dc.description.abstract |
Due to Ethiopia’s large area and favorable agro-climatic conditions, the country has immense
potential for expanding rice production area and high consumer demand exists in the country.
However, the rice sector is not fully developed as compared to the potential. Many institutional,
organizational and technological factors were attributed to existing inefficiencies in rice
production and utilization. The aim of the study was to evaluate Rice value chain in Libo
Kemkem District of South Gondar Zone, Amhara National Regional State. For the study both
primary and secondary data were used. Primary data was collected from 394 sample rice
producers and other 57 rice value chain actors. A multi-stage sampling technique was used to
select sample rice producer households. First, out of 31 rural kebeles in the district, 15 potential
rice producer kebeles were selected. Second, 5 kebeles were selected randomly. Thirdly,
households who produced rice were listed and finally, 394 households were selected using
simple random sampling technique based on the population proportion. The data were analyzed
and interpreted by using descriptive statistics and econometric model. The Structure Conduct
Performance approach was used to analyze the efficiency of rice market. Heckman two stage
model was used to analyze factors affecting rice market participation and volume of sales.
Producers, processors, whole sellers, retailers and consumers were the direct value chain
actors. Lack of investment capital and working place, unhealthy trade competition and
information asymmetry were found to be the main barriers to entry into the rice business. The
results of Structure Conduct Performance analysis showed a weak oligopsony market structure
at Yifag market with four firms’ concentration ratios (CR4) of 42.24%. With respect to conduct,
price setting strategy deviates from competitive market norms and marketing margin and cost
analysis showed unreasonable cost and profit share among rice market chain actors. The
highest marketing margin producers, millers, wholesalers and retailers received from different
channels were 84.4%, 16.7%, 8.6%, and 18% respectively. Therefore, rice market in the study
area being inefficient. Few large traders collude each other to set the price, while others follow
them. The Heckman two stage model results showed marital status, market information, rice
farming experience and productivity positively and significantly affected both market
participation decision and marketed surplus. Experience of saving was affected participation
decision positively and significantly and household size affected participation decision
negatively and significantly. Thus strengthening value chain development by improving the
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extension services and accessing improved seed, increasing bargaining power of producers by
promoting rural financial institutions/cooperatives and strengthening market information access
and trade regulatory systems are some of the actions to be taken to strengthen the sector’s
development. |
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