Teff value chain analysis in Becho and Dawo Districts of South West Shewa, Ethiopia

Abstract

This study investigates the value chain of teff in Becho and Dawo district where the livelihood of farmers depend on the production and marketing of teff. The study was particularly designed for identifying and categorizing the value chain actors, evaluate their roles, value added by value chain actors and relationships in the value chain, analyze the performance of teff market in the value chain, determine the factors affecting value addition of teff producers, and identify the factors affecting market participation and intensity of marketed surplus. Multi-stage sampling procedure was employed to draw sample of 150 teff producers. About 54 traders including urban wholesalers, rural wholesalers, urban retailers and rural retailers, consumers, cooperatives, hotels and restaurants, injera sellers, flour sellers, unions and NGOs were also included in the study. HHI and marketing margin were used to analysis market structure and performance in teff value chain respectively. The value chain analysis approach developed by GTZ, (2007) was used for financial analysis to capture the share of value added by each value chain participant. Double hurdle model was used to identify factors affecting market participation and intensity of marketed surplus of teff. Probit model was used to analyze the factors influencing the decision to add value by teff producers. The market structure of teff in Tulu bolo and Busa town was imperfect market. Teff farmers received higher returns when they sell their outputs directly to rural wholesalers. The findings show that injera sellers added the largest value to teff. Price and standard of teff in the study areas is entirely determined by teff traders. Teff farmers’ production and marketing constraints were double taxation, shortage of fertilizer and seed supply, price setting and access to credit whereas that of teff traders were poor infrastructure, capital shortage, access to credit, farmer reluctance to sell, lack of demand, inadequate storage facility and inadequate government support. Teff market participation of smallholder farmers was significantly affected by access to credit, perception of farmers on lagged market price of teff, family size, agroecology, farm size and ownership of transport equipment. The intensity of marketed supply was significantly influenced by family size, agroecology, distance to the nearest market, farm size, perception of current price, income from other farming and off-farm activity, and livestock holding. The findings generally suggest the need to create trust among value chain actors, reliable market information, strong extension intervention on upgrading the value chain, and giving training for farmers on marketing.