Abstract:
The study was aimed at market supply and value chain analyses of wheat in Hetosa and Tiyo
districts of Oromia region with specific objectives of mapping wheat value chain actors and
their value addition, analyzing performance of wheat market and, estimating the intensity
and determinants' of marketed surplus of wheat by small holders in the study area. The
primary data for this study were collected from 150 households, 85 traders; 5 cooperatives,
18 processors and 20 consumers based on three stage random sampling method. Value chains
tools were used to map wheat value chain, S-C-P model to analyzing performance of wheat
market, and Tobit model to analyze factors affecting marketed surplus of wheat in the study
areas. The study result showed Constraints hindering the development of production and
marketing of wheat were shortage of improved wheat variety, diseases, theft on the field and
at market level price setting problem, theft and others. Value chain analyses revealed that the
major actors in wheat value chain were input suppliers, farmers, traders, brokers, processors,
retailers, and consumers. Each of these actors adds value in the process of changing product
title. Based on the market concentration ratio we conclude that both Eteya (26.5%) and Asela
(37.7 %) markets are classified as monopolistic competition forms of market structure. Lack
of capital is found to be the major trade barriers in the study area. Wheat producers added
34% of the total value, collectors, wholesalers, retailers and processors are responsible for
value addition of 4%, 2%, 4% and 56%, respectively. The result of Tobit model indicated that
value adding activities, livestock holding, access to credit, family size, to non-farm income,
type of seed used and cultivated land for wheat influenced the amount of wheat marketed
surplus significantly. Therefore, policy aiming at increasing farmers’ access to modern
inputs, developing and improving infrastructure, cooperative development and improving
extension and marketing system are recommended to accelerate the chain’s development.
