ANALYSIS OF SESAME MARKET CHAIN: THE CASE OF MELOKOZA DISTRICT, GAMO GOFA ZONE, SNNPRS, ETHIOPIA

Abstract

Sesame is an important cash crop and plays vital role in the livelihood of many people in Ethiopia. In Melokoza district, sesame is a source of income for the people. However a number of challenges hampered the development of sesame sector along the market. Therefore this study was initiated to analyze Sesame market chain in Melokoza District, Gamo Gofa Zone of Southern Nation Nationality Peoples’ Regional State with the objectives of identifying sesame market chain actors and their roles, analyzing structure-conduct - performance of sesame market and determinants of sesame market supply by farm household in the study area. Both primary and secondary data were used for the study. Primary data were collected from 123 farm households selected randomly, 20 traders through semi structured questionnaire. Secondary data were collected by reviewing documents from different sources. The major market chain actors for sesame marketing are smallholder farmers, cooperatives, Union, village collectors, wholesalers, Ethiopian commodity exchange, exporters. Four sesame market channels were identified in the study area. Both descriptive and econometric model were used to analyze the data. Result from analysis of degree of market concentration indicated, that the sesame markets are characterized by weak oligopolistic markets with the buyers’ concentration ratio of 40.28%. The major barriers to enter into the market were shortage of capital, licensing procedure, high price fluctuation, untimely and non- availability of price information and limited trading experience. The sesame market performance result reveals that, share of producers, wholesalers and exporters from the export free on board price was 52.07%, 25.28% and 22.65% respectively. Gross profit was Birr 1199.11, Birr 346.54 and Birr 106.25/qt. for producers, wholesalers and exporters respectively. This implies that sesame trading is profitable in the production year and the share of actors may be considered as faire. The result of the multiple linear regression model indicated that seven variables namely Land allocated under sesame, sesame yield, family size, extension contact, credit access and market information influenced market supply of sesame positively while distance to the nearest market center was found to have a significant negative effect on sesame market supply. The finding suggests that, Strengthening Institutions that convey reliable and timely market information; strengthening extension system through training in all aspect and design financial institutions to address the challenges of financial access to smallholder farmers and traders. Moreover, government and concerned stakeholders need to give attention to infrastructural, yield increasing technologies, post-harvest management and integrated pest and diseases control system in the study area to boost production and thereby increase marketed surplus of sesame.