Analysis Of Wheat Marketing Performance In Robe District Arsi Zone Oromia Regional State, Ethiopia

Abstract

This study was initiated with the general objective of analyzing wheat-marketing performance in robe District of Oromia Region, Ethiopia. Both qualitative and quantitative data for this study were collected from primary and secondary source of data. The primary data was collected from 156 sampled households, and 24 traders. A two-stage random sampling procedure was employed to select 156 households from 4 kebeles. Much of the marketed surplus of wheat was channeled through producer, assembler, cooperatives, wholesalers, retailers and consumers. Concentration ratio of the largest four traders trading in four markets was 56.05%, which indicate that strong oligopolistic form of market structure. Marketing performance of wheat was analyzed by estimating the marketing margin considering associated marketing costs. Producers obtained average profit of Birr 730.95 per quintal in 2019/20 cropping year from wheat production. The average total costs incurred by assemblers, wholesalers, and retailers of wheat were 57, 137.6, and 106.15 Birr per quintal, respectively. Structure, conduct and performance analysis, descriptive statistics and econometric models (i.e Heckman twostage) were used for data analysis. Heckman twostage model was employed to identify factor affecting wheat market participation decision and the level market participation. The model results showed that six explanatory variables significantly affected market participation decision such as age of household, frequency of extension contact, distance from the nearest market, lagged wheat market price, number of oxen owned and family size were significantly affect wheat market participation decision and four explanatory variables significantly affected the volume of wheat marketed by smallholder wheat producers. Total land size owned, land allocated for wheat product, farm income, wheat harvested product were positively and significantly affecting wheat market supply. Absence of improved seed, absence of information on how to use credit, shortage of land, lack of transport facility, quality problem, poor actors linkage, lack of market information, and high cost of seed and fertilizers were the major challenges of wheat marketing performance. Therefore, policy aiming at systematic approach to wheat market performance, increase in farmers training centers, and strengthening of family planning education through rural health extension, land intensification, improved infrastructure, supplying production inputs timely, improving yield and increasing wheat production, knowledge, and creating and strengthening linkages between actors were forwarded by the study to improve wheat marketing performance in the study area. Both the public and private sectors have a role to play in achieving this.