i

Declaration
I, Arefayne Eshete Desta, declare that this thesis entitled: “Assessing the Camel Supply
Chain in Awssi-Resu of Aysaita and Chifra Towns, Afar” is outcome of my own effort and
study and that all sources of materials used for the study have been duly acknowledged.

To the best of my knowledge, this study has not been submitted for any degree in this
University or any other University. It is offered for the partial fulfillment of the degree of
Masters of Business Administration.

By: Arefayne Eshete Desta

Signature_______________________

Date____________________________

ii
 CERTIFICATION

This is to certify that thesis entitled, “Assessing the Camel Supply Chain in Awssi-Resu of
Aysaita and Chifra Towns, Afar”, undertaken by Arefayne Eshete Desta for the partial
fulfillment of degree of Master of Business Administration at Samara University, to the best
of my knowledge, is an original work and not submitted earlier for any degree either at this
University or any other University.

Major Advisor _________________________

Signature _________________________

Date __________________________

Co-Advisor _________________________

Signature _________________________

Date __________________________

iii
 STATEMENT OF AUTHOR
First, I declare that this thesis is my own work and that all sources of materials used for this
thesis have been duly acknowledged. This thesis has been submitted in partial fulfillment of
the requirements for MBA degree at Samara University and is deposited at the University
Library to be available to borrowers under rules of the library. I solemnly declare that this
thesis is not submitted to any other institution anywhere for the award of any academic
degree, diploma, or certificate.

Brief quotations from this thesis are allowable without special permission provided that
accurate acknowledgement of the source is made. Requests for permission for extended
quotation from or reproduction of this manuscript in whole or part may be granted by the
head College of Business and Economics or the Dean of the School of Graduate Studies
when in his/her judgment the proposed use of the material is in the interest of scholarship. In
all other instances, however, permission must be obtained from the author.

Recommended Citation:
Arefayne Eshete Desta (2017), "Assessing the Camel Supply Chain Management in Awssi-
Resu: A Case of Asayita and Chiffera Woredas, Afar Region, Ethiopia". A thesis submitted
in partial fulfillment of the requirements for MBA degree at Samara University, Samara,
Ethiopia.

Name: Arefayne Eshete Desta Signature:

Place: Samara University, Samara
Date of submission: April, 2018

iv
 BIOGRAPHICAL SKETCH

The author was born on 5th September, 1971 GC in Dubti town of-Awsi Resu, Afar region.
He attended his elementary and junior education at Dubti primary and Asfaw Wessen junior
secondary schools at Dubti and Assab towns respectively, and Secondary School in Assab
Senior Secondary School in Assab town. After successful passing ESLCE in 1990 GC, he
joined Dessie TTI in 1991GC and graduated with Certificate in Primary and Nursery School
Teacher in 1991. After graduation he served in Assab Ethiopian Community School for one
year. He joined National Meteorological Service Agency (NMSA) and graduated with
Certificate in assistant meteorological observer in 7 th June, 1999 and awarded Diploma in
Meteorological Observer (WMO Class IV) in March 10, 2004. He joined Samara University
and graduated with BA Degree in Accounting and Finance on June 30, 2012. After
graduation he served in Afar National State Government Communication Affairs Office as
Internal Auditor for one year (20/12/2004 through 30/12/2005 EC), ln Afar HIV Network
(Afar/NAP+/) as accountant for one year (November 19/2012 through November 18/2013),
in Afar Pastoral Community Development Project as Finance Officer for two years
(September 11/2014 through March 16//2016 GC) and in Tendaho Sugar Factory as Senior
General Accountant for six months (March 30/2017 through September 26/2017 GC). He
joined Samara University in 2014 to pursue his MBA degree in Business Administration
program.

v
 Acknowledgments

I am indebted to many individuals for their help and encouragement rendered while
conducting this study. First, I would like to appreciate my Principal Advisor Kahsu Mebrahtu
Araya (Dr) and my Co-advisor Yibabie Nigussie (MBA) for their valuable comments,
guidance and encouragement from proposal write up and questionnaire development up to
submission of the final thesis write up.
I would like to thank my sister W/ro Fikre Eshete, to her husband Ato Adem Mohammed
Muzemil, to their son Fahim Adem and to their daughter Firdows Adem for their invaluable
support. It is a great pleasure to extend my appreciation to all staff members and development
agents of Aysaita and Chifra Woreda Pastoral and Agro-Pastoral Development offices for
their permission and cooperation to use available data from Woreda offices and all sample
respondents for this study.
Above all, I thank the Almighty Allah for giving me health and strength for the completion of
the study.

vi
 TABLE OF CONTENTS
Contents Page

Approval Board of Examiners ………………………………………………………………...i

Declaration ……………………………………………………………………………………ii
Certification ………………………………………………………………………………….iii
Statement of Author…………………………………………………………………………..iv
Biographical Sketch …………………………………………………………………………..v
Acknowledgments …….…………………………………………………..…………………vi

Table of Contents ……………………………………………………………………...…….vii

List of Tables………………………………………………………………………………….xi
List of Tables In The Appendix…………………………………………………………….xiii
List of Figures ………………………………………………………………………………xiv
Acronyms ……………………………………………………………………………………xv
Abstract …………………………………………………………………………… ……...xviii
CHAPTER
ONE……………………………………………………………………………….1
INTRODUCTION……………………………………………………………………………..1
1.1Background of the study………………………………………………………….. ……...1
1.2 Statement of the problem …………………………………………………….…………..3
Research Questions ……………………………………………………………………….6

1.3 Objective of the study…………………………………………….……………….……….6

1.3.1 General Objective ………………………………….………………………………..6

1.3.2 Specific Objectives ………………………………………………………………….6

1.4 Significance of the study…………………………………………….…………………….7

1.5 Scope and limitation of the study………………………………………………………….7
1.5.1 Scope of the study ……..……………………………………………………………7

1.5.2 Limitation of the study ……………………………………………………………..7

1.6 Organization of the thesis …….……………………………………………….…………..8

CHAPTER TWO ………………………………………………………………………...........9

REVIEW OF LITERATURE …………………………………………………….……….......9

vii
2.1 Definitions and Concepts in Camel Value Chain Analysis………………….……………9
2.1.1 Market chains versus value chains ………………………………………………11
2.1.2 Major concepts guiding agricultural value chain analysis …………………...… 12
2.1.2.1 Effective demand ………………………………………………………… 12
2.1.2.2 Production …………………………………………………………………12

2.1.2.3 Value chain governance ………..………………………………………….13

2.1.2.4 Value chain upgrading ……………………………………………………..14
2.1.3 Market and marketing ……………………………………………………………14

2.1.3.1 Marketing efficiency ….……..………………..………………………….. 15

2.1.3.2 Marketing channel …….………….………………..………………………15

2.1.3.3 Marketing Performance ………..………………………………………….15

2.1.3.4 Measuring Value Chain ……………………………….…………………...16
2.2 Benefit of Value Chain in Agricultural Sector ……………………….…………………17
2.3 Developing Value Chain Systems towards the Benefits of the Poor ….…….…………18
2.4 Development of Market-Driven Camel Value Chain……………………………………19
2.4.1 Drivers of Ethiopian livestock exports: does policy matter ………………………19

2.5 Value Addition and Camel Trading………………….…………………….…………….21

2.5.1 Camel Populations in the Mid-Altitude Regions …….………………..………….22

2.5.2 Camel Breeding In the Mid-Altitude Regions ………………….….,….………….24
2.5.3 Categories of the Camel Markets in the Chain ……………………….…………. 26

2.6 Status of Pastoralist Camel Trading in Ethiopia ………………………………………...28

2.7 Review of Empirical Studies …………………………………………………………….31

2.7.1 Value chain approach ……………………………………………………...………31

2.7.2 Determinants of marketable surplus ……………………………………………..32

2.7.3 Determinants of market channel choices …………………………….……………33

2.8 CONCEPTUAL FRAME WORK
……………………………………………………….35
CHAPTER THREE ………………………………………………………………………….37
RESEARCH METHODOLOGY ……………………………………………………………37
3.1 Site Selection …………………………………………………………………………….37

viii
3.2 Description of the Study Area …………………………………………………………..37
3.3 Data Type and Sources…………………………………………………..………………40
3.4 Research Strategy and Research Design ……………………………………..…………41
3.4.1 Target Population and Selection of Respondents …………………………………42
3.4.2 Data Collection and Instrument ………………………………………………….43
3.4.3 Methods of Data Analysis …………….………………………………………….44
3.4.3.1 Descriptive and Inferential Statistics ……………………...………………44
3.4.3.2 Econometric analysis …………………..………………………………….48
3.5 Hypothesis, Variable Selection and Definition ………………….……………………..53
3.5.1 Dependent variables ………………………………………………………………..53
3.5.2 Independent variables ………………………………………………………………54
CHAPTER FOUR …………………………………………………………………………...60
RESULTS AND DISCUSSION …………………………………………………………….60
4.1 Descriptive Results ………………………………………………………………………60
4.1.1 Demographic characteristics of sample households………...…………………….60
4.1.2 Production overview………………………………………………………………...62
4.1.3 Means of livelihood ………………………………………………...………………63
4.1.4 Herders characteristics by the level of market supply ……….……………………..63
4.1.5 Herders’ characteristics by marketing outlets ……………………………………..65
4.2 Value Chain Analysis …………………………………………………….……………..67
4.2.1 Value chain map of Camels in Ayssaita and Chifra Woredas ……….….…………67
4.2.2 Actors and their role in Camel value chain …………………..…….………………68
4.2.2.1 Primary actors ………………………………………….…………………..69
4.2.2.2 Supporting actors …………………………………………………………...74
4.2.3 Value chain governance ………………………………………………...……….. ..76
4.3 Marketing Channels and Performance Analysis ……………………………..………….77
4.3.1 Marketing channels ……………………..……………………….…………………77
4.3.1.1 Camel marketing channel ………………………………………………….77
4.3.2 PERFORMANCE OF CAMEL MARKET ………………………………………..79
4.3.2.1 MARKETING MARGIN …………………………………………………...79
4.4 Econometric Model Outputs ……………………………………………………………82
4.4.1 Determinants of camel market supply ……………………………………………...82
4.4.2 Determinants of camel market outlet choices …………………………………….89
4.5 Challenges and Opportunities in Camel Value Chain ………………………………….95
ix
 4.5.1 Production ……………………………………………………………………….....95
4.5.2 Production opportunities …………………………………………………………..97
4.5.3 Marketing constraints …………………………………………………………….....97
4.5.4 Marketing opportunities …………………………………………………………….98
CHATER FIVE …………………………………………………………………………….101
SUMMARY, CONCLUSION AND RECOMMENDATIONS …………………………...101
5.1 Summary and Conclusion ……………………………………………………………...101
5.2 Recommendations …………………………………………………………………….103
6. REFERENCES …………………………………………………………………………..106
7. APPENDICES …..……………………………………………………………………….115

Appendix A: List of Appendix Tables ……………………………………………….115 - 127

Appendix B: Questionnaires & Interview Schedules ………………………………..128 - 156

x
 LIST OF TABLES
Table 1: Enterprise relations: production chain versus value chain …………………………11
Table 2: Estimated volume and value of camel transactions (2009/10) …………….……..24
Table 3: Trekking costs for camels …………………………………………………………29

Table 4: Trucking costs for camels ………………………………………………..….. ……30

Table 5: Conceptual Frame Work …………………………………………………………. 35

Table 6: Sample size distribution in the study woredas …………………………….……… 43

Table 7: Demographic and socioeconomic characteristics of samples (categorical variables) ………61

Table 8: Demographic and socioeconomic characteristics of samples (continuous variables)…….....62

Table 9: Mean productivity of Camels per hectare ………………………………………….63

Table 10: Statistical test of continuous variables by the level of market supply……………………...64

Table 11: Statistical test of dummy variables by the level market supply ……………. ……65

Table 12: Herders’ by demographic characteristics across marketing outlets …..…………. 66

Table 13: Percentage of Herders by demographic characteristics across marketing outlets …………66

Table 14: Source of Camel species for sample respondents ………………………………...69

Table 15 Herding systems, value addition and experience use ……………………………..70

Table 16: Value adding inputs use by sample respondents ………….……………………. .71

Table 17: Post-harvest loss of camels (Livestock’s) in percent of production ……………...72

Table18: Access to services by sample respondents …………………………….…………..75

Table 19: Camel marketing costs and benefit shares of actors ……………………………...80

Table 20: Marketing Margins of Actors in Different Marketing Channels of Camel ……… 82

Table 21: Marketing margins ……………………………………………………….…… …82

Table 22: The Multiple Regression Model Estimates ………………………………..…… 83

Table 23: Coefficients and marginal effects of Multinomial Logit Model for the

xi
 choice of marketing outlets ………...…………………………………………….91

Table 24: Major Production Constraints of Camel Herders …………...………………….. ..96

Table 25: Major Marketing Constraints of Camel Herders …………………...……………98

Table 26: Factors Affecting Camel Production …………………………………………….99

Table 27: Determinants of camel quantity supplied to the market ……………….………...100

xii
 LIST OF TABLES IN THE APPENDIX
Appendix table1: The result of multicollinearity test ………………………………………115

Appendix table 2: Hausman tests of IIA assumption for MNL model …………………… 116

Appendix table 3: Conversion factors used to compute tropical livestock units (TLU) …...116

Appendix table 4: Conversion factor used to compute adult equivalent ……………….….116

Appendix table 5: Mean land allocation of sample households for Livestock’s herds …… 117

Appendix table 6: Income sources by woreda ……………………………………………..117

Appendix table 7: Means of transportation for sample respondents ……………………….118

Appendix table 8: Market place for selected Camels ………………………………………118

Appendix table 9: Quantity purchased and income of Camel consumers ………………….119

Appendix table 10: Source of extension service …………………………………………...119

Appendix table 11: Source of credit by sample households’ herder ………………………120

Appendix table 12: Need of respondents to expand camel production and marketing …….120

Appendix table 13: Marketing problems mentioned by traders ………………….………...121

Appendix Table14: MNLinear Regression Coefficient Correlations ……………………....122

Appendix Table 15: MNLogit Model Parameter Estimates ……………………………......123

xiii
 LIST OF FIGURES
Figure 1 Typical agricultural value chain and associated business development Services…. 10

Figure 2: The Camel Market Network ………………………………………………………26

Figure 3: Volume of Camel Sales Conceptual Frame Work ………………………………..36

Map 4: Administration Regions and Woreda Map of Afar Region …………………….….. 40

Figure 5: Value chain map of Camels ………………………………………………………68

Figure 6: Camel market channel ………………………………………………………….. ..78

xiv
 ACRONYMS
AAFC ………………………………………………… Agriculture and Agri-Food Canada

CASCAPE ….. Capacity Building for Scaling Up of Evidence Based Best Practices

In Agricultural Production in Ethiopia

AEqu ………………………………….…………………………………... Adult Equivalent

AExte ……………………………………………….………… Access to Extension Service

AFExp ……………………………….…………………. Agricultural Farming Experience

BoARD…………….……………….…… Bureau of Agricultural and Rural Development

BoFED ……………………………...…… Bureau of Finance and Economic Development

BL Model ………………………… Binary Logit model for market participation decision

CACIA………………………………….. Central Australian Camel Industry Association

CBE………………………………………..………………….Commercial Bank of Ethiopia

CSA…………………………………………..……………….. Central Statistical Authority

CA ……….…………………………………………………………………….. Credit Access

DWH …………………..………………..…………………………… Durbin-Wu-Huasman

DKCRC… ………………………………Desert Knowledge Cooperative Research Centre

DMkt …………………………...……………………… Distance from the Nearest Market

EEA/EEPRI …………… Ethiopian Economic Association/Ethiopian Economic

Policy Research Institute

ELVCD………………………………………. Ethiopia Livestock Value Chain Diagnostic

ENA………………………………………………………..……….. Ethiopian News Agency

FAO…………………………….………….………… Food and Agricultural Organization

FAOSTAT………..…. Food and Agriculture Organization of the United Nations (FAO)

GTP ………………………………..…………………… Growth and Transformation Plan

GTZ …………………………………………. German Agency for Technical Cooperation

HEduc ………………….……………………………… Education of the Household Head

xv
ILCA…….………………………………..…… International Livestock Centre for Africa

MCoop …………………………………………………… Membership to any Cooperative

MoARD…………………...……………. Ministry of Agriculture and Rural Development

MoFED ………………………………… Ministry of Finance and Economic Development

MInfo ………………………………………..…….………. Access to Market Information

MktO ……………………………………………..……….……………… Marketing Outlet

MNL ………………………… Multi Nomial Logit model for the choice market channels

MSPA ………………………..…………….……. Mauritius Sugar Producers’ Association

NGOs………………….…………………………………Non Governmental Organizations

NMM ………………..……………………………………………… Net Marketing Margin

NOFI …………………………………………… Income from Non/Off Farming Activities

OECD ………………………. Organization for Economic Cooperation and Development

OLS regressions …………………………..…….…… Ordinary Least Square regressions

OTran …………………………...…………… Ownership of Market Transport Facilities

PLC……………………………………………………….………..Privet Limited Company

QPron …………………………………………………………………… Quantity Produced

RMA ………………………………………………..……..……… Rapid Market Appraisal

RIRDC……………………….. .Rural Industry Research and Development Corporation

Sex ……...…..……………..……………………………….…… Sex of the Household Head

TADs……………………………………………………... Trans-boundary animal diseases

TEV…………………………………………………………..….. Total Economic Valuation

TGMM ……………………………………………………. Total Gross Marketing Margin

TLU ……………………………………………………………...… Tropical Livestock Unit

UK………………………………………………………………..………….United Kingdom

UNIDO ….………………..……… United Nations Industrial Development Organization

UNDP-EUE…………….United Nations Development Programme – European Economy

USAID………………………..United States of America for International Development

xvi
USD………………………………………………………………..…….United States Dollar

VAdd ………………………………………………………… Post Harvest Value Addition

VCS ……….……………………………………………………….... Volume of Camel Sales

VIF ……………………………………………………………… Variance Inflation Factors

WoFED…………………………………..Woreda of Finance and Economic Development

xvii
 Assessing the Camel Supply Chain Management in the Awssi-Resu (Asayita
and Chiffera Woredas), Afar Region, Ethiopia

ABSTRACT
This study was aimed at analyzing supply chain of camels in Aysaita and Chifra Towns of
Afar Region with specific objectives of identifying camel supply chain actors and examining
the performance of actors in the chain; analyzing the determinants of camel supply to the
market in the study area; and identifying marketing channels and factors affecting outlet
choice decisions of camel herders. The data were collected from both primary and secondary
sources. The primary data for this study were collected from 140 camel herders, 18 camel
traders and 40 camel consumers through application of appropriate statistical procedures.
The multinomial logit model results also indicated that the probability to choose the collector
outlet was significantly affected by Volume_Of_Goats, ExpCP, Income_from_camel_sale,
ACredit, Number_Working_Persons, AgeHH, Death_dueto_draught, MCooperative and
Volume_Of_Oxen compared to retailers, wholesalers, consumers and brokers outlet. And
also, the probability of choosing retailer marketing outlet was affected by AgeHH, ExpCP,
Income_from_camel_sale, Volume_Of_Goats, and Number_Working_Persons as compared
to wholesalers, consumers and broker’s outlet. Similarly, the probability of choosing
wholesalers marketing outlet was affected by ExpCP, AgeHH, Volume_Of_Goats,
Volume_Of_Oxen, and Income_from_camel_sale. The probability of choosing consumer’s
marketing outlet was affected by Family Size, volume of cows current year herd, TH Size,
Volume of Goats current year herd and Age of HH as compared to collectors, retailers,
wholesalers and brokers outlet. The probability of choosing broker’s marketing outlet was
affected by Volume_Of_Oxen, Volume_Of_Goats AgeHH, Income_from_camel_sale,
ACredit, ExpCP, Death_dueto_draught and Number_Working_Persons as compared to
collectors, retailers, wholesalers, and consumers’ outlet. Therefore, policy aiming at
increasing herders’ access to modern inputs, developing and improving infrastructure,
gender consideration, cooperative development and improving extension system are
recommended to accelerate the chain’s development.

Methodology: Camel herder’s response in Aysaita and Chifra Towns of Afar Region in
2016/2017 were analysed.

Statistical Analysis: Descriptive analysis like chi-square analysis and multinomial logistic
regression analysis is performed. Results: Out of the 140 camel herder’s cases, 40 (28.57%)

xviii
were from Aysaita woreda and 100 (71.43 %) were from Chifra woreda. In Ayssaita woreda
out of 40 herders 4(10.0%) were mainly choose collectors camel outlet channel, 20(50.0%)
were mainly choose retailers camel outlet channel, 9(22.5%) were mainly choose whole
sellers camel outlet channel, 4(10.0%) were mainly choose consumers camel outlet channel
and 3(7.5%) were mainly choose brokers camel outlet channel .Whereas in Chifra woreda
out of 100 herders 43(43.0%) were mainly choose collectors camel outlet channel, 23(23.0%)
were mainly choose retailers camel outlet channel, 22(22.0%) were mainly choose whole
sellers camel outlet channel, 6(6.0%) were mainly choose consumers camel outlet channel
and 6(6.0%) were mainly choose brokers camel outlet channel. MLR analysis showed that
Volume_Of_Goats, ExpCP, Income_from_camel_sale, ACredit, Number_Working_Persons,
AgeHH, Death_dueto_draught, MCooperative and Volume_Of_Oxen had higher odds of
camel marketing outlet channels in Ayssaita and Chifra towns’ herders.

xix
 CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY

In many countries in the Middle East, Asia, and Africa, camels (both species) have been
commercially exploited for hundreds of years. The industry in these countries is often built
around a structured value chain that includes farming, trading, and transport, slaughtering,
processing, and marketing to final consumers. A wide range of products are traded: live
animals for racing and beasts of burden, meat, milk, hides, and components of medicinal
products. Camels (both Dromedary and Bactrian camels) are used commercially in many
countries, primarily as a source of meat, milk, medicinal products, leather, and wool. The
international camel industry is based on farmed, not feral animals (Zeng B., 2008a).

The global population of domestic camels is relatively stable, at around 22 million, with only
5% of them being Bactrian camels. In 2007, the largest herds existed in the African nations of
Somalia, Sudan, Ethiopia, Mauritania, Kenya, Chad, Mali, and Niger and the subcontinent
countries of Pakistan and India, for a population of 18.8 million, with the other 3.2 million
distributed across 36 other countries (FAOSTAT, 2008).

There is significant global trade in live camels (Foster et al., 2005). While it is hard to obtain
accurate information, the following Food and Agriculture Organization of the United Nations
(FAO) data (FAOSTAT, 2008) show that since 1990, global trade in live camels has
oscillated considerably, with an average annual number traded of 80 000 head for an average
annual value of approximately US$28 million. Since the late 1990s, the world trade in live
camels has been declining at a rate of approximately 8% per year.

The Arab nations of Egypt, Saudi Arabia, Qatar, the United Arab Emirates, and Oman were
the world’s largest importers of live camels in 2000–2005, accounting for more than 90% of
total world imports (FAOSTAT, 2008).

Sudan was the world’s largest exporter of live animals from 2000 to 2005 (FAOSTAT,
2008). In this period the country’s live camel exports varied from ~22 000 to ~97 000 head
per annum, accounting for approximately 53–68% of total international live camel exports.

1
Other key exporting nations recorded by FAOSTAT between 2000 and 2005 were Qatar,
United Arab Emirates, Oman, Saudi Arabia, and Djibouti (FAOSTAT, 2008) with Mauritania
(Goulding et al., 2007) and Ethiopia (Ethiopian News Agency, 2008) beginning to export
large numbers.

Recent reports suggest that the international trade in live camels has started to recover, with
the second largest live animal exporting company in Ethiopia, SAAFI Trading and Agro
Industry PLC, predicting it would export 20, 000 camels worth US$6 million abroad in 2008.
This is a 50% increase on its previous year’s export figures, and they continue to expect an
average price of US$300 per head. It is interesting to note that the company requested the
Ethiopian government strengthen its control over contraband trade, which, it said, is disabling
the exporter’s competitive capacity in the global market (ENA, 2008).

In contrast to cattle and small ruminants, camels have received very limited attention from
policy makers in Ethiopia. In terms of research, a growing body of literature is available on
camel production and diseases (e.g., Abebe Wosene, 1991; Bekele, 1999; Melaku Tefera and
Fesha Gebreah, 2001; Bekele Mergersa Bati, 2004; Bekele Mergersa, 2010), but relatively
little information is available on camel marketing and trade (e.g., Yohannes Mehari et al.,
2006). However, important trends in camel ownership have been reported, such as the
increasing ownership of camels by Borana herders (Desta and Coppock, 2004) and the Issa-
Somali in Shinile zone (Kassahun et al., 2008), associated with the drought-resistance
qualities of camels changing vegetation, and other factors More recently, a boom in camel
trade from pastoralist areas has been recognized, with pastoralists shifting herd composition
to produce more camels for the market (Aklilu and Catley, 2010).

