MARKET CHAIN ANALYSIS OF TEFF (Eragrostistef): THE CASE OF DEJEN DISTRICT, EAST GOJAM ZONE,ETHIOPIA

Abstract

In Ethiopia, teff is one of most important crops in terms of number of producers and area coverage. It is the main source of cash income and food security crop for most of rural areas. Dejen district is well known in the production of teff in Amhara Region. This study was aimed to evaluate the efficiency of teff market chain and to identify factors determining farmers’ teff market participation and level of participation. A multi stage sampling procedure was used to draw sample producers. first identify 14 teff producing kebeles from the district,secondly identify four teff producing kebeles purposively with their potential of production and finally 170 teff producer households were selected randomly. 49 sample traders were selected from two town markets for Structure-Conduct-Performance (SCP) analysis to evaluate efficiency of teff market. Furthermore, Double hurdle model was used to identify factors influencing decision to participate in teff market and the level of participation of producers. Producers, rural collectors, wholesalers, retailers and consumers are the major actors in teff market chain in the study area. The results of S-C-P analysis showed a strong oligopoly market structure at both Dejen and Yetnora markets with four firms’ concentration ratios (CR4) of 57.2% and 74.4%, respectively. There are also barriers to enter in to teff market like licensing procedure and lack of initial working capital. With respect to the conduct teff market in the study area, price setting strategy deviates from competitive market norms and marketing margin and cost analysis showed unreasonable cost and profit share among teff market chain actors. This indicates that teff market in the study area being inefficient. The results of the first Double Hurdle model indicated that producers’ decision to participate in teff market was positively affected by being male headed household, teff farming experience, number of oxen owned and frequency of extension contact and the results of the second hurdle shows that level of market participation was positively and significantly affected by teff farming experience, number of equine owned, frequency of extension contact and yield. Hence, the study indicated a need to resolve entry barriers, strengthen market oriented extension service and improve transport facilities.