Marketing Strategies and Grape Farmers’ Welfare Improvement: Evidence from Afghanistan

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 traders and 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 that affected 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.