Analysis of Vegetable Market Chain in Dugda Woreda, East Shoa Zone, Oromia Region, Ethiopia
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Date
2015-06
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Addis Ababa University
Abstract
This study is aimed at assessing vegetable market chain in Dugda Woreda, Oromia Region oj
Ethiol'ia(ocusing on tomato and onion products. Irrigated vegetable production is increasing with
pop Illation grOlvth and changes in consumption habits in Ethiopia creating business 0pp0i'lunity Jor
many actors along the market chain, despite number oj production and marketing constraints.
Analysis oj marketing peljormance oj vegetable plays an important role in an ongoing or Juture
market development plan. This study aimed at analyzing the market chain of vegetable Jor Dugda
Woreda with the specific objectives of identifoing the key vegetable marketing aclOrs and channels:
examining market structure oj major actors: assessing the market peljormance Jar key vegetable
markeling aclors and channels by quantifoing costs and profit margins: and identifying key
production and marketing constraints and opportunities Jaced by smallholders. The data was
generated by household survey using a pre-tested structured questionnaire, key in/ormanl interview,
Jocus group discussions, semi structured questionnaires and checklists. This was supplemented by
secondcu), data collected from different published and unpublished sources. The data analyzed using
SPSS version 20 and summarized info descriptive formals slich as frequ encies, percentages, means
and standard deviation. Besides, Structure, Conduct and Performance (SCP) model employed to
evaluate Ihe slructure and peljormance oj vegetable market.
The study finding shows that vegetable market chain actors are broadly classified into Ihree: input
suppliers: direcl market actors (producers, brokers, Jarmer traders, wholesalers, relailers and
consllmers): and enablers (extension service providers & credit providers). Vegetable producers sell
their products to different market intermediaries andfinal consumers. About five vegetable marketing
channels were idenlified. The total amollnt oj vegetable that was transacted through these marketing
channels in 201-1115 was 32,010 quintals. Chunnel II was Jound to be the dominant lIlarkeling
channel in terms oj volume oj vegetable supply, where about 23,752 qllintals oj vegetable (74.2% of
the total vegetable) was supplied to the market. Channel {II was the second dominant market
supplier, where about 6,786 quintals oj vegetable (21.2%) supplied through this channel. The study
result also shows that the total gross marketing margin was 30% with producer participation margin
oj 70%. The markel intermediaries incurred different marketing costs such as packing, sorting,
transportal ion, loading and unloading. Central wholesalers obtain relatively highest profit in
channel /I and 1/1, which amounted to Birr 204,827 and 58,675, respectively. The study result
signifies that thefirst Jour largest volumes of vegetable purchased by traders (CR,) constilule 50% of
market share. which indicates the market structure Jor vegetable is strongly oligopolislic. OLS
regression results also revealed that there are econamies oj scale Jor wholesalers at Meki market,
which clearly indicates the presence oj barrier to entry/exit Jor wholesalers in the market.
Opportlll1ilies idenlified Jor vegetable production include: existence oj groundwater, convenient
agro-ecology and ideally appropriate for agro-processing induslries. On Ihe other hand, challenges
recognized for vegetable market chain includes: oligopolislic market structure, absence qf storage
Jacililies, soil salinity, overutilizatioll oj inputs (fertilizers), increasing cost oj inputs, lack of
il1lproved seeds and chemicals (insecticides and jill7gicides), price fluc tuatian, and high markel
involvemenl oj brokers. Policy implications drawn from the study findings necessitate legalizing and
supporting actors in the local vegetable markets, creating access 10 accurate and regular nwrkel
inJorlllation and technical support to producers on crop diversification.
Keywords: Vegerable, market chain, market margin, OrdinOlJI Least Square, challenges.
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Keywords
Vegerable, market chain, market margin, OrdinOlJI Least Square, challenges