TESTING AND VALIDATION OF TRANSACTION COSTS FACTORS IN MEASUREMENT OF PERFORMANCE OF SMALLHOLDER AGRICULTURAL VALUE CHAINS IN ZIMBABWE

Abstract

The study sought to test and validate the effect of the seven transaction factors: crop-livestock/farm specific, livestock specific, household specific, inputs and livestock markets, crop marketing, crop value addition, and location specificity on measurement of performance of smallholder agricultural value chains. It analysed data collected from 402 households selected through purposive and random sampling in six rural wards in Kariba District, Zimbabwe. The study used path analysis as part of structural equation modelling (SEM) to assess and validate the impact of transaction factors across the different stages of the agricultural value chains. The findings of the study revealed that crop livestock factors significantly impact the performance of smallholder agricultural value chains, leading to higher production per capita. Also, the location factor, that is, improved road networks and proximity to urban centres improves these enterprises. Smallholder households outperform larger ones in agricultural value chains, and crop marketing and livestock-specific factors also impact their performance. However, value addition doesn't significantly affect value chains in the suggested form and might require reconfiguration and further testing and validation.