As Aklilu and Catley (2010), reported their study, for a long time the camel market network
chain to north and north-western Ethiopia began at the Miesso market, some 300 km east of
Addis Ababa. The last six months, however, saw the extension of the chain to Melka Oda
market in south-eastern Ethiopia (Bale) in response to the growing domestic and export
demand. The chain consists of some 24 markets in Oromia, Afar, Amhara, and Tigray
Regions, in which camels are either the dominant species or supplied in significant or
reasonable numbers. The chain stretches approximately 1,200 km from Miesso to the
terminal market of Shiraro. The crossing point into Sudan (Humera) is another 160 km from
Shiraro. With the recent inclusion of the Melka Oda market in Bale, the total length of the

2
market chain extends more than 1,600 km up to the exit point to Sudan. The markets in the
chain can be classified into three broad categories, source markets, value-adding markets, and
the terminal market (Aklilu and Catley, 2010).

As can be seen in this report, the camel trading chain comprises more than six ethnic groups
acting as producers, value adders, tinerant/regular traders, trekkers, and truckers, Despite the
physical scope of the trade and the range of actors involved, it seems not to have been
documented previously. This lead we to be initiate to know about the contribution of Afar in
this camel supply chain. Because, the contribution of camel in terms of cash to pastoralists
and marketing of camels and its product and the performance of commercial camel
production for domestic and export market are not well studied before. Therefore, the study is
initiated with the objectives generating base line information to examine the factors affecting
the supply chain management of camel trading in the Afar Region of Awssi-Resu at Aysaita
and Chifra markets and forward the possible suggestions to alleviate these prevailing
challenges. It is from this point of view that the researcher is motivated to assess camel
supply chain management in the Afar Region.

1.2 STATEMENT OF THE PROBLEM

Supply and value chains are vertically integrated strategic alliances between a series of
independent businesses that have come together as a group to more efficiently capitalize on
specific market opportunities (Cox, 1999). The goal of a supply/value chain is to optimize
performance in that industry using the combined expertise and abilities of the members of the
chain. Successful chains depend on integration, coordination, communication, and
cooperation between partners with the traditional measure of success being the return on
investment (O’Keefe, 1998; Boehlje, 1999).

The conventional view of a successful value chain is that it incorporates competitive

advantage (Porter, 1985) with some acknowledgement and consideration of social factors
such as trust, satisfaction, appropriate power structures, commitment, communication,
relationship-specific investment, and strong personal relationships (Batt, 2003). These social
factors relate to both vertical and horizontal connections within the chain (Lazzarini et al.,
2007).

3
The value chain for the camel industry (commercial use of camels) includes all kinds of
camel resources through to the final camel product market. The issues along the supply chain
including the availability of the resource supply capacity (harvesting and processing), market
capacity and accessibility, and economic viability. The camel industry value chain is an
important tool for ensuring the viability will addressed of the camel industry in Australia, as
it can identify the issues connected to each node of the supply chain. The camel industry
comprises a range of enterprises that use camels commercially, as shown including
harvesters, camel farmers and consolidators, transporters, live exporters, abattoir operators,
pet meat manufacturers, product wholesalers, and retailers. These enterprises vary in size
from one-person businesses to major abattoirs employing tens of staff. The industry can be
divided into five sectors: harvest, live export, meat for human consumption, pet meat, and by-
products.

A review of literature in agro-industry value chain in Ethiopia indicates that the sector faces
many challenges due to limited market outlets, limited efforts in market linkage activities and
poor market information among actors (Dereje, 2007; Kaleb, 2008; Dendena et al., 2009).
Correspondingly, Mamo (2009) argued that small scale, dispersed and unorganized producers
are unlikely to exploit market opportunities as they cannot attain the necessary economies of
scale and lack bargaining power in negotiating prices.

Development need of agricultural products, for instance camel commercialization is poorly

addressed in Ethiopia. But these days efforts have been stepped up to improve and support
the sector. With this line, the current Growth and Transformation Plan (GTP) prioritize
intensive production and commercialization of horticulture as a sector for attention. Thus, the
development policy initiates the need to accelerate the transformation of the sub-sector from
the subsistence to business oriented agriculture. But, the existing constraints of production,
post-harvest handling and marketing such as: - input utilization, productivity, packing,
warehousing cold storage and distribution have played their deterring role on production,
trade, and consumption of vegetables in Eastern Ethiopia (Bezabih and Hadera, 2007).

The CACIA is continuing to work with manufacturers to promote the value of camel by-
products such as camel oil, wool, and leather (Peter Seidel, 2008; CACIA, pers. comm.).
Supplying both domestic and export markets, pastoralism provides growing urban
populations with meat at competitive prices and secures livelihoods, not only for millions of
primary producers, but also for tens of thousands people working in and around the livestock

4
trade (Aklilu and Catley 2011; Gertel and Le Heron, 2011). For example, the primary
production of livestock in Sudan (dominated by pastoral systems) supports thousands of
trading and non-trading market operators, transporters, drovers, hundreds of feedlot
operations, and more than 50,000 jobs (estimate) between meat and skin processing (Krätli,
unpublished).

Pastoral systems also support important auxiliary market chains such as fodder and crop
residues and water for livestock. They are specialized but rarely isolated. In many parts of
sub-Saharan Africa, pastoral systems are still (or sometimes again) part of a regional
integration with crop systems, for example where pastoral herds feed regularly on crop
residues on the fields, either in exchange for manure or for cash (Powell et al., 1994). They
provide small-scale farmers with draft-oxen, as well as the cheapest and often the only source
of regeneration of soil fertility: manure. In Ethiopia, for example, pastoralism was estimated
to contribute 20% of the draft power used in agriculture, with almost three million oxen
(EEA, 2005), and produce manure for an estimate value of US$34 million (SOS Sahel
Ethiopia, 2008, p. 21).

As Behnke and Metaferia (2011) and Behnke (2010) reported that the monetary values of
pastoral system identified through TEV and Ethiopia estimated 80% of exports from pastoral
system. Working camels provide transport services worth 46 million dollars per year.
Collective insurance value of pastoral herds estimated at 340 million USD and Returns to
capital investment around 25–30% per year.

Problems in the camel supply chain hinder the potential gains that could have been attained
from the existing opportunities. In this regard, camel supply chain analysis is an interesting
process that has not been investigated much in the study areas. Both buyers and sellers in the
study areas usually do not play collective roles towards one another and there are no camel
processing activities. Under such circumstances, a study that focused on production
problems, marketing problems, and roles and responsibilities of actors can play significant
role towards the improvements of the existing system.

A review of literature conducted by Aklilu and Catley (2010) aims to fill some of the
information deficits on camel trade in Ethiopia by describing an extensive camel trade route
that stretches for nearly 2,000 km from Melka Oda in Bale and Miesso (near Awash in the

5
east) to the Raya Plains, Shiraro, and Setit Humera (the crossing point to Sudan) in northwest
Ethiopia. The trade involves more than six ethnic groups as producers, value adders,
itinerant/regular traders and trekkers, and truckers. Despite the physical scope of the trade
and the range of actors involved, it seems not to have been documented previously. This
shows that the presence of conceptual gap in the camel supply chain which lead the
researchers to be initiate to know about the contribution of Afar in this camel supply chain.
Because, the contribution of camel in terms of cash to pastoralists and the marketing outlet
options (both domestic and international) for camels and its product and the performance of
commercial camel production for domestic and export market are not well studied before.
Therefore, the researcher is initiated with the objectives generating base line information to
examine the factors affecting the supply chain management of camel trading in the Afar
Region of Awssi-Resu at Aysaita and Chifra markets and forward the possible suggestions to
alleviate these prevailing challenges. It is from this point of view that the researcher is
motivated to assess camel supply chain management in the Afar Region.

To assess the factors affecting the performance of camel supply chain management in the
Afar Region, the researcher was tried to address the following basic research questions.

RESEARCH QUESTIONS

1. What are the camel supply chain actors’ and their performance in the study area?
2. What are the determinants of camel supply to the market in the study areas?
3. What are the marketing channels of camels and factors affecting outlet choice
decisions of camel herders?

1.3 OBJECTIVES OF THE STUDY

1.3.1 GENERAL OBJECTIVE

The general objective of the study is to analyze the supply chains of camels in the study
areas.

1.3.2 SPECIFIC OBJECTIVES

The specific objectives of the study are:

1. To identify camel supply chain actors and examine their performance in the chain;
2. To analyze the determinants of camel supply to the market in the study areas;

6
3. To identify marketing channels of camels and factors affecting outlet choice decisions of
camel herders.

1.4 SIGNIFICANCE OF THE STUDY

The research was assessed the main factors that affect supply chain management of Awssi-
Resu camel marketers. Additionally, the performance of camel trade and main actors in the
supply chain of camel trade was identified. Based on the identified challenges and
opportunities, the research was used by camel exporters and other stakeholders to alleviate
the challenges and exploit the opportunities of camel export business. As the government
encourages the live animal export, the study might have contribution to the policy makers for
using appropriate policy interventions. Besides, the study is going to identify what areas of
support should government institute and exporters have to work together was provide a clue
to improve the performance of camel export and organization of the actors (or stakeholders)
from input suppliers, producers and processors, to exporters and buyers engaged in the
activities required to bring agricultural product from its conception to its end use (Kaplinsky
and Morris, 2001) in the chain. Finally, since more is not studied in this area, the study may
also be used as an input and reference for researches aimed at similar or related areas of the
study.

1.5 SCOPE AND LIMITATION OF THE STUDY

1.5.1 SCOPE OF THE STUDY

The scope of the study was delimited geographically to the assessment of factors that affect
the performance of Awssi-Resu camel supply chain management. Conceptually, it was be
limited to assessment of the dependent and independent variables that hinder the performance
of Awssi-Resu camel supply chain management of the Resu. And it was also be limited by
the time. Methodologically, the study was be done on the government bureau officials and
individual actors starting from supplier to customers who are participating in the camel
supply chain and accessible for this research and found in the Ayssaita and Chifra markets of
Awssi-Resu.

1.5.2 LIMITATION OF THE STUDY

Despite the researcher’s effort to maximize the fruitfulness of the research, the study was
subjected to different limitations that were emanated from its scope. It would have been

7
important to conduct the research at regional level. But the vastness of the region along with
time and financial constraints, the research was confined only to Aysaita and Chifra markets
of the Afar Region. Geographical location where terminal market found in the camel trade
was limited the research to be surveyed only on the primary and secondary market in the
camel supply chain.

1.6 ORGANIZATION OF THE THESIS

This thesis paper contains five chapters. The first chapter deals about the introduction part of
the thesis proposal that provides readers with the background of the study, statement of the
problem, objectives of the study, research design and methodology, significance of the study,
scope and limitation of the study. The second chapter is about the review of related
literatures. It contains both theoretical and empirical literatures. The third chapter is also
presented methodology of the study and data analysis. In the fourth chapter, the raw data are
analyzed via both descriptive and econometric methods of data analysis. The fifth chapter is
about conclusion and recommendation. This chapter focuses on conclusion of analysis and
finally recommendation is based on the findings obtained from the analysis.

8
 CHAPTER TWO
REVIEW OF LITERATURE
In this part of the study the basic concepts of value chain, concepts guiding agricultural value
chain, benefit of value chain in agricultural sector, markets and marketing, market channel,
market performance, measuring value chain, developing value chain towards the benefit of
the poor, market deriving development in camel value chain, status of pastoralist camel
trading in Ethiopia and empirical reviews would be discussed.

2.1 Definitions and Concepts in Camel Value Chain Analysis

Industry chains are classified as either ‘supply’ or ‘value’ chains. The following definitions
within the general term ‘industry chain’ are used:

Supply chain: It is taken to mean the physical flow of goods that are required for raw
materials to be transformed into finished products. Supply chain management is about
making the chain as efficient as possible through better flow scheduling and resource use,
improving quality control throughout the chain, reducing the risk associated with food safety
and contamination, and decreasing the agricultural industry’s response to changes in
consumer demand for food attributes (Dunne, 2001).

Value chain: It is taken to mean a group of companies working together to satisfy market
demand. It involves a chain of activities that are associated with adding value to a product
through the production and distribution processes of each activity (Schmitz, 2005). An
organization’s competitive advantage is based on their product’s value chain. The goal of the
company is to deliver maximum value to the end user for the least possible total cost to the
company, thereby maximizing profit (Porter, 1985).

A value chain is the full range of activities required to bring a product from conception,
through the different phases of production and transformation. A value chain is made up of a
series of actors (or stakeholders) from input suppliers, producers and processors, to exporters
and buyers engaged in the activities required to bring agricultural product from its conception
to its end use (Kaplinsky and Morris, 2001). Bammann (2007) has identified three important
levels of value chain.

9
  Value chain actors: The chain of actors who directly deal with the products, i.e.
produce, process, trade and own them.
 Value chain supporters: The services provided by various actors who never directly
deal with the product, but whose services add value to the product.
 Value chain influencers: The regulatory framework, policies, infrastructures, etc.

The value chain concept entails the addition of value as the product progresses from input
suppliers to producers and consumers. A value chain, therefore, incorporates productive
transformation and value addition at each stage of the value chain. At each stage in the value
chain, the product changes hands through chain actors, transaction costs are incurred, and
generally, some form of value is added. Value addition results from diverse activities
including bulking, cleaning, grading, and packaging, transporting, storing and processing
(Anandajayasekeram and Berhanu, 2009) as shown in Figure 1 for the case of a typical
agricultural value chain.

Figure.1 Typical agricultural value chain and associated business development services.
Source: Adapted from Anandajayasekeram and Berhanu (2009).

Value chains encompass a set of interdependent organizations, and associated institutions,

resources, actors and activities involved in input supply, production, processing, and
distribution of a commodity. In other words, a value chain can be viewed as a set of actors
and activities, and organizations and the rules governing those activities.

10
Value chain management is about creating the added value at each link in the chain and a
sustainable competitive advantage for the businesses in the chain. How value is actually
created is a major concern for most businesses. Porter (1985) indicates that value can be
created by differentiation along every step of the value chain, through activities resulting in
products and services that lower buyers’ costs or raise buyers’ performance. In much of the
food production and distribution value chain, the value creation process has focused on
commodities with relatively generic characteristics, creating relatively small profit margins.

2.1.1 Market chains versus value chains

The terms production chain, supply chain, market chain and value chain are often used
interchangeably, but in fact there are some important differences (Table 1). In its simplest
definition, the terms production chain, supply chain, market chain are synonymously used to
describe all participants involved in an economic activity which uses inputs and services to
enable a product to be made and delivered to a final consumer. A value chain is understood as
a strategic network between a numbers of independent business organizations. According to
Hobbs et al. (2000), a value chain is differentiated from a production/supply chain because
participants in the value chain have a long-term strategic vision, disposed to work together,
oriented by demand and not by supply, shared commitment to control product quality and
have a high level of confidence in one another that allows greater security in business and
facilitates the development of common goals and objectives.

The goal of a value chain is to optimize performance in that industry using the combined
expertise and abilities of the members of the chain. Successful chains depend on integration,
coordination, communication and cooperation between partners with the traditional measure
of success being the return on investment (Dunne, 2001; Bryceson and Kandampully, 2004).

Table.1 Enterprise relations: production chain versus value chain

Factors Production market chain Value market chain
Information flow Little or none Extensive
Principal focus Cost / price Value / quality
Strategy Basic product (commodity) Differentiated product
Orientation Led by supply Led by demand
Organizational structure Independent actors Independent actors
Philosophy Competitiveness of the Competitiveness of the

11
 enterprise market chain
Source: Hobbs et al. (2000).

2.1.2 Major concepts guiding agricultural value chain analysis

There are four major key concepts guiding agricultural value chain analysis
(Anandajayasekeram and Berhanu, 2009; Kaplinsky and Morris, 2000). These are effective
demand, production, value chain governance, and upgrading.

2.1.2.1 Effective demand

Agricultural value chain analysis views effective demand as the force that pulls goods and
services through the vertical system. Hence, value chain analysis need to understand the
dynamics of how demand is changing at both domestic and international markets, and the
implications for value chain organization and performance. Value chain analysis also needs
to examine barriers to the transmission of information in the changing nature of demand and
incentives back to producers at various levels of the value chain (MSPA, 2010).

2.1.2.2 Production
In agricultural value chain analysis, a stage of production can be referred to as any operating
stage capable of producing a saleable product serving as an input to the next stage in the
chain or for final consumption or use. Typical value chain linkages include input supply,
production, assembly, transport, storage, processing, wholesaling, retailing, and utilization,
with exportation included as a major stage for products destined for international markets. A
stage of production in a value chain performs a function that makes significant contribution to
the effective operation of the value chain and in the process adds value (Anandajayasekeram
and Berhanu, 2009).

Producing the required amount effectively is a necessary condition for responsible and
sustainable relationships among chain actors. Thus, one of the aims of agricultural value
chain analysis is to increase the quantity of agricultural production. Understanding the
mechanisms of the agricultural production greatly help to design appropriate policy that bring
more gain to farmers and the whole society at large. For a long time, sector analyses have
been used to measure the different economic aspects of production. However, sector analyses
have not been without weaknesses. In particular, sector analysis tends to be static and suffers
from the weakness of its own bounded parameters. Such analysis struggles to deal with

12
dynamic linkages between productive activities that go beyond that particular sector
(Kaplinsky and Morris, 2000). By going beyond the traditional narrow focus on production,
value chain analysis scrutinize interactions and synergies among actors. Thus, it overcomes
several important limitations of traditional sector assessments.

2.1.2.3 Value chain governance

Governance refers to the role of coordination and associated roles of identifying dynamic
profitable opportunities and apportioning roles to key players (Kaplinsky and Morries, 2000).
Value chains imply repetitiveness of linkage interactions. Governance ensures that
interactions between actors along a value chain reflect organization, rather than randomness.
The governance of value chains emanate from the requirement to set product, process, and
logistic standards, which then influence upstream or downstream chain actors and results in
activities, roles and functions.

It is important to note that governance and coordination sometimes appear as synonymous or

interchangeable terms in the literature. Already in the 1980s, Williamson (1979; 1985) used
the term governance to define the set of institutional arrangements in which a transaction is
organized. As Gereffi’s work on Global Commodity Chains and the role of governance
appeared, the term coordination took on a new meaning, basically, the vertical organization
of activities. The application of contract/private ordering/governance leads naturally into the
reconceptualization of the firm not as a production function (in the science of choice
tradition) but as a governance structure (Williamson, 2002).

According to Raikes et al. (2000), trust-based coordination is central for goods and services,
whose characteristics change frequently, making a standardized quality determination for the
purposes of industrial coordination difficult. This applies to the manufacturing industry as
well as agri-food chains. It is possible to identify in one industry several coordination forms
used by different firms where the choices rely on the trust existent between the firms.

Value chains can be classified into two based on the governance structures: buyer-driven
value chains, and producer-driven value chains (Kaplinisky and Morris, 2000). Buyer-driven
chains are usually labor intensive industries, and so more important in international
development and agriculture. In such industries, buyers undertake the lead coordination
activities and influence product specifications. In producer-driven value chains which are
more capital intensive, key producers in the chain, usually controlling key technologies,

13
influence product specifications and play the lead role in coordinating the various links. Some
chains may involve both producer and buyer driven governance. Yet in further work
(Humphrey and Schmitz, 2002; Gibbon and Ponte, 2005) it is argued that governance, in the
sense of a clear dominance structure, is not necessary a constitutive element of value chains.
Some value chains may exhibit no governance at all, or very thin governance. In most value
chains, there may be multiple points of governance, involved in setting rules, monitoring
performance and/or assisting producers.

Chain governance should also be viewed in terms of ‘richness’ and ‘reach’, i.e., in terms of
its depth and pervasiveness (Evans and Wurster, 2000). Richness or depth of value chain
governance refers to the extent to which governance affects the core activities of individual
actors in the chain. Reach or pervasiveness refers to how widely the governance is applied
and whether or not computing bases of power exists. In the real world, value chains may be
subject to multiplicity of governance structure, often laying down conflicting rules to the poor
producers (MSPA, 2010).

2.1.2.4 Value chain upgrading

Upgrading refers to the acquisition of technological capabilities and market linkages that
enable firms to improve their competitiveness and move into higher-value activities
(Kaplinsky and Morris, 2000). Upgrading in firms can take place in the form of process
upgrading, product upgrading, functional upgrading and chain upgrading. Upgrading entails
not only improvements in products, but also investments in people, knowhow, processes,
equipment and favorable work conditions. Empirical research in a number of countries and
sectors (e.g. Humphrey and Schmitz, 2000; Humphrey, 2003; Humphrey and Memedovic,
2006) provide evidence of the importance of upgrading in the agricultural sector.

2.1.3 Market and marketing

Market can be defined as an area in which one or more sellers of given products/services and
their close substitutes exchange with and compete for the patronage of a group of buyers.
Originally, the term market stood for the place where buyers and sellers are gathered to
exchange their goods, such as village square. A market is a point, or a place or sphere within
which price making force operates and in which exchanges of title tend to be accompanied by
the actual movement of the goods affected (Backman and Davidson, 1962). The concept of
exchange and relationships lead to the concept of market. It is the set of the actual and
potential buyers of a product (Kotler and Armstong, 2003). Conceptually, a market can be

14
visualized as a process in which ownership of goods is transferred from sellers to buyers who
may be final consumers or intermediaries.

2.1.3.1 Marketing efficiency

Efficiency in marketing is the most used measure of market performance. Improved
marketing efficiency is a common goal of farmers, marketing organizations, consumers and
society. It is a commonplace notation that higher efficiency means better performance
whereas declining efficiency denotes poor performance. Most of the changes proposed in
marketing are justified on the grounds of improved efficiency (Kohls and Uhl, 1985).

2.1.3.2 Marketing channel

Formally, a marketing channel 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 Armstong, 2003). This channel
may be short or long depending on kind and quality of the product marketed, available
marketing services, and prevailing social and physical environment (Islam et al., 2001).

2.1.3.3 Marketing Performance

Market performance can be evaluated by analyzing costs and margins of marketing agents in
different channels. A commonly used measure of system performance is the marketing
margin or price spread. Margin or spread can be useful descriptive statistics if it used to show
how the consumer’s price is divided among participants at different levels of marketing
system (Mendoza, 1995).

Marketing costs: Marketing costs are the embodiment of barriers to access to market
participation by resource poor smallholders. It refers to those costs, which are incurred to
perform various marketing activities in the transportation of goods from producer to
consumers. Marketing costs includes handling cost (labour, loading and unloading, costs of
damage, transportation and etc) to reach an agreement, transferring the product, monitoring
the agreement to see that its conditions are fulfilled, and enforcing the exchange agreement
(Holloway et al., 2002).

Marketing margin: It is a commonly used measure of the performance of a marketing

system (Abbot and Makeham, 1981). It is defined as the difference between the price the

15
consumer pays and the price that is obtained by producers, or as the price of a collection of
marketing services, which is the outcome of the demand for and supply of such services
(Cramers and Jensen, 1982; William and Robinson, 1990 and Holt, 1993). The size of market
margins is largely dependent upon a combination of the quality and quantity of marketing
services provided the cost of providing such services, and the efficiency with which they are
undertaken and priced. For instance, a big margin may result in little or no profit or even a
loss for the seller involved depending upon the marketing costs as well as on the selling and
buying prices (Mendoza, 1995).

Under competitive market conditions, the size of market margins would be the outcome of
the supply and demand for marketing services, and they would be equal to the minimum costs
of service provision plus “normal” profit. Therefore, analyzing market margins is an
important means of assessing the efficiency of price formation in and transmission through
the system. There are three methods generally used in estimating marketing margin: (1)
detailed analyses of the accounts of trading firms at each stage of the marketing channel (time
lag method); (2) computations of share of the consumer’s price obtained by producers and
traders at each stage of the marketing chain; and (3) concurrent method: comparison of prices
at different levels of marketing over the same period of time (Mendoza, 1995; Scarborough
and Kydd, 1992).

2.1.3.4 Measuring value chain

A fundamental aspect of global value chain research is how ‘value’ itself, is conceptualized
and measured. According to Gereffi (1999) profit, value addition and price mark-ups are
indications of income shares across value chain actors. Value–added shares can be calculated
for different links in the chain. A second way to calculate value added is to look its
distribution by each value chain actors of vegetable market and decomposing for each actor
to get approximations of each value-added share. Marketing margin is the difference between
the value of a product or a group of products at one stage in the marketing process and the
value of an equivalent product or group of products at another stage. Measuring this margin
indicates how much has been paid for the processing and marketing services applied to the
product(s) at that particular stage in the marketing process (Smith, 1992).

