MARKET CHAIN ANALYSIS OF WHEAT IN HAGEREMARIAM KESEM DISTRICT, NORTH SHEWA ZONE, ETHIOPIA

Abstract

This study was conducted in Hageremariam Kesem District, North Shewa Zone Ethiopia as the area is known for its potential production of wheat. The aims of this study were to identify the structure, conduct, and performance of the wheat market; identify the factors that determines market supply of wheat and identify factors affecting wheat market outlet choice by smallholder farmers in Hageremariam Kesem district. Data from primary sources were used wheat producers from three randomly selected kebeles. Data from secondary sources were obtained from different published documents, internet, and district of agricultural office. Descriptive Statistics and Econometric models were used. The identified wheat market chain actors in the study area include producers, local collectors, retailers, wholesalers and consumers. Five market channels were identified for wheat in the study area with the major share of Volumes of wheat marketed to marketing through channel III (producers-wholesalers-consumers) at 676 qt (23.4%). The result from the analysis of market concentration indicated that the structure of the wheat market in Hageremariam Kesem district is a strong oligopoly with the four largest wheat traders’ concentration ratios of 58.58%. Total gross marketing margin (TGMM) is highest in channel V (producers-local collector- wholesalers-retailer-consumers) at 22.6 % and lowest in channel II (producers retailers-consumers) at 7.5%. Tobit econometric model was employed to identify the underlying determinants of wheat market supply. The result revealed that age, sex and lagged price were positively significant, while access to credit has negatively significant. Multivariate probit model for the determinants of producer market outlet choice decision was used for data analysis. The finding stress that policy aiming at offering farmers a fair price and targeting gender inclusive strategy (paying attention to women) were recommended.