Factors Influencing the Decision of Smallholder Farmers to Sell to Small Grain Traders: The Case of Groundnuts and Soya Value Chains in Malawi

This dissertation explores the involvement of small grain traders (SGT) within the value chains of groundnuts and soya in Malawi. The objective of this study is to verify if the negative perception of smallholder farmers towards small traders in grain value chains influences decisions to sell to them and identify factors that motivate farmers to sell to small traders using the case of aforementioned value chains in Mchinji and Kasungu districts of Malawi. The study used both quantitative and qualitative data using questionnaires combining open and closed questions for data collection from 136 smallholder farmers (SHFs) and 19 small grain traders (SGTs). The researcher conducted three focus group talks, one in each of the selected extension planning areas (EPAs) and interviews with key government and non-government stakeholders. Results of this study validate that despite the scepticism towards the small grain traders, smallholder farmers rely on them for a market. Four factors were found to significantly influence groundnuts farmers’ decision to sell to small traders including “Paying on Delivery”, “Loan Access”, “Negotiation Platform” and “Price”, while for soya farmers are influenced by three factors including, “Distance”, “Paying on Delivery” and “Price”. The study further observes that smallholder farmers of groundnuts and soya in Malawi are restricted in accessing favourable markets due to their limited capability to mitigate or resolve transaction costs. The research proposes implementation of interventions focused on augmenting the capacities of smallholder farmers and small grain traders alike in accessing financial products, among other interventions.