Abstract:
Onion plays a significant role in enhancing food security and generates income for the poor
farmers of Ethiopia. This study attempted to analyze onion market chain in Gemechis District,
Oromia Region of Ethiopia and tries to sort out the marketing problems which discourage
smallholder farmers to invest on onion product. Specifically, the study aimed at analyzing the
structure, conduct and performance of onion market, to identify market chain actors and their
respective roles, to identify the determinants of onion supplied and constraints and opportunities
of onion production and marketing. Data for the study were collected from both primary and
secondary sources. The primary data were collected by household survey using a pre-tested
structured questionnaire and key informant interview using checklists. The data were collected
from 176 farmers, 30 traders and 30 consumers. The findings indicate that onion market chain
actors identified in the study area include producers, rural collectors, brokers, retailers,
wholesalers and consumers. Producers were price takers and hardly bargain the price due to
fear of post-harvest losses, in case the product was not sold. Six market channels were identified
in onion marketing. The highest total gross margin was 28.57% and the highest gross marketing
margin of producers was 91%. The result of the market concentration ratio of Kune market
(51.49%) and Chiro market (65.36%) shows that onion transaction in the study area was
operating under a strong oligopolistic market structure. The results of two-stage least square
regression model showed that quantity of onion supplied to the market was significantly and
positively influenced by the endogenous quantity of onion produced. In addition, distance from
nearest market, non/off farming income, land allocated for onion and lagged price significantly
affect the volume of onion supplied to the market. The study findings suggest the need to
strengthen the linkage among market chain actors, enhancing bargaining power of onion
producers and reducing the level of oligopolistic nature improving production and volume sales
of onion and expanding accessibility of rural infrastructure.
