Abstract:
Groundnut plays a significance role in enhancing food security and generates income for the
poor farmers of Ethiopia. This research attempted to analyze value chain of groundnut in
Fedis district, Oromia region of Ethiopia. Specifically, the study aimed to identify the main
groundnut value chain actors, their roles and relationships, to examine the market
performance of groundnut; and to identify factors that affect marketing channel choices.
Data for the study were collected from both primary and secondary sources. The primary
data were generated by a household survey using a semi-structured questionnaire and key
informant interview using checklists. The study employed data collected from 152 groundnut
producers, 8 local assemblers, 4 wholesalers, 2 cooperatives, 1 groundnut processors and 10
retailers using purposive and random sampling techniques. Descriptive statistical analysis
and econometric model were employed to achieve the study objectives. Result obtained from
descriptive statistical analysis revealed that the major groundnut value chain actors were
input suppliers, producers, cooperatives, local assemblers, wholesalers, retailers, processors
and consumers. Six market channels were identified and the highest total gross marketing
margin was 56.67% in wholesalers and the highest gross marketing margin of producers’
share was 69.07% in retailers. The results of multivariate probit showed that amount of
groundnut supply, access to market information, education level, trust to buyers, groundnut
production experience and distance to nearest market were among the factors which affect
significantly groundnut producers’ choice of alternative market outlets in the study area.
Therefore, the finding of the study suggest strengthening the linkage /interaction among value
chain actors, increasing the production and productivity of groundnut, strengthening farmers
cooperatives, expanding the accessibility of market infrastructure and encouraging
education.
