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Agricultural Product Marketing: Challenges Towards a Commercial Approach with Particular Reference to Cereal Crops (A Case Study in Bahir Dar Zuria Woreda)

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Agricultural Product Marketing: Challenges Towards a Commercial Approach with Particular Reference to Cereal Crops (A Case Study in Bahir Dar Zuria Woreda) AGRICULTURAL PRODUCT MARKETING: CHALLENGES TOWARDS A COMMERCIAL APPROACH WITH PARTICULAR REFERENCE TO CEREAL CROPS (A CASE STUDY IN BAHIR DAR ZURIA WOREDA) BY: ABEBE KEBIE HUNEGNAW A Thesis Submitted to the School of Graduate Studies of I Addis Ababa University In Partial Fulfillment of the Requirements for the Degree of Master of Arts in Regional and Local Development Studies July, 2007 Addis Ababa AGRICULTURAL PRODUCT MARKETING: CHALLENGES TOWARDS A COMMERCIAL APPROACH WITH PARTICULAR REFERENCE TO CEREAL CROPS (A CASE STUDY IN BAHIR DAR ZURIA WOREDA) BY: ABEBE K Approved By Board of Examiners Chairman of graduate committee signature Advisor signature External examiner • /it)~ 1((1 e.l1- NRYodlA . tern al exammer ~sIgnature Acknowledgement I would like to express my gratitude and appreciation to a nyon e who have contributed to the study one way or another. Specifically I would like to thank the following individuals and institutions. First I would like to express my specia l thanks to my Thesis advisor Issac Paul (PHD) for his inva luable suggestions, advice and constructive criticisms he be has been giving from the inception to the completion of the study. Secondly I would like to express my gratitude to the data collectors and enumerators who pa rticipa te in the study and have done their job with due care. In addition I would like to thank staff members of 2A computer center in BahirDar particularly w /2 Etsegenet Asrat for h er typing and , computer related help she rendered for me. I am a lso indebted to GAMBY College of Medical Sciences for it has render computing services for me during the sLudy. I a m also grateful to farmers who h ave been covered in the study for they have taken time to respond to the questionnaire administered to them. in addition I would like to express my special thanks to different institutions mainly Ministry of Agriculture, Ethiopian Livestock Research institute (ILRI), Amahara Credit a nd Saving Institution (ACSI), and Amahra Region Agricultural Bureau for they have provided me with different data a nd library accesses which I was in need during the study. Finally, [ would like to say thanks to God . Table of Contents Page Acknowledgements ........... ... ... ........... ... ........................................ .... ........ 1 Table of Contents ...................... ........ ... ................... .............. .. .. .. ............ ii List of Tables and Graphs ........ ............. .......................................... .. ....... v Acronyms ............................... .. .............................................................. vii Abstract. ........................................................ ... ... .................................... viii CHAPTER ONE .................................................................................... 1 INTRODUCTION .................................................................................. 1 1. 1 Background of the Study ..................... ... ................................... ............................ 1 1.2 S tatemen t of the Pro blem .................................. .................................................... 4 1.3. Objectives of the Study ............ ............................................ ........... ...................... 6 1.4. Research Questions ................................................................................................ 7 l.5. Scope of the study / Delimitation of the Study ........................ .................... 7 l. 6. J ustifica tion / Significance of the Study .......................................................... 8 1.7. Organization of the Study ........................................................... ...... ................... 8 1.8. Limitations of the Study .............. .............. .......... ...... ...... .......... .. .. ....................... 8 CHAPTER TWO .................................................................................... 9 LITERATURE REVIEW ......................................................................... 9 2.1. The Evolution of Agricultural Marketing in Ethiopia .................................. 9 2. 1. 1 The Imperial Regime (Pre-l 974) ............................................ ...................... 9 2.1.2. The Age of Market Regulation (1975 - 1990) ....................................... 10 2. 1.3. After Market Liberalization (1990 to Date) ................................ ............ 12 2.2. Challenges of Agricultural Marketing ............................................................. 14 2 .2 . l. Inadequate Modern Storage Facility .... .. .................. ......... .. ............... .. ... 15 2.2.2. Grain Quality problem ............................................................................ ..... 15 2.2.3. I nadequate Market Information ................................................ .. .. " .. ........ 16 2.2.4 . Transportation .............................................. .................................................. 17 Jl 2.2.5. Transaction Costs .................................................................................... ..... 18 2.2.6. Lack of Credit and Appropriate Agrarian Reform ............................... 19 2.3. Marketing and Its Functions .................................................... ........................ .22 2.4. Analytical Framework ....................................... ........................... .. .. .................... 24 CHAPTER THREE .............................................................................. 27 RESEARCH METHODOLOGY AND STUDY AREA DESCRIPTION .......... 27 3.1. RESEARCH METHODOLOGY ........................................................................... 27 3.1.1. Samples / Subjects/ Participants .......................................................... .27 3.1.2. Sampling Method ............................................ .. ........ .................................... 28 3.1.3. Methods of Data Collection ..................................................... ................... 28 3.1.4. Procedure of Data Collection ............ ..................................... .. .................. 28 3.1.5. Data Analysis ............................................................... ............... .. .................. 28 3.2. Study Area Description .......................................... ............ ................................. 29 3.2. 1. Amhara National Regional State .............................................................. 29 3.2.2. Bahir Dar Zuria Woreda.......................... ..................................... ............... 3I CHAPTER FOUR ................................................................................ 33 ANALYSIS AND DISCUSSION .............................................................. 33 4.1. Background Information of Respondents ..................................................... 33 4.2. Major Actors of Agricultural Product Marketing in the Study Woreda ....................................................................................................................... 34 4.3. Production Decisions .................................................................................. .. ....... 36 4.3.1. Primary purpose of production (consumption versus commercialization) ........................................................................................ 3 6 4.3.2. Factors that Affect Farmers Choice of Product ................................... 37 4.3.3. Factors That Determine Farmers' Effort to Increase Production .. 39 4.3.3.1. Financial problems ............................................................................ .40 4.3.3.2. Land Scarcity Problem .................................. ..... ....... .. ..................... .45 4.4. Pricing Related Decisions .................................................... ............................... 50 4.4. 1. Basis of pricing ............................................. .... ........... ............. ....... ............... 51 III 4.4.2. Access to Information and its Role in Marketing Particularly in Pricing ............................................................................................................... 52 4 .5. Distribution and Transportation Decisions ..... ...... ..... .................................. 56 4 .6. Problems after Production .......... ,......... ,............................. ................................ 57 4 .7. Place and Season of Sell ..................................................................................... 59 4 .8. Non- Fa rm Income Generating Activity En gagement.. .............................. 62 4.9. Co-operative Marketing .. .. .. .. .. .. .... ... .. ..... .. ......... .... .............. ... ...................... .. .. .. .64 4.10. Post Harvest Processing Activities ................................................................ 65 4.1 1. Amount of Surplus Sold in the Market ....................................................... 66 CHAPTER FIVE ........... .......... ... ........ .... .... .... ........... ...... ... ................. 70 CONCLUSION AND RECOMMENDATION .............. ... ......... ... ................ 70 5.1. Conclusions .. ........ .. ................................................................................. ............... 70 5.2. Recommendations ................. ................................................. " .............. .. ............. 73 Bibliography Appendices IV List of Tables and Graphs Page Tables Table 4 .1.
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