MARKET CHAIN ANALYSIS OF TEFF: THE CASE OF MERHABETE DISTRICT, NORTH SHEWA ZONE, AMHARA NATIONAL REGIONAL STATE OF ETHIOPIA

Abstract

In Ethiopia, teff production contributes significantly to the economy in terms of cash income and food security, especially for the smallholder teff producers in rural areas. This study was aimed to analyze market chain of teff in the case of Merhabete District of Ethiopia. Cross sectional data was used for the study. A two stage sampling procedure was used to draw 150 sample producers from four teff producer kebeles and 34 sample traders were interviewed. Secondary data sources were also used for the study. Producers, rural collectors, wholesalers, and retailers were found to be the main actors of teff market chain in the study area. Structure, conduct and performance analysis shown that both Fetira and Alemketema market were found strong oligopoly market; with four firms’ concentration ratios (CR4) 75% and 68.3%, respectively. Overall conduct of traders is not transparent. Total gross marketing margin is highest when producer sold to consumers through retailers’ channel which was 11.9%. The share of producers was highest where producers sold to consumers through wholesalers’ and retailers channel which was 90%. In general the structure conduct and performance analysis indicated the teff market in the study area was inefficient. The double hurdle model was used to identify factors influencing market participation decision and intensity of participation in teff market. The first hurdle indicated that participation decision was positively affected by frequency of extension contact, land allocated for teff, productivity of teff and teff production experience; whereas family size, and non-farm income influenced teff market participation negatively. The second hurdle indicated that intensity of teff market participation positively and significantly affected by land allocated for teff, productivity of teff, teff production experience and numbers of equine owned. The study indicated government and other stakeholders need to strengthen agricultural input or service delivery, increasing frequency of extension contacts, land intensification, family planning, and involvement in facilitating transportation services.