2.2 Benefit of Value Chain in Agricultural Sector

16
It is an innovation that enhances or improves an existing product, or introduces new products
or new product uses. This allows the farmer to create new markets, or differentiate a product
from others and thus gain an advantage over competitors. In so doing, the farmer can ask a
higher premium (price) or gain increased market share or access. Adding value does not
necessarily involve altering a product; it can be the adoption of new production or handling
methods that increase a farmer’s capacity and reliability in meeting market demand. Value-
added can be almost anything that enhances the dimensions of a business. The key is that the
value-adding activity must increase or stabilize profit margins, and the output must appeal to
the consumer (AAFC, 2004).

Value chain is useful as a poverty-reduction tool if it leads to increase on and off farm rural
employment and income. Increased agricultural productivity alone is not a sufficient route
out of poverty within a context of globalization and increasing natural resource degradation.
A focus on post-harvest activities, differentiated value added products and increasing links
with access to markets for goods produced by low-income producers would appear to be the
strategy open to smallholders (Lundy et al., 2002).

Traditionally, little attention has been paid to the value chains by which agricultural products
reach final consumers and to the intrinsic potential of such chains to generate value added
and employment opportunities. While high-income countries add nearly US$185 of value by
processing one tone of agricultural products, developing countries add approximately US$40.
Furthermore, while 98 percent of agricultural production in high-income countries undergoes
industrial processing, barely 38 percent is processed in developing countries. These indicate
that well developed agro-value chains can utilize the full potential of the agricultural sector
(UNIDO, 2009).

In the process of preparing an agro-industrial master plan for Ethiopia, a prioritization

process was conducted for several commodities to identify those offering the highest
prospects for growth (UNIDO and FAO, 2009).

Group 1: Commodities that are highly important to the economy due to the large population
involved in their production and to their contribution to national food security. This group
includes: (i) cereals (wheat, maize, teff and barley); (ii) oilseeds (sesame, Niger seed, linseed
and rapeseed); (iii) coffee; and (iv) sugar
17
Group 2: Commodities that are of importance to the economy, due to the number of people
involved in production, processing and marketing as well as to their contribution to food
security. This group includes: (i) dairy products; (ii) meat; (iii) tea; and (iv) fruit and
vegetables.

Group 3: Commodities that entail a competitive advantage for Ethiopia. This group includes:
(i) honey; (ii) pulses; (iii) spices; and (iv) grapes/wine.

2.3 Developing Value Chain Systems towards the Benefits of the Poor
In recent years, the pro-poor growth approach has become one of the key concerns of
developmental organizations. The focus of the approach lies in the promotion of economic
potentials of the poor and disadvantaged groups of people (OECD, 2006). The main aim is to
enable them to react and take advantage of new opportunities arising as a result of economic
growth, and thereby overcome poverty (Berg et al., 2006). The promotion of value chains in
agribusiness aims to improve the competitiveness of agriculture in national and international
markets and to generate greater value added within the country or region. The key criterion in
this context is broad impact, i.e. growth that benefits the rural poor to the greatest possible
extent or, at least, does not worsen their position relative to other demographic groups. Pro-
poor growth is one of the most commonly quoted objectives of value chain promotion. In
recent years, the need to connect producers to markets has led to an understanding that it is
necessary to verify and analyze markets before engaging in upgrading activities with value
chain operators. Thus, the value chain approach starts from an understanding of the consumer
demand and works its way back through distribution channels to the different stages of
production, processing and marketing (GTZ, 2006).

The value chain approach seeks to identify long-term solutions to reduce the vulnerability of
developing countries to fluctuating world market prices or trade shocks. It does not just focus
on adding value to existing traditional commodity exports (in other words, diversifying the
same product), but also on promoting alternative products. Another characteristic of the
approach is that it does not solely concentrate on functional dimensions such as supplying
appropriate inputs, or applying good agricultural processing, handling and distribution
practices. It emphasizes the importance of institutional arrangements, or rather governance

18
issues, along the value chains that link and coordinate producers, processors and distributors
of a certain product. Moreover, this aspect covers authority and power relationships that
determine how financial, material and human resources are allocated and flow within the
chain (Gereffi et al., 1994). Dynamic value chain systems respond to market shifts by
developing and transferring knowledge to intermediaries and producers, so that they can
adapt and maintain a competitive market position over time. Vibrant value chain systems
grow and continuously incorporate new businesses, generating ever-increasing jobs, income,
and assets. In this manner, value chain systems can have the potential to significantly reduce
poverty for large numbers of poor people (Alexandra and Mary, 2006).

2.4 Development of Market-Driven Camel Value Chain

The value chain approach considers both the added value of a product and an insight into the
actors’ roles and relations. The value chain approach analyses a product’s development
process from input supply through production and processing level, transport, trade and
marketing, to consumption. Despite the fact that, earlier work on agriculture concentrated
mainly on improving the supply side of the respective value chains e.g. production conditions
and output, recent studies have also paid attention to the demand side (Diao, 2007). Here the
value chain analysis concentrates on both ends of the chain corresponding with the two sides
of a market.

2.4.1 Drivers of Ethiopian livestock exports: does policy matter?

During the last 40 years, trade policies in Ethiopia have shifted from free market (up to
1974), through a command economy (1975-1991), and then back to a liberalized system
(from 1992), Aklilu, Y. (2006, pp.187-202). However, land still belongs to the Government
and can be used only on a lease basis. Looking specifically at the marked growth in formal
livestock exports detailed in Policy Briefs 72 at www.Future-agricultures.org [Access May
2014], a milestone was the eradication of rinderpest, a disease which had previously
prevented cattle exports Awoke, W.A. and Tikue, N.T. (2009).

The World Organization for Animal Health certified Ethiopia as free from rinderpest in May
2005. Since then, policy incentives for the livestock sector included the formation of industry
associations, deregulation of domestic prices, liberalization of foreign trade, institutional

19
support for the export sector and promulgation of liberal investment and labour laws (Aklilu
Y, 2008).

These changes were important for establishing privately-owned export abattoirs and the
construction of market yard facilities in pastoral areas. When combined with greater market
stratification, mainly through feedlot operations, and improvements in roads and mobile
phone systems, the result was a boost in the formal export of livestock and livestock products
from the country. Yet, many of these developments are rooted in the pastoral livestock
resource base, with supply dominated by commercially-orientated producers using mainly
traditional rearing systems. Although the investment policy favors the creation of ranches and
farms, to date this has not happened – unlike foreign investment in agriculture in the country.
At the same time, it seems that privatized government ranches have not been widely used for
livestock production. This raises an interesting question because pastoralism actually
outperforms ‘modern ranching’ Oba, G. (2013, pp.29-36), in African dry lands; therefore,
the provision of land to investors may well have undermined rather than enabled growth in
the sector.

Ethiopia’s influential Growth and Transformation Plan (GTP), released in 2010, aimed to
generate US$1bn from livestock exports by 2015. However, current formal export values
from livestock are only about 25 percent of this target, and the substantial gap can be
attributed to three main factors:

• Close proximity, demands and profits continue to drive a substantial proportion of traded
livestock to Somalia and Somaliland.

• As in other countries, investment policy is skewed heavily towards crop production rather
than livestock. For example, a fact sheet on Ethiopia’s GTP, see the Finance Ministry
website, http://www.mofed.gov. et offers over 8m acres of land to commercial farming
investors, but only for crops; livestock is not mentioned. Instead, a GTP Policy Matrix
Ministry of Finance and Economic Development (2010) on the livestock sector
http://www.future-agricultures.org is limited to breed improvement, fodder production and
animal health services.

20
• In pastoral areas the production system performs well, but in non-pastoral areas the sector
has not attracted large private investments in commercial livestock farms; the reasons for this
require further study.

2.5 Value Addition and Camel Trading

The value addition of camels for profit is the ultimate motive for their acquisition. The initial
purpose was to supply sturdy mature camels for the salt trade route, to transport contraband to
Djibouti, and to sell camels at a profit in high-value chain markets, particularly in Raya and
Shiraro. This pursuit allowed farmers to raise income from transport rental services in the
interim and to make a significant return from the final disposal of camels after value addition.
With the increasing engagement of farmers in camel trade as value adders, part-time traders,
middlemen, speculators, and drovers, this practice has, during the last three years, turned into
a profitable enterprise for the export trade to Sudan, subsequently raising the price of camels
by 70% and upwards. This move has transformed camels into transitory commodities, readily
disposable at an opportune time (unlike donkeys or mules, which are retained by farmers
until they die or become too old to provide services). The commercialization of camels has
begun in earnest.

The value addition process takes place in a variety of ways. Most farmers buy immature
camels, known as sosas or birkos, (one to two years old), since they are affordable for cash-
strapped farmers. They break the camels at about age three to generate income through rental
services. The camels are raised on kinchib, cacti, crop stalks, and other feeds for about three
to four years, before being sold as mature animals for a profit level that ranges between
3000–6,000 birr ($180–$360).

Within this group, the most prized camels come from Girana, in Mersa woreda, and Harbu.
Farmers from these areas have the reputation of finishing sosas of Afar type to the highest
standard in about four to five years. Mature camels from Girana and Harbu are reputed not to
lose weight when travelling long distances, even when provided with minimum feed. They,
therefore, command higher prices in the market. In fact, they are easily identifiable by their
shiny skin and alertness.

Farmers with the means also buy young and mature males in September/October, just before
the harvest season, and use them for transporting their own and other farm produce (on hire)

21
and resell them around February, when the harvest season is over. Such farmers may buy two
to five camels at a time and may earn a profit of up to 1,000 birr per camel.

There are also farmers-cum-small-scale traders. Such farmers may buy camels in one market
to sell for profit in another within a few months or weeks of purchase. For example, a farmer
who bought a young camel for 3,900 birr ($235) in Kukuftu six months ago was trying to sell
it for 5,900 ($355) on December 17, 2010 in Kobo.

There are also itinerant farmers-cum–traders who travel long distances in the off-farm season,
usually in groups, to purchase camels from production areas and then to sell them for profit at
high-end markets after value addition. Such farmers-cum-traders reside in or operate from
mid-altitude regions.

2.5.1 Camel Populations in the Mid-Altitude Regions

Estimating the camel population over such a vast region is difficult for two main reasons:
most agricultural offices (except for Shiraro, Kobo, Alamata, and Senbete) do not keep
records of the camel population in their respective areas; and the transitory nature of camel
ownership makes it difficult to keep adequate records, as camels are bought and sold on
continuous bases. Regardless, the growing trend in camel acquisition can be figured out from
the following indicators.
• According to the woreda agricultural office in Kobo, there are 41 rural kebeles10 with
53,450 households. A census in 2009 established the existence of 9,538 camels. Current
estimates are around 15,000 camels, due to the increased export demand. This implies that
close to one in three households own a camel.
• In Alamata, the woreda agricultural office estimates 12% of the 17,940 farming households
own camels; or 15% of the population, if small-scale traders are included (2,690 camels).
• In Mehoni, the woreda agricultural office estimates 20% of the 29,000 households own
camels (4,800 camels).
• In Shiraro, estimates of camel ownership by farming and trading communities vary between
20% and 25%. There are 41,217 rural households in the woreda, suggesting a population of
9,270 camels.
• In Senbete, a census taken this year indicates the existence of 1,893 camels amongst 17,000
households (a little over 10% of the population own camels).

22
• In Shewa Robit, 5% of the farming population is estimated to own camels. There are 48,764
households in the woreda (or 2,440 camels).
• Hara is comprised of 10 rural kebeles scattered in three woredas, with 29,585 households in
total. Here, the chairmen of the kebeles insist that 40% of the households own camels and
usually more than one, which implies that there are, at least, 11,834 camels in this woreda.

The above estimates indicate the existence of close to 50,000 camels in seven mid-altitude
woredas (since some farmers own more than one camel). We can reasonably assume that the
camel population in the mid-altitude range could be over 200,000 if other woredas in the
trade belt are included—Minjar, Jeweha, Ataye, Karakore, Kemissie, Harbu, Kombolcha,
Haik, Wuchale, Mersa, Bati, Bokoksa, Hara, and Chercher.

Another way of estimating the camel population along the mid-altitude range is by comparing
the average number of camels offered in source and value-adding markets in the trade route
(see Table 3).
Table.2 Estimated volume and value of camel transactions (2009/10)
Region Market Average Peak Weekly Average Weekly Weekly
Weekly supply Sales price(US$) value of value of
supply level Level volume average average
supplies sales
Oromia Melka Oda* 180 300 75 180 32,400 13,500
Miesso** 450 635 170 270 121,500 45,900
Metehara** 150 275 100 270 40,500 27,000
Afar Sabure* 52* 100 25 210 10,920 5,250
Dulecha** 58 150 30 180 10,440 5,400
Rasa* 25 50 15 210 5,250 3,150
Dawe* 75 125 40 270 20,250 10,800
Chifra*** 175 275 75 456 79,800 34,200
Yalo* 100 175 50 420 42,000 21,000
Abala** 50 75 21 390 19,500 8,190
Amhara Minjar** 30 70 15 331 9,930 4,965
Shewa Robit** 75 150 40 337 25,275 13,480
Senbete** 228 350 140 343 78,204 48,020
Kemissie** 100 200 58 301 30,100 17,458
Harbu** 100 200 45 391 39,100 17,595
Bati*** 335 400 98 316 105,860 30,968
Bokoksa* 125 275 62 325 40,625 20,150
Girana* 180 225 85 421 75,780 35,785
Hara** 150 200 60 451 67,650 27,060
Kobo** 50 75 30 481 24,050 14,430
Tigray Waja*** 820 1790 390 547 448,540 213,330
Mehoni*** 500 710 291 520 260,000 151,320
Kukuftu** 400 525 280 520 208,000 145,600
Chercher** 50 100 30 511 25,550 15,330

23
 Shiraro*** 520 800 340 710 369,200 241,400
Estimated annual volume of supplies 256,152
Estimated annual sales volume 133,380
Estimated annual sales value $60,907,000

Notes: US$1 = 16.64 Ethiopian birr at the time of writing this report.
* = markets not visited; estimates on supplies, sales, and prices made by traders operating in these markets
** = supply estimates made by woreda MoARD staff, traders, brokers, and tax office; prices from records of sample
population
*** = data on supplies and prices from woreda MoARD data collected for the period July 2009–June 2010
Source: Shifting Sands: The Commercialization of Camels in Mid-altitude Ethiopia and beyond, (Aklilu and Catley,
2011, pp.28).

Source markets include Melka Oda, Miesso, Metehara, Sabure, Dulecha, Rasa, Senbete,
Dawe, Chifra, Yalo, Abala and, in some part, Shewa Robit, Bati, and Hara. Informed
estimates suggest that 81,952 camels were offered for sale in 2009/10 in these markets
against a total of 243, 37211 in the whole chain. In other words, some 161,420 camels were
offered for sale from mid-altitude “value-adding” markets, where farmers and traders
dominate as the major and, in some cases, the sole suppliers. This suggests the existence of
more than 200,000 camels in mid altitude regions at any given time, even without considering
those serving on the salt trade route (Aklilu and Catley, 2011).

2.5.2 Camel Breeding In the Mid-Altitude Regions

Nearly all the camels owned by mid-altitude farmers and traders are male, essentially because
of the market demand and, more importantly, since female camels are never used for loading.
Secondly, most pastoralists do not sell female camels except in rare cases12 when they are
under pressure. Even when they are forced to do so, they prefer to sell female camels to other
pastoralists rather than to any one else whom they consider to be unfamiliar with camel
breeding (Aklilu and Catley, 2011).

The only aberrations are Kereyu pastoralists, known for selling female camels of breeding
age in Metehara market. A few old female camels are also sold in Miesso and Bati markets
but only for slaughtering purposes. Afar pastoralists have been known to bring a few female
camels in Chifra and Yalo markets, when they are hard pressed.

Meanwhile, some daring farmers in mid-altitude regions have gone one step further by
engaging in camel breeding.

24
Market Network: for a long time, the camel market chain to northern and north western
Ethiopia began at the Miesso market, some 300 km east of Addis Ababa. The last six months,
however, saw the extension of the chain to Melka Oda market in south eastern Ethiopia
(Bale) in response to the growing domestic and export demand.

The chain consists of some 24 markets in Oromia, Afar, Amhara, and Tigray Regions, in
which camels are either the dominant species or supplied in significant or reasonable
numbers. The chain stretches approximately 1,200 km from Miesso to the terminal market of
Shiraro. The crossing point into Sudan (Humera) is another 160 km from Shiraro. With the
recent inclusion of the Melka Oda market in Bale, the total length of the market chain extends
more than 1,600 km up to the exit point to Sudan (Aklilu and Catley, 2011).
The supply network of the chain is presented in Figure 2 below.

25
 Figure 2: The Camel Market Network
Source: Shifting Sands: The Commercialization of Camels in Mid-altitude Ethiopia and
Beyond (Aklilu and Catley, 2011, pp.22).

2.5.3 Categories of the Camel Markets in the Chain

In general terms, the markets in the chain can be classified into three broad categories.

Source Markets: these are markets located in or close to production areas where pastoralists
dominate as the major suppliers. The markets consist of Melka Oda, Miesso, and Metehara in
Oromia; Sabure, Dulecha, Rasa, Dawe, Chifra, Yalo, and Abala in Afar; and Senbete in
Amhara Region. Shewa Robit, Bati, and Hara, all in Amhara Region, can be considered as
26
partial source markets, because they are also accessed directly by Afar producers (the latter in
peaceful times). These markets are the principal sources of supplies to the mid-altitude
regions and nearly all camels found in farming and trading communities above the
escarpments originate from them. The source markets supply a combination of immature,
young, and adult camels. Farmers from mid-altitude regions generally buy immature or
young camels from source markets in order to benefit from transport rental services in the
interim and subsequently from natural growth and the value addition process during the final
disposal. Traders, on the other hand, prefer to buy young or adult camels to which they may
add value through the provision of cacti-based feed for a short period (three months) or else
to sell them directly for profit in mid-altitude markets (Aklilu and Catley, 2011).

Value-Adding Markets: these markets are located in the mid-altitude region between Minjar
and Raya Plains outside of production areas and southeast of the terminal Shiraro market,
where conditioners (farmers and traders) dominate as the major suppliers. These markets
consist of Minjar, Shewa Robit, Kemissie, Harbu, Bokoksa, Girana, Hara, and Kobo in
Amhara Region; Waja, Mehoni, Kukuftu, and Chercher in Tigray Region. Shewa Robit, Bati,
and Hara partially fit into this category since Afar producers also access these markets along
with farmers and traders. Occasionally, Afar producers also access Kemissie and Harbu
markets in times of drought, when they vertically migrate to the Chiefa Plains (Aklilu and
Catley, 2011).

In any case, immature and young camels bought from source markets undergo a natural
growth and value addition process in this mid-altitude region—hence the name “value-
adding markets.” These markets can further be classified into two groups consisting of the
southern and the northern half (Aklilu and Catley, 2011).
• The southern half, consisting of Minjar, Shewa Robit, Kemissie, Harbu, Bati, Bokoksa,
and Girana markets, is essentially a supplier of value-added camels to the northern half—
Hara, Waja, Mehoni, and Kukuftu markets.
• The northern half plays two roles: it is the main supplier to the terminal market of Shiraro;
it also acts as a terminal market for camels destined to the salt mines or required in the Raya
Plains for various purposes (Aklilu and Catley, 2011).

Obviously, camel prices are higher in the northern than in the southern half. Major buyers in
the northern half are made up of large-scale traders and exporters from northern and north

27
western Tigray. In parallel, major buyers in the southern half are traders and farmers from the
northern half. The northern half, consisting mostly of the Raya Plains, demarcates the
finishing line for the value addition process in the whole chain (Aklilu and Catley, 2011).

The Terminal Market: Shiraro, located in north western Tigray, is the main terminal market
for the chain that begins at Melka Oda in Bale, where value-added camels are transacted for
local use in the vast area stretching between Eritrea in the north and Humera in the west.
Camels that have not gone through the intensive value addition process or been brought
directly from source markets are exported from here to Sudan. Such camels are bulked
around Shiraro for a few months and then trekked to Humera, some 160 km west. Some
camels originating from Chifra and Yalo markets are reported to end up in Tsorona, along the
Ethio-Eritrean border.

2.6 Status of Pastoralist Camel Trading in Ethiopia

Domestic Trade: It is often unrecognized at the policy level that pastoralist producers are the
sole suppliers of livestock to domestic consumers, especially those adjacent to pastoralist
areas – and 60 percent of Ethiopia’s land surface is covered by such areas. In addition to
using livestock for meat, the Ethiopian highlands are known for their dependence on oxen for
ploughing, and some 20 percent of the plough oxen used by farming communities originate
from pastoral areas Coppock, L. (1994). International Livestock Centre for
Africa /http://pdf.usaid.gov/pdf_docs/PNABW360.pdf [Accessed April 2014]

With improved roads and communications, this figure seems likely to increase. In addition,
the meat that commands premium prices in major consumption centers like Addis Ababa,
Adama, Dire Dawa and Awassa also comes from cattle originally sourced from pastoral areas
and then stall-fed by farmers using traditional methods. Pastoralists have also responded to
increasing domestic demands associated with the high and increasing human populations in
urban areas, and rising purchasing power among some consumers.

According to Aklilu, Y. and Catley, A. (2011) Pastoral livestock are also increasingly sought
for breeding purposes. Government and donor-funded development programmes and
commercial farmers are buying large numbers of heifers from pastoral marketing
cooperatives. Considering all of these trends, it can be safely assumed that 40-50 percent of
the cattle and goats supplied to domestic markets originate from the pastoral system, while

28
the proportion of sheep could be much lower. Pastoral camels are also increasingly sought in
domestic markets in mid- and highland areas, as farmers see their value as a drought-tolerant
pack animal.

Export trade: Without doubt pastoral areas remain the major, and in some case the sole,
supplier for both formal and informal live animal and meat exports. Ethiopia’s exports consist
of live cattle, sheep, goats and camels, as well as chilled goat meat and mutton, which are
mainly sourced from pastoral areas.

Pre-dating the New Alliance there was an unprecedented growth in formal exports, and this
trend has continued. The main supply areas are Borana for cattle and chilled sheep and goat
carcasses, and Somali Region for live camels, sheep and goats. Other supply areas include the
lowlands of Bale, Southern Nations, Afar and the mid-altitude agro pastoral zones of Oromia.
Critically, rather than showing pastoral producers as conservative and market-averse, the data
on formal exports indicates substantial market responsiveness by these producers.

Table 3: Trekking costs for camels

From To No. of trekking days Trekking cost/camel

Bati Bokoksa 1 day 10 birr
Bati Hara 4-5 days 40 birr
Bati Girana 2 days 20 birr
Bokoksa Hara 3 days 30 birr
Chifra Hara 2 days 20 birr
Chifra Bokoksa 1 day 10 birr
Chifra Yalo 3 days 30 birr
Dawe Hara 5 days 40 birr
Girana Waja 2 days 20 birr
Melka Oda (Bale) Miesso 15 days 150 birr
Metehara Shewa Robit 5 days 40 birr
Miesso Shewa Robit 7 days 50 birr
Senbete Bati 4 days 50 birr
Senbete Hara 7 days 50 birr
Shewa Robit Waja 9 days 50 birr
Shiraro Humera 5-6 days 50 birr
Waja/Kobo/Mehoni, Shiraro 10-15 days 70 birr
Kukuftu
Shiraro Humera 5-6 days 50 birr
Melka Oda Humera 46-52 days 370 birr
Source: Shifting Sands: The Commercialization of Camels in Mid-altitude Ethiopia
and beyond, (Aklilu and Catley, 2011, pp.26).

29
 Table 4: Trucking costs for camels
From To No. of camels/truck Travel time Transport cost
Melka Oda Miesso 15 medium or 9 adult camels 24 hours 7,000 birr
(rough road)
Miesso Wolenchiti 8-10 young camels 3 hours 1,200-1,400 birr
(tarmac)
Miesso Bati 19-20 immatures or 16 1 day 300 birr/camel
medium or 14 adult camels (tarmac)
(on a 6-ton truck)
or 14 immatures or 12
medium or
9-10 adult camels (on a 4-ton
truck).
Miesso Raya 19-20 immatures or 16 2 days 7,000 birr
medium or 14 adult camels
(on a 6 ton truck) (tarmac)
or 14 immatures or 12
medium or 5,000 birr (tarmac)
9-10 adult camels (on a 4-ton
truck).

