| Summary: | Approximately 70 % of the Namibian population depends on agricultural activities for their
livelihoods. Moreover, agriculture remains an important sector in Namibia, because its national
economy is widely dependent on agricultural production. However, two distinct land tenure
systems (communal and commercial farming sectors) separated by the Veterinary Cordon Fence
(VCF) complicated the marketing of cattle from the Northern Communal Areas (NCA). Cattle
producers in the NCA have the option to market their cattle via the formal or informal market.
Although efforts have been made to encourage producers to market their cattle through the
formal market, limited improvement has been observed. In this study a number of factors were
analysed to determine their influence on the decisions made in respect of cattle marketing.
Factors influencing the decision of whether or not to sell through the formal market were
analysed using the Probit Model. Factors influencing the proportion of cattle sold through the
formal market in cases where the producer has decided to use that market to sell her/his cattle
were analysed using the Truncated Model. Testing the Tobit Model against the alternative of a
two-part model was done by means of Craggâs Model. Factor analysis was used to study the
underlying structure resulting in transaction costs.
The empirical results revealed that problems related to transport to MeatCo, improved
productivity, accessibility to market-related information and accessibility to information on new
technology are some of the factors significantly affecting the decision of whether or not to sell through the formal market. Payment arrangements by MeatCo, animal handling, accessibility to
new information technology, age of respondents and lack of access to marketing expertise are
some of the factors influencing the proportion of cattle sold through the formal market.
The results suggest that substantially more information is obtained by modelling cattle-marketing
behaviour as a two-decision-making framework instead of a single-decision-making framework.
Factor analysis identified discounting factors, delivery aspects and market features as the
underlying structure resulting in transaction costs.
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