ADDIS ABABA UNIVERSITY COLLEGE OF DEVELOPMENT STUDIES, FOOD SECURITY STUDIES PROGRAM Value chain and cost benefit analyssis of honey production and its implication on household food security: a comparative analyl sis of certified organic and conventional honey in Ginbo Wereda, southern Ethiopia By: Amanuel Tadesse June 2011 Addis Ababa ADDIS ABABA UNIVERSITY COLLEGE OF DEVELOPMENT STUDIES, FOOD SECURITY STUDIES PROGRAM Value chain and cost benefit analysis of honey production and its implication on household food security: a comparative analysis of certified and conventional honey in Ginbo Wereda, southern Ethiopia By Amanuel Tadesse A Thesis Submitted to the Food Security Studies Program of the College of Development Studies in Partial Fulfillment of the Requirements for the Degree of Master of Science in Food Security Studies APPROVED BY THE EXAMINING BOARD: CHAIRPERSON, DEPARTMENT GRADUATE COMMITTEE _____________________________________ _______________ ADVISOR Dr. Aseffa Seyoum _______________ EXAMINER Dr. Beyene Tadesse _______________ Table of Contents Table of Contents ............................................................................................................................. i List of Tables ................................................................................................................................. iv List of Figures ................................................................................................................................. v List of Appendices .......................................................................................................................... v Acronyms ....................................................................................................................................... vi Acknowledgements ....................................................................................................................... vii Abstract ........................................................................................................................................ viii 1. Introduction ............................................................................................................................. 1 1.1 Background ...................................................................................................................... 1 1.2 Statement of the problem ................................................................................................. 3 1.3 Objectives of the study ..................................................................................................... 5 1.4 Significance of the study .................................................................................................. 5 1.5 Scope and limitation of the study ..................................................................................... 6 2. Literature Review .................................................................................................................... 7 2.1 General concepts on value chain analysis ................................................................. 7 2.2 Cconcept and application of profit margin. .............................................................. 9 2.3 Honey production and marketing systems in Ethiopia. .......................................... 10 2.4 International organic standards and certified organic honey production ................ 13 2.5 Challenges of organic certification ......................................................................... 16 2.6 Ccontribution of certified organic honey production and marketing to household food security ........................................................................................................... 18 2.7 Empirical literature ................................................................................................. 20 3 Research Methodology .......................................................................................................... 23 3.1 Description of the study area .......................................................................................... 23 3.1.1 Location .................................................................................................................. 23 3.1.2 Climate .................................................................................................................... 24 3.1.3 Farming systems ..................................................................................................... 25 3.1.4 Population ............................................................................................................... 26 3.2 Study Design .................................................................................................................. 27 i 3.2.1 Sampling techniques and sample size ..................................................................... 28 3.2.2 Method of data collection ....................................................................................... 30 3.2.3 Method of data analysis .......................................................................................... 31 4 Results and discussion ........................................................................................................... 32 4.1 Socioeconomic characteristics of the sample households .............................................. 32 4.1.1 Demographic characteristics of the households ...................................................... 32 4.1.2 Resource ownership of the household .................................................................... 33 4.1.3 Decision making and participation level of the household ..................................... 34 4.2 Cost benefit analysis of the certified organic and conventional honey producer households...................................................................................................................... 35 4.2.1 Labor and material cost analysis ............................................................................. 36 4.2.2 Sources of production materials .............................................................................. 38 4.2.3 Total production cost against revenue from honey and associated products per household ................................................................................................................ 39 4.2.4 State of honey for marketing ................................................................................... 42 4.2.5 Access to credit ....................................................................................................... 43 4.2.6 Farmers’ training ..................................................................................................... 44 4.2.7 Access to extension services ................................................................................... 45 4.3 Value chain of honey produced from Ginbo Wereda .................................................... 46 4.3.1 Direct honey value chain actors .............................................................................. 46 4.3.2 Honey value chain service providers ...................................................................... 49 4.3.3 Business enabling environment .............................................................................. 53 4.3.4 Responsible actors for honey value addition .......................................................... 53 4.3.5 Availability of markets and buyers for honey and associated products .................. 55 4.3.6 Channel of selling product ...................................................................................... 56 4.4 Distribution of profit margin among honey value chain actors ..................................... 57 4.5 Role of organic honey certification to food security ...................................................... 61 4.5.1 Food availability ..................................................................................................... 61 4.5.2 Access to food ......................................................................................................... 63 4.5.2.1 Wealth ranking ........................................................................................................ 64 4.5.2.2 Household food insecurity access scale scores ....................................................... 67 ii 4.5.3 Food consumption ................................................................................................... 68 5 Conclusions and Recommendations ...................................................................................... 71 5.1 Conclusions .................................................................................................................... 71 5.2 Recommendations .......................................................................................................... 73 References ..................................................................................................................................... 75 iii List of Tables Table 1: Comparison of revenues from organic and conventional crops-----------------------------15 Table 2: Sample distribution of respondents by location-----------------------------------------------29 Table 3: Socioeconomic data of the sample households-----------------------------------------------32 Table 4: Resource ownership by the household---------------------------------------------------------34 Table 5: Level of decision making by household members--------------------------------------------35