The objective of this study is to identify the transaction costs factors and
household characteristics that influence the farmers’ choice of cattle marketing
channels in Mahalapye district, Botswana. The marketing channels are, typically,
the Botswana Meat Commission and the local butchers. The study also identifies
transaction costs influencing the level of cattle sales. It is expected that the
identification of these transaction cost factors and the extent to which they
influence farmers’ choice of particular marketing channels could assist in the
formulation of policy interventions.
Transaction costs emanate from several sources such as information
asymmetries, negotiations and monitoring and enforcement of trade agreements.
The hypothesis of the study is that farmers’ choice of cattle marketing channels is
influenced by transaction costs and household characteristics. Households facing
higher transaction costs and other inhibitive market conditions are excluded from
using certain marketing channels. In order to test the hypothesis that transaction
costs affect households’ decisions to choose marketing channels, a probit model
was estimated to identify these transaction costs factors. The model was applied
to a survey of 100 households selected using simple random sampling. A
structured questionnaire was designed to capture the required data.