Market orientation

Market orientation is defined as production with an intention to sell to the market. Market orientation examines the agricultural production by the household that is destined for the market (Gebremedhin and Jaleta, 2010). This indicator is used to distinguish between market participation of the household (indicator described previously) versus degree of commercialization. Commercialization indices have focused on the ratio of the total value of agricultural production sold to that produced (Carletto et al., 2017). Note that the market orientation index presented in this document also considers the share of land allocated to the crop by the household.

Market orientation levels of cash crops are by definition higher than those of non-traditional cash crops and hence as listed in the metrics below, cash crop production in terms of area may be a proxy to household overall market orientation.  But if a farmer is strategic in his production of crops on the farm with an intent to sell, the market orientation index, a composite measure of sales by activity, will be able to assess a household’s output orientation.