Source: Shifting Sands: The Commercialization of Camels in Mid-altitude Ethiopia and

beyond, (Aklilu and Catley, 2011, pp.27).

The formal export process follows different procedures by species. Goats and sheep are
exported either as chilled carcasses by air or live through Djibouti. Pastoral cattle are
conditioned for three to four months before export. Camels sourced from the southern
pastoral areas are exported without conditioning through Djibouti and Sudan. On the other
hand, intensive camel conditioning takes place in the little-known camel market chain
stretching from south-eastern to north-western Ethiopia, which eventually feeds Sudan.

More controversial at the policy level are Ethiopia’s informal pastoral livestock exports,
which pass via Somaliland, Somalia and Djibouti to the Gulf States. Livestock export records
from the northern Somali ports date back to the 1920s, and the supply from Ethiopia is part of
a very well-established and generally robust marketing system. Ethiopia also has a substantial
informal livestock trade south into Kenya (Hussein, M., 2013, pp.98-107). Proxy measures of
the informal trade are available from detailed data provided by the Somaliland Chamber of

30
Commerce, as indicated in Policy Briefs 72 at www.Future-agricultures.org [Access May
2014].

It seems likely that Somalia’s and Somaliland’s booming livestock exports are associated
with increases in the informal supply from Ethiopia. Somaliland and Puntland have benefitted
from the lobbying made on their behalf by the Saudi tycoons operating the quarantine centres
in Berbera and Bosasso. Furthermore, the recent political tension between Sudan and Saudi
Arabia has impacted negatively on Sudan’s livestock exports. As a result of these and other
events, the total volume of exports from Somalia in 2012 and 2013 have been reported to be
over 4m animals, which some see as the ecosystem’s productive limit. Figures obtained for
Somaliland exports alone indicate a huge disparity with Ethiopia.
/http://www.sudantribune.com/spip.php?article50141 [Accessed April 2014]

2.7 Review of Empirical Studies

2.7.1 Value chain approach

There are a number of studies that have employed the value chain approach to agricultural
commodities. Fitter and Kaplinsky (2001) used a value chain analysis to examine inter-
country distributional outcomes of the global coffee sector by mapping input-output relations
and identifying power asymmetries along the coffee value chain. Their study showed that
returns to product differentiation taking place in the face of globalization do not accrue to the
coffee producers. They also found that power in the coffee value chain was asymmetrical. At
the importing end of the chain, importers, roasters and retailers compete with each other for a
share of value chain rents but combine to ensure that few of the rents return to the farmer or
the producer country.

Value chain study conducted on off-season vegetables by USAID (2011) in Nepal indicated
that the subsector faces some challenges such as unavailability of quality planting materials,
lack of knowledge among the producers of the proper usage of fertilizers and pesticides as
well as poor soil fertility management, lack of irrigation facilities, labor shortage, postharvest
loss due the perishable nature of vegetables, limited access to reliable market information,
unorganized market center, limited collection centers, and lack of proper packaging and
transportation facilities. The study recommended short-term and long term infrastructural and
institutional innovation to reduce the above challenges.

31
Ponte (2002) also used a value chain analysis to examine the impact of deregulation, new
consumption patterns and evolving corporate strategies in the global coffee chain on the
coffee exporting countries in the developing world. The study concluded that the coffee chain
was increasingly becoming buyer-driven and the coffee farmers and the producing countries
were facing a crisis relating to changes in the governance structure and the institutional
framework of the coffee value chain.

Horticulture value chain study conducted in Eastern parts of Ethiopia identified different
problems on the chain (Bezabih, 2008). The major constraints of marketing identified by the
same study include lack of markets to absorb the production, low price for the products, large
number of middlemen in the marketing system, lack of marketing institutions safeguarding
farmers' interest and rights over their marketable produces (e.g. cooperatives), lack of
coordination among producers to increase their bargaining power, poor product handling and
packaging, imperfect pricing system and lack of transparency in market information
communications.

Dereje (2007) used value chain approach to study the competitiveness of Ethiopian coffee in
the international market. The study indicates that Ethiopian farmers have low level of
education, large family size with small farmland and get only 3% of the retail price in the
German market. Thus, policy intervention was suggested to improve farmers’ performance.

Value chain study conducted on mango by Dendena et al. (2009) indicated that the subsector
faces some challenges. Among others: highly disorganized and fragmented industry with
weak value chain linkages, long and inefficient supply chains, inadequate information flows
and lack of appropriate production are explained as the major problems. In this study an
attempt will be made to analyse factors affecting camel supply chain to reduce the above
challenges.

2.7.2 Determinants of marketable surplus

The study of marketable surplus turned out to be very vital for agricultural based countries
because the transition of smallholder farmers towards commercial production is determined
by it. Getachew (2009) has noted that the transition of the small-scale sector towards
commercial production will ultimately be determined by the ability and willingness of

32
producers to provide a commodity. Similarly, Mamo (2009) argued that the development of
markets, trade and the subsequent market supply that characterize commercialization are
fundamental to economic growth.

There are a number of empirical studies on factors affecting the marketable surplus of
agricultural commodities. Ayelech (2011) identified factors affecting the marketable surplus
of fruits by using OLS regressions. She found that fruit marketable supply was affected by;
education level of household head, quantity of fruit produced, fruit production experience,
extension contact, lagged price and distance to market.

Abay (2007) applied Heckman two-stage model to analyze the determinants of vegetable
market supply. Accordingly, the study found out that marketable supply of vegetables were
significantly affected by family size, distance from main road, number of oxen owned,
extension service and lagged price.

According to Wolday (1994) marketable supply of agricultural product could be affected by

different factors including the size of land holding, the output level, family size, market
access, price, inputs, formal education, oxen number, accesses to extension and credit
services, distance to market, time of selling, access to labor and age. In sum, empirical
evidences indicate that marketable supply approach has become an important framework to
analyze economic agents in agricultural sector. In this study an attempt will be made to
identify factors affecting the marketable supply of camels.

2.7.3 Determinants of market channel choices

Regarding factors affecting channel choices of the households, different researchers used
multinomial logit and probit for categorical marketing system for different agricultural
commodities.

A study by Ferto and Szabo (2002) identified variables influencing producers’ decision for
channel choices. The analysis was based on a survey among three supply channels of fruit
and vegetable producers in Csongrad, Hungary in respect the choice of marketing channels
which are wholesalers, marketing cooperative and producers’ organization channel. A
multinomial logit model was applied to reveal on the determinants influencing these choices
among various supply channels. Farmer’s decisions with respects to supply channels were

33
influenced differently by transaction costs, and producers sell to wholesale market were
strongly and negatively affected by the farmer’s age, information costs, and negatively by the
bargaining power and monitoring costs. The probability that farmers sell their product to
marketing cooperative is influenced by the age and information costs positively, whereas by
the asset specificity and bargaining power negatively.

Rao et al. (2010) confirmed that educational level of the operator, off-farm employment; own
means of transportation and age of operator had positive effect whereas household size was
negatively associated with supper marketing channel choices. In second stage second stage of
treatment model, off-farm employment and own means of transportation affected income of
vegetables growers positively. Furthermore, dummy variable for channel choices were
positive and significant. This indicated that supplying vegetable to supermarket channels
rendered better income gain over spot marketing channel. On the other hand, ownership of
livestock negatively influenced income of vegetables growers supplying traditional or spot
marketing channel.

Jari and Fraser (2009) identified that market information, expertise on grades and standards,
contractual agreements, social capital, market infrastructure, group participation and tradition
significantly influence household marketing behavior. The study uses multinomial regression
model to investigate the factors that influence marketing choices among smallholder and
emerging farmers.

Bongiwe and Masuku (2012) identified that age of the farmer, quantity of baby corn
produced and level of education were significant predictors of the choice to sell vegetables to
NAM Board market channel instead of selling to other-wholesale market channel. The age of
the farmer, distance from production area to market, membership in farmer organization and
marketing agreement were significant determinants of the choice to use non-wholesale
market channel over other-wholesale market channel. The study uses descriptive and
multinomial logistic regression analyses to investigate factors that influence market channel
choices.

Mamo and Degnet (2012) identified that gender and educational status of the household head
together with household access to free aid, agricultural extension services, market
information, non-farm income, adoption of modern livestock inputs, volume of sales, and

34
time spent to reach the market have statistically significant effect on whether or not a farmer
participates in the livestock market and his/her choice of a market channel. The study uses
binary logit and multinomial logit to explore the patterns and determinants of smallholder
livestock farmer’s market participation and market channel choice using a micro-lever survey
data from Ethiopia. In this study an attempt will be made to identify what determinant factors
will affect market channel choices in the marketable supply of camels.

2.8 CONCEPTUAL FRAME WORK

The independent variables, shown in the conceptual frame work were selected after going
through various literature review given above, which were hypothesized to influence volume
of camel sales.

Dependent Variable Y= Volume of camel Sales

Independent Variables 𝐗𝒏
Variables Definitions Unit Expected Sign
Codes Measurement
X1 Volume_Of_Goats Continuous + ve
X2 ExpCP Continuous + ve
X3 AExtension Dummy +ve
X4 Income_from_camel_sale Continuous + ve

X5 ACredit Dummy + ve
X6 Number_Working_Persons Continuous + ve
X7 AgeHH Continuous + ve
X8 EduStatHH Continuous +ve
X9 Own_Transportation_Facilities Continuous + ve or_ve
X10 Death_dueto_draught Continuous - ve
X11 Trainning Dummy +ve
X12 MCooperative Dummy +ve
X13 Volume_Of_Oxen Continuous + ve

Table.5 Conceptual Frame Work

Source: Own computation from survey result, 2016/2017.

35
 Volume_Of_Oxe Volume_Of_Goa
n ts

MCooperative ExpCP

Income_from_ca
Trainning
mel_sale
Volume of
Camel Sales
ACredit AExtension

Number_Worki Death_dueto_dr
ng_Persons aught

Own_Transport
AgeHH
ation_Facilities
EduStatHH

Figure 3: Volume of Camel Sales Conceptual Frame Work

Source: Own computation from survey result, 2016/2017.

36
 CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Site Selection
Afar Region has five administrative zones. For the purpose of this study, both Chifra and
Aysaita markets are selected from zone one, which are largest and most livestock markets are
concentrated, purposively on the bases of the volume of animals marketed. According to the
information obtained from agricultural product marketing promotion office about volume of
animal traded in each market and type of market participants, there is no terminal market tier
in the Region. Thus, for data collection only two market tiers (source, value-adding, primary
and secondary) were covered. But, to minimize the information gap, some important
information about the terminal markets was gathered from traders through group discussion
and inspecting other researchers' findings.

Accordingly, Sabure, Dulecha, Rasa, Dawe, Chifra, Yallo, and Abala markets are source
markets in the camel chain network (Aklilu and Catley, 2011) and four secondary (Assayita,
Chifra, Yallo and Sabure) and two primary (Delfage, and Abaala) markets, which are well-
known by offering large volume of live animal to terminal as well as cross border trade
(Zewde Kiflie, 2014). So, for this study Chifra and Ayssaita markets are selected purposively.

3.2 Description of the Study Area

Afar region is one of the nine regions of Ethiopia and contains the homeland of the afar
people located in north east Ethiopia stretched from the north Danakil depression to south
lowland Awash valley sharing international boundaries with Eritrea and Djibouti. The
regional temperature is usually high and range from 12 0c to 48 0c.May, June and July are the
hottest months and January and February the coldest months (BoFED, 2009).

Description of Asayita Woreda

Ayssaita is one of the eight Woredas in the Awssi-Resu. Ayssaita is surrounded by Afambo
woreda in the South, Dubti woreda in the West, in the North Awash River which separates it
from Elidar woreda and Djibouti in the East. The woreda consists of 13 pastoral Associations
(Kebeles) of which 2 urban, 5 agro-pastorals and 6 pastoral.

37
The Woreda is found in Kola climatic zone with the mean annual temperature 32.55℃and the
mean annual rain fall is 10.40mm. The land use pattern shows that out of the total area
coverage of the woreda 138,800km2, 7,756km2 (36.93%) is currently cultivated, (4.34%) used
for grazing, (7.28%) forest cover, (1.28%) covered by water, the rest are uncultivable land.

Mixed agriculture is the main activity and trade also plays an important role in the woreda.
According to CSA the total population in 2008 was estimated to be 47,210 from which
22,058 are female and 25,152 male. From the total population 66% live in rural areas and
34% in urban centers.

Concerning of Livestock composition it has 71,383 cattle, 16943 sheep, 23,086 goats, 3,277
camel and 360 poultry. The woreda has one livestock market place and the market day is on
Tuesday. The woreda is renowned for the livestock production which is mainly supplied to
Djibouti and other parts of the country.

Description of Chifera Woreda

Chifra is another one of the eight Woredas in the Awssi-Resu. Chifra is located near the base
of the Eastern escarpment of the Ethiopian highlands and bordered on the South by Mille, on
the west by the Oromia zone in Amhara Region, on the North by the Zone four of Afar, and
on the East by Dubti woreda, which is about 162km far from the capital city of Afar Regional
State (Samara) located approximately 572km North Eastern of Addis Ababa.

The average elevation of the area is approximately 950 mb (PARDB, 2006).The district has
total area coverage of 12,444.00km2 with a total number of 19 kebeles of which 13 are
pastorals and the rest 6 are agro-pastoral kebeles. Based on figures published by the CSA in
2008, this woreda has an estimated total population of 90,896, of which 39,706 were males
and 51,190 were females. 1,209 or 1.33% of its population are urban dwellers, which are less
than the zone average of 14.9% (CSA, 2005).

The production system of the area is dominated by pastoralism while agro-pastoralism is now
emerging following the Mille and We’ama permanent rivers and some temporary rivers on
which small scale irrigation is developed. The study area is characterized by a semi-arid and

38
arid type of climate having (receiving) 25℃ - 27.5℃ of mean annual temperature and 300mm
– 900mm of mean annual rain fall.

Today the country as well as the region is on the way of free market economies which incite
investment in the region. According to the investment data of the region, most of the region
investments are in the agricultural sector which mainly concentrated in 6 woredas, namely
Amibara, Gewane, Assayita, Dubti, Mille and Awash, which account 58.10 % of the regional
agricultural investment. A huge sugar factory project called Tendaho sugar factory also
established woreda as called Assayita and Dubti. But as a result of low fertility, rocky and
sandy nature of the lands, only 3.20% of the lands used for cultivation (BoFED, 2009). That
is only the recent years that efforts have been undertaken to provide basic infrastructure such
as road and administrative building as well as basic health services and education. But, still it
is in lower level compared to other regions.

Afar is increasingly drought prone. The production system of the Afar region is dominated by
pastoralism (90%) from which agro pastoralism (10%) is now emerging following some
permanent and temporary rivers on which small scale irrigation is developed (MoARD,
2008). Farmers in Afar Region had total 1,853,798 cattle, 2,804,222 sheep, 4,467,901 goats
and 570,581 camels (Roy B, 2010; BoFED, 2009; CSA, 2009).The camel (Camelus
dromedaries) is an important livestock species uniquely adapted to hot arid environments.
Camels have multiple function and purposes, including milking, packing and draught power
source. However, the region is one of the poorest and least developed regions of Ethiopia.

The reason to conduct this study in this site is to provide important information regarding to
the factors that affect the actors of camel supply chain and determinants in the choice of
marketing channels which can helps to improve camels supply chain management in a more
efficient way. This in turn will help to improve the livelihood of pastoralists by increasing the
income they deserve.

39
 Map 4: Administration Regions and Woreda Map of Afar Region

Source: Regional and Geographical Information Map (www.ethiopianreview.com)

3.3 Data Type and Sources.

The study used both quantitative and qualitative types of data. Both primary and secondary
sources of data were used for the study. The primary data was obtained through interviews to
be conducted different government bureau officials, and semi structured questionnaires to be
distributed to the individual camel supply chain actors. Secondary source of data was
included documents obtained from the Regional Bureau of Agriculture and Rural
Development (BoARD), Custom Authority, NGOs and reviews of different live animal
export related literatures.

40
The study used information on different variables such as data on camel production, camel
marketed, prices of camel supplied, and distance to Woreda market, distance to all weather
roads, age of the household head, extension service, educational status of the household head,
family size, access to market information, credit facility, and type of sellers and buyers.
Survey was made to obtain this information.

The secondary data collected from Central Statistical Authority (CSA), Bureau of Agriculture
and Rural Development (BoARD), Capacity Building for Scaling up of Evidence Based Best
Practices in Agricultural Production in Ethiopia (CASCAPE) project and other sources.
Primary data was collected using informal and formal surveys, and from key informants. The
informal survey was conducted through Rapid Market Appraisal (RMA) technique using
checklists. The formal survey was undertaken through formal interviews with randomly
selected (pastoralist or agro-pastoralist) farmers, traders and consumers using a pre-tested
semi-structured questionnaire for each group. Lastly, the accomplished survey forms were
collated, encoded, statistically analyzed and interpreted and websites.

3.4 Research Strategy and Research Design

The major focus of the study was description of information related to the supply chain
management of camel trading in the Afar Region of Aysaita and Chifra markets. Survey
researches were concerned with describing, recording, analyzing and interpreting conditions
that either exist or existed. The researcher manipulated the variable or arrange for events to
happen. Surveys were only concerned with conditions or relationships that exist, opinions
that are held, processes that are going on, effects that are evident or trends that are
developing. They are primarily concerned with the present and variables that exist or have
already occurred are selected and observed (Zikmund, 2003). So, the descriptive survey
research design was employed to assess the supply chain management of camel trade in the
selected markets. The researcher was used this design because it will help to describe
different factors that hinder the performance and efficiency of actors (camel herders’, traders,
consumers, etc..) in camel supply chain, define a particular observable fact, and the strength
of the relationship between different factors that challenge market outlet choice.

The researcher was adopted both qualitative and quantitative research approaches because the
data to be obtained from the respondents will be analyzed qualitatively and quantitatively

41
(using descriptive statistical approach). The quantitative approach has several advantages. As
it is highly structured, it can allow for cost efficient and less boring data. It also allows for the
computation of statistics from which the interpretation easily drowned. The qualitative
methods are also increasingly accepted in social science and business research. It helps to
obtain qualitative data about the people feeling, behavior and opinion. Using mixed
quantitative and qualitative methods can be significant to triangulate results from different
dimensions and to develop richer pictures of the phenomenon under investigation (Greener,
2008). The study is cross-sectional type that it was used primary data which was collected in
a single period of time mainly through interview schedule, discussion and observation in
order to appraise the performances of camel marketing system rapidly. And also, the study is
mostly descriptive type that the data was collected, from camel herders, traders, consumers,
etc. was surveyed to describe these actors’ feeling, experience, attitudes and knowledge about
the variables of the study, was analyzed and presented with the help of descriptive statistical
tools.

3.4.1 Target Population and Selection of Respondents

The camel supply chain actors (camel herders, traders, government officials, consumers, etc)
who are participating in the camel supply chain in the selected markets of the region were
used as a sample frame. The sample size for this study was from camel herders, traders,
government officials and consumers of sample frame in the selected markets. To determine
the sample size, the trends of past studies on the issue of livestock marketing were used as a
benchmark.

Most of the studies on the issue, which were conducted in the regional as well as zonal level
of the country, were used 120 to 160 sample size. For instance, Zewde Kiflie (2014) in his
study of ‘’assessment of performance of goat market system in Afar Region Ethiopia’’ used
120 sample size; Belay(2009) in his study of ‘’performance of cattle marketing in Jijiga
zone, Somali Region’’ used 150 sample size from 540 sample frame; Belete(2009) in his
study of ‘’production and marketing systems of small ruminants in the Goma district of
Jimma zone, western Ethiopia‟ used 160 sample size from 7594 sample frame; Tesfaye
(2008) in his study of ‘’performance efficiency analysis of livestock marketing in Afar region
Ethiopia‟ used 120 sample size from 343 sample frame; Endeshaw (2007) in his study of
‘’Assessment of production and marketing System of Goats in Dale district, Sidama Zone‟

42
used 120 sample size; Tsedeke (2007) in his study of ‘’production and marketing systems of
sheep and goats in Alba special zone, southern Ethiopia‟ used 150 sample size from 2446
sample frame.

All this studies were mostly undertaken with in the country especially at the regional and
zonal level in lowland areas of the country and most of them used five up to eight market
outlets. Therefore, depending on these trends, from two selected market outlets 200 camel
supply chain actors (20 Camel Traders, 40 Camel Consumers and 140 Camel Herders) was
selected through convenience sampling for interview purpose based on the experience they
have in camel supply chain trading business. Accordingly, those who have more than six
months in the camel supply chain trading business experience were selected in order to get
more detailed information.

Table 6: Sample size distribution in the study woredas

Name of woreda Number of selected Pas Total number of PAs Total number of sample
HH
Ayssaita 6 Pas 30% of 6 PAs = 2 PAs 40 HH
Chifra 16 Pas 30% of 16 PAs= 5 PAs 100 HH
Total 140 HH
Source: Own computation from survey result, 2016/2017.

3.4.2 Data Collection and Instrument

Primary data gathered from different government bureau officials, individual camel supply
chain actors, the livestock marketing promotion officials of the Afar Region, market
participants and camel market outlets through interviewing sample traders with the help of
interview schedule, group discussion with market participants and physical observation of
market outlets by researcher. In each market one group discussion was conducted to obtain
general information about camel supply chain on the basis of the variables of the study.

The data was collected from sample traders with the help of semi-structured questionnaire.
The interview schedule primarily was prepared in English to be translated into both Amharic
and Afaringa in order to make communication easy with both Amharic and Afaringa speakers
in the market.

43
In addition, group discussions with market participants, observations of market outlets and
interview with regional livestock promotion bureau experts was conducted by researcher.
2009-2013 Secondary data about camel population and camel supply chain were collected
through inspections of different secondary sources, such as, the reports from selected
governmental institutions (CSA, BoFED, and BoAPMP) and websites. Lastly, the
accomplished survey forms was collated, encoded, statistically analyzed and interpreted.

3.4.3 Methods of Data Analysis

Descriptive statistics, inferential statistics and econometric analysis were used to analyze the
data collected from camel herders, traders and consumers.

3.4.3.1 Descriptive and Inferential Statistics

These methods of data analysis refer to the use of percentages, means, standard deviations, t-
test, χ2-test, F-test and maps in the process of examining and describing marketing functions,
facilities, services, and household characteristics.

Value chain analysis

As products move successively through the various stages, transactions take place between
multiple chain actors, money and information are exchanged and value were progressively
added. The analysis of agri - value chains highlights the need for enterprise development,
enhancement of product quality, and quantitative measurement of value addition along the
chain, promotion of coordinated linkages among producers and improvement of the
competitive position of individual enterprises in the marketplace. Moreover, individual
enterprises may feed into numerous chains; hence, which chain (or chains) was/were targeted
depends largely on the point of entry for the research inquiries (Kaplinsky and Morris, 2001).
The following four steps of value chain analysis were applied to this study:
1. Mapping the value chain to understand the characteristics of the chain actors and the
relationships among them, including the study of all actors in the chain, of the flow of camels
through the chain, of employment features, and of the destination and volumes of domestic
and foreign sales. This information was obtained by conducting surveys and interviews as
well as by collecting secondary data from various sources.

44
2. Identifying the distribution of actors’ benefits in the chain. This was involved analyzing the
margins and profits within the chain and therefore determined who benefits from
participating in the chain and who would need support to improve performance and gains. In
the prevailed context of market liberalization, this step is particularly important, since the
poor involved in value chain promotion were the most vulnerable.

3. Defining upgrading needed within the chain. By assessing profitability within the chain
and identifying chain constraints, upgrading solutions could be defined. These may include
interventions to: (i) improve product design and quality and move into more sophisticated
product lines to gain higher value and/or diversify production; (ii) reorganize the production
system or invest in new technology to upgrade the process and enhance chain efficiencies;
(iii) introduce new functions where in the chain to increase the overall skill content of
activities; and (iv) adapt the knowledge gained in particular chain functions in order to
redeploy it.

4. Emphasizing the governance role. Within the concept of value chain, governance defines
the structure of relationships and coordination mechanisms that exist among chain actors. By
focusing on governance, the analysis identified actors that may require support to improve
capabilities in the value chain, increase value added in the sector and correct distributional
distortions. Thus, governance constituted a key factor in defining how the upgrading
objectives could be achieved.

Following the above procedure, the main aspects of agri - value chain analysis was done by
applying some quantitative and qualitative analysis. First, an initial map which depicts the
structure and flow of the chain was drawn in logical clusters. This exercise was carried out in
qualitative and quantitative terms through graphs presenting the various actors of the chain,
their linkages and all operations of the chain from pre-production (supply of inputs) to
consumption. After having developed the general conceptual map of the value chain, the next
step was analyzing the chain’s economic performance and benefit share of actors.

