Exploring The Market Chain Analysis of Wheat in Ethiopia: The Farmers Benefit Perspective
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Date
2025-02-11
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Publisher
AAU
Abstract
Value-adding to agricultural commodity is a means to increase farm
incomes and to regenerate rural economy. Although farmers are the primary
producers and actors of wheat, they were not able to share from the growing
market benefit of the product in Ethiopia.This study was aimed at analyzing
value chain of wheat in Agarfa district of Bale zone with the specific
objectives of identifying wheat value chain actors and their respective
functions, analyzing marketing margin of wheat value chain actors and
identifyingthe determinants of wheatsoldvolume to the market by producers.
The data were obtained from both primary and secondary sources. The
primary data for this study were collected from 201 farmers, 68 wheat
traders, 6 wheat processors and 15 wheat consumers following appropriate
sampling procedures. Descriptive statistics and Two Stage Least Squares of
econometric modelwere used to analyze the data. Margin analysis was used
to estimate the share by each actor involved in wheat value chain. Value
chain analysis result of the study showed that input suppliers, producers,
assemblers, wholesalers, retailers, processors, cooperatives and
consumerswere the main wheat value chain actors in the study area.
Whereas, office of agriculture and natural resources, office of trade and
industry, micro f inance institutions, cooperatives office, NGOs and
bankswere the main supporting actors. Due to limited capital capacity of
farmer primary cooperatives and union, producers are not governing the
value chain. Hence, they are price takersand the whole wheat value
chain is governed by processor.The results of margin analysis revealed that
22.29% and 26.80% share of margin and profit were captured by wheat
producers and 36.63% and 34.76% share of margin and profit were captured
by wheat processorsrespectively.This shows that the producers are not
adequately benefiting from the further value adding profit. The rest actors
(cooperatives, assemblers, wholesalers and retailers) were received
sharemarginof8.89%, 9.99%, 12.21% and 9.99% respectively and profit
margin of 4.87%, 6.82, 12.26%, and 15.46% in the same order. The result of
Two Stage Least Squares indicated that quantity of wheat produced, sex,
memberships to cooperative, lag price of wheat, family size and farming
experience significantly influenced volume of wheat soldto market. Policy
implications drawn from the study findings include the need to improve the
input supply system, improving farmers’ know how and experience on wheat
production, encouraging females productivity,improving productivity of
wheat, strengthening the linkage among wheat value chain actors,
encouraging farmers to be member of cooperative,concerning bodies should
provide last year price information inthe market,strengthening poor profit
share and strengthening family planning programs to reduce the amount of
wheat consumption at household level.