Value chain analysis of potato in dedo district of jimma zone, southwest Ethiopia

Abstract

Potato is number one non-grain food commodity and economically important crop of the world. Even though, Ethiopia is endowed with favorable agro ecology for producing potato. Potato in Ethiopia is characterized by poor seed quality, low management capacity of the farmers, diseases, high post-harvest losses, poor marketing and other challenge is poor organization along the potato supply chain. The study aimed to map potato value chain, identify actors and their roles, analyze marketing margins of actors, identify major constraints and opportunities, and identify the determinants of potato marketed surplus. For this study 136 potato producers were randomly selected, 5wholesalers, 8collectors, 12 retailers and 6 small scale processors were purposively selected. Quantitative and qualitative data were collected from primary and secondary sources. Primary data was collected through interview schedule from actors. Descriptive and econometric data analysis was used to analyze data. Value chain mapping was used to identify actors, their roles and supply linkage. Margin analysis was used to estimate value gained by each actors involved along potato value chain. Tobit model was employed to identify determinants of marketed surplus of potato. The identified key actors in potato value chain were input suppliers, producers, wholesalers, retailers, small scale processors and consumers. Main supporting actors were office of agriculture and natural resources, office of irrigation authority, micro finance institutions, cooperatives office, office of trade and market development, NGOs and bank that found in the district. The results of margin analysis revealed that 65.01% and 63.52 % share of margin and profit goes to small scale potato processors and 12.29% and 15.16 % share of margin and profit respectively, was captured by potato producers. The rest actors (retailers, wholesalers and collectors) received a profit margin of 9.78%, 8.27% and 3.27% respectively. Major constraints identified at producers level were high price of improved seed ,poor infrastructure(road and telecommunication) interferences of brokers, low storage facilities, poor linkages with other actors in the chain, prevalence of disease and pests and parish ability of the product. The identified opportunities were suitable agro-ecology, government support and availability of buyers. The results of econometric analysis shows that active family labor, land allocated for potato, access to improved seed, access to credit and number of extension contact influenced potato marketed surplus significantly and positively. Non-farm income and age of house hold head affects potato marketed surplus negatively. Therefore, concerned bodies should promote land allocation for potato and increase productivity per unit area, provide training for development agents and initiate frequency of contact with producers and supply improved seed timely. District office of agriculture and natural resources and district office of irrigation authority should have close link with research institutions that release improved potato varieties. The micro finance institutions should provide adequate credit service for potato producers. Non-farm income and age of house hold head affects potato marketed surplus negatively. Therefore, concerned bodies should initiate producers to invest their non-farm income on potato production to increase marketed surplus.