Analysis of agri-value chain performance

Estimates of the marketing margins are the best tools to analyse performance of market.
Marketing margin was calculated by taking the difference between producers and retail
prices. The producers’ share is the commonly employed ratio calculated mathematically as,
45
the ratio of producers’ price to consumers’ price. Mathematically, producers’ share can be
expressed as:

Pp MM
PS= =1− …………………………..…………………………………….……. (1)
Cp Cp

Where: PS= Producer’s share

Pp= Producer’s price
Cp = Consumer price
MM = marketing margin

The above equation tells us that a higher marketing margin, diminishes producers share and
vice versa. It also provides an indication of welfare distribution among production and
marketing agents.

Calculating the total marketing margin was done by using the following formula. Computing
the Total Gross Marketing Margin (TGMM) is always related to the final price paid by the
end buyer and is expressed as a percentage (Mendoza, 1995).

Consumer price−Producer price

TGMM = % ………………….…………….....…………
Consumer price
(2)

Where, TGMM=Total gross marketing margin.

Net Marketing Margin (NMM) is the percentage over the final price earned by the
intermediary as his net income once his marketing costs are deducted. The equation tells us
that a higher marketing margin diminishes the producer’s share and vice-versa. It also
provides an indication of welfare distribution among production and marketing agents.

Gross marketing margen−Markrting cost

NMM = ……………………………………. (3)
Consumer price

From this measure, it is possible to see the allocative efficiency of markets. Higher NMM or
profit of the marketing intermediaries reflects reduced downward and unfair income

46
distribution, which depresses market participation of smallholders. An efficient marketing
system is where the net margin is near to reasonable profit.

To find the benefit share of each actor the same concept was applied with some adjustments.
In analyzing margins, first the Total Gross Marketing Margin (TGMM) was calculated. It
was the difference between producer’s (farmer’s) price and consumer’s price (price paid by
final consumer). i.e.

TGMM =Consumer ’ s price – Farmer ’ s price ………………….……………….…….. (4)

Then, marketing margin at a given stage ‘i’ (GMMi) was computed as:

SPi−PPi
GMMi= ……………………………………………………………………. (5)
TGMM

Where, SPi is selling price at ith link and PPi is purchase price at ith link.

Total gross profit margin also computed as:

TGPM=TGMM −TOE ……………………………………………..……………………. (6)

Where, TGPM is total gross profit margin, TGMM is total gross marketing margin and TOE
is total operating expense.

Similar concept of profit margin that deducts operating expense from marketing margin was
done by Dawit (2010) and Marshal (2011).

Then profit margin at stage “i” is given as:

GMMi−OEi
GPMi= …………………………………………………………..……….. (7)
TGPM

Where, GPMi = Gross profit margin at ith link

GMMi = Gross marketing margin at ith link

47
 OEi = Operating expense at ith link

TGPM=Total gross profit margin …………………………………………………… (8)

3.4.3.2 Econometric analysis

Market supply model
In order to expand the leading role agriculture plays in economic growth and poverty
reduction, smallholder farmers need to improve their marketable surplus. A higher
marketable surplus can help farmers to participate in a high value markets by increasing their
level of income. Therefore, investigating the nature of marketable surplus is a major
component of agro-value chains.

In this study, multiple linear regression models (MLR) Model was used to analyze factors
affecting farm level camel supply to the market in the study areas because of all camel
herders participate in the market. This model could also be selected for its simplicity and
practical applicability (Greene, 2000). Econometric model specification of supply function in
matrix notation is the following.

γ =β +U ………………………………………….…………………………………… (8)

Where:γ = quantity of camels supplied to market

= a vector of explanatory variables
β = a vector of parameters to be estimated
U = disturbance term

Market outlet choice model

It has become a common practice to apply logit models for data which are individual
(household) specific (Green, 2000). The application of logit models depends on the number
of marketing channels involved to study decisions related to market participation and channel
choice (Lu, 2007). When the choice set consists of only two options, binary or probit models
are the most frequently used econometric models for an empirical analysis. However, if the
choice sets are more than two, then the multinomial logit (MNL) discrete choice model is
used (Green, 2000).

48
In this study two empirical choice models was used, a binary logit and multinomial logit
models. The logit model was used where market participation is assumed to be dichotomous,
that is whether or not small scale farmers are participating in livestock markets. The objective
of the binary logit model was to estimate the probability of participating in a livestock market
during 2016/2017 harvesting season. The second model was the multinomial logit model with
the intention to estimate the determinants of farmers’ decision to choice market channels to
sell their livestock during the same period.

A multinomial logit (MNL) model was applied to explain inter household variation in the
choice of a specific marketing outlet. This study assumes that camel herder’s decision is
generated based on its utility maximization. This implies that each alternative marketing
outlet choice entails different private costs and benefits, and hence different utility, to a
household decision maker.

The analytical model is constructed as follows. Suppose that the utility to a household of
alternative j .is U ij , where j=0 , 1, 2 … .. From the decision maker’s perspective, the best
alternative is simply the one that maximizes net private benefit at the margin. In other words,
household i will choose marketing outlet j . if and only if U ij U ij >U I k . It is important to note
that household’s utility cannot be observed in practice. What a researcher observe are the
factors influencing the household’s utility such as household and personal characteristics and
attributes of the choice set experienced by the household. Based on McFadden (1978), a
household’s utility function from using alternative j can then be expressed as follows:

U (Choice of j for household i)=U ij =V ij + ε ij …………………………………… (9)

Where,
U ij is the overall utility,
V ij is an indirect utility function and
ε ijis a random error term.
The probability that household i select alternative j can be specified as:

Pij =Pr ¿…………………………………………… (10)

49
Assuming that the error terms are identically and independently distributed with type i
extreme value distribution, the probability that a household chooses alternative j can be
explained by a multinomial logit model (Greene, 2000) as follow:

exp ⁡(βjXij)
P ij= ……………..………………………...………………………………… (11)
exp ⁡(βjXij)

Where,
Xij is a vector of household of the ith respondent facing alternative j
j is a vector of regression parameter estimates associated with alternative j .
Following equation (11) above, we can adapt the MNL model fitting to this study as follow:

exp(βjXi)
P ( CHOICEij= j ) = …………………………………………………………. (12)
exp ⁡(βjXi)

Where,
i Represents ith farm household, and
i=1 , 2 ,3 , … , 140 .
j Represents different marketing outlets,
j=0 for sale to Retailers,
j=1 for sale to Whole salers,
j=2 for sale to Consumers,
j=3 for sale to Brokers, and
j=4 for sale to Collectors.

P Represents the probability of camels marketing outlet j to be chosen by farm householdi ;

CHOICEij= j Means that camels marketing outlet j is chosen by farm household i ;
Xi Is independent variables

It is a common practice in econometric specification of the MNL model to normalize

equation (11) by one of the response categories such that β j=0 . In this regard, the MNL
model can alternatively be specified as follow:

exp(βjXi)
Pij= ………………………………………………..…………………………. (13)
exp ⁡(βjXi)

50
The coefficients of explanatory variables on the omitted or base category are assumed to be
zero. The probability that a base category will be chosen can be calculated as follows:

1
Pij= ……………………………………………….……………………… (14)
1+exp ⁡(βjXi)

The marginal effects of the attributes on probability of choice are determined by

differentiating equation (11):

∂ Pj
δj= =Pj=Pj ¿ …………………………... (15)
∂ Xj

Where,
Pj Is the probability that farmers choose market outlet j
β j Is a vector of regression parameter estimates associated with alternative j .

The model predicts the relative probability that a producer would choose one of the five
categories based on the nature of the explanatory variables. For this analysis, the market
outlet Collectors was used as comparison base because this outlet was chosen by the majority
of camel selling herders in trading their camels. Econometric analysis of the data was done
with SPSS V16.

It is important to check multicollinearity, hetroscedasticity and endogeneity problems before

running the model. Multicollinearity problem arises due to a linear relationship among
explanatory variables; and becomes difficult to identify the separate effect of independent
variables on the dependent variable because there exists strong relationship among them
(Gujarati, 2003). Variance inflation factors (VIF ) technique was employed to detect
multicollinearity in explanatory variable. According to Gujarati (2003) VIF (Xj ) can be
defined as:

1
VIF ( Xj )= …………………………………………………………………………..
1−Rj 2
(16)

Where, R j is the multiple correlation coefficients between Xj and other explanatory

variables. If the value of VIF is 10 and above, the variables are said to be collinear.

51
If there is heteroscedasticity problem in the data set, the parameter estimates of the
coefficients of the independent variables cannot be BLUE. Therefore, Breusch-Pagan test of
heteroscedasticity was employed for detecting heteroscedasticity in this study.
The problem of endogeneity occurs when an explanatory variable is correlated to the error
term in the population data generating process, which causes, the ordinary least squares
estimators of the relevant model parameters to be biased and inconsistent.

The source of endogeneity could be omitted variables, measurement error and simultaneity
(Maddala, 2001). Both Hausman test and Durbin-Wu-Hausman (DWH) test was applied to
check the presence of endogeneity. In the case of Huasman test if there is little difference
between OLS and IV estimators, then there is no need to instrument, and we conclude that the
regressor was exogenous. If instead there is considerable difference, then we need to
instrument and the regressor is endogenous (Cameron and Trivedi, 2009). In the case of just
one potentially endogenous regressor with the coefficient denoted by β , the Huasman test
statistics is:

( βIV −βOLS )2
HT = …………………………………………...……………………………
V ( βIV −βOLS )2
(17)

Is χ 2 (1) distributed under the null hypothesis that the regressor is exogenous.

In the case Durbin-Wu-Huasman (DWH) test the error term from the first stage added on the
structural equations. i.e y 1i=β 1 y 2 i x 1i 2 p 1 ii, where v 1 is the error term from the first
stage equation (Davison, 2000).

Both test results of endogeneity showed that quantity of camel produced is endogenous
variable for camel supply to the market. This problem can be overcome by using two stages
least square (2SLS) method. The method involves two successive applications. The first stage
is made by regressing the suspected endogenous variables over the pre-determined or pure
exogenous variables to get their predicted values. Then the predicted values of the
endogenous variables in the first stage are used to estimate the supply equation. Here AgeHH
was used as instrument to quantity of camel produced. This instrumental variable was
selected from the available variables by checking the correlation between endogenous
variable and the instruments and the model was specified as:

52
Y (VCS )=f ¿…. (18)

Where, V CSis volume of camel supplied to the market, QHerd is amount of camel produced
(harvested) and TLU is amount camels in quintals.

MNL model is only applicable if the conditions of Independent Irrelevant Alternative

assumption is fulfilled (Green, 2003). IIA implies that the decision between two alternatives
is independent from the existence of more alternatives. The validity of IIA assumption can be
also tested using Hausman’s specification test. Following (Green, 2003) the statistics is given
as:

( βs−βf )
X 2= ……………………………………………………………………….
[ Vs−Vf ] (βs−βf )
(19)

Where, s indicates estimators based on the restricted (constrained) subsets, f indicates

estimators based on the full set of choices (Unconstrained). Therefore, βs and βf are the
respective coefficients, andVs and Vf are the respective estimated covariance matrices.

3.5 Hypothesis, Variable Selection and Definition

In the course of identifying factors influencing camel supply to the market and market
channel choice decisions, the main task is exploring which factors potentially influence and
how (the direction of the relationship) factors are related with the dependent variables.
Therefore, potential variables, which are supposed to influence camel supply to the market
and market channel choice decisions, need to be explained. Accordingly, the major variables
expected to have influence on both the pastoralist camel supply to the market and market
channel choice decision and quantity supply are explained as follows:

3.5.1 Dependent variables

Volume of Camel Sales (VCS) and Marketing Outlet (MktO) are dependent variables which
were used to measure in the camel supply chain.

Volume of Camel Sales (VCS);

53
It is continuous dependent variable used in the multiple linear regression model equation. It is
measured in TLU. It has a positive value and represents the actual supply by Camel Herding
household to the market in the survey year.

Marketing Outlet (Mkt O);

In the analysis it is measured by the probability of selling camels to either of the markets. The
outlet choices might be along household camel herders’ decision involving in five alternative
markets. It is represented in the model as Y0 for household who choose to sell Camel mainly
to retailers, Y1 for Camel herders that mainly sell their Camels to wholesalers, Y2 for Camel
herders who mainly sell Camels for consumers, and Y3 for Camel herders who mainly sell
Camels for brokers, and Y4 for Camel herders who mainly sell Camels for collectors.

3.5.2 Independent variables

The independent variables that will be expected to have influence on the camel supply chain
could be of many types. Based on the review of literature, the result of pilot study, and
consultation with experts, 17 independent variables were identified which will be classified
as categorical and continuous variables. These are explained below:

Age of Household Head (Age);

It is a continuous variable and measured in years. Aged households are believed to be wise in
resource use, on the other hand young household heads have long investment horizon and it is
expected to have either positive or negative effect on volume of Camel sales. Adugna (2009)
who found that age of the household head have negative effect on the elasticity of agricultural
product supply to the market. This variable is also expected to have relationship with outlet
choice decision of agricultural producers. Bongiwe and Masuku (2012) found that age of the
farmers was significant determinant of the choice to use non-wholesale market channel over
other-wholesale market channel.

Distance to All Weather Roads (DAWR);

It is the distance of the Camel herder households from the nearest market and it is measured
in hours of walking time. The closer the market, the lesser would be the transportation
charges, reduced walking time, and reduced other marketing costs, better access to market
information and facilities. In this study distance to nearest market is hypothesized to affect
volume Camel sales negatively. Similar issue was studied by Ayelech (2011) on fruit market

54
in Goma woreda identified that poor market access has significant and negative effect on
quantity of avocado and mango supplied. Also those households who are close to market
were assumed to have more probability to choose better market outlet. In this study, distance
from market is hypothesized to influence the decision of Camel herders to choose the
wholesalers market outlet.

Sex of the Household Head (Sex):

It is a dummy variable taking 0 if female and otherwise 1 if male to be considered. Sign could
not be attached with the variable. Tshiunza et al. (2001) determined that male farmers tended
to produce cooking banana for market and therefore participated in banana market more than
female farmers participate. Further, study conducted by Awol (2010) indicated negative
relation between sale volume of poultry and male-headed household. It is also expected to
have relationship with outlet choice decision of vegetable producers. Mamo and Deginet
(2012) found that sex of the household head has statistically significant effect on whether or
not a farmer participates in the camel market and his/her choice of a market channel.

Access to Market Information (MInfo):

This was a variable expected to influence market supply positively. The variable was
considered dummy. Assign 1 if a farmer got information and 0 if not. Farmers marketing
decisions are based on market price information, and poorly integrated markets may convey
inaccurate price information, leading to inefficient product movement. Therefore, it is
hypothesized that market information is positively related to market supply of Camels. Again,
business decisions are based on dynamic information such as consumer needs and market
trends (CIAT, 2004). Therefore those who have access to dynamic information will supply
more Camels for market. Mohammed (2011) who found that if wheat producer gets market
information, the amount of wheat supplied to the market increases. It is also hypothesized
that market information is related to wholesale marketing outlet

Woreda Dummy (Woreda):

This variable is a dummy taking the value 0 if the Woreda is Ayssaita and 1 if the Woreda is
Chifra, which consists of a number of characteristics of the Woredas. This is related to the
difference between Woredas in access to information, access to market, hearding potential
55
and etc. This variable will influence quantity of Camel sales either positively or negatively
and is hypothesized to have relationship with outlet choice decision of Camel herders’.

Credit Access (Credit):

This is a dummy variable taking the value 1 if the household takes loan and 0 otherwise,
which indicates credit taken for Camel herding. Access to credit would enhance the financial
capacity of the Camel heard to purchase the inputs, thereby increasing Camel herding and
market share size. Therefore, it is hypothesized that access to credit would have positive
influence on level of production and sales. Alemnewu (2010) and Mohammed (2011) who
found that if pepper and teff producer gets credit, the amount of pepper and teff supplied to
the market increased. It is also hypothesized that access to credit would have influence on
wholesale market outlet choice decisions. Urquieta (2009) found that access to loan was
significant determinant of market channel choice.

Income from Non/Off Farming Activities (NOFI):

It is a dummy variable measured in terms of whether the household obtained income from off
and non-farming activities. It is 1 if the household is involved in non/off farm activities and 0
otherwise. This income may strengthen farming activity on one side and may weaken it on
the other side. But for this study it is assumed to have inverse relation with volume of Camel
sales. Rehima (2006) who found that if pepper producer have non-farm income, the amount
of pepper supplied to the market decreases. Again, farmers who gain more income from
non/off farm income want to supply their vegetable to any nearest market outlet with low
price than to go far. Hence, off/non farm income is hypothesized to influence market outlet
choice decision of Camel herding.

Access to Extension Service (AExte):

A dummy variable taking a value of 1 if Camel herder household has access to extension
service and 0 otherwise and representing extension services as a source of information on
technology, it is expected that extension service widens the household’s knowledge with
regard to the use of improved technologies and has positive impact on Camel sale volume.
Therefore, this variable is hypothesized to influence volume of camel sales positively.
Ayelech (2011) found that if fruit producer gets extension, the amount of fruits supplied to
the market increases. Access to extension is also assumed to have direct relation with market
outlet choice of camel herders’.
56
Education of the Household Head (HEduc):
It is a dummy variable measured in terms of whether the household has a formal education or
not which takes a value of 1 if a household have formal education and 0 otherwise. Education
broadens farmers’ intelligence and enables them to perform the farming activities
intelligently, accurately and efficiently. Moreover, better educated farmers tend to be more
innovative and are therefore more likely to adopt the marketing systems. Formal education
enhances the information acquisition and adjustment abilities of the farmer, thereby
improving the quality of decision making (Fakoya et al., 2007). Therefore, this variable is
hypothesized to influence volume of camel sales positively. Astewel (2010) found that if
paddy producer gets educated, the amount of paddy supplied to the market increases, which
suggests that education improves level of sales that affects the marketable surplus. Education
is also hypothesized to influence the probability of market outlet choice of Camel herder’s.

Camel Herding Experience (CHExp):

It is the total number of years a herder stays in herding of Camel. A household with better
experience in Camel herding is expected to produce more amounts of Camels and, as a result,
he/she is expected to supply more amounts of Camel to market. Farmers with longer farming
experience are expected to be more knowledgeable and skilful (Ayelech, 2011).Therefore,
this variable is hypothesized to positively influence Camels marketable surplus.

Land Tenure Systems (Land_Tenure_Systems):

This refers to the total area of land that a farm household owned in hectares. In agriculture,
land is one of the major factors of production. The availability of land enables the owner to
earn more agricultural output which in turn increases the marketable supply (Desta, 2004).
Availability of grazing land is a continuous independent variable measured in hectare. It
means the access of the livestock to grazing land nearby. It may have indirect positive impact
on market participation decision. Therefore, land holding and marketable supply are expected
to have direct relationship.

Livestock (TLU):
This is a continuous variable measured in tropical livestock unit (TLU). Farmers who have a
number of livestock are anticipated to specialize in livestock production so that they allocate
57
large share of their land for pasture. Study by Rehima (2006) on pepper marketing showed
that TLU showed a negative sign on quantity of pepper sales. On the other hand, it is
assumed that household with larger TLU have better economic strength and financial position
to purchase sufficient amount of input (Kinde, 2007). But for this study TLU is hypothesized
to influences volume of Camel sales negatively.

Quantity of Camels Herd (QHerd):

It is continuous variable measured in tropical livestock unit. This variable is expected to have
a positive contribution to Camel herders’ market supply. A marginal increase in the camel
herding has obvious and significant effect in motivating market supply. Therefore, this
variable is hypothesized to have a positive effect on marketable surplus. Abay (2007);
Adugna (2009) and Ayelech (2011) found that the amount of tomato, papaya, avocado and
mango produced by farming households has augmented marketable supply of the
commodities significantly.

Family Size (Family):

Family size of a respondent is a continuous variable measured in terms of number of family
members in the household. As Camel herding is labour intensive activity, Camel herding in
general and market supply of camel in particular is a function of labour. Accordingly,
families with more household members tend to have more labor which in turn increase Camel
herding and then increase camel market supply. On the other hand, family size also decreases
market supply because high proportion of the product would be used for consumption. But
for this study family size was expected to influence positively the volume of camel supply to
the market. Gezahagn (2010) who found that family size have positive effect on the
households’ gross income from groundnut production.

Adult Equivalent (AEqu):

Family size of a respondent is a continuous variable measured in adult equivalent. Camel
herding and marketing is labour intensive activity, since Camel herd size is large in nature.
Accordingly, families with more household members tend to have more labor which in turn
increases the choice of better market outlet. Baltenweck et al (2006) found that the higher the

58
number of adults in the household, the more likely that private trader channel and
coop/private processor channel will be selected than individual customers.

Membership to any Cooperative (MCoop):

It is binary variable and takes the value of 1 if the household is membership of any
cooperatives engaged in any business, otherwise 0. Thus cooperatives improve understanding
of members about market and strengthen the relationship among the members. Therefore, it
is expected to be associated with market outlet choice decision of Camel herders’.

Ownership of Market Transport Facilities (OTran):

Specifically vehicles, carts and transport animals would be used to measure the availability of
produce transportation facilities by households. In cases where households owned
transportation facilities, the variable took the value of 1, and 0 if the household did not own
any form of transport facility. This variable is expected to have influence on the market outlet
choice of Camel herders’. The availability of transportation facilities helps reduce long
market distance constraint, offering greater depth in marketing choices (Jagwe, 2007).

Post Harvest Loss of Camels (Post_Harvest_Loss_Camels):

It is a dummy variable measured in terms of whether the household practices value adding
activities on his camel herds or not. It takes a value ‘1’ if a household practice value adding
activities and ‘0’ otherwise. Camel herders who practice better post harvest handling like
(washing, cutting, separating quality product, etc) have better relationship with wholesaler
and have high probability to sell to wholesaler. Therefore, it is hypothesized that the ability to
add value influences outlet choice decisions of camel herders.

Death due to drought (Death_dueto_draught):

This is measured as a continuous independent variable taking as number of dead animals (in
TLU) during drought. It is characterized by very low rainfall and the lack of natural grazing
range land which leads to the higher occurrence of mortality. Therefore, death due to drought
was expected to have influence of the household to supply camels in to the market positively.

Income from camel sale in 2017 E.C (Income_from_camel_sale):

59
Is one of the sources of on-farm cash income which is the immediate source of capital for
pastoralists and agro-pastoralists to finance their food and non-food consumption and farming
operations? The income from camel sale in 2016 G.C was expected to affect the household
camel supply positively in a way that income from camel sale can stimulate production and
thus volume camel supply for 2017 G.C.

CHAPTER FOUR
RESULTS AND DISCUSSION
This chapter presents the major findings of the study. It has five main sections. The first
section deals with descriptive and inferential statistics of the sample households. The second
section presents value chain analysis of camels which includes value chain map, actors and
their roles, and value chain governance. The third section presents marketing channel and
performance analysis of the value chain which includes marketing channels, marketing costs
and margins, and benefit shares of actors in the value chain. The fourth section presents
results of econometric analysis which contains the determinants of market supply of camels
by using OLS and the determinants of outlet choice of camel herders by using MNL model.
The fifth section deals with the constraints and opportunities of camel production and
marketing in the study area.

4.1 Descriptive Results

4.1.1 Demographic characteristics of sample households
Tables 7 and 8 present demographic and socioeconomic characteristics of the sample
respondents. The total sample size of camel herders respondents handled during the survey
year 2016/2017 was 140. All the total sample respondents, 100% were male-headed
households and only 28.57% were in Ayssaita Woreda and 71.43% were in Chifra Woreda.
With regards to educational status of the two Woredas, 39.22% and 60.78% were literate in
Ayssaita and Chifra, respectively. The average family size of the total sample respondents
was found to be 11.8 and 11.8 persons in Ayssaita and Chifra Woredas respectively. Family
size also showed no variation at 1 percent significance level.

60
Table 7: Demographic and socioeconomic characteristics of samples (categorical variables)

Items Ayssaita Chifra Total

Variables (N=40) (N=100) (N=140) χ2-test
N % N % N %
SexHH Female - - - - - -
Male 40 100 100 100 140 100 X2 = 144.00
EduHH No Formal 20 50.0 69 69.0 89 63.57
Education X2= 148.581
Yes Formal 20 50.0 31 31.0 51 36.43
Education
Marital Status Married 40 100 100 100 140 100
HH Single - - - - - -
Divorced - - - - - - X2 = 144.00
Widowed - - - - - -
MCooperatives No 5 12.5 - - 5 3.57
Yes 35 87.5 100 100 135 96.43 X2=157.333
Non/off No 7 17.5 2 2.0 9 6.43
Farm Income Yes 33 82.5 98 98.0 131 93.57 X2=155.737
N is number of respondents. Statistical test at 1% and 10% significance probability level

Source: Own computation from survey result, 2016/2017.

