IJERD – International Journal of Environmental and Rural Development (2021) 12-1

Research article
erdMarketing Strategies and Grape Farmers’ Welfare
Improvement: Evidence from Afghanistan
SAYED JALIL HASHIMI*Southwest University, Chongqing, China
Email: jalilhashimi802@gmail.com

DAN YANGSouthwest University, Chongqing, ChinaZAINULLABUDDIN HAKIMI
Bamyan University, Bamyan, Afghanistan

ZAIGHAM KAZIMITokyo University of Agriculture, Tokyo, Japan
Received 7 March 2021

Accepted 30 June 2021(*Corresponding Author)

Abstract The role of marketing channels in agribusiness has been extensively studied in the last
decade. While most studies have focused on the general impact of marketing channels on sales,
the impacts of different choices of marketing channels on net returns has not been widely
studied. Focusing on Afghan grape farmers, this paper studied the determinants of marketing
channels, as well as the impact of marketing channel choices on net returns. The marketing
channels considered in this paper were channels through farmer’s organizations, local tradersand farmers who do on spot selling. Using survey data from 150 grape farmers in Kabul,
Parwan, and Kapisa provinces in Afghanistan, the results showed that grape farming experience,
selling price, province, distance to markets and internet use were some of the factors thataffected the choice of marketing channels. In addition, marketing channels through local traders
had a positive impact on returns as compared to channels through farmer’s organizations and on
spot selling. The selectivity correction terms for all marketing channels were significant
indicating the existence of selectivity bias from unobserved factors.
Keywords marketing channels, Afghan grapes, MNL model, BFG method,
selectivity correctionINTRODUCTION
Marketing channels act as a bridge between producers and consumers. According to Bowersox et al.
(1986), marketing channels are mediators that are responsible for taking products through themarketing system. Marketing channels are purposed to reduce transaction costs and enhancecompetitiveness on the market. Therefore, marketing channels will ensure that products are at the rightplace, at the right time, hence poor choices in marketing channels would in turn result in unwanted
costs.
It has been shown in literature that economic factors, social factors, and demographic factors aresome of the determinants of marketing channels (Jari, 2009; Safi et al., 2019). Specifically, factors likeaccess to information, the distance the nearest trading center, age, the level of education, income,experience and land holding have shown statistical significance in determining the choice of marketingⒸ ISERD

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IJERD – International Journal of Environmental and Rural Development (2021) 12-1contracts (Jari, 2009; Safi et al., 2019). Furthermore, Chiang (2016) and Uematsu and Mishran (2011)
reported that the choice of different marketing channels affects the net returns from farm produce.
Afghanistan, being one of the low income countries whose economy relies mainly on agriculture,
still faces financial and agricultural related challenges in the grape industry (USAID, 2016). In addition,
there is no proper marketing system for fruits, especially grapes in Afghanistan with less than 3 percentof grape farmers having access to formal marketing systems Afif (2015). This has led to 30-40% of thegrapes getting destroyed due to poor marketing techniques with a lot of farmers opting for poppy
farming. This research therefore aims at finding the determinants of marketing channels and the impact
of marketing channels on net returns. Focusing on three major grape producing provinces, this researchaims at drawing a light on the marketing channels farmers can opt for to maximize their returns.
DATA AND METHODS
The study aims at finding factors that influence the choice of marketing channels by grape farmers inAfghanistan. Three marketing channels considered were marketing channels through contracts with
farmer’s organizations, contracts with local traders and on spot selling (farmers with no marketing
contracts). The study focused on farmers cultivating grapes for commercial purposes. From the 7 maincommercial grape growing provinces, a random sample of three provinces was drawn, leading to thestudy provinces of this research which are Kabul, Kapisa and Parwan. Using the adjusted Cochran’s
formula, a sample size of 164 was drawn and randomly sampled from a list of commercial grape
farmers from the agricultural departments of Kabul, Kapisa and Parwan provinces. The study used aquestionnaire which consisted of closed-ended questions and it captured information on farmer's
demographic information, agricultural status and information on the marketing strategies, marketing
channels and net returns. All data analysis was done in excel, SPSS and STATA.
Model Description
Data was analyzed using a two stage model proposed by Bourguignon, Fournier, and Gurgand (2007)(hereinafter BFG), which controls for selectivity biasness. The first stage of the BFG method employsa multinomial logistic regression (MNL), which analyses the determinants of marketing channels. The
second stage BFG uses the Linear Logit model to assess the impact of marketing channels on net
returns while controlling for selectivity bias.
RESULTS AND DISCUSSION
Data from 164 households was collected in which 14 households were dropped because ofincompleteness, leaving the total number of households at 150. From the 150 farmer, 40 (26.67%) had
contracts with farmer's organizations, 68 (45.33%) had contracts with local traders and 42(28.00%) did
on spot selling. The mean age of farmers was 30.9 years and the average number of grape farming
experience in years was 10.4.
Table 1 shows that internet use and farm distance have a significant positive impact on the choiceof local traders. This means that farmers with access to intern and long farm distances respectively, aremore likely to choose local traders. However, both internet use and farm distance do not have any
impact on the choice of farmer’s organizations. In addition, experience in grape farming contribute tochoosing local traders, unlike farmer’s organizations, which are negatively affected by grape farming
experience. Furthermore, the negative marginal values of selling price and province indicate that anincrease in selling price reduces the probability of farmers choosing local traders and farmers fromKabul are less likely to choose local traders unlike farmers from Parwan and Kapisa.

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Table 1 Determinants of marketing channels (First stage BFG)
Variable

On spot selling
Marginal
effects

Z-value

Channel with traders

Channel with farmers
organization

Marginal
effects

Marginal
effects

Z-value

Z-value

Experience

0.008195

0.254

0.014967

1.75*-0.02316-3.69***

Sales volume-7.00E-06-0.71

9.67E-06

1.02-2.67E-06-0.57

Selling price0.905188

0.147-0.61295-3.04***0.707764

2.71***

Province

0.043652

0.46-0.2764-2.38**

0.232751

2.85***

Loans

0.03850.78

0.089493

1.5-0.12799-3.04***

Distance-0.00532-3.8***

0.004321

3.02***

0.001002

0.146

Internet-0.26078-2.87***

0.318437

3.25***-0.05765

0.336

Training-0.1369-1.51-0.00068-0.01

0.137588

2.16**

Area

0.008411

0.25-0.05485-1.39

0.046441

1.87*

vehicle-0.03844-0.72

0.03992

0.69-0.00148

0.963

Age0.00373

0.97-0.00321-0.69-0.00052

0.844

Education-0.01832-0.47

0.018808

0.44-0.00048-0.02

Source: own survey data. *,**,*** represent significance at 0.1, 0.05 and 0.01 significant levels, respectively.
The base group is on spot selling.

Every increase in selling price and planting area increases the probability of farmers choosing
farmer’s organizations. On top of that, farmers from Kabul have a higher probability of choosing
farmer’s organizations unlike farmers from Parwan and Kapisa. Farmers who undergo training also
have a higher probability of choosing farmer’s organizations as compared to farmers without training.
On the other hand, the significant negative value of access to loans indicates that farmers who takeloans from farmer’s organization are less likely to choose farmer’s organizations as their marketing
channels, as compared to the farmers with loans from friends, family and banks.
The results presented in Table 2 show that the selectivity terms are significant in the choice ofchannels through contracts farmer’s organization, channels through contracts with traders and no spot
selling. The selectivity coefficient of channels through contracts with farmer’s organizations ascompared to channels through contracts with traders is positive, meaning that the expected revenue fora farmer with a contract with farmer’s organization will increase if they switched from farmer’sorganizations to local traders.
Likewise, the significant negative coefficient for on spot selling relative to contracts with farmer'sorganization indicate that the expected revenue for a farmer who does on spot selling will decrease if a
farmer switched from on spot selling to having a contract with farmer's organization.
The results for the OLS indicate that farming vehicle has a positive significant impact on the net
returns of farmers who choose farmers organizations. In addition, sales volume, internet use, planting
area, loans and education have a positive impact on the net returns of farmers who do on spot selling.
However, age has a negative impact on the net returns of farmers who do on spot selling. Furthermore,sales volume, training participation and education have a positive impact on the net returns of farmers
with contracts with traders while planting area has a negative impact.
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IJERD – International Journal of Environmental and Rural Development (2021) 12-1

Table 2 Impacts of marketing channels on net returns (second stage BFG)
Variable

Channel with farmer'sorganization

On spot selling

channel with traders

coefficient

z-valuecoefficient

z-value

Coefficient

z-value

Experience-397.92

-0.11

-0.14

-0.25

-2731.29-2.09

Volume

1.98

1.71

0.99

1328***

8.28

10.56***

Price-138042.50-0.27-219.38-0.94138721.10

0.34

Province-38662.15

-1.09

-1.23

-0.14

19460.29

0.83

Loans2421.51

0.13

13.07

3.15***-5447.20-0.59

Distance

265.52

1.45

0.62

1.66

-263.05-0.56Internet

22279.50

0.97

42.17

1.90*

5689.33

0.17

Training

21013.61

1.05

7.86

1.00

35033.67

2.0*

Area-559.30

-0.06

4.68

2.19**-17112.90-3.87***

Vehicle3929.92

0.69*

4.99

0.89

-6764.24-0.81

Education

7398.88

1.87

2.85

0.86**

16860.50

2.86***

Age-659.71

-1.25

-0.50

-2.19*

971.281.28_m123899.37

0.63-104.36-1.78*

166337.40

1.45

_m2

28801.98

0.39-91.87-2.5140147.60

0.96

_m3

153988.40

2.12**-19.51-0.33

95157.10

1.85*

_cons

125075.60

0.61

43.42

0.48

-37630.50-0.46

Source: own survey data. *,**,*** represent significance at 0.1, 0.05 and 0.01 significant levels, respectively.

CONCLUSION
The study used the BFG methods to analyze the factors that influence the choice of marketing channels
and the impact of marketing channels on net returns of grape farmers in Afghanistan. Focusing on
three Afghan provinces, the results of the study showed that selling price, province, participation intraining and planting area are some of the factors that influence the choice of marketing channels. Inaddition, the results showed that marketing channels through local traders would improve the overall
net returns of farmers. However, future studies would incorporate management structures of farms, andfocus on all commercial grape growing provinces in Afghanistan to give a clearer picture.
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