DETERMINANTS OF PARTICIPATION IN DAIRY MARKET CHAINS IN HARAMAYA WEREDA, OROMIA REGIONAL STATE, ETHIOPIA

Abstract

The purpose of the study was to assess determinants of participation in dairy market chains in Haramaya Woreda. More specifically, it aimed to identify milk producer participation, assess the participation of dairy cooperatives, identify the contribution of extension systems, and contribution of infrastructure in different market channels. Exploratory and diagnostic survey was used to collect both quantitative and qualitative data. To this effect, a total of 120 dairy producer households, of which 77(64.2%) and 43(35.8%) were milk market participants and non-participants from Damota and Iffa Oromia and 10 dairy traders from Haramaya town, Aweday and Bate, were selected based on random and purposive sampling, respectively. Quantitative data was analyzed using ANOVA, Chi-Square, independent sample tests and Logit model to identify factors affecting determinants of milk market participation. The result showed that market participation decision in dairy market chains were affected by demographic and socio economic characteristics. The Logit model analysis result indicated that household participation in dairy market chains was significantly affected by distance to nearest market, number of milking cows, membership in cooperatives, sex of the household head, access to extension service, and access to transport. Farmer traders, retailers, semi-whole sellers and dairy cooperatives were found to be important market intermediaries in the study area. Among them, retailers possessed the highest return while the dairy cooperatives gained the lowest margin. The result indicated that production and marketable surplus, regular extension contact, proper extension package, and market infrastructure were found to be inadequate. Based on the major findings the researcher recommends that dairy cooperatives should be promoted and expanded for better economic benefit and to adopt new technologies in the dairy sector. Furthermore, financial institutions such as bank and micro finance should revise their overall system to create conducive environment for dairy households to solve their financial problems and participate in dairy market chains in the Wereda.