Herding was the main occupation and source of livelihood for all sample respondents (100%)
in both Woredas. Some of respondents from Ayssaita Woreda have been practicing mixed
crop livestock production relative to Chifra Woreda. However, in addition to the farming
activities, but Majority respondents (91.0%) from Chifra have also engaged in non-farm
activities, like in small trading activities and 75.0% from Ayssaita engaged in off- farm

61
activities. Most (87.5% and 100.0% percent) of the respondents have been a member of
cooperatives from Ayssaita and Chifra Woredas, respectively (Table7).

As can be seen in table 8 below the average age of camel herders sample respondent
household head in Ayssaita and Chifra woredas were 41.07 years with standard deviation of
5.771 and 40.48 years with standard deviation of 5.279 respectively. The average family size
of camel herders sample respondent household head was 11.78 with standard deviation of
2.106 and 11.79 with standard deviation of 1.879 in Ayssaita and Chifra Woredas,
respectively. The average camel herding years of experience was 16.28 years with standard
deviation of 2.611 and 14.55 years with standard deviation of 2.520 in Ayssaita and Chifra
Woredas, respectively (Table 8). There was significant difference in camel production
experience in the two Woredas at 1% significant level.
Table 8: Demographic and socioeconomic characteristics of samples (continuous
variables)

Ayssaita Chifra Total

Variables (N=40) (N=100) (N=140) t-test
Mean SD Mean SD Mean SD
AgeHH 41.07 5.771 40.48 5.279 40.65 5.410 88.91***

Family_Siz 11.78 2.106 11.79 1.879 11.79 1.937 71.99***

e
CH Exp 16.28 2.611 14.55 2.520 15.04 2.655 67.042***

Note: *** Statistically significance at 1% probability level, SD is standard deviation.

Source: Own computation from survey result, 2016/2017.

4.1.2 Production overview

As indicated in table 9 below the average camel’s productivity was 89.82 camel/ha with
standard deviation of 19.087 and 82.24 camel/ha with standard deviation of 21.191 in
Ayssaita and Chifra woreda respectively. The average Oxen/bull productivity was 16.98
Oxen/bull/ha with standard deviation of 2.778 and 15.94 Oxen/bull/ha with standard
deviation of 3.117 in Ayssaita and Chifra woreda respectively. The average Cows/heifers
productivity was 91.15 Cows/heifers/ha with standard deviation of 20.579 and 83.09
Cows/heifers/ha with standard deviation of 22.945 in Ayssaita and Chifra woreda
respectively. The average Calves productivity was 8.58 Calves/ha with standard deviation of

62
1.567 and 7.94 Calves/ha with standard deviation of 1.740 in Ayssaita and Chifra woreda
respectively. The average Goats productivity was 69.05 Goats/ha with standard deviation of
18.392 and 61.42 Goats/ha with standard deviation of 20.244 in Ayssaita and Chifra woreda
respectively. The average sheep productivity was 55.32 Sheep/ha with standard deviation of
16.079 and 48.46 Sheep/ha with standard deviation of 17.979 in Ayssaita and Chifra woreda
respectively (Table 9). All households produce Bactrian camel types both in Chifra and
Ayssaita Woredas. There are significant differences in productivity between the Woredas and
there are also huge differences in productivity among the households.

Table 9: Mean productivity of Camels per hectare

Variables Ayssaita Chifra Total t-test

Mean SD Mean SD Mean SD
Camels 89.82 19.087 82.24 21.191 84.41 20.830 47.946
Oxen/bull 16.98 2.778 15.94 3.117 16.24 3.050 62.981
Cows/heifers 91.15 20.579 83.09 22.945 85.39 22.520 44.866
Calves 8.58 1.567 7.94 1.740 8.12 1.711 56.162
Goats 69.05 18.392 61.42 20.244 63.60 19.969 37.685
Sheep 55.32 16.079 48.46 17.979 50.42 17.677 33.751
Note: *** Statistically significance at 1% probability level, SD is standard deviation.
Source: Own computation from survey result, 2016/2017.

4.1.3 Means of livelihood

The respondents depend on different means of income generation strategies where small scale
irrigation, livestock’s trading, agricultural products trading, and fodder supplying were major
sources of income for the majority of the herders in Ayssaita and Chifra Woredas,
respectively. For this reason, about 40(28.6%) and 100(71.4%) of the respondents earned their
livelihood from camel and other livestock’s production as a primary source in Ayssaita and
Chifra Woredas, respectively. 15(31.2%) and 33(68.8%) of the respondents earned their

63
livelihood from Livestock’s trading, 10(21.3%) and 37(78.7%) of the respondents earned
their livelihood from Small scale Irrigation, 9(37.5%) and 15(62.5%) Livestock’s fodders
supply and 6(28.6%) and 15(71.4%) of the respondents earned their livelihood from Agri-
products Trading as a secondary source in Ayssaita and Chifra Woredas, respectively. Small
irrigation production is also considered as the second major means of livelihood in both
Woredas (Appendix Table 6).

4.1.4 Herders characteristics by the level of market supply

Camel herders sell different amount of camels in the market depending on different
demographic and socioeconomic characteristics of the household. In average camel herders
market supply were 2970 and 3600 heads of camels, in Ayssaita and Chifra respectively in
July 2009/June 2010 herding season. Here, herders were divided into two according to their
level of market supply by using the average market supply as reference. The study shows that
majority of the camel herders’ market supply were below the average supply of the sample
households’ i.e. 48 and 40 households supply below the average from 71 and 66 camel
herders, respectively.

Tables 10 and 11 present demographic and socio-economic characteristics of sample

respondents across the level of market supply. The study indicated that herders in Chifra
supply to the market better than those in Ayssaita. Chi-square test result also showed that
there was significant difference in market supply between the Woredas at less than 5%
significant level. The reason for the difference is may be the difference in camel herding
experience and market access of the Woredas. In addition, the level of camel herding and
access to market information has significance difference among those camel suppliers below
the average and above the average at less than 1% significant level. This implies that
households who harvest large quantity of camel sell large quantity than households who
harvest low quantity. Therefore, improving production and productivity of herders is crucial
to achieve the objective of commercialization.

Table 10 Statistical test of continuous variables by the level of market supply

Camel
(N= 140)
Variables Below mean Above Mean t-test
Mean SD Mean SD
AgeHH 39.89 5.410 41.41 5.410 88.910

64
Family_Size 11.51 1.937 12.06 1.937 71.990
CHExp 14.67 2.655 15.41 2.655 67.042
DMKt 1.65 0.453 1.78 0.453 44.739
THsize 294.10 85.551 318.04 85.551 42.331
Note: Statistical test at 1% and 10% significance probability level respectivelly

Source: Own computation from survey result, 2016/2017.

Table 11 Statistical test of dummy variables by the level market supply

Camel (N= 140)

Variables Items Below Mean Above Mean
(N=) (N=) χ2-test
N % N %
SexHH Female - - - -
Male 40 28.57% 100 71.43% --

No, formal - - 89 63.6% X2 =10.995

Education
EduStatusHH Yes, formal 51 36.4% - -
Education
Woreda Ayssaita 40 28.57% - - X2 =10.526
Chifra - - 100 71.43%

MInfo Yes - - 140 100.0% --

No - - - -

ACredit Yes 1 0.7% - - X2 =5.124

No - - 139 99.3%
AExte Yes - - 128 91.4% X2 =3.899
No 2 8.6% - -

Statistical test at 1% and 10% significance probability level respectivelly

Source: Own computation from survey result, 2017

65
 4.1.5 Herders’ characteristics by marketing outlets
In this study, four major camel market outlets were identified as alternatives to herders to sell
majority of their camel products. These were Consumers which accounts for 40.0% of total
sells followed by, Wholesalers (33.1%), Brokers (19.3%) and Retailers (4.1%). Although the
role of agricultural cooperatives in smallholder farmers marketing is recognized as vital, no
single household reported cooperatives as alternative market outlet in their camel marketing.
This should be seen as serious policy concern for the government and other relevant
stakeholders in this sector.

Tables 12 and 13 present demographic characteristics of sample respondents across

marketing outlets. The study indicated that the majority herders in Ayssaita sales camels to
wholesalers while those in Chifra sales their camels to retailers. ANOVA test result also
showed that there was also significant difference in outlet choice between the Woredas at less
than 1% significant level. The reason for the difference is the existence of high market
intermediaries in Ayssaita Woreda and the difference in camels’ production and marketing
access of the Woredas.

Table 12 Herders’ by demographic characteristics across marketing outlets

Variab Retailers Whole Consumer Brokers Total

les Collectors sellers (N=140)
F-
(N=47)
(N= 43) (N=31) (N=10) (N=9) test
Me SD Me SD Me SD Mea SD Mea SD Mea SD
an an an n n n
AgeHH 39.8 5.4 40.6 4.8 42.7 5.1 35.9 4.53 43.2 5.826 40.65 5.41 4.2
1 40 0 41 7 88 0 3 2 0 86
Family 11.4 1.9 12.1 1.8 11.9 2.0 11.6 2.10 11.3 1.500 11.79 1.93 1.0
Size 3 20 9 93 7 57 0 3 7 82
DMkt 1.91 .28 1.53 0.5 1.71 0.4 1.60 0.51 1.67 0.500 1.71 0.45 4.6
2 05 61 6 3 00
Statistical test at 1% and 10% significant probability level respectively.
Source: Own computation from survey result,
2016/2017

66
 Table 13 Percentage of Herders by demographic characteristics across marketing outlets

Variables Collectors Retailers Whole Consum Broker Total F-

(N=47) (N=43) sellers ers s tes
(N=9) t
(N=31) (N=10) (N=140)
N  N  N      N 
SexHH 47 33.57 43 30.71% 3 22.14 10 7.14 9 6.43 140 100.0%
% 1 % % %
EduStatus 47 33.57 43 30.71% 3 22.14 10 7.14 9 6.43 140 100.0%
% 1 % % %
HH
MaritalSt 47 33.57 43 30.71% 3 22.14 10 7.14 9 6.43 140 100.0%
% 1 % % %
at
Woreda 47 33.57 43 30.71% 3 22.14 10 7.14 9 6.43 140 100.0%
% 1 % % %
OTranspo 47 33.57 43 30.71% 3 22.14 10 7.14 9 6.43 140 100.0%
% 1 % % %
rt
MCoop 47 33.57 43 30.71% 3 22.14 10 7.14 9 6.43 140 100.0%
% 1 % % %

Statistical test at 1% and 10% significant probability level respectively

Source: Own computation from survey result, 2016/2017

4.2 Value Chain Analysis

4.2.1 Value chain map of Camels in Ayssaita and Chifra Woredas
According to McCormick and Schmitz (2002), value chain mapping enables to visualize the
flow of the product from conception to end consumer through various actors. It also helps to
identify the different actors involved in the camel value chain, and to understand their roles
and linkages. Consequently, the current value chain map of Camels in Chifra and Ayssaita
Woredas is depicted in Figure 5.

67
 Figure 5: Value chain map of Camels

Consumers
Exporters

Banks
Consumption

Retailers Whole Sellers Agro-pastora

Research
Institute
Samara
University
Marketing
Collectors
Woreda
Administratio
Herders
Production Informal
Credit Supply

BoARD Cooperatives Private Vendors NGOs

Input Supply ACSI

Functions Actors Enablers

Represents physical flow of inputs and products

Represents two way flow of information and technologies
Represents one way flow of information
Represents the flow of much of products

Source: Own sketch from survey result, 2016/2017

4.2.2. Actors and their role in Camel value chain

The value chain map highlighted the involvement of diverse actors who are participated
directly or indirectly in the value chain. According to KIT et al. (2006), the direct actors are
those involved in commercial activities in the chain (input suppliers, herders, traders,
consumers) and indirect actors are those that provide financial or non-financial support
services, such as credit agencies, business service providers, government, NGOs,
cooperatives, researchers and extension agents.
4.2.2.1 Primary actors

68
The primary actors in Camel value chain in Chifra and Ayssaita Woredas were herders,
traders, consumers’, fodders and other input suppliers. Each of these actors added value in the
process of changing product title. Some functions or roles ware performed by more than one
actor, and some actors performed more than one role.

Input Suppliers
At this stage of the value chain, there are many actors who are involved directly or indirectly
in agricultural input supply in the study area. Currently OoARD, primary cooperatives/ union
and private input suppliers are the main source of input supply. Camel herders also
participated in this stage especially for fodder supply in Chifra Woreda, and Afar PCDP
Project and Agricultural and Agro-pastoral Research Institute are also participated in such
activity both in Ayssaita and Chifra Woreda. All such actors are responsible to supply
agricultural inputs like improved camel specious, herbicides, pesticides and farm implements
which are essential inputs at the production stage. For major camels herd in Chifra and
Ayssaita Woredas, the majority of the sample herders used their own local specious of
camels. Regarding medicine and drug, offered by both Ayssaita and Chifra Woreda Pastoral
and Agro-Pastoral Development Offices and Afar Pastoral and Agro-Pastoral Research
Institute.

Table 14 Source of Camel species for sample respondents

Source of camel Ayssaita Chifra

species (N= 40) (N= 100) χ2-test
N % N %
Local Market - - - -
OoARD 2 50.0% 2 50.0% χ2=146.803

Cooperatives 5 45.5% 6 54.5%

NGOs 33 26.4% 92 73.6%
Woreda OoARD experts 33 26.4% 92 73.6%
Source: Own Computation from survey result, 2016/2017

Herders
Camel herders are the major actors who perform most of the value chain functions right from
herd inputs preparation on their farms or procurement of the inputs from other sources to post
harvest handling and marketing. The major value chain functions that camel herders perform

69
include using demand driven camel spesious type, feed properly, manage camel health, apply
advisory services, pest/disease controlling, harvesting and post harvest handling.

The diverse agro-climatic conditions can make camels highly cost-effective and competitive,
and provide vast opportunities in study areas. Unfortunately, these opportunities have not
been exploited by the herders due to the lower price they receive for their produce in the
markets, as well as bearing the cost of post-harvest losses. Camel production in these two
Woredas was based on Mixing different Livestock’s herding system. In Ayssaita and Chifra
Woredas 100.0% all of the respondents use mixing different Livestock’s herding system for
camel production (Table 15).

Table 15 Herding systems, value addition and experience use

Variables Items Ayssaita Chifra Total

(N= 40) (N= 100) (N= 140) χ2-test

N % N % N %
Herding Sole - - - - - - X2 =
Herding 144.000
System
Mixing 40 28.6% 100 71.4% 140 100.0%
different
Livestock’s
Value Yes 40 28.6% 100 71.4% 140 100.0% X2 =
144.000
Adding
- - -
No - - -
CHExp 40 28.6% 100 71.4% 140 X2 =18.914
100.0%
Note: *** and ** are statistically significant at 1% and 5% significance level, respectively.
Source: Own computation from survey result, 2016/2017

Camel herders use value adding inputs like feeding kinchib, cacti, crop stalks, and other
feeds, physical and medical treatment and value adding approaches for camels in the study
area. In Ayssaita and Chifra woredas 20 (42.6%) and 27 (57.4%) of the respondents use value
adding inputs, like feeding kinchib, cacti, crop stalks, and other feeds,11(26.2%) and 31
(73.8%) of the respondents keep physical and medical treatment, 9 (17.6%) and 42 (82.4%)
of the respondents use value adding approaches for their camels respectivelly (Table 16).

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 Table 16: Value adding inputs use by sample respondents

Ayssaita Chifra Total

Value Adding Inputs (N= 40) (N= 100) (N= 140) χ2-test
N % N % N %
Use value adding inputs,
like feeding kinchib, 20 42.6% 27 57.4% 47 100.0% X2 = 151.818
cacti, crop stalks, and
other feeds for camels
Physical and medical 11 26.2% 31 73.8% 42 100.0%
treatment
Use value adding
approaches
9 17.6% 42 82.4% 51 100.0%
Note: *** and ** are statistically significant at 1% and 5% significance level, respectively.
Source: Own computation from survey result, 2016/2017

Post harvest handling, which includes different activities like sorting, grading, packing,
storing, transportation, loading and unloading, is done by the buyers themselves or traders or
brokers. If camels are sold at the farm gate which is the case in Chifra Woreda, all
aforementioned activities are performed by the buyer (traders or broker). There are high
postharvest losses due to improper harvesting, handling and poor facilities to market.

The result of the sample herders’ survey in Ayssaita and Chifra woredas show that 7 (14.6%)
and 34 (73.9%) of the respondents lost one camel and 21 (45.7%) and 25 (54.3%) of the
respondents lost two camels due to Post-harvest loss before it reach to market. The result of
the sample herders’ survey in Ayssaita and Chifra woredas also shows that 3 (18.8%) and 13
(81.2%) of the respondents lost one camel, 9 (16.1%) and 47 (83.9%) of the respondents lost
two camels and 28 (41.2%) and 40 (58.8%) of the respondents lost three camels due to
draught (Table 17).

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 Table 17: Post-harvest loss of camels (Livestock’s) in percent of production

Ayssaita Chifra Total

Count (N= 40) (N= 100) (N=140) X2-test
Variables
N % N % N %
Post-harvest loss of 0 12 26.1% 34 73.9% 46 100.0 X2=11.317
camels %
1 7 14.6% 41 85.4% 48 100.0
%
2 21 45.7% 25 54.3% 46 100.0
%
Camel loss due to 1 3 18.8% 13 81.2% 16 100.0 X2=10.338
draught %
2 9 16.1% 47 83.9% 56 100.0
%
3 28 41.2% 40 58.8% 68 100.0
%

Note: ***, ** and * are statistically significant at 1%, 5% and 10% significance level,
respectively.
Source: Own computation from survey result, 2016/2017

In Chifra and Ayssaita Woredas, all buyers trek their purchased camels to the nearby markets
(destination). However, both in Chifra and Ayssaita Woreda, traders also go to the herders’
field (market) and negotiate about price, purchase it and eventually trek mostly camels to
urban markets.

Collectors/Assemblers
These are traders in assembly markets who collect camels from herders in village markets
and from herders for the purpose of reselling it to wholesalers and retailers. They use their
financial resources and their local knowledge to bulk camels from the surrounding area. They
play important role and they do know areas of surplus well. Collectors are the key actors in
the camel value chain, responsible for the trading of 4(10.0%) and 43(43.0%) from herding
areas to wholesale and retail markets in the study areas, Ayssaita and Chifra woredas
respectivelly. The trading activities of collectors include buying and assembling, repacking,
sorting, trekking and selling to wholesale markets (Aklilu and Catley, 2011).

Brokers/Middle Men

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Brokers play an important role in linking herders to market and other stakeholders of the
commodity chain while the ability of market accession of farmers is limited and market
demand requires an improvement in quantity amount as well as diversity of products type.
The brokers sometimes go beyond facilitation of transaction and tend to control and fix
prices, create price symmetry and make extra benefits from the process in addition to
convincing the herders to sale their camels at the prices set by wholesalers. Brokers are the
other key actors in the camel value chain, responsible for the trading of 3(7.5%) and 6(6.0%)
from herding areas, Ayssaita and Chifra woredas. More over brokers are divided in to village
level brokers, urban brokers and commission agents. Village level brokers facilitate
transaction by convincing herders to sale his/her camels and facilitating the process of
searching good quality and quantity of camels to traders and urban brokers. Commission
agents are brokers working for specific traders (Aklilu and Catley, 2011).

Wholesalers
Wholesalers are mainly involved in buying camels from collectors and herders in larger
volume than any other actors and supplying them to exporters, retailers and consumers.
Wholesalers are the second key actors in the camel value chain, responsible for the trading of
9 (22.5%) and 22 (22.0%) from the study areas, Ayssaita and Chifra woreds. They also use
barracked, usually for a maximum of three days. Survey result indicates that wholesale
markets are the main assembly centers for camels in their respective surrounding areas. They
have better barracks, transport and communication access than other types of camel traders.
Almost all wholesalers have a warehouse in a market either self owned or rental basis. They
are located in Shiraro and Humera market towns but the numbers of wholesalers in Shiraro
and Humera market are higher than all other market towns (Aklilu and Catley, 2011).

Retailers
Retailer involvement in the chain includes buying of camels; trek to retail shops (markets) of
camel from retailers as they offer according to requirement and purchasing power of the
buyers. Retailers are the other key actors in the camel value chain, responsible for the trading
of 20 (50.0%) and 23 (23.0%) from the study areas, Ayssaita and Chifra woreds. Retailers
can be divided in to urban and rural in both Woredas. Rural retailers are based in village
market and mainly purchase camels from herders, and sell to consumers and urban retailers.
Urban retailers purchase camels from herders and rural retailers in village market and sale to
urban consumers (Aklilu and Catley, 2011).
73
Exporters
Exporters are not identified even if at the crossing point in Shiraro/Humera market and they
are exporting their camels to Middle-East/Sudan. Almost male camels were exported to
Middle-East/Sudan from Shiraro/Humera market. Camels are mostly exported by Sudanese
exporters who come to Humera market to buy camels (Aklilu and Catley, 2011).

Camel consumers
Consumers are those purchasing the camels products for consumption. About three types of
camel products consumers were identified: households, restaurants and institutions which
give services such as higher education institutions, hospitals, etc. The private consumers are
employees, and urban and rural dwellers who purchase and consume camel products with an
average income of Birr 48,778.5 per annum and purchase camel products by 21 (52.5%) and
19(47.5%) of their incomes in Ayssaita and Chifra Woredas, respectively (Appendix Table
9).

Private consumers purchase camel products directly from herders, retailers and wholesalers
though most of the consumers purchase from retailers. Herders also make important segment
of the rural consumers since they consume part of their produces. The survey result also
showed that, 20 (54.1%) and 17 (45.9%) of camels harvested in Ayssaita and Chifra
Woredas, respectively in 2016/17 were consumed by the Consumers, Wholesalers, Brokers,
and Retailers. Institutions purchase their camel product from wholesaler who has the capacity
to supply sustainably based on contractual agreements.

In general consumers have their own quality criteria to purchase camel products. In this
regard consumers prefer camel physically well fitted and medium size, with shinny skin
color, alert and free from any diseases.

4.2.2.2. Supporting actors

Such actors are those who provide supportive services including training and extension,
information, financial and research services. According to Martin et al. (2007), access to
information or knowledge, technology and finance determines the state of success of value
chain actors. OoARD, primary cooperatives, micro finance, NGOs, Afar PCDP, Samara

74
University and Afar Pastoral and Agro-Pastoral Research Institute are main supporting actors
who play a central role in the provision of such services.

Training and Extension Services

DA’s, Afar Pastoral and Agro-Pastoral Research Institute, Afar PCDP and OoARD were the
main sources of camel herding training in both Woredas. The survey result revealed that 67%
and 84% of sample respondents participated in camel herding training that were organized in
the last five years in Chifra and Ayssaita Woredas, respectively (Table 18). The result shows
that most of the trainings were given on camel herding application and the other trainings
such as camel product management, value addition, harvesting and post harvest handling are
given in composition. Trainings on Problem Identification and CDD, SACCO, CIF
application, etc were given by Afar PCDP. The survey result revealed that 36 (27.7%) and 94
(72.3%) of sample respondents participated in camel herding training that were organized in
the last five years in Chifra and Ayssaita Woredas, respectively (Table 18).

Regarding extension service, among the total sample herders 35 ( 27.3%) and 93 (72.7%) have
been taken extension services on the camel value chain in Ayssaita and Chifra Woredas
respectivelly (Table 18). OoARD through its DA backed by the Woreda subject matter
specialists is the major actor who provides information and advisory service on camel
herding and management practices (Appendix Table 10). Furthermore, sample herders
indicated that they are getting information particularly of input availability and price from
primary cooperatives and kebele administration.

With regard access to credit services except a single respondent from Chifra woreda, all
sampled herders 40 (28.8%) and 99 (71.2%) of sampled respondents from Ayssaita and Chifra
indicated that who not took credit due to their religion background that restrict from not
taking interest revenue (Appendix Table 11).

