Volume 2, Issue 2, May 2017, Page: 62-72
Market Chain Analysis of Red Pepper: The Case of Abeshge District, Guragie Zone, South Ethiopia
Mekdes Dessie, College of Agriculture and Natural Resources, Wolkite University, Wolkite, Ethiopia
Teshale Woldeamanuel, College of Forestry and Natural Resources Sciences, Hawassa University, Hawassa, Ethiopia
Getachew Mekonnen, College of Agriculture and Natural Resources, Mizan Tepi University, Mizan Teferi, Ethiopia
Received: Dec. 9, 2016;       Accepted: Jan. 18, 2017;       Published: Feb. 13, 2017
DOI: 10.11648/j.ajere.20170202.12      View  4001      Downloads  286
Abstract
The study was conducted at Abeshege Woreda to analyze the market chain of red pepper. The area is known for its surplus production of agricultural commodities. However, market chain of agricultural crops in general and red pepper in particular is not well understood. The study has duly focused on the structure and conduct, market participants and performance of red pepper markets. The data were generated by structured questionnaire, focus group discussions, key informant interviews and field observation. This was augmented by secondary data collected from the BoARD, Woreda marketing agency reports and websites. Quantity of pepper passed through different marketing agents from farmers to consumers. The Farmers-Collectors-Wholesalers-Processors-Consumers channel carried the largest volume, which is 35.7% of the total volume followed by Farmers-Wholesalers-Processors-Consumers channel which carried about 27.6% of the total red pepper marketed. Structure of pepper market indicates four-firm Concentration Ratio (CR4), that is, the share of the largest four traders in the total volume of pepper purchased. The four largest traders handled 35.32% of the total volume of purchased pepper. This suggested that the pepper market in Abeshege Woreda shows a weak oligopolistic market. In relation to the conduct of pepper market, pricing mechanism of the farmers indicated that 13.29% of farmers set their selling price. Cheating was very common in pepper marketing by manipulating weighing scale and adulteration. Regarding payment strategy, about 74.68% of sample farmers sold their product on cash. Traders took a total of 61.3% out of the total profit margin. Red pepper producers added 38.7% of the total value of red pepper in the Woreda. The Total Gross Marketing Margin is highest in Farmers- processors- Consumers (62.1%) followed by Farmers-Retailer –processors- Consumers (55.4%). Therefore, the development of pepper producers’ bargaining power through cooperatives is the best measure that should target at reducing the oligopolistic market structure and increases pepper production in the Woreda pepper markets.
Keywords
Actors, Marketing Cost, Marketing Margin, Red Pepper
To cite this article
Mekdes Dessie, Teshale Woldeamanuel, Getachew Mekonnen, Market Chain Analysis of Red Pepper: The Case of Abeshge District, Guragie Zone, South Ethiopia, American Journal of Environmental and Resource Economics. Vol. 2, No. 2, 2017, pp. 62-72. doi: 10.11648/j.ajere.20170202.12
Copyright
Copyright © 2017 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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