricultural finance, land, plant and machinery, weather and

farming inputs are the independent variables and increased farm products and reduced poverty

are the dependent variables.

3 Methodology and Design

This chapter looked at methods used to collect the data

3.1 Research Philosophy and Approach

There are two types of methodology that can be used by the researcher and these are:

3.1.1 Quantitative Research Methodology

Quantitative research is the systematic scientific investigation used to measure the findings and

thoughts of people, and action of the way and why things are done. Everything that is measurable

can be used to gather quantitative data. Structured questionnaires and interviews, one on one and
telephonic data gathering are some of the common ways of collection data for quantitative

research.

3.1.2 Qualitative Research Methodology

Qualitative Research is used to gain an in-depth insight into matters that affect human behaviour.

it is a study that reflects more on the why and how of decision making, by studying peoples

culture, values system,attitude,behaviour,concern,motivation,aspiration,etc.qualitative research is

multi-focal in its reasoning ,exploring, questioning and answering :hence, it is extremely useful

in market research ,constructing business decision and policies, enhancing communication and

fascinating research. Unlike quantitative data collection, methods of qualitative research are

based on unstructured interviews recordings, and feedback. This is the methodology which was

used by the researcher.

Research design

3.2.1 Research Strategy

Research strategy is the structure or plan of a research-what to do and how to do it. It involves

the structuring of variables in a manner that enables their relationship to be determined. The
research used a case study as a research design during the study. A case study is defined as an indepth
investigation of an individual, group or institution to determine the variables and

relationship among the variables influencing the current behaviour or status of the subject of the

study. A case study is the development of detailed, intensive knowledge about a single case or of

a small number of related cases. This design is flexible and hence enables the researcher to use

different methods of collecting data and information i.e. questionnaires and interviews.

3.2.2. Research Choice

The research used mixed methods for data collection.

3.2.3 Time Horizon

There are two approaches to time horizon, namely Cross-sectional and Longitudinal.

Cross-sectional studies involve data collection from a population or a representative subset at

one specific point in time, while longitudinal studies: usually study the change and development

over a period of time.

3.3 Sources of Data.

There are two sources of data primary and secondary data. Primary data is data obtained in the

field, while Secondary data is data that is already in existence such as published materials. The

research used both sources of data

According to the English oxford dictionary a population is defined as the number of people

living in an area. The area of study was 1,000 small holder farmers in Nega-Nega , Mazubuka

District, Southern Province . The population was obtained from the Extension Agricultural

Officer in Mazabuka.

3.4.1 Sample Size

Because there is not enough money and time to gather information from all the population, the

goal becomes finding a representative sample of the whole population. The sample size of the

targeted population were 100 smallholder farmers in Nega-Nega .

3.4.2 Sampling Techniques

A sample is a segment of the population selected to represent the population as a whole. There

are various sapling techniques some which are;

i) Simple Random Sampling

The critical attribute of simple random sampling is that each member of the target

population has an equal and independent chance of being included in the sample.

Independence in this sense means that the selection of a member of the population.
ii) Stratified Random Sampling

Stratified sampling aims at ensuring proportionate representation of subgroups in the

sample. The stratified sampling procedure divides the population into homogenous

subgroups containing members who share common characteristics

iii) Cluster Sampling

Cluster sampling is necessitated when simple random sampling poses administrative

problems. The population may be large and widely dispersed.

iv) Stage Sampling

Stage sampling is an extension of cluster sampling. Using the example, given cluster

sampling, stage sampling would involve the random selection in stages, firstly of a

number of schools; secondly, of a number of classes within these schools; of a number of

pupils within these classes.

v) Systematic sampling

Systematic sampling involves the selection of members from a population list in a

systematic fashion. The technique is used when the members of a defined population are

already placed on a list in random order. The selection of members then proceeds by
dividing the population by the required sample size.

vi) Judgment sampling

The researcher uses her/his judgement to select population members who are good

prospects for accurate information. This is the method that was used by the researcher to

select the appropriate sample.

3.5 Data collection techniques

3.5.1 Questionnaires

A questionnaire is a carefully designed instrument for collecting data in accordance with the

specifications of the research questions and hypotheses. It elicits written responses from the

subjects of the research through a series of question/statements put tighter with specific aims in

mind. The questionnaire may be used to ascertain facts, opinions, beliefs, attitudes, and practices.

The researcher distributed questionnaires to the respective sample; this enabled the respondents

to answer the questions at their convenient time.

.5.2 Interviews

An interview is a face to face interaction in which oral questions are posed by an interviewer to

elicit oral responses from the interviewee. It should be realised that an interaction takes place
among the interview situation, the interviewer, the interviewee and the interview schedule. For

maximum success in an interview, the interview situation should be kept as flexible as possible.

3.5.3 Observations

It is the gathering of primary data by investigator’s own direct observation of relevant people,

actions and situations without asking from the respondents.

3.6 Data Analysis Techniques

Data gathered from this research was analyzed using tables and graphs.

3.7 Reliability and Validity (triangulation)

Triangulation facilitates validation of data through cross verification from more than two

sources. It tests the consistency of findings obtained through different instruments and increases

the chance to control, or at least assess, some of the threats or multiple causes influencing our

results. There are four basic types of triangulation:

 Data triangulation: involves time, space, and persons

 Investigator triangulation: involves multiple researchers in an investigation

 Theory triangulation: involves using more than one theoretical scheme in the

interpretation of the phenomenon

interviews, observations, questionnaires, and documents.

7.1 Triangulation to minimise bias

The problem with relying on just one option is to do with bias. There are several types of bias

encountered in research, and triangulation can help with most of them.

 Sampling bias- sampling bias is when you don’t cover all of the population you’re

studying (omission bias) or you cover only some parts because it is more convenient

(inclusion bias). The researcher combines the different strengths of these options to

ensure getting sufficient coverage.

 Procedural bias- procedural bias occurs when participants are put in some kind of

pressure to provide information.

3.8 Ethical considerations

When we talk about ethics in research, we are referring primarily to the ethical issues involved in

the implementation and execution of a good project. In other words, making distinctions between

what can be considered right and what can be considered wrong. Highly ethical standards were

applied by making information obtained confidential where needed and procedures of getting
data was done in a professional manner in order to avoid plagiarism and protect intellectual

property rights; bias was avoided.

3.9 Limitations of the study

The data collection process was not easy because of the following problems;

 The researcher was not given all the required data information from the respective

companies visited

 Resources constraints to some extent hindered the efficiency of the study such as time,

finances, materials and human resources.

 The researcher lacked much secondary sources of data like books

 The researcher hoped to get responses from the questionnaires in two weeks’ time but

instead, these were received much later than anticipated.