Background: The global surge in demand for organic produce
presents a lucrative opportunity for smallholder farmers to escape poverty
traps through agribusiness integration. However, the transition to organic
farming entails significant changes in cost structures and requires navigating
complex market access channels.
Objective: This study aimed to conduct a comparative economic
analysis of organic versus conventional tomato production and to evaluate the
determinants of formal market access among smallholder farmers.
Method: A cross-sectional survey of 200 smallholder tomato
farmers was utilized. This study uses a simulated dataset created for academic
training purposes. Gross margin analysis was employed to assess profitability,
while a binary logistic regression model was used to analyze factors
influencing access to high-value formal markets.
Key Results: The simulated data revealed that organic tomato
production yielded a significantly higher gross margin ($2,845/ha) compared to
conventional production ($1,520/ha), driven by a 120% price premium, despite a
28% reduction in yield and higher labor costs. Furthermore, possession of
organic certification and participation in farmer cooperatives were the
strongest positive determinants of formal market access.
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