Table18: Access to services by sample respondents

Ayssaita Chifra Total
Items (N= 40) (N= 100) (N= 140) χ2-test
Variables
N  N  N 

75
Trainning Yes 36 27.7% 94 72.3% 130 100.0%
No 4 40.0% 6 60.0% 10 100.0% χ2= 144.709

AExte Yes 35 27.3% 93 72.7% 128 100.0%

No 5 41.7% 7 58.3% 12 100.0% χ2=145.134
Minfo Yes 40 28.6% 100 71.4% 140 100.0%
No 0.0 0.0% 0.0 0.0% 0.0 0.0% χ2= 144.000

ACredit Yes 0 0.0% 1 100.0 1 100.0%

χ2= 144.414
%
No 40 28.8% 99 71.2% 139 100.0%
InputAccProble Yes 37 28.5% 93 71.5% 130 100.0%
χ2= 144.011
m No 3 10
30.0% 7 70.0% 100.0%
AcAdvisory Yes 40 28.6% 100 71.4% 140 100.0% χ2=144.000
No 0.0 .0% 0.0 .0% 0.0 .0%
Note: ***, ** and * are statistically significant at 1%, 5% and 10% significance level,
respectively.
Source: Own computation from survey result, 2016/2017

Financial services
In the study area, cooperatives, Afar Credit and Saving Institution (ACSI) and individual
lenders have been identified as a potential source for credit both in kind or on a cash basis.
The survey result showed that only 1(0.01%) sample respondent from Chifra Woreda took
credit (Table 18). Most of the respondents’ reasons for not participating in credit market were
religious which is related to taking or giving interest. Sources of credit for traders are also the
same as producers except some big traders get credit from banks.

4.2.3 Value chain governance

The dominant value chain actors play facilitation role. They determine the flow of
commodities and level of prices. In effect they govern the value chain and most other chain
actors subscribe to the rules set in the marketing process. The study result indicates that the
wholesalers assisted by the brokers are the key value chain governors. Humera/Shiraro
market is heavily dependent on the cross border exporters to Sudan/Egypt, and therefore the
camel value chains are highly influenced by the cross border export to Sudan/Egypt. In most
cases, the business relations between the various operational actors are of free market
exchange and uncoordinated. Due to the lack of a proper market information system and
minimal bargaining power, herders are forced to sell their camels at the price offered by
traders. Traders in Chifra Woreda usually refer to Hara, Kukuftu, Wajja, Raya plane Mehoni

76
market for price fixation. Traders in Humera/Shiraro markets usually refer to Sudanese/Egypt
market for price fixation and in Ayssaita Woreda price is fixed by wholesalers. There is no
vertical linkage between value chain actors but there is horizontal linkage between traders. In
some cases, there are conflicts among the traders regarding payment and failure to keep their
commitment. Overall, the governance of the camel value chain is buyer driven with minimum
trust between various actors. Traders are always complaining that the herders are not
providing quality camel product while herders are blaming the traders for offering low prices.
The smallholder herders are not organized and are not governing the value chain. Hence, they
are price takers and negotiate the price but no fear of post harvest loss, in case the camel is
not sold. The value chain governance is similar both in the Ayssaita and Chifra Woredas.

4.3 Marketing Channels and Performance Analysis

4.3.1 Marketing channels
A marketing channel is a business structure of interdependent organizations that reach from
the point of product origin to the consumer with the purpose of moving products to their final
consumption destination (Kotler and Armstrong, 2003). The analysis of marketing channels
is intended to provide a systematic knowledge of the flow of the goods and services from
their origin (producer) to the final destination (consumer). Since the channels to camels were
identical the analysis was done on camel in the study area, Ayssaita and Chifra Woredas.

4.3.1.1 Camel marketing channel

Nine main alternative channels were identified for Camel marketing. It was estimated that
3062.8 qts of camels were marketed in Ayssaita and Chifra markets in 2016/17. From the
total quantity marketed 911.6 qts of camels are supplied by sample respondents. The main
marketing channels identified from the point of production until the product reaches the final
consumer through different intermediaries were depicted in Figure 6.

77
 Figure 6: Camel market channel

Herders

Collectors 47 Retailers 43
(33.57%) (30.71%)

Whole Sellers
31 (22.14%)

Brokers 9
(6.43%)

Consumers 10(7.14%)

Source: Own sketch from survey result, 2016/2017

As can be understood from Figure 6 the main receivers from herders were collectors,
retailers, whole sellers, brokers and consumers with an estimated percentage share of
47(33.57%), 43(30.71%), 31(22.14%), 9(6.43%) and 10(7.14%), respectively.

78
 Channel I Herder Consumer

Channel II Herder Retailer Consumer

Channel III Herder Collector Consumer

Channel IV Herder Collector Retailer Consumer

Channel V Herder Whole Seller Consumer

Channel Whole Consume

VI
Herder Broker seller
Retailer r

Channel VII Herder Collector Retailor Wholesaller Consumer

Whole
Channel VIII Herder Collector Seller Retailor Consumer

Channel Whole
IX Herder Collector Retailor Seller Broker Consumer

Source: Own sketch from survey result, 2016/2017

4.3.2 PERFORMANCE OF CAMEL MARKET

Analysis of Market Performance: Marketing efficiency is essentially the degree of market

performance. It is defined as having the following two major components: (i) the
effectiveness with which a marketing service would be performed and (ii) the effect on the
costs and the method of performing the service on the production and consumption. These are
the most important because satisfaction of the consumer at lowest possible cost must go hand
in hand with maintenance of high volume of farm output (Ranakumar, 2001).

The two approaches to measure marketing performance are: marketing margin and the
analysis of market channel efficiency. Market performance in this study was examined using
marketing margins at different levels of market chains.

4.3.2.1 MARKETING MARGIN

79
A marketing margin can be defined as a difference between the price paid between
consumers and that obtained by producers; or as the price of a collection of marketing
services that is the outcome of the demand for and supply of such services (Tomek and
Robinson, 1990). This approach includes the analysis of marketing costs and margins and it
measures the share of the final selling price that is captured by a particular agent in the
marketing chain (Mendoza, 1995).

But in this study total gross marketing margin was calculated using Channel VII because this
channel was dominantly practiced

Channel Whole
VII Herder Collector Retailor Seller
Consumer

Table 19: Camel marketing costs and benefit shares of actors

Items Herd Whole Collecto Retailer Consume Horizont

(Birr/Qt) ers salers rs s rs al Sum
Purchase -- 20,000. 19,000.0 18,500. 17,000.00 74,500.0
price 00 0 00 0
Producti 15,000. -- -- -- -- 15,000.0
on cost 00 0
Marketing cost
Guaranto -- 30.00 30.00 30.00 -- 90.00
rs
Trekkers -- 10.00 10.00 10.00 -- 30.00
Loss -- -- -- -- -- --
Overhea 30.00 100.00 75.00 75.00 -- 280.00
d cost
Tax -- 100.00 100.00 100.00 30.00 330.00
Total 30.00 240.00 215.00 215.00 30.00 730.00
Marketi
ng Cost
Total 15,030. 20,240.0 19,215.0 18,715.0 17,030.00 90,230.0
Cost 00 0 0 0 0
Sale 17,000. 21,500.0 20,500.0 19,750.0 18,000.00 96,750.0
Prices 00 0 0 0 0
Market 2,000.0 1,500.00 1,500.0 1,250.00 1,000.00 7,250.00
Margine 0 0
 Share 27.58 20.68 20.68 17.24 13.79 100
of
Margine
Profit 1,970.0 1,260.00 1,285.00 1,035.00 970.00 6,520.00

80
 Margine 0
Share 30.21 19.33 19.71 15.87 14.88 100
of Profit
Source: Own computation from survey result,
2016/2017

Each of the camel value chain actors adds value to the product as the product passes from one
actor to another. In a way, the actors change the form of the product through improving the
grade by sorting, cleaning or washing or create space and time utility. Compared to herders,
traders’ (collectors, wholesalers and retailers) operating expense is more than half 54.91%
but their profit margin is about two times that of herders. That means by simply buying from
the herders and selling to consumers, traders took above 54.91% of the total profit margin.
While herders, doing all the work of herding camel and bearing the associated risks, took
only 30.21% of the profit margin. This disproportionate share of benefits is the reflection of
power relationship among actors. Camel herders added 30.21% of the total value of camel in
the woreda. Collectors, wholesalers and retailers are responsible for19.71%, 19.33%, and
15.87%, respectively. The price change from herder’s price to consumer price is 86.18%.

Marketing margins of camel in different channels

Marketing margins of camel in the nine channels for each group of market players are given
below in Table 20. GMMh, GMMco, GMMw, GMMr and GMMcn are gross marketing
margins of herders, collectors, wholesalers, retailers, and consumers, respectively. NMMc,
NMMco, NMMr and NMMw are net marketing margins of collectors, retailers and
wholesalers, respectively.

The total gross marketing margin (TGMM) is the highest in channel II, III and V which is
about 44.4%. Wholesalers, Collectors and Retailers have got the highest gross marketing
margin in channel II, III and V, respectively whereas Retailers have got the lowest marketing
margin in channel IV, VI and VII.

Without considering channel I (herders sell directly to consumer) producer’s share (GMMp)
is highest (44.4%) from the total consumers’ price in channel II, III and V and lowest in
channel IV, VI and VII (34.79%) because of the involvement of collectors and retailers in
this channel that purchase relatively at a lower price from herders in their locality. NMM are

81
somewhat high in channel II, III and V as the collectors, retailers and wholesalers directly
purchase from producer and sell it to the end buyers who are consumers.

Table 20: Marketing Margins of Actors in Different Marketing Channels of Camel

Marketin I II III IV V VI VII VIII IX
g
Margins
TGMM 0 4500 4500 5750 4500 5750 6000 7250 7250
GMMh 10 44.4 44.4 34.7 44.4 34.7 33.3 27.5 27.5
0 4 4 8 4 8 3 9 9
GMMco -- 33.3 33.3 26.0 33.3 26.0 25.0 20.6 20.6
3 3 9 3 9 0 9 9
GMMw -- 33.3 33.3 26.0 33.3 26.0 25.0 20.6 20.6
3 3 9 3 9 0 9 9
GMMr -- 27.7 27.7 21.7 27.7 21.7 20.8 17.2 17.2
7 7 4 7 4 3 4 4
GMMc -- 22.2 22.2 17.3 22.2 17.3 16.6 13.7 13.7
2 2 9 2 9 6 9 9
NMMh -- 30.2 75.8 93.0 75.8 93.0 96.5 -- --
1 4 8 4 8 2
NMMco --
NMMw -- -- -- -- -- --
NMMr --
NMMcn --
Source: Own computation from
survey result,2016/2017

Table 21: Marketing margins

TGMM (complete 86.18
distribution channel)
GMM (Wholesalers) 20.68
GMM (Collectors) 20.68

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 GMM (Retailers) 17.24
GMMp (Producers 13.82
participation)=( 100% -
TGMM )

Source: Own computation from survey result, 2016/2017

4.4 Econometric Model Outputs

4.4.1 Determinants of camel market supply
Camels are produced for market and consumption and are important transitory commodity in
Chifra and Ayssaita Woredas. According to the result of this study, all sample households are
good suppliers of the camels to the market. Analysis of factors affecting farm level
marketable supply of camels was found to be important to identify factors constraining
camels supply to market. The analysis was done separately. The numbers of sample camel
producing herders in Chifra and Ayssaita Woredas were 100 and 40, respectively. Multiple
linear regression models were employed to identify the factors. For the parameter estimates to
be efficient, unbiased and consistent assumptions of Classical Linear Regression (CLR)
model should hold true. Hence, multicolliniarity, endogeniety and heteroscedasticity
detection test were performed using appropriate test statistics.

The command robust (in SPSS) was used to correct for heteroscedasticity. There is no
multicollinearity problem since VIF results are less than 10 (Appendix Table 1).
Endogeniety test results show that quantity of camels produced is endogenous variable for
camel market supply to the market (F = 2.210, p = .018) and there is no endogeneity problem
for volume of camel supplied to the market. The reason for the existent of endogeneity
problem in the case of camel market supply is may be the usage of camel for household
consumption more than any other livestock’s. This problem can be overcome by using two
stages least square (2SLS) method for camel market supply.

Sixteen explanatory variables were hypothesized to determine the household level marketable
supply of camels. In the first stage of 2SLS method, THSize, Camel_feed_sources and
Family_Size_HH affect positively and significantly the amount of camels produced where as

83
Distance_All_Weather_Road, ExpCP, Number_Working_Persons, Income_from_camel_sale
and Land_tenure reduce the quantity of camels produced (Table 22).

Table 22: The Multiple Regression Model Estimates

84
 Regression ANOVAb

Model Sum of Squares Df Mean Square F Sig.

1 Regression 10.803 11 .982 2.210 .018a

Residual 56.882 128 .444

Total 67.686 139

a. Predictors: (Constant), Camel Sources of Feed, Family size, ExpCP, Post Harvest Lost, Land Tenure
System, Distance to All Weather Road, THSize, Number of Working Persons (14-64 ages), Age of
Household Head, Camels Lost Due to Draught and Income From Camel Sales.

b. Dependent Variable: Volume of Cam0el Sales

To investigate, the researcher selected a random sample of 140 (40 from Ayssaita
and 100 from Chifra herders) recently sold their camels. It determined volume of
camels’ sale during January 2016 – October 2017, as well:
1. R2 = .160 -- In this sample the combined linear relationships of Age of
Household Head, Number of working persons (14 - 64 ages), Family size,
Camel Sources of Feed, Distance to all weather road in hrs walk, ExpCP,
THSize, Land Tenure System, Post Harvest Lost, Camels Lost Due to
Draught, and Income From Camel Sales account for 16.0% of the variance
in percent Volume of Camel Sales.
2. Adjusted R2 = .087 -- In the population, the combined linear relationships
of Age of Household Head, Number of working persons (14 - 64 ages),
Family size, Camel Sources of Feed, Distance to all weather road in hrs
walk, ExpCP, THSize, Land Tenure System, Post Harvest Lost, Camels
Lost Due to Draught, and Income From Camel Sales account for 8.7% of
the variance in percent Volume of Camel Sales.
3. √ MSresid = .6663 -- The average residual is 66.63% of Volume of Camel
Sales (Predictors). Overall the combined linear effects of Age of
Household Head, Number of working persons (14 - 64 ages), Family Size,
Camel Sources of Feed, Distance to all weather road in hrs walk, ExpCP,
THSize, Land Tenure System, Post Harvest Lost, Camels Lost Due to
Draught, and Income From Camel Sales significantly predict Volume of

85
 Regression ANOVAb

Model Sum of Squares Df Mean Square F Sig.

1 Regression 10.803 11 .982 2.210 .018a

Residual 56.882 128 .444

Total 67.686 139

a. Predictors: (Constant), Camel Sources of Feed, Family size, ExpCP, Post Harvest Lost, Land Tenure
System, Distance to All Weather Road, THSize, Number of Working Persons (14-64 ages), Age of
Household Head, Camels Lost Due to Draught and Income From Camel Sales.

Unstandardized Standardized 95% Confidence

Coefficients Coefficients Interval for B

Lower Upper
Model B Std. Error Beta T Sig. Bound Bound

1(Constant) 5.396 1.184 4.560 .000 3.055 7.738

Age of Household Head -.046 .019 -.358 -2.459 .015 *** -.083 -.009

Distance to all weather road in

-.078 .148 -.051 -.526 .600 -.370 .215
hrs walk

Family size .099 .049 .276 2.008 .047 *** .001 .197

Number of working persons

-.226 .068 -.463 -3.322 .001 *** -.360 -.091
(14 - 64 ages)

ExpCP .071 .041 .271 1.743 .084 -.010 .152

THSize -.002 .001 -.222 -1.304 .194 -.005 .001

Land Tenure System .000 .051 .000 .005 .996 -.101 .102

Post Harvest Lost .056 .093 .066 .602 .548 -.129 .241

Camels Lost Due to Draught .214 .245 .209 .873 .384 -.271 .700

Income From Camel Sales -4.588E-5 .000 -.226 -.898 .371 .000 .000

86
 Regression ANOVAb

Model Sum of Squares Df Mean Square F Sig.

1 Regression 10.803 11 .982 2.210 .018a

Residual 56.882 128 .444

Total 67.686 139

a. Predictors: (Constant), Camel Sources of Feed, Family size, ExpCP, Post Harvest Lost, Land Tenure
System, Distance to All Weather Road, THSize, Number of Working Persons (14-64 ages), Age of
Household Head, Camels Lost Due to Draught and Income From Camel Sales.

Camel Sources of Feed .017 .136 .012 .128 .898 -.253 .287

a. Dependent Variable: Volume of Camel Sales

F (11, 128) = 2.210

Prob > F = .018

R-squared = .982

The number of observations = 139

Note: *** significant at 5% level.

Source: regression output, 2017

The possible reason for the negative signs of Distance_All_Weather_Road, ExpCP,

Number_Working_Persons, Income_from_camel_sale and Land_tenure may be incurs
transportation charges, increases additional walking time, and add other marketing costs,
reduced access to market information and facilities, herders have no commercial camel
production experiance to supply more amounts of camels to market, in adequacy number of
working persons in camel production and marketing, herders could not get enough benefits of
share from their camel of sale and the herders have no right on the land respectively.

The Multiple Regression Equation—Interpreting the Measures of Association and

Applying the Model for Estimation

87
 ŷ=a+b 1 x 1+b 2 x 2+ b3 x 3+…+bkxk

ŷ=⍺−b 1 x 1−b 2 x 2+b 3 x 3−b 4 x 4+b 5 x 5−b 6 x 6+b 7 x 7+b 8 x 8+b 9 x 9−b 10 x 10+ b 11 x 11

ŷ=5.396−0.046 x 1−0.078 x 2+ 0.099 x 3−0.226 x 4 +0.071 x 5−0.002 x 6+0.000 x 7+0.056 x 8+0.214 x 9−4

Interpreting the Regression Coefficients

Age of Household Head (Age);

It is a continuous variable and measured in years. Aged households are believed to be wise in
resource use, on the other hand young household heads have long investment horizon and it is
expected to have either positive or negative effect on volume of Camel sales. Adugna (2009)
who found that age of the household head have negative effect on the elasticity of agricultural
product supply to the market. This variable is also expected to have relationship with outlet
choice decision of agricultural producers. Bongiwe and Masuku (2012) found that age of the
farmers was significant determinant of the choice to use non-wholesale market channel over
other-wholesale market channel.

Age of Household Head (Age):

 b1 = -.046 -- Controlling for all other Predictors, a 1 unit increase in Age of

Household Head is associated with a .046 decrease in percent Volume of Camel
Sales.
 β1 = -.358 -- Controlling for all other Predictors, a 1 standard deviation unit increase
in Age of Household Head is associated with a .046 standard deviation unit decrease
in percent Volume of Camel Sales.
 t (139) = -2.531, p < .001 - We reject the null hypothesis and conclude that the linear
relationship between Age of Household Head and Volume of Camel Sales
(controlling all other Predictors) is statistically significant.
 sr1 = -.202 -- Controlling for all other Predictors, the linear relationship between Age
of Household Head and Volume of Camel Sales accounts for (-.202)2 = 4.08% of the
variance in Volume of Camel Sales.

88
Family Size (Family):
Family size of a respondent is a continuous variable measured in terms of number of family
members in the household. As Camel herding is labour intensive activity, Camel herding in
general and market supply of camel in particular is a function of labour. Accordingly,
families with more household members tend to have more labor which in turn increase Camel
herding and then increase camel market supply. On the other hand, family size also decreases
market supply because high proportion of the product would be used for consumption. But
for this study family size was expected to influence positively the volume of camel supply to
the market. Gezahagn (2010) who found that family size have positive effect on the
households’ gross income from groundnut production.

Family size:

 b2 = .104 -- Controlling for all other Predictors, a 1 unit increase in Family size is
associated with a .104 increase in percent Volume of Camel Sales.
 Β2 = .288 -- Controlling for all other Predictors, a 1 standard deviation unit increase in
Family size is associated with a .104 standard deviation unit increase in percent
Volume of Camel Sales.
 t (139) = 2.158, p < 0.001 - We reject the null hypothesis and conclude that the linear
relationship between Family size and Volume of Camel Sales (controlling all other
Predictors) is statistically significant.
 Sr2 = .173 -- Controlling for all other Predictors, the linear relationship between
Family size and Volume of Camel Sales accounts for (.173)2 = 2.99% of the variance
in Volume of Camel Sales.

Number of working persons (14 - 64 ages): Number of working persons with the age of 14-
64 years is a continuous variable measured in years of adult equivalent. As camel herding is
labour intensive activity, camel herding in general and market supply of camel in particular is
a function of labour, it needs number of working persons (14 – 64). Accordingly, families
with more household working members tend to have more labor which in turn increases
camel herding and then increase camel market supply. Moreover, Number of working
persons in the family also increases market supply because high proportion of productive
working forces would be used for camel production. But for this study family size was
expected to influence positively the volume of camel supply to the market. Gezahagn (2010)

89
who found that family size have positive effect on the households’ gross income from
groundnut production.

Number of working persons (14 - 64 ages):

 b3 = -.226 -- Controlling for all other Predictors, a 1 unit increase in Number of

working persons (14 - 64 ages) is associated with a -.226 decrease in percent Volume
of Camel Sales.
 β3 = -.463 -- Controlling for all other Predictors, a 1 standard deviation unit increase
in Number of working persons (14 - 64 ages) is associated with a -.236 standard
deviation unit decrease in percent Volume of Camel Sales.
 t (139) = -3.322, p < 0.001 - We reject the null hypothesis and conclude that the linear
relationship between Number of working persons (14 - 64 ages) and Volume of
Camel Sales (controlling all other Predictors) is statistically significant.
 sr5 =-.269 -- Controlling for all other Predictors, the linear relationship between
Number of working persons (14 - 64 ages) and Volume of Camel Sales accounts for
(-.269)2 = 7.23% of the variance in Volume of Camel Sales.

Again all traders engage in camel’s value chain confirmed that there is marketing problems in
camel value chain. The major camel marketing constraints mentioned by traders are related
with the limited power of price setting, the problem of supply shortage, lack of storage
facility, problem in information flow, low product quality and lack of support from concerned
bodies (Appendix Table 13). Traders also mention that the main cause of these problems are
high monopolistic power of wholesalers, high travel distance of to cross border
(Humera/Shiraro) to Sudan/Middle-East, lack of processing and long chain condition of the
market.

In addition, data from key informant interview showed that the absence of policy instrument
that governs Ethio-Sudan/Middle-East market route is serious camel marketing problem.
Retailers/whole sellers buy the products at farm gate prices and directly sell to invisible end
consumers and official institutions could not know about consumer’s price in the end market
payment to the products. Cross border traders also do not secure all these high margins
because of illegal actors through transportation of long journey to the final destination inside

90
Sudan/Middle-East. This shows that there are high losses in between due to lack of
appropriate policy instruments.

4.4.2 Determinants of camel market outlet choices

The MNL model as specified in section 3.4.2.2 with three choices, was tested for the
independence of irrelevant alternatives (IIA) assumption based on Hausman test (Appendix
Table 2). The hypothesis that all the coefficients except the constant are zero is rejected at 1
percent level based on the Wald test. The model explained 41.4% of the variation in market
choice among camels producing herders. The possible heteroscedasticity and
multicolleaniarity problems are also corrected. The command robust (in SPSS) was used to
correct for heteroscedasticity. There is no multicolleaniarity problem because the result of
VIF is less than 10 for all variables (Appendix Table 1).

Table 23 below presents the coefficients from multinomial logit regression on the existing
alternative marketing outlets in the sample and the marginal effects. According to Green
(2012), the coefficient values measures the expected change in the logit for a unit change in
the corresponding independent variable, other independent variables being equal. The sign of
the coefficient shows the direction of influence of the variable on the logit. It follows that a
positive value indicates an increase in the likelihood that a household will change to the
alternative option from the baseline group. The result showed that some of the variables were
significant at both market outlets while some others were significant in one marketing outlet
but not in the other outlet. Compared to the base category (collectors) Volume_Of_Oxen,
ACredit, Death_dueto_draught, MCooperative and Trainning determined the selection of
retailer as market options while the variables AExtension, ACredit,
Number_Working_Persons, EduStatHH, Death_dueto_draught, MCooperative and
Trainning, affected the choice of Whole seller’s outlet.

The results of the estimated marginal effects are discussed in terms of the significance and
signs on the parameters. The positive estimated coefficients of a variable indicates that the
probability of the producers being in either supplying to whole seller market outlet or retailer
market outlet relative to supplying to collector market outlet increases as these explanatory
variables increase. The implication is that the probability of the producers to be on these
outcomes is greater than the probability of being collector outlet (the base category). The
negative and significant parameter indicates the probability of using collector outlet is higher

91
 than the probability of being in the two alternatives. Estimates not significantly different from
zero indicate that the explanatory variable concerned does not affect the probability of the
producers decision to use collector outlet category than in the other two categories. The result
of the MNL and marginal effects and their possible explanations are presented below.

The alternative “collector” was used as a base category (bench mark alternative). This implies
that the discussion of the results focuses on the impact of the explanatory variables on a use
of wholesalers and retailers category relative to use of collectors (the base category).

Table 23: Coefficients and marginal effects of Multinomial Logit Model for the choice of marketing
outlets
Retailers Whole salers Retailers Whole salers
Variables Coef. Robust Z Coef. Robust Z dy/dx Robust Z dy/dx Robust Z
Std.Err. Std.Err. Std.Err Std.Err
. .

Volume_Of_Goats
9.894*** 49.102 0.041 -4.112 84.504 0.00 0.201 49.102 0.04 - 84.504 0.002
2 5 1 0.048
7

ExpCP -18.916 0.006 -11.963 320.307 0.00 - 0.00 - 320.307 0.001

243.381 1 0.077 243.381 6 0.037
*** 7 3
--
AExtension 5.050 4.412 1.31 -- -- 1.144 4.412 1.311
-- -- --
1 6
0.21 0.01
Income_from_camel_s 5.396 0.11 10.926 51.084 0.108 2 0.213 51.084 0.046
49.773 4 49.773 9
ale ***

92
 0.068 0.43 - 0.06
ACredit -44.899 68.364 1 0.261 8 - 68.364 0.431
-22.866 4 0.656
87.474 87.474 8
***

0.07 0.04
Number_Working_Per -9.674 0.047 -21.459 79.490 3 - 7 - 79.490 0.073
44.555 0.217 44.555 0.269
sons *** 1 9
0.001 7.506 316.658 0.00 0.035 0.00 0.023 316.658
AgeHH 11.343 1 3 1 7 0.001
320.990 320.990
***
-- 0.69 -- --
EduStatHH 2.969 7 0.831 2.969 0.697
-- -- 2.479 --
9
0.376 0.25 0.37 -
Death_dueto_draught -23.548 -22.715 44.681 8 - 6 0.508 44.681 0.258
38.425 0.586 38.425 4
*** 8
0.082 0.74 0.08
Trainning -29.343 34.044 3 - 2 - 34.044 0.743
-2.921 10.183 0.286 10.183 0.861
9 9
0.275 0.58 0.27
MCooperative 14.623 19.137 4 0.524 5 0.764 19.137 0.584
9.001 17.162 17.162
8 1
0.673 0.00 0.820 0.67
Volume_Of_Oxen 17.042 3.844 67.390 3 7 3 0.057 67.390 0.003
20.766 20.766 0
***
-cons 0.000 0.40 0.016 0.00
79.397 131.722 83.610 131.722 3 3 131.722 0 0.634 131.722 0.040
7 3
Collector outlet is base outcome. dy/dx is marginal effect. N=139, LR χ2 (139) = 356.204***,
Pseudo R = 0.921. Log likelihood = 42.184. ***, **and * are statistically significant at 1%, 5%
2

and 10%, respectively.

Source: Own computation from survey result, 2017

Age of Household Head: The variable was positively and significantly associated with use
of retailer and whole seller outlets at less than 5% significance level. Other things being
equal, the likelihood of using retailer and whole seller outlet would be higher by 3.53 % and
2.37 % for households that having age of household head relative to using collector’s outlet.
Camel herder’s age of household head in camel production increased the ability of herders to
acquire important system of production as well as market information and other related
agricultural information which in turn increases farmer’s ability to choose the best market
outlets for its product. This variable is also expected to have relationship with outlet choice
decision of agricultural producers. This result is in line with Bongiwe and Masuku (2012)
found that age of the farmers was significant determinant of the choice to use non-wholesale
market channel over other-wholesale market channel.

Experience in Camel Production: The variable was negatively and significantly associated
with use of retailer and whole seller outlets at less than 5% significance level. Other things
being equal, the likelihood of using retailer and whole seller outlet would be lower by 7.77 %

93
and 3.73 % for households having experience in camel production relative to using
collector’s outlet. Camel herder’s having experience in camel production increased the ability
of herders to acquire important system of production as well as market information and other
related agricultural information which in turn increases farmer’s ability to choose the best
market outlets for its product. It is the total number of years a herder stays in herding of
Camel. A household with better experience in Camel herding is expected to produce more
amounts of Camels and, as a result, he/she is expected to supply more amounts of Camel to
market. This result is in line with (Ayelech, 2011) Farmers with longer farming experience
are expected to be more knowledgeable and skilful.

Income from Camel Sale: The variable was positively and significantly associated with use
of retailer and whole seller outlets at less than 5% significance level. Other things being
equal, the likelihood of using retailer and whole seller outlet would be higher by 10.84 % and
21.39 % for households having income from camel sale relative to using collector’s outlet.
Camel herder’s generating income from camel sale increased the ability of herders to acquire
asset and expand its camel herding and improve its production as well as livelihood. It is one
of the sources of on-farm cash income which is the immediate source of capital for pastoralists
and agro-pastoralists to finance their food and non-food consumption and farming operations?
The income from camel sale in 2016 G.C was expected to affect the household camel supply
positively in a way that income from camel sale can stimulate production and thus volume camel
supply for 2017 G.C.

Access to Credit Services: The variable was negatively and significantly associated with use
of retailer and whole seller outlets at less than 5% significance level. Other things being
equal, the likelihood of using retailer and whole seller outlet would be lower by 26.14% and
65.68 % for households having access to credit services relative to using collector’s outlet.
Access to credit would enhance the financial capacity of the Camel heard to purchase the
inputs, thereby increasing Camel herding and market share size. This result is in line with
Alemnewu (2010) and Mohammed (2011) who found that if pepper and teff producer gets
credit, the amount of pepper and teff supplied to the market increased. It is also hypothesized
that access to credit would have influence on wholesale market outlet choice decisions.
Urquieta (2009) found that access to loan was significant determinant of market channel
choice.

94
Volume of Goats: The variable was positively and significantly associated with use of
retailer and was negatively and significantly associated with use of whole seller outlets at less
than 5% significance level. Other things being equal, the likelihood of using retailer would be
higher by 20.15 % and using whole seller outlet would be lower by 4.87 % for households
having considerable volume of goats relative to using collector’s outlet. Camel herder’s use
goats for household consumption as well as generating income from goat sale increased the
ability of herders to acquire asset and expand its camel herding and improve its production as
well as livelihood.

Number of working persons (14 - 64 ages): The variable was negatively and significantly
associated with use of retailer and whole seller outlets at less than 5% significance level.
Other things being equal, the likelihood of using retailer and whole seller outlet would be
lower by 21.71 % and 26.99 % for households having number of working persons (14 - 64
ages) relative to using collector’s outlet. As camel herding is labour intensive activity, camel
herding in general and market supply of camel in particular is a function of labour, it needs
number of working persons (14 – 64). Accordingly, families with more household working
members tend to have more labor which in turn increases camel herding and then increase
camel market supply. Moreover, Number of working persons in the family also increases
market supply because high proportion of productive working forces would be used for camel
production. But for this study family size was expected to influence positively the volume of
camel supply to the market. Gezahagn (2010) who found that family size have positive effect
on the households’ gross income from groundnut production.

Access to Training Services: The variable was negatively and significantly associated with
use of retailer and whole seller outlets at less than 5% significance level. Other things being
equal, the likelihood of using retailer and whole seller outlet would be lower by 28.69% and
86.19 % for households having access to training services relative to using collector’s outlet.
Access to training would enhance the knowledge and skill capacity of the Camel heard to
produce camel for commercial purpose, thereby increasing Camel herding and market share
size.

Camel Death due to Draught: The variable was negatively and significantly associated with
use of retailer and whole seller outlets at less than 5% significance level. Other things being
equal, the likelihood of using retailer and whole seller outlet would be lower by 58.68 % and
50.84% for households having camel death due to draught relative to using collector’s outlet.

95
Camel herder’s measured this variable as a continuous independent variable taking as number
of dead animals (in TLU) during drought. It is characterized by very low rainfall and the lack
of natural grazing range land which leads to the higher occurrence of mortality. Therefore,
death due to drought was expected to have influence of the household to supply camels in to
the market positively.

Educational Status of Household Head: It was positively and significant related with whole
seller outlet choice at less than 10% significance level. The result also confirmed that, if the
household head is educated the probability of choice of retail outlet decreased by 83.19%
relative to using collector’s outlet. Education is believed to give individuals with the
necessary knowledge that can be used to collect information, interpret the information
received, and make productive and marketing decision. Education is related with the
wholesale market outlet because as the education level increases farmers’ ability to post
harvests handling activities increases and strengthen the linkage with wholesalers. Education
broadens farmers’ intelligence and enables them to perform the farming activities
intelligently, accurately and efficiently. Moreover, better educated farmers tend to be more
innovative and are therefore more likely to adopt the marketing systems. This result is in line
with (Fakoya et al., 2007) who found formal education enhances the information acquisition
and adjustment abilities of the farmer, thereby improving the quality of decision making.

Membership to any Cooperatives: Membership in any cooperative determines farm

household’s market outlet choice decision. As hypothesized the coefficients for this variable
is positively and significantly related with use of retailer and whole seller outlets at 5%
significance level. This result indicated that those households who were members of
cooperatives the probability of choosing retailer and whole seller outlet increased by 52.48%
and 76.41% compared to base category, collector outlet. This is mostly related to the reality
that those multipurpose cooperatives passing down production and market information they
accessed directly or indirectly to their members. Thus cooperatives improve understanding of
members about market and strengthen the relationship among the members. Therefore, it is
expected to be associated with market outlet choice decision of Camel herders’

Volume of Oxen: The variable was positively and significantly associated with use of
retailer and whole seller outlets at less than 5% significance level. Other things being equal,

96
 the likelihood of using retailer and whole seller outlet would be higher by 82.07 % and 5.7 %
for households having considerable volume of oxen relative to using collector’s outlet. Camel
herder’s use for household consumption as well as generating income from sale of oxen
increased the ability of herders to acquire asset and expand its camel herding and improve its
production as well as livelihood.

4.5 Challenges and Opportunities in Camel Value Chain

A number of challenges, opportunities and entry points for further technological, institutional
and organizational innovation for upgrading the value chain in the study area were identified
by the different value chain actors. In this subsection, the major constraints and opportunities
are briefly discussed.

4.5.1 Production constraints

There are factors that hinder the production of camel products in the study area. The majority
of the sample producers indicated lack of drug, diseases and drought as major constraints of
camel production. The major constraints of camel production are discussed below in Table
24.

Secondly, Lack of drug, Diseases and Drought are the major production constraints of camel
herders in the study areas of Ayssaita and Chifra woredas that determine quantity of camel
supplied to the market were presented in Table 24.

Table 24: Major Production Constraints of Camel Herders

Camel Oxen/bull Cows/ Calves Goats Sheep

Major Constraints (N=) (N=) heifers (N=) (N=) (N=)
(N=)
N % N % N % N % N % N %
Lack of drug 1 .7% 1 .7% 1 .7% 1 .7% 1 .7% 1 .7%
Lack of improved camel - - - - - - - - - - - -
species
Diseases 12 8.6% 12 8.6% 12 8.6% 12 8.6% 12 8.6% 12 8.6%

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Camel shortage - - - - - - - - - - - -
Drought 127 90.7% 90.7 90.7 12 90.7 12 90.7 90.7
127 % 127 % % % 127 %
7 7

Source: Own computation from survey result, 2017

Limited access to and supply of agricultural inputs

The most important physical inputs for camel production are animal drugs. Research and
extension services, information and appropriate technological support are non-physical inputs
that are equally important for higher yields. Among the total sample of respondents, 90.7%
replied limited access and supply of inputs as their production problem (Table 15). This is
caused mainly due to absence of animal drug, shortage of supply, high input price,
inappropriate delivery mechanisms and delayed supply. Delay in input supply happened
because of prolonged chain of input supply especially for improved animal drugs and
chemical pesticides.

Diseases and pests

This was directly related to agricultural input access problem. Unavailability of livestock’s
drugs and pesticide mainly creates these problems in addition to the problem of accessing to
improve and diseases resistance camels. This shows most herders are using poor quality
camels, as high quality camels are often not available at herding time and are expensive. The
other reason for this problem is the problem of management skill. Inadequate farmer skills
and knowledge on production and farm management creates such problems. This is mainly
related with poor extension service in the areas.

Natural factors
Natural factors such as drought, rainfall, water supply and flood are often beyond the control
of herders and institutions. Despite the poor availability of irrigation water for some
respondents, the utilization is traditional leading to inefficient water use.

4.5.2 Production opportunities

Availability of camel herding, its effect in generating income, its better productivity in range
land, its use as cash income source and livelihood consumption, increasing price and its
continuous demand in the market were some of the opportunities of camels by most of the

98
herders. The survey result shows that all of the respondents 40 (28.6%) from Ayssaita and
100(71.4%) from Chifra woreda of the herders intend to expand camels’ production due to
the above opportunities (Appendix Table 12).

The Woredas are also naturally endowed though they have some production and marketing
constraints. Some of the potentials to mention are the following. The Woredas are very
suitable to produce not only camel products but also other market oriented livestock’s animal
production.

The deployment of development agents at each kebeles based on their academic back ground
are also important policy dimensions. Furthermore, provision of infrastructure facilities like
roads, telecommunication, power supply and financial institutions are the infrastructural
advantages that facilitate the production and marketing of camels in the study area. There are
also various organizations such as Samara University, Afar Pastoral and Agro-pastoral
Institute, Afar PCDP and APDA that provide production inputs and technical services to the
herders.

4.5.3 Marketing constraints

Almost all camel herders responded that there were market problems in their area (Table 25).
The major camel marketing constraints are related with non-availability of market/limited
access to market, low price of product, lack of storage (barked), lack of transport, low quality
product that cannot meet consumers demand and perishability. In availability of pastoral
policies designed by Government to support herders at the grass-root level is the major
marketing constrain dimension.
Again all traders engage in camel’s value chain confirmed that there is marketing problems in
camel value chain. The major camel marketing constraints mentioned by traders are related
with the limited power of price setting, the problem of supply shortage, lack of storage
(barked) facility, problem in information flow and low product quality (Appendix Table 13).
Traders also mention that the main cause of these problems are high monopolistic power of
wholesalers, high trekking distance to cross-border point (Humera/Shiraro), lack of
processing and long chain condition of the market.

99
 In addition, data from key informant interview showed that the absence of policy instrument
that governs Ethio-Sudan Cross-border market route is serious camel marketing problem.
Whole sellers buy the products at farm gate prices and directly sell to end consumers but we
do not know how much consumers in the end market pays to the products. Due to this reason
whole sellers also do not secure all these high margins losses. This shows that there are high
losses in between due to lack of appropriate policy instruments.

Table 25: Major Marketing Constraints of Camel Herders

Camel Oxen/bull Cows/heifers Calves Goats Sheep

Major (N=140) (N=140) (N=140) (N=140) (N=140) (N=140)
constraints N % N % N % N % N % N %
Asymmetric 45 32.1% 45 32.1 45 32.1% 45 32.1% 45 32.1% 45 32.1%
Information Flow %
Low quality of - - - - - - - - - - - -
product
Lack of 47 33.6% 47 33.6 47 33.6% 47 33.6% 47 33.6% 47 33.6%
Government %
Support
Low price of 48 34.3% 48 34.3 48 34.3% 48 34.3% 48 34.3% 48 34.3%
product %

Source: Own computation from survey result, 2016/2017

4.5.4 Marketing opportunities

On the other hand, availability of market demand throughout the year (1day/week,
4days/month and 48 days/year), growing number of buyers, high experience in camel’s trade
and growing price were some of the opportunities of camels by most of the producers. The
survey result shows that 85.2% of the producers intended to expand camel’s sale due to the
above opportunities (Appendix Table 12).The natural proximity to market and being found
on export center to Dijibouti port and Custom and Revenue Authority found at the cross
border point Humera/Shiraro; the main road to Dijibouti and bordering to Humera/Shiraro are
the opportunities that enhance level of commercialization to Ayssaita and Chifra woredas
respectively.

Table 26: Factors Affecting Camel Production

Variables Coef. Robust T P>|t|
Std.Err.

100
 Age of HH -.046*** .019 -2.459 .015
Distance_All_Weather_Road -.078 .148 -.526 .600
Family size .099*** .049 2.008 .047
Number_of_Working_Persons -.226*** .068 -3.322 .001
ExpCP .071 .041 1.743 .084
THSize -.002 .001 -1.304 .194
Land_Tenure_System .000 .051 .005 .996
Post_Harvest_Camel_Lost .056 .093 .602 .548
Camels_Lost_Dueto_Draught .214 .245 .873 .384
Income_From_Camel_Sales -4.588E-5 .000 -.898 .371
Camel_Feed_Sources .017 .136 .128 .898
cons 5.396*** 1.184 4.560 .000
R2 .160

F 2.210 ***
N 139
Note: Dependent variable is amount of Camel produced in Tropical Livestock Unit (THSize).
***, ** and * are statistically significant at 1%, 5% and 10%, respectively. THSize is an
instrument for quantity of Camel produced.
Source: Own computation from survey result, 2016/2017

Table 27: Determinants of camel quantity supplied to the market

Variable Camel
Coef. Std.Err Z
Age of HH -0.046*** -2.42
0.019
Distance_All_Weather_Road -0.078 0.148 -0.53
Family size 0.099*** 0.049 2.02
Number_of_Working_Persons -0.226*** 0.068 -2.63
ExpCP 0.071 0.041 1.73

101
THSize -0.002 0.001 -2.00
Land_Tenure_System 0.000 0.051 --
Post_Harvest_Camel_Lost 0.056 0.093 0.60
Camels_Lost_Dueto_Draught 0.214 0.245 0.87
Income_From_Camel_Sales -4.588E-5 0.000 --
Camel_Feed_Sources 0.017 0.136 0.125
cons 5.396*** 1.184 4.56
R2 .160
2
F/Chi 2.210/356.204=0.006
N 139
Note: Dependent variable is amount of Camel produced in Tropical Livestock Unit (THSize).
***, ** and * are statistically significant at 1%, 5% and 10%, respectively. THSize is an
instrument for quantity of Camel produced.
Source: Own computation from survey result, 2016/2017

CHATER FIVE
SUMMARY, CONCLUSION AND
RECOMMENDATIONS

5.1 Summary and Conclusion

This study was aimed at analyzing value chain of camels in Ayssaita and Chifra Woredas of
Afar region. The specific objectives of the study include identifying camel value chain and

102
examining the performance of actors in the chain; analyzing the determinants of camel supply
to the market in the study area; and identifying marketing channels and factors affecting
outlet choice decisions of farm households. The data were generated from both primary and
secondary sources. The primary data were collected from individual interview using pre-
tested semi-structured questionnaire and checklist. The primary data for this study were
collected from 140 randomly selected camel herder households 40 from Ayssaita and 100
from Chifra Woredas, 20 traders from Ayssaita and Chifra markets; and from 40 consumers.

The analysis was made using descriptive statistics and econometric model using SPSS
software. All the sampled households were camel producers. Market outlet choice decision
and marketable surplus of camels are found to be important elements in the study of camel
value chain. Therefore, in identifying determinants that affect the marketable surplus of
camels, a multiple regression model was used in the study and multinomial logit model
(MNL) was applied to analyze factors affecting market outlet choice of herders for selling
camels in the study areas. The findings of this study are summarized as follows.

Of the 140-interviewed camel herding households, 40(100%) were male headed households
in Ayssaita Woreda and 100(100%) were male headed households in Chifra Woreda. The
average ages of the sampled respondents were 41.07 and 40.48 years in Ayssaita and Chifra
Woredas, respectively. The average family size was 11.78 and 11.79 in Ayssaita and Chifra
Woredas, respectively.

Camel value chain analysis of the study areas revealed that the main value chain actors are
input suppliers, camel herding farmers, wholesalers, retailers, collectors and consumers.
Camel herders, OoARD, Afar PCDP, Baeuro of Agriculture and Agro-pastoral, Institute of
Agriculture and Agro-pastoral, Ayssaita and Chifra woredas Agriculture and Agro-pastoral
Development Offices, private pesticides/herbicide suppliers, Samara University and APDA
were the main actors involved in the herding and input supply activities. Collectors were
engaged in purchasing camels from remote areas and sell at town markets to wholesalers.
Wholesalers purchase camels from herders and collectors and sell to retailers, exporters and
consumers. Retailers purchase camels from herders, collectors and wholesalers and sell to
consumers. There are also governmental and non-governmental supportive actors who
support camel value chain directly or indirectly. Value chain supporters or enablers provide
facilitation tasks like creating awareness, facilitating joint strategy building and action and,
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the coordination of support. The main supporters of the camel value chain in the study areas
are office of agricultural and rural development (OoARD), Office of trade and industry
(OoTI), Woreda administrations, Afar Saving and Credit Institution, Samara University,
Informal Credit Suppliers and Banks.

Constraints hindering the development of camel value chain are found in all the stages of the
chain. At the farm-level, camel herders are faced with lack of modern input supply and high
postharvest losses. On marketing side, limited access to market, low price of product, lack of
storage, lack of transport, low quality of product and lack of policy framework to control the
Cross-border Ethio-Sudan/Middle-East trade route are the major problems.

Camels produced in this area passes through several intermediaries, i.e. collectors,
wholesalers and retailers, with little value being added before reaching the end-users. The
intermediate buyers obtain the camels from the herders at a lower price and they sell to the
consumers at a higher price. The estimated average price that sample respondents received
for an adult camel was reported to be Br. 17, 900.00 per head of camel, whereas the price that
consumers paid at cross-border Humera/Shiraro market was Br. 19, 350.00 per head of
camel, respectively. The research result also indicated the absence of organized institution
and system group marketing, and lack of processing activities have made traders in a better
position to dominate the roost in pricing. Camel is highly perishable product and has to reach
the consumer as fast as possible. This hands the power to buyers and due to this its
governance is buyer driven. The study indicates that traders’ operating expense form 93.26%
of total value chain expense but their profit margin is almost 99.97% of the total profit
margin.
The results of the study show a slight difference between total production and marketable
surplus; making camels a market oriented product. The result of the multiple regression
model indicates that marketable supply of camel is significantly affected by Age of
Household Head, Family size and Number of working persons (14 - 64 ages); and marketable
supply of camel was significantly affected by AExtension, Number_Working_Persons,
AgeHH, EduStatHH, Own_Transportation_Facilities, Death_Dueto_Draught and Trainning.
Camel herders in the study areas supply their produce through different market outlets.
Herders were classified into five categories according to their outlet choice decision: those
herders who have supplied most of their produce to collectors 47(383.57%); those herders
who have supplied most of their produce to retailers 43(30.71%); those herders who have
104
supplied most of their produce to wholesalers 31(22.14%); those herders who have supplied
most of their produce to brokers 9(6.43%) and those herders who have supplied most of their
produce to consumers 10(7.14%). The multinomial logit model was run to identify factors
determining farmers’ market outlet choice decision. The model results indicated that the
probability to choose the collector outlet was significantly affected by access to extension
service, owning transport facility, membership to any cooperatives and post harvest value
addition compared to wholesale outlet. Similarly, the probability of choosing retailer
marketing outlet was affected by Woreda dummy, educational status of household head,
access to extension services and owning transport facility compared to wholesale outlet.
Therefore, these variables require special attention if herders margin from camel production
is to be increased.

5.2 Recommendations
The recommendations or policy implications to be drawn from this study are based on the
significant variables from the analysis of present study. To start with, dissemination of
modern input technologies is essential in increasing the productivity of camels. Given that
herders are small-scale and unorganized in the study area, this state of affairs clearly needs
strong government intervention. Not only does it require providing input facilities, but also
their dissemination to ensure optimal access. Effort should also be made to establish and
strengthen herders’ cooperative and encourage collective action of herders to lower
transaction costs to access inputs.

Secondly, the results of econometric analysis indicate that camels supply to the market is
positively and significantly affected by access to market information, non/off farm income,
camel farming experience and quantity of camel produced. Therefore, these factors must be
promoted in order to increase the amount of camel marketable supply. Increasing the
production and productivity of camels per unit area of land is better alternative to increase
marketable supply of camels. Introduction of improved varieties, application of modern value
addition approaches, using of modern technologies, controlling disease and pest practices
should be promoted to increase production. Quantity production of camel is also positively
and significantly affected by camel herding experience, access to market information and
quantity of fertilizer application. Strengthening the supportive activities such as information
centers and input supply systems would also boost camel supply. In addition to that, building

105
the asset base of the herders and developing the skills what herders have through experience
increases camel supply to the market.

Thirdly, marketable supply is significantly and negatively affected by distance to nearest

market, access to extension service and Woreda dummy. Therefore, strengthening efficient
and area specific extension systems, improving road infrastructure, supporting DAs by giving
continuous capacity building trainings and separating DAs extension work from other
administrative activities increases camel supply to the market.

Fourthly, retailer outlet