Market chain analysis of teff and wheat production in Halaba Special Woreda, southern Ethiopia
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Urgessa, M. 2011. Market chain analysis of teff and wheat production in Halaba Special Woreda, southern Ethiopia. MSc thesis in Agriculture (Agricultural Economics). Haramaya, Ethiopia: Haramaya University.
Permanent link to this item: http://hdl.handle.net/10568/16656
This research attempted to analyze the market chain of teff and wheat in Halaba with specific objective of assessing the structure-conduct-performance of teff and wheat marketing, the various marketing channels, the institutional support services of extension, input supply, and credit and analyzing the determinants of teff and wheat supply. Primary data were collected from160 teff and wheat producers and 43 grain traders based on two stage random sampling method. Multiple linear regression model was employed to estimate the determinants of teff and wheat supply. The results of the study indicated that out of the total teff and wheat produced by sample farmers, 86.2% of teff and 49.2% of wheat were marketed. Urban assemblers, regional wholesalers and regional retailers bought 40%, 37.4% and 16.5% the teff marketed respectively. Likewise, wholesalers and urban assemblers bought 45.1% and 43.8% of wheat marketed respectively. Alaba Qulito sample market was inefficient, characterized by oligopolistic market structure. The major barrier to enter into the market was shortage of capital. Licensing and years of trading experience did not hinder entry into teff and wheat trading activities. Moreover, the markets were overwhelmed by information asymmetry with low degree of market transparency. Although trading of teff and wheat is profitable across all sample farmers and traders, problems like oligopolistic market structure and information asymmetry made the trading business uncompetitive and inefficient. Among the different variables hypothesized to determine the supply of teff and wheat, econometric result showed that four variables such as quantity produced, access to market information, access to extension service and sex of the household head significantly affected the volume of teff supplied to the market. Moreover, three variables namely quantity produced, access to credit and price of other (pepper) crop significantly affected volume of teff supplied to the market. As hypothesised, all variables took a sign as expected. The study recommends providing policies that improve teff and wheat production capacity by identifying new technologies create stable demand for surplus production would enhance farmers’ decision in marketable surplus. Strengthening Institutions that convey reliable and timely market xv information required by all market participant. Strengthening the existing extension system through training in a way to serve grassroots level producers in all aspect is important. The number of farmers and traders who accessed credit is very limited; therefore, financial institutions should design a mechanism to address the challenges of financial access to smallholder farmers and traders. Eventually, policies that strengthen the bargaining power of cooperative are vital in order to reduce the market inefficiency created due to oligopolistic nature of market structure.