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Potato is strategic crop in Ethiopia to improve food security and economic benefit to the
country. The value chain of potato in Lay-Gayint district was not developed due to lack of
poor market performance. Therefore this study was initiated to analyze potato value chain
in Lay-Gayint district, South Gondar zone Amhara region of Ethiopia. The objectives of
the study were to calculate benefit share of actors in the chain and to identify market
participation decision of farmers and volume of potato marketed. Two-stage sampling
procedure was employed to select potato producer households and 248 potato producers
were selected by using systematic random sampling technique. Data were collected from
multiple sources including potato producers, collectors, traders, processors, and service
providers by conducting survey, key informant interview, focus group discussion and
personal observations. Descriptive statics and Heckman two stage models were used to
analyze the data. The main actors participated in potato value chain were input supplier,
producers, collectors, retailers and consumers. The results of the marketing costs, profits
and margin analysis indicated that producers incurred the highest production cost and the
major share of the benefit from potato value chain goes to producers in both ware
(51.4%) and seed (68.4%) potato marketing which implies there is poor marketing
performance in the study area. The econometric model result revealed that sex and family
size are the significant factors that affect market participation decision of potato producer
farmers negatively. Other variables like livestock, annual potato harvest and potato farm
experience of households affect positively the market participation decision of potato
producers and are significant. The model also indicated that farm area, annual potato
harvest, road condition to nearest market, and credit access were the significant factors
that determined the amount of potato marketed by potato producers in the study area
positively. Therefore focus on promoting farmers to use irrigation in addition to rain fed,
empowering women to be participant in the market, and creating aces to credit and road
should be taken in to considerations for the potato value chain development.
Key words: value chain, potato, market participation decision, actors
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