Abstract:
Potato crop is important for its contribution to food security and as income support to 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 120 farmers and from purposively selected 42 traders and 35 consumers. Descriptive analysis was used for characterizing farmers, describing value chain and examining market performance and econometrics analysis was used for identifying determinants of marketed surplus and market channel choices. 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. Market performance evaluation results showed that potato market structure was oligopolistic, the product passed through different channels and went out to different destination markets. The OLS estimation result indicated that total livestock unit, land size allocated for potato production, distance to all-weather road, irrigation access, other farm income and lagged price were significant predictors of potato marketed surplus. The estimation result of multivariate probit model showed that the likelihood of households to select consumer, collector, wholesaler and retailer channel were 44.49%, 27.65%, 26.65%, and 37.85%, respectively. The joint probability of success and failure to select all market channels was nearly 0% and 8.07%, respectively. Sex of the household head, family size, marketing experience, quantity produced, total livestock unit, distance to all-weather roads and nearest market, value addition, non/off farm income and current price significantly influenced market channel choices. Even though the study area has high potential for potato production, there are constraints from input supply to consumption stages. Therefore, the study underscores inputs supply system, infrastructure development and cooperatives strengthening for policy implications.
