: Value Chain Analysis of Rice: The case of Shebe Sombo Woreda, Southwest Ethiopia.

Abstract

This research attempts to analyze rice value chain in Shebe Sombo district of Jimma zone, Ethiopia. The study aimed at identifying rice value chain actors and their respective functions, assessing the distribution of rice value addition at different stages of themarketing chain,analyzing market performance of rice value chain, identifying factors affecting market participation and intensity of marketed surplus. Data were collected from primary sources through astructured questionnaire, checklists, focus group discussion and key informant interviews. In addition, secondary datawere gathered through reviewing andexamination of reports as well as records of published and unpublished documents. Two-stage random sampling technique were employed; and a total of 148 farmers from four kebeles were randomly and proportionately sampled. Other than farmer, 32 traders were also selected using purposive sampling techniques based on their volume of trade.Descriptive statistics and econometric methods of data analysis were used to analyze the data. Value chain tools were used to identify rice value chain actors and share of value added by each value chain participant. Besides,S-C-P model was used to analyze market performance of rice value chain. Tobit model was used to identify factors affecting market participation and the extent of marketed surplus of rice.The results of the descriptive statisticsshowed that out of the sampled rice producing households 80% were rice market participants and about 36.4% of the total rice produced was supplied to the market. Value chain analyses revealed that the major actors in rice value chain were input suppliers, producers, collectors, processors, wholesalers, retailers and consumers. Each of these actors adds value as the product was transferred from one actor to another. Rice producers added 41% of the total value, processors, wholesalers, retailers and Collectors respectively contributed to further value addition of20%,18%,13% and 8%. Based on the market concentration ratio (62.3%) we conclude that the rice market in the study area can be classified asoligopolistic form of market structure. The result of Tobit model shows that market participation and intensity of marketed surplus are influenced significantly and positively by availability of labor, amount of credit used, membership in cooperative, land allocated for rice, education of household head, rice farming experience, number of oxen and market information while family size, livestock holding, distance to nearest market, non-farm income negatively affect market participation and intensity of marketed surplus.Based on the findings of the study, we suggest that the government and concerned stakeholders should focus on Strengthening the linkage among rice value chain actors and supportive institutions, improving road infrastructures, providing adequate credit and building knowledge of farmers on credit use, strengthen the adult education system, strengthening institutions that convey reliable and timely market information and promoting farmers’ cooperatives.