Potato Value Chain Analysis in the case of Dugda Woreda, East shoazone, Oromia national regional state of Ethiopia
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Date
2019-04
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Addis Ababa University
Abstract
Potato is important for its contribution to food security and as source of cash income
for a large proportion of the rural households. However, enhancing potato farmers to
reach markets and actively engage in the potato value chain is a key issue needed in
the study area. This paper was aimed to identify value chains and their performance,
factors affecting marketed surplus and farmers’ choice of market channels using
survey data collected from randomly selected 118 farmers and from purposively
selected 42 traders and 35 consumers. Descriptive analysis was used for
characterizing farmers, describing value chain and examining market performance.
Input suppliers, farmers, collectors, wholesalers, retailers and consumers were main
value chain actors and governmental offices and NGOs were support service
providers of potato value chain in the study area. The chain is governed mainly by
wholesalers with the assistance of brokers. Producers are price takers and hardly
negotiate the price due to fear of post-harvest loss, in case the product is not sold.
District retailers and wholesalers were received the highest remuneration from potato
marketed in the study area while central retailers and rural collectors took the
smallest profits shares from potato value chain. Five market channels are identified
for potato in the study area. Total gross marketing margin (TGMM) is highest in
channel II and IV which was 53.78% and 53.5%, respectively and lowest in channel
III which was 34.24%. Producer’s share (GMMp) was highest in channel III which
account 65.76% from the total consumers‟ price and lowest in channel-II and IV
which is 46.22% and 46.5, respectively. The cost led pricing approach dictates that
the maximum retail price of potato from farmer to consumer in the addis abeba
market should be 888.21 through potato supply chain; even though the current actual
retail price of potato is higher than MRP which is 950 birr per quintal. On the other
hand from the consumer’s point of what potato finally worth to them, the potato value
chain analysis at addis abeba market revealed a maximum retail price of 600 birr per
quintal on average, which is less than potato supply chain analysis of
888.21.Variables like quantity produced, value addition, distance to market, distance
to roads, non/off farm income, current price, potato market experience, sex of the
household head, family size, and total livestock number (TLU) affected significantly
farmer’s market channel choice decisions. Therefore, these variables require special
attention to increase farmer’s margin from potato production and marketing so
special focus need to be on these variables
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Keywords
marketed surplus,, channel choices,, market cost and margins of the actors in the chain.