MARKET CHAIN ANALYSIS OF TOMATO: THE CASE OF BORAMA AND BAKI DISTRICTS OF AWDAL REGION OF SOMALILAND

Abstract

Tomato production and marketing plays a central role in improving and providing income, employment, nutrition and food security to a significant proportion of small farmers and traders in Awdal region in general and Borama and Baki districts in particular. However, the development and improvement of tomato sub-sub sector faces different marketing problems in Borama and Baki districts of Awdal region in Somaliland. Thus, this study is aimed to the market chain analysis of tomato in these two districts. The study employs both primary and secondary data. A random sample of 118 tomato farmer households and 36 traders from the two districts were taken for the data analysis using both descriptive statistics and econometrics models. The SCP analysis result revealed that the CR4 for Ahmedguray and Halane tomato markets are 72.13% and 93% respectively, implying strongly oligopolistic and highly concentrated markets. Moreover, CR4 for wholesalers, retailers and collectors in the study areas were 0.71, 0.44 and 0.71 respectively. Implying highly concentrated and strongly oligopolistic markets for the wholesalers and collectors and relatively and medium oligopolistic market for tomato retailers. Limited access to credit and initial capital requirement are the major entry barriers for tomato wholesalers and collectors. Robust multiple linear regression result indicated that productivity of tomato, access to irrigation, distance to the nearest market, and non/off-farm income positively and significantly affected the quantity of tomato supplied to the market. MVP model result revealed two variables (productivity of tomato and distance to the nearest market) significantly and negatively affected the probability to choose the retailer market outlet. One variable (distance to the nearest market) significantly and positively affected the likelihood to choose wholesaler outlet. Two variables (land size allocated for tomato production and access to credit) significantly and positively influenced the likelihood to choose collector outlet at 10% level. And three variables (productivity of tomato, distance to the nearest market and average price per quintal of tomato) significantly and differently affected consumer market outlet. Therefore, this implies the need to promote and improve the current level of education, provision of sufficient credit and extension contact, improve infrastructure like roads, improve irrigation facilities and access to market information.