Abstract:
Ethiopia has a diverse climate and altitude conditions which are conducive to the production of different horticultural
crops. Despite a favorable condition in the country, small-scale vegetable producer farmers are not benefiting from the
available opportunities due to low market participation. This study was aimed at analyzing the vegetable value chain in
Yayu and Hurumu districts of Ilubabor zone focusing on kale and tomato crops. The specific objectives of the study were to
identify actors and their roles in the value chain, to estimate marketing margins of each actor and identifying determinants
of market participation decision and level of participation of farm households in the vegetable market. The study used both
primary and secondary data. The primary data were collected through personal interviews from a total of 161 respondents
(120 producers, 25 traders and, 16 consumers) using questionnaires. Value chain analysis approach was used to identify
major value chain actors and their roles. The major vegetable value chain actors in the study area are input suppliers,
producers, collectors, wholesalers, retailers and consumers. Five and four marketing channels were identified for tomato
and kale, respectively. Market margin analysis was carried out to estimate value captured by each actor. The highest total
gross margin was about 25% in channel III for kale and 33.33% in channel IV for tomato. The highest producers share in
kale and tomato marketing channels are 85% and 80% both in channel II. Producer received the maximum profit when
they sell directly to consumers. From traders, collectors received the highest (21.05%) marketing margin in channel IV for
kale and wholesalers received the highest (28.57%) in channel V for tomato. The Heckman first stage model result showed
that four variables such as education level of household head, irrigation access, participation in non-farm activity and
quantity produced significantly affect the probability of kale market participation decision while family size, production
experience, participation in non-farm activity and quantity produced significantly affect the tomato market participation
decision. Heckman second stage model indicated that age of household head, family size and quantity produced significantly influence the kale level of market participation of producers while extension contact, quantity produced and perception of lagged price were among determinants which affect significantly tomato producer’s level of market participation.
Policy implications drawn from the study findings include the need to strengthen the provision of extension service, strengthen education level of household heads, arranging experience sharing program for producers, improving farmer’s knowledge and experience on vegetable production and improving productivity, providing irrigation facility
