Analyzing the determinants of beef cattle commercialization and Its market inefficiency: A case study of Pabna district, Bangladesh

Abstract

The world has entered a new era of globalization and industrialization, which pose several challenges to ensuring food security. Beef cattle production is one of the fastest-growing subsectors that has the capacity to meet protein demand. Due to growing demand of meat and protein and a market-oriented production system, small-scale beef cattle production contribute most to marginal farmers as a means of rising income in many developing nations like Bangladesh. Though production and commercialization are not easier for households’ due to various factors and a lack of market efficiency. To determine beef cattle commercialization and market inefficiency, the current study focused on the determinants of beef cattle commercialization and the challenges to the of market efficiency. Heckman’s two-stage model used to determine the factors that influence households’ commercialization decisions, and the two-stage least squares method is used to examine the constraints of market inefficiencies. However, commercialization decisions offer twofold decision of commercialization and degree of commercialization. The result showed that commercialization decisions are significantly influenced by households’ age, extension services, and production costs. The degree of commercialization was affected by education, marketing costs, income from dairy, transportation costs, and training access. On the other hand, market inefficiency was influenced by formal market access, distance, extension services, and earning from cattle. As extension services worsen both commercialization decisions and market efficiency, the government should focus on extension services and offer farmers opportunities to increase their understanding and knowledge of marketing.