MARKET CHAIN ANALYSIS OF GROUNDNUT: THE CASE OF GURSUM DISTRICT, OROMIA NATIONAL REGIONAL STATE, ETHIOPIA

Abstract

This study analysed the marketing chain of groundnut in Gursum District, Oromia National Regional State, Ethiopia. Data used in the study were collected from 155 groundnut producers with the aid of semi structured questionnaire using three stage sampling technique in 2014/15. The data were analyzed using descriptive statistics; gross-margin analysis, measures of market concentration and regression analysis. Concentration ratios (4-firm) were employed in measuring the market concentration structure of groundnut market and multiple linear regression models was employed to identify factors that affect groundnut quantity supplied. Results revealed that the market structure for groundnut is strongly oligopolistic with Concentration ratios (4-firm) of 76.83%. The analysis of market performance revealed that groundnut producers in the District incurred on average, a loss of about 703.68 Birr/ha in 2014/15. Groundnut marketing is profitable in the study area though in the face of few constraints. Result of multiple linear regression model revealed that family size, land size, market information, lagged price and extension contact were the main determinants of market supply of groundnut at household level. The empirical finding of the study implies that there should be appropriate interventions by the government and private institutions with the aim of providing adequate and timely market information, providing employment opportunity other than farming for rural youth and wise use of land resource