Abstract: This study aimed at evaluating and determining the impacts of Agricultural Marketing System Development Programme (AMSDP) on smallholder farmers and their participation as a way of empowerment in the market places. Among the programme objective which also become the central to this study includes empowerment of smallholder agricultural producers and their market linkages. Specifically, the study contributes on understanding the impacts of assets owned by household farmers on agricultural output market participation, level of market orientation of smallholder farmers in the study area and identifying transaction costs/factors that influence the decision of farmers to participate in agricultural product markets. The study employs interview, observation, statistical analysis using the logit model as mechanisms approach in estimating data from a randomly selected 163 households. The results show that insufficient land constitutes one of the most constraining assets facing rural households in Tanzania particularly in the area where this study was conducted. Households have access to very small pieces of land for cultivation where by 62% of farmers cultivates a farm size of <4 acres. Road conditions and household size were positively related to household participation in the market. Market orientation remains very low in the area studied, farming learned through extension officers and education of the household positively and significantly influenced the probability of household participation in the market. On the other hand, transaction costs/factors such as the distance to the market and the age of the household head were negatively and significantly associated with the probability of smallholder farmers participating in the market education influence stronger and significant at p = 0.01, farming learned through extension officers and age were significant at p = 0.05. The study highlights the recommendations that would reduce impediments of farmers participation in the markets.