Value Chain Analysis of Maize and Haricot Bean in Central Rift Valley of Ethiopia: The Case of Adami Tulu-Jido Kombolcha and Dugda Districts

Abstract

This study was initiated with the general objective of analyzing maize and haricot beans value chains in the Adami Tulu Jido Kombolcha and Dugda districts of Central Rift Valley of Ethiopia. The main objectives of the study were to map and identify the actors of the value chains, the structure of costs and incentives among them and to identify determinants of farmers’ participation decision and marketed volume in the study areas. In this study, both primary and secondary data were used. A total of 200 sample households, 65 maize traders, 28 haricot beans traders, 6 input suppliers and 2 processors were taken. Producers, assemblers, wholesalers, retailers, cooperatives and unions were found to be important actors in the maize value chain. In haricot beans market, in addition to mentioned actors, exporters were the intermediaries found in the market in the study areas. Value chain governance was studied on the basis of control over volume of flow, contractual agreement, quality and level of competition. The highest value added in maize and haricot beans was 192.43 ETB/qt and 358.96 ETB/qt respectively. Producers gained the highest gross profit in maize and haricot beans value chains. The Heckman two-stage econometric estimation procedure was employed to identify factors that determine market participation decision and intensity of participation of maize. In maize market, the selection equation results showed that participation decision was positively and significantly affected by market price, district dummy and source of price information. The outcome equation results revealed that intensity of participation was found to be positively and significantly affected by market price, district dummy, land size, livestock holding, distance to main market, family size, source of price information and literacy level. On the other hand, haricot beans market, since the inverse mills’ ratio was insignificant ML was applied. District dummy, land size, non-farm income and number of extension contact were found to significantly affect market participation and intensity of participation; in addition, the participation was positively and significantly affected by sex, source of price information and distance to main market negatively. The outcome equation identified market price, level of education and family size was found to affect positively and significantly; and negatively to livestock holding. Lambda is significant for maize and insignificant for haricot bean market. To upgrade the value chain, minimizing loss at production and marketing stage; planting maize processing factories; minimizing costs of production through establishing seed producing enterprises are the actions to be taken to strengthen the sector development