BARLEY MARKET CHAIN ANALYSIS :THE CASE OF SMALL

HOLDER FARMERS DEBRE MARKOS ZURIA GOZAMIN WOREDA IN

IN WONKA KEBELE, EAST GOJAm ZONE, AMHARA REGON,
ETHIOPIA

BY TEFERA TESFAW

ADVISER CHERNET

SENIOR RESEARCH PROPOSAL IN PARCIAL FULFILMENT OF

BACHELOR DEGREE (BSC) ON AGRIBUSINESS AND VALUE CHAIN
MANAGEMENT (ABVM)
SUBMITTED TO DEPARTIMENT OF AGRIBUSINESS AND VALUE
CHAIN MANAGEMENT

COLLAGE OF AGRICULTURAL SCIENCE

DEBRE MARKOS UNIVERSITY BURIE CAMPAS.

BURIE, ETHIOPIA

APRIL 2013

Table list
Table:- 1: research project working schedule 14

Table :-2 Personal costs 15

Table:- 3 Stationery cost 15

Table :-4 Budget summary 15

 LIST OF ABBREVIATION

ACS Amhara Credit and saving institution

CBE Commercial Bank of Ethiopia

CSA Central Statistical Authority

FAO Food and Agricultural Organization

KM kilo Meter

MOARD Ministry of Agricultural Rural Development

NGO Non- Governmental Organization

Contents
Table list I
LIST OF ABBREVIATION II
1. INTRODUCTION 1
1.1. Background of the study 1
1.2 Statement of problem 2
1.3. Objective of the Study 3
1.3.1. General Objective 3
1.3.2. Specific Objectives 3
1.4. Research Questions 3
1.5. Significance of the Study 3
1.6. Scope of the study………………………………………………………………………………………………………………………..3

2. LITRATURE REVIEW 4
2.1. Theoretical Review 4
2.1.1. Definitions 4
2.1.2. Barley Marketing Chain Actors 5
2.1.3. Consumption of Barley and Barley Products inEthiopia 7
2.2. Empirical Literature on Barley Marketing ChainAlemu (2014) 8
3. METHODOLOGY9
3.1. Description of the Study Area 9
3.3. Data Source 9
3.5. Methods of Data Analysis 10
4. WORK PLAN 11
5. BUDGET PLAN 12
6. REFERENCES 13

1. INTRODUCTION
1.1. Background of the study

Globally, barley is the fourth important cereal crop in the production term after wheat, rice and
maize. It is gown annually on 48 million hectare in a wide range of environment. Ethiopia
produces both malt and food barley. In Ethiopia, barley types are predominantly categorized as
food and malting barley based on their uses while the highest proportion of barley production
area is allocated for food barley. Food barley is Barley serves as food, beverage, and feed for
many highlanders in the country and as a substitute of other cereals. At the national level, it
accounts for about 6% of the per capital calorie consumption (Berhane et al, 2011).

Ethiopia is the second largest barley producer in Africa,(FAO, 2014). In the highland of the
country barley can be grown in Oromia, Amhara, Tigray Regional States and part of SNNP in
the altitude range of 1500 and 3500 m, but it is predominantly cultivated between 2000 and 3000
masl (Muluken 2013).It belongs to the genus Hordeum; family panacea in cereal grains. Due to
short supply of malt barley, the country imports about 67,453 tons annually valued at 22.7
million birr (MOARD, 2004).

Barley as a whole is well adapted to marginal and stress prone environment. Than wheat and rice
in the regions which are colder or higher in altitude. Since Ethiopia has various agro ecological
zones which have colder or higher in altitude, barley is widely produced in those areas. In
Ethiopia, barley is grown on about 1.47 million hectare. The total production is about 1.55 tones
with average yield of 1.1 tons per hectare.

Generally from barley producer area amhara region is one of the most producer area from this
region Debre MARKOS zuria gozamin woreda in EAST Gojam Zone is one that is common
area. This area has midium or woinadegaclimatic condition or higher in altitude. The area has
midium favorable condition for barley production. Due to this reason, barley is widely produced
 in that area. The small scale farmers who engaged on the barley marketing chain are full fill their
consumption and generate their income source.

In the study area, barley is grown for many purposes, but the majority of barley is used for
animal feed, human consumption or malting and beer production.

High protein barleys are generally valued for food and feeding while the starch barleys are used
for malting. In the study area, barley is the major important staple food crop. The share of malt
barley is low and most is used for making local bead or injera. Furthermore, the straw of barley
is a good source of animal feed especially during dry season and also useful material for
thatching the roof house. Barley is preferred to other cereals for its early maturity, relieving
hunger amenability for beg (short run season) grown, double cropping and stability of grain yield
compared to other cereals under low and erratic rain fall, poor soil fertility and other stress prone
environmental conditions (HailuGeb

1.2. Statement of the problem

Globally, over 133 metric tons of barley is produced annually (FAO, 2007). However, now days
the market value of the product has become reduce in the different parts of the world from year
to year. The Ethiopian agricultural output markets are characterized by inadequate transport
network, limited number of traders, with inadequate capital facilities, inadequate market
information system,inadequate method of irigation system, lack of skill man power and weak
bargaining power of farmers and undeveloped industrial sectors (Kinde, 2007).A review of
literature in agro-industry value chain in Ethiopia indicates that the sector faces many challenges
due to limited market outlet, limited in market linkage activity and poor market information
among actors (Derek’s, 2007). Barley production has a significant role in reducing poverty
through employment generation. Negassa et al (2011) suggested that biotic factors like diseases,
rusts, insect pests and weed infections contributed to lower rate of barely yield in Ethiopia. Due
to these reasons, the quality of produce is very low and the market price of the product is
reduced. In the study area there are so many problems which have negative impact on the barley
market value. Even if has so many problems, sufficient studies have not been conduct in the
study area, concerning that barley production and marketing. Therefore, this study will be aim to
identifying the problems which are obstacle of barley marketing in the study area. And also it
examines the improvement of barley marketing in the future and minimizes or reduces the gap of
barley marketing problems in wonka kebele.
1.3. Objective of the Study

1.3.1. General Objective

 The overall objective of this study is to assess barley production and market chain
in Debre Markos zuria wonka kebele.

1.3.2. Specific Objectives

 To identify barley market chain actors and their functions in the study area
 To identify the existing market channels in the study area
 To identify the major barley marketing constraints and opportunities in the study area

1.4. Research Questions

1. Who are the major actors in barley market chain and what about their functions in the
study area?
2. What are the major barley marketing channels in the study area?
3. What are barley marketing constraints and opportunities in the study area?
4. How to promote irigation system of wonka kebele?
5. How to develop skill man power barly productivity?

1.5. Significance of the Study

The study will be important for producers , processors , traders and service providers who
engage in barley production and marketing by creating awareness about the marketing problems ,
by providing available or relevant information about barley chain actors that are participate in
barley marketing and major marketing channels in the study area .The other significance of this
study is that it is crucial to formulate barley marketing strategy and policy development for
efficiency and effectiveness of barley marketing system . After the acceptance of the proposal
document, it will serve as a guide for other researchers who will do on the same topic.

1.6. Scope of the Study

The study will be conducted in Debre Marrkos zuria in wonka kebele, Amhara region, Ethiopia.
The study will concern on the assessment of barley market chain.

2. LITRATURE REVIEW
2.1. Theoretical Review

2.1.1. Definitions

Market: The market for barley is the largest of all markets in Ethiopia in terms of the volume of
output handled the number of producers, consumers and other market participants involved, and
the vastness of the geographical area of operation. Million of farmers and consumers as well as a
number of marketing agents are engaged in the production and consumption of grain and in the
provision of diverse marketing services, namely, buying, selling, transporting, storing,
processing, retailing, etc( Rozelle S. 1991).
Market is an actual nominal place where forces of demand and supply operate and where buyers
and sellers interact (directly or through intermediaries) to trade goods, services, contract or
instruments for money or barter (Andargachew, 2011). Market is the way of buyers and sellers
can conduct transaction resulting in mutual net gain that otherwise would not possible (Hyman,
2006).

Marketing: Marketing is a management process through which goods and services move from
producers to consumers. Simply, it is a task of creating, promoting and delivering goods and
services to consumers and business (Branson and Norvel, 2001). Is the adaptation of the
commercial activities and use of institutions by the organizations with a purpose to induce
behavioral change on a short-term or permanent basis? Marketing includes the co-ordination of 4
elements called 4p’s markets. These are:
1. Selection of product

2. Determination of price
3. Channel to reach customers place and

4. Development and implement promotional strategy.

Marketing channels: is a business structure of interdependent organizations that reach from the
point of product or origin to the consumer with the purpose of moving products to their final
consumption or destination (Kotler and Armstrong, 2003).
Marketing channels are the set of practices or activities necessarily to transfer the ownership of
goods from the point of production to the point of consumption. Marketing channel is simple,
direct from vendor to consumer or complex, with several fairly independent but mutually
dependent intermediaries like wholesalers, and distributers, agents or retailers.

2.1.2. Barley Marketing Chain Actors

In barley marketing chain there are three major actors, namely core actors, service providers and
enabling environments.

2.1.2.1. Core Actors(Main Actor)

Core actors are persons who directly involved from the initial point, production to the final point,
consumption. These actors include:

Producers: Barley producers include smallholders and commercial farms. They are core actors
who perform barley production and marketing functions from input of farm preparation on their
farm to post harvest handling of the product.

Processors: are core actors who involved on the barley processing functions and supplied the
processed product to the market. Processors change the product into other forms such as in jera,
bread, porridge, besso, tela etc.

Wholesalers: these are actors who buy large quantities of goods from the producers to the
retailers rather than to the ultimate customers / end consumers.

Retailers: these are also the key actors in barley marketing activities who buy small quantities of
goods from producers and wholesalers and then resell to the final consumers.
Consumers: are the final actors in the barley marketing chain. They purchased the product for
their own consumption . Mostly, the consumers purchase the products from producers and
retailers.

2.1.2.2. Service Providers(Supporter Actor)

These are the one, whose services add value to the barley product, but they are not directly
involved on the barley production and market chain .These includes:

Basic infrastructural service: include market place development in the rural area, road and
transportation services which connect rural barley producer to urban markets and communication
service like telephone.

Financial service: includes micro finance, bank, NGO etc.

Market and business support service: the one who tells about the market of barley where the
supply and to be determined. It links buyers and sellers of barley.

2.1.2.3. Enabling Environment

These are also known as influencers who affect the barley market chain participants either
positively or negatively. These include regulatory frame work and policy, investment incentives,
taxation system, market and trade regulation, land tenure security, administrative procedure,
economic infrastructure and market infrastructure

2.1.3. Consumption of Barley and Barley Products in Ethiopia

Barley is not only the largest produce, but also the biggest consumer of barley and various barley
products in Africa South of Sahara. Barley is a main ingredient in staple foods (e.g. Injera,
porridge and bread) and a local drink (e.g. Tela, besso), in addition to its use for malting and
animal feed. In 2013/14, household consumption accounted for 60% of the total barley
production in the country (CSA, 2014). Barley serves as food, beverage, and feed for many
highlanders in the country and as a substitute of other cereals. At the national level, it accounts
for about 6% of the per capital calorie consumption (Berhane et al, 2011).

Ethiopia’s per capital food barley consumption is by far the largest compared to other African
countries. According to FAO (2011) food balance sheet, Ethiopia’s annual per consumption of
food barley was 14 kg which is more than 3 times the average for Eastern African and 14 times
the world average consumption. However, for food barley and barley products contributed to
Ethiopian diets is small compared to other staple food grain.

2.2. Empirical Literature on Barley Marketing Chain Alemu (2014

Alemu (2014) further identified the production and marketing constraints of barley such as poor
soil fertility, shortage of fertilizers and improved seeds, lack of market information, insufficient
knowledge in product sorting, grading and packing.

Makhura (2003) in doubt that shortage of resources such as poor infrastructure , distant from the
market , lack of assets , in adequate market information , lack of bargaining power and poor
product handling were the main constraints of farmers marketing activities .

Porter (2005) market participations becomes more profitable if producers/farmers are able to
minimize transaction costs like negotiation cost and enforcement cost and services at lower
opportunity costs .

Yirga et al (1998) suggested that a biotic stresses like poor distribution of rain fall in low land
areas and low soil fertility due to soil erosion and poor soil drainage were causes of significant
yield losses in barley production. Negassa et al (2011) suggested that biotic factors like diseases,
rusts, insect pests and weed infections contributed to lower rate of barely yield in Ethiopia. Due
to these reasons, the quality of produce is very low and the market price of the product is
reduced.
Producers

Processors

Barley
Consumers
market
chain Retailers
actors

Whole sellers
 3. METHODOLOGY
3.1. Description of the Study Area

The study will be conduct at wonka Keble in Debre MARKOS Zuria, East Gojam Zone in
Amhara Regional State. The district area is located at 300km from Addis Ababa, the capital city
of Ethiopia. in these Kebele includes there are 20 vilages. wonka kebele found in far from Debre
Markos by 12 KM. The total household population in the district kebele is 1100 from the sample
of some vilages found number of poplation indivisual maximum 60 and minimum 50 then
avarege 55. wonka kebele is foud at the center of wonka wense and Gidel river.

3.2. Types and Methods of Data Collection

The study will use both quantitative and qualitative data type. In collecting this quantitative and
qualitatitive data from individual’s households, I will use open-ended and closed –ended
questionnaires. Quantitative types of data use the purpose of describing the amount of barley
produce, its price each year and number of barly production poplation. Qualitative types of data
use the purpose of expressing the quality of barley, the preference of the people for the barley
production control of factor and SWAT analysis.

3.3. Data Source

The study will be carry out based on both primary and secondary data sources. Primary data will
collect from the respondents of the sample producers, processors, whole sellers and retailers
through interview and questionnaires. In this case, the study will be use structural questionnaires.
Secondary data will be collected from published and un published docments such as
books,manual policy and stratageis and previous research pepers andfrom internet web site.
3.4 Sample size and sampling Technique

in the first stage wonka kebele is selected perpesivly. Ther are 20 vilages among them two
kebele Atare and Abuin will be selected by random sampling method. The total households of
the two kebele are 55and 60 respectively. Among them, 65 people in atar and abuin vilage
participate only keeping rain fall barly prodoction but 50 poplation participate both rain fall and
irigation. wonka kebele are participant on barley production and marketing to survive and
generate their in households by probability proportion to size study will be use quantitative and
qualitative methods to analyze the collected data. After the data collected, it will be analyze by
descriptive statistics such as frequency distribution table, percentage and figure.

4. WORK PLAN

To accomplish the research we use the following time table plan. We use the time table plan
to know each month do any activity perfectly.
Table: - 1: research project working schedule

no Activity februr march April may June July

ay

1 Title selection 

2 First draft 
proposal

3 Second draft 
proposal

4 Proposal 
presentation

6 Data colection 

7 First draft 
research writing

8 Writing final 
research

9 Submition final 
draft

10 presentation 

5. BUDGET PLAN

The cost budget shows the total cost or an expense that is going to be full filled by the
students for the purpose of equation of materials that are necessary for this proposal while
conducting the proposal.

5.1. Personal costs

Table:-2 Personal costs

no descriptaion Day amount mearment Unit cost Totalcost inETB

1 transportaion 3 NO OF TRIP 140 420

2 Stationary material

paper 1 1Pakage A4 200 200

pen 3 Number 10 30
 pencil 3 Number 3 9

Note book 1 number 80 80

Total cost for stationary 790

3 Communication cost 200

4 Cost to print the docment 50 sheets Number of page 2 100

5 Cost for photocopy 150 page 1.50 225

6 Contigency cost(10) 112

1315 ETB

REFERENCES

Alemu (2014), trends and prospects of malt barley value chain in Ethiopia.
Andargachew (2011), Market chain analysis of crop for Goma woreda, in Jima zone, in
Oromia regional state. Ethiopia; final report.
Berhan G. (2011), Food grain consumption and calorie intake pattern in Ethiopia.
Berhane Lake, Hailu Gebre & Fekadu Alemayehu. 1996. Barley production and research. pp 1–8,
in: Hilu
Branson and Norvel (2001), Position and promotion of Ethiopian commodity in the world
market.
Brester, G. 2012. Barley profile. Available at: http://www.agmrc.org/commodities.
CSA (2014), agricultural sample survey area and production of major crops. eds. Barley
Research in Ethiopia: Past Work and Future Prospects. Addis Ababa
FAO (2014), food balance sheet.
FAO (Food and Agriculture Organization). 2009. Agribusiness Handbook: Barley, Malt, and Beer.
for Collection Farm Production Data. Cornell University, Working Papers in Agricultural
Economics.
Gebre and J. Van Leur (Eds.). Barley Research in Ethiopia
Investment Center Division, Rome.
Kotler and Armstrong (2007), principles of marketing tenth edition. Hall of Indian put.Ltd.
New Delh: 5-12
Kotler, p.And g. Armstrong, 2003.Principle of marketing, 10th edition. Hall of indiapvt.Ltd. New
delhi.
Lakew, B., Gebre, H. and Alemayehu, F. 1996. Barley production and research. In: Gebre, H, van
Leur, J,
Makhura (2007), export promotion department of English, p.sJaffee.
Molla A. (2011), research achievements in barley cultural practices in Ethiopia.
Porter (2005) agricultural products promotion in eastern and southern Africa training manual
on market information for those productions in Tanzania.
Rozelle S. 1991. Rural Household Data Collecting in Developing Countries: Designing
Instruments and Methods
U.S grain council (2006), barley; Genus Hordem, family poacea, a cereal grain.
Yirga (1998), barley livestock production system in Ethiopia.

