Analysis of Groundnut Market Performance in Limmu Seka District, Jimma Zone

Abstract

Groundnut is an important crop from the perspective of food and nutrition security of poor smallholder farmers in developing countries, where it is grown widely. It also generates considerable cash income for several small scale producers and foreign exchange earnings through export for Ethiopia. If market performance is inefficient, the sustainability of the production becomes questionable and, as a result, a steady supply of a commodity for the market may become difficult. Few studies have been done on groundnut profitability but adequate information on performance of groundnut market is not well identified. Hence this study analyse groundnut market performance in Limmuseka District, Oromia National Regional State, Ethiopia. The overall objective of the study was to evaluate groundnut market performance. Primary data were collected from 147groundnut producers and 40 trader sand consumers using semi structured questionnaire with three stage sampling technique in 2018/19. The data were analyzed using descriptive statistics; gross-margin analysis, measures of market concentration and regression analysis. Concentration ratios (4-firm) were employed in measuring the market concentration structure of groundnut market and multiple linear regression models was employed to identify factors that affect groundnut quantity supplied. Results revealed that the market structure for groundnut is strongly oligopolistic with Concentration ratios (4-firm) of 73.02%. Groundnut marketing is profitable in the study area though in the face of few constraints. Result of multiple linear regression model revealed that family size, land size, market information, average lagged price and extension contact were the main determinants of market supply of groundnut at household level. The presence of suitable soil and agro ecology Experience of producers’ in groundnut production & marketing, Willingness of producers’ to use new groundnut production & marketing technology, Availability of market demand throughout the year, Availability of supportive government policies and government offices organized at all levels to implement the policies are the main opportunity for groundnut producers in the study area. Howe ever some constraints like using local seeds, Disease and pest, groundnut weeds, unfair weighing scale, deduction, and quoting of lower prices than actual Poor market access roads that makes movement of produce to markets expensive etc the main problems for groundnut producers in the study area. Using high Yielding variety of groundnut, Access to Market Information Promoting and strengthening of cooperatives, strengthening extension contact, Proper utilization of land resource the main recommendation for concerned bodies.