Abstract:
This study was initiated with the main objective of analysing the market chain of groundnut
specifically assesses the structure-conduct-performance of groundnut market and analyse the
determinants of marketed surplus of groundnut farmers. Multi-stage random sampling
technique was used to select 138 smallholder farmers from three kebeles of the district and 20
traders were selected from Babile, Harar and Jigjiga markets purposively for the survey. The
data were analyzed using descriptive statistics and econometrics model. Concentration ratio
(4-firm), price setting strategy and marketing margin were employed in measuring the market
structure, conduct and performance of groundnut markets. The survey results show that
farmers supply 612.92 quintals of groundnut to the market through identified twelve market
channels. Wholesalers, village collectors, urban assemblers, retailers, roadside traders and
consumers respectively purchased 54.36%, 10.01%, 19.94%, 7.92%, 5.71% and 2.06% of the
marketed groundnut in the study area. The study reveals existence of strongly oligopoly
market type in groundnut market with concentration ratio of 64.19% and also 52.17%
producers and 55% buyers indicate that selling price is set by buyers and testified buyers had
the power to set price. Result of multiple linear regression model revealed that land allocated
to groundnut, access to credit, lagged price and quantity of groundnut produced significantly
affected the market supply of groundnut. The study suggests that there should be appropriate
interventions by the government and private institutions with the aim of enhancing farmers
bargaining power by establish agriculture price information center, increasing farmer’s
productivity through introducing modern technology and improved varieties, and providing
training on financial management.