Appendix
Questionnaires

These questionnaires are prepared by agribusiness and value chain management third year
student. The aim of this questionnaire is to gather adequate or necessary information on the
assessment of barley marketing in Sinn worked.

Please, respondents give appropriate answer for each question.

I would like to forward my great tank for all respondents.

 Background information

 Name and place of the respondents

Name…………………

Region……………..

Zone…………………..

Worde…………………….

 Sex of respondent

Male Female

 Educational level

Illiteracy 1-8 grade Above 12 grade

Able to read and write 9-12 grades

 Marital status

Married Divorced

Unmarried widowed

 Age of respondents

0-14 years 22-32 years above 64 years

15-21 years 33-64 years

 Questionnaires for producers

 What are the major inputs used in barley production?

 Seed B. Pesticide C. Herbicide D. Others (specify)

2. Who are your input suppliers?

 Smallholder farmers C. cooperatives

  Private limited company D. Others (specify)

3. Do you receive additional service from your input suppliers?

Yes No

4. If your answer for question number 3 is yes, what kind of service you get?

 Farm equipment C. Credit

 Fertilizers D. Others (specify)

5. Why do you produce barley?

A .For your own consumption

B .For marketing

 For both marketing and consumption

 Who are your barley buyers?

A. Wholesalers’ C. Retailers

B. Processors D. Consumers

7. Where do you sell your barley?

A. In village C. In woreda

B. In keeled D. Others (specify)

8. Do you use contract agreement to sell your barley?

Yes No

9. If your answer for question number 8 is yes, what kind of contract?

A. Oral B .Written C. Both

10. Who decide the price of barley?

A. Yourself B. Buyers C. Brokers D. Others (specify)

11. How do you attract your customers?

A. By selling at lower price

 B. By improving the quality of the product

C. By selling the product with credit

D. Others (specify)

12. What are the major opportunities to produce your barley?

A. Availability of market information B. Availability of service providers

C. Availability of labor D. Others (specify)

13. What are the major constraints to produce barley?

A. Lack of skilled man power B. Lack of market information

C. Seasonality in its production D. Others (specify)

14. Do you have storage service?

Yes No

 Questionnaires for traders (wholesalers or retailers)

1. From whom you buy barley?

A. Producers are farm get level B. Collectors C. Others (Specify)

2. To whom you sell your barley?

A. Other traders B. Brokers

C. Consumers D. Others (Specify)

3. What do you do if your Product is not sold on time?

A. Return back to home B. Sell with lower price

C. Sell on another market place D. Sell on the same market

4. Do you have storage service?

Yes No

5. Do you have access to transport?

Yes No
6. Do you have access to credit?

Yes No

7. If you answer for question number 6 is yes, what are your financial service providers?

 Bank

 Amhara credit and saving institution

 Friends

 Traditional leaders

8. What are the major opportunities and constraints of barley marketing in the study area?

 Availability of market C. Availability of market information

 Availability of labor D. Others (specify)

9. What are the major constraints of barley marketing?

 Loss of customers C. Lack of transportation service

 Lack of financial service D. Others (specify)

10. Where do you sell your barley?

 In village C. In woreda

 In kebele D. Others (specify)

11. Do you process your barley?

Yes No

12. If your answer for question number 11 is yes, in what form?

 Injera B. Porridge C. Tela D. Besso

 Questionnaires for processors

 From whom you buy the raw barley?

 A. Producers B. Retailers C. Others (specify)

2. In what form that you process the raw barley?

A. Injera B. Porridge C. Tela D. Besso

3. What are the major opportunities of barley processing?

A. Availability of raw inputs

B. Demand of people for local alcoholic drinks

C. Others (specify)

4. What are the major constraints of barley processing?

A. Price fluctuation of raw barley

B. Loss of customers

C. Development of substitute products

D. Others (specify)

5. Do you have access to credit?

Yes No

6. Do you have storage service?

Yes No