ANALYSIS OF MALT BARLEY VALUE CHAIN: THE CASE OF ANGOLALLA TERA WOREDA OF NORTH SHEWA ZONE, AMHARA REGION, ETHIOPIA

Abstract

This study analyzed the malt barley value chain in Angolalla Tera Woreda, North Shewa Zone of Amhara Region. The study used cross sectional data collected from 120 farm households selected through two-stage sampling techniques, 22 traders, 2 processors, 1 union and 4 cooperatives. Malt barley value chain actors in the study area include input suppliers, producers, cooperatives, union, wholesalers, processors, retailers, and consumers. The malt barley market concentration ratio in the study area was 50.1% and there were observed barriers to entry into malt barley market. These structural characteristics indicate strong oligopolistic market structure of malt barley market at district level. Buying, selling, and pricing strategies, which are indicators of market conduct, showed deviation of malt barley market from competitive market norms. Performance of malt barley market was analyzed by considering production costs, marketing costs, marketing margins and profit. The structure-conduct-performance approach malt barley markets assessed by this study appeared to be poor structured (strong oligopoly) and deviating from competitive norms. Processors and retailers were received the highest remuneration from malt barley marketed in the study area while union, wholesalers and cooperatives took the smallest profits shares from malt barley value chain. Robust OLS regression econometric model result indicated that distance from nearest market, education status of the household head, experience, quantity of improved seed used, number of extension contact, total livestock holding significantly determined quantity of malt barley supplied to market. Based on the findings government and other stakeholders need to focus on disseminating market information, improving soil structure and drainage through cultivation, improving provisions of education, encouraging and managing livestock farming, developing road infrastructure, targeting experienced households to encourage them in producing quality malt barley for the market, developing varieties by considering attributes related to quality based on local processors requirements, maximum yields, resistant to drought and disease and, strengthening extension contact in order to solve the production and marketing problems and increase production and market supply of malt barley.