VALUE CHAIN ANALYSIS OF WHEAT (Triticum aestivum L.): THE CASE OF LANFORO DISTRICT OF SILTE ZONE, SOUTHERN ETHIOPIA

Abstract

(Two stages least square model and multivariate probit model) were used to analyze the collected data. Results confirmed that input suppliers, producers, rural assemblers, wholesalers, flour factories, retailers, primary cooperatives, bakeries, flour wholesalers, flour retailers, consumers and supportive actors were identified as wheat value chain actors in this study. The chain is governed mainly by flour factories. Eleven market channels were identified for wheat. Total gross marketing margin is highest in channel V (Producers- rural assemblers- wholesalers- flour factories- flour wholesalers- flour retailers- consumers) which was 56.39% and lowest in channel II (Producers- retailers- consumers) which was 17.68%. Producer’s share was highest in channel II which accounts 82.32% from the total consumer’s price. The result of 2SLS model indicated that livestock holding, quantity of wheat produced, farming experience, lagged market price and frequency of extension contacts are positively and significantly influencing wheat supplied to the market. Multivariate probit model results also signified that the alternative market outlets choice significantly affected by frequency of extension contact, quantity of wheat supplied to market, education level of the household, distance to nearest wheat market, access to transport facilities and membership to cooperatives. Therefore, policy aiming at strengthening the linkage among wheat value chain actors, increase connection with research institutes and other supportive institutions, increasing wheat production, expanding accessibility of market infrastructure and encouraging education through extension service is recommended