Journal of Economics and Sustainable Development www.iiste.org ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online) Vol.5, No.1, 2014 69 Determinants of Market Participation by Maize Farmers in Ondo State, Nigeria Lawrence Olusola Oparinde * Adebiyi Gregory Daramola Department of Agricultural and Resource Economics, Federal University of Technology, P.M.B. 704, Akure, Ondo State, Nigeria. * E-mail of corresponding author: e-mail: saintlawrence8@yahoo.com Abstract Smallholder farmers’ performance of marketing functions in Nigeria is very low despite the fact that there are invaluable benefits associated with market orientation and favourable trends in agricultural commercialization. This is the motivation for this study, which analyses market participation by maize farmers in Ondo State, Nigeria. The objectives of the study are to assess the extent of commercialization of agriculture in the rural and peri-urban areas, determine the factors that influence the degree of commercialization among households, identify the constraints facing the respondents in the study areas and carry out a policy simulation and analysis of market participation by maize farmers in the study area. The sample size for this study was 80 maize farmers from both rural and peri-urban areas by employing multistage sampling technique. Data collected were analysed using descriptive statistics, truncated regression analysis and chow- test. The study revealed that the extent of agricultural commercialization in rural area (66.6%) was higher than that of peri-urban (65%) area in maize enterprise. It was observed that age of the household head, experience of the household head, cropping system, quantity of harvested output, farm size, land tenure and unit price of output had significant (5% and 1% significant level) influence on the intensity of market participation by maize farmers in rural and peri-urban areas of the State. As revealed from the study, some of the constraints facing majority of the maize farmers in the State covering rural and peri-urban areas were insufficient capital, high cost of transportation, poor road network, poor storage facilities, lack of credit facilities, inadequate agricultural inputs. It could be concluded that the extent of commercialization in both rural and peri-urban areas were not high enough, which calls for the attention of all the concerned parties (government and individuals) to put in place measures that will critically improve the extent of agricultural commercialization in the study area. In order to enhance market participation of maize farmers, well equipped market centers in various villages should be established by government and private individuals. Keywords: Commercialization, Market Orientation, Marketing, Peri-urban Area, Rural Area, Simulation, Truncated Regression 1. Introduction Agriculture is the bed rock of every nation and the major reason for this is the role it plays in providing food for the populace, employment opportunities, export revenue and contribution to the nation’s Gross Domestic Product (GDP). Agricultural sector of Nigerian economy greatly depends on smallholder farmers as they contribute significantly to food and fiber production. For most economies in Africa, agriculture remains a critical sector for attaining economic growth. However, to make a significant contribution to economic growth, the sector needs to be commercialized to enable smallholder farmers to participate in markets. Such participation is expected to have a positive impact on their incomes and thus enhance their livelihoods. Markets and improved market access for poor rural households are therefore a prerequisite for enhancing agriculture-based economic growth and increasing rural incomes. Intensification of production systems and increased commercialization must be built upon the establishment of efficient and well- functioning markets and trade systems that keep transaction costs low, minimize risk and extend information to all actors, particularly those living in areas of marginal productivity and weak infrastructure (IFAD, 2003;World Bank, 2008). Commercializing smallholder agriculture is an indispensable pathway towards economic growth and development for most developing countries relying on the agricultural sector (von Braun 1995; Pingali and Rosegrant 1995; Timmer, 1997). As the agricultural sector in developing countries transforms towards commercialization, smallholder farmers require systems that are responsive to their needs: access to markets, market information, market intelligence and effective farmer organization (Jagwe, Machethe and Ouma, 2010). The importance of maize cannot be overemphasized, with Nigeria producing 43% of maize grown in West Africa. Maize is the most important staple food in Nigeria. It accounts for about 43% of calorie intake (Nweke et al., 1983; NARP, 1994). Maize has consumption quantity of 53.20 g/capital/day (FAOSTAT, 2007). Onuke, et al.,(2010) consolidated the importance of maize by stating that maize is one of the most abundant food crops in Nigeria. About 80% is consumed by man and animals, while 20% is utilized in variety of industries processes for