ANALYSIS OF VEGETABLES MARKET CHAIN: THE CASE OF HABRU DISTRICT, NORTH WOLLO ZONE, AMHARA REGIONAL STATE, ETHIOPIA

Abstract

Vegetables play significant role in income generation and improving nutritional status in Ethiopia and Habru district in particular. However, the development of vegetable subsector faces various marketing problems in Habru district. Therefore, this study aimed to analyze vegetables (onion and tomato) market chain in Habru district. Both primary and secondary data were used for the study. A random sample of 147 vegetable producer households and 53 vegetable traders were used to generate the data. Both descriptive and econometric methods were used for data analysis. The structure-conduct-performance analysis result indicated that four firm’s concentration ratios (CR4) of onion and tomato traders in both Mersa and Woldia market indicates strongly oligopolistic vegetable market. Lack of capital is reported as the main barrier to entry particularly for collectors and wholesalers. Producers share from consumer price is largest when they directly sell to consumers and lowest when they supply through wholesalers and collectors. Two-stage least squares result showed that quantity produced, farming experience and extension contact significantly and positively affected quantity of onion supplied to the market whereas age of the household head significantly and negatively affected it. Robust multiple linear regression result showed that quantity produced, education level, family size and extension contact positively and significantly affected quantity of tomato supplied to the market whereas distance to the market affected it negatively and significantly. Multivariate probit model result showed that age, education level, sex, farming experience, land cultivated, quantity produced, selling price, and extension contact significantly affected farmers onion market outlet choice. While education level, sex, farming experience, quantity produced, selling price, extension contact and non/off-farm income significantly affected farmers tomato market outlet choice. The study recommends the need to promote farmer organization for collective marketing, enhance competitiveness, improve road networks, boost production and provision of market-oriented extension, improve farmers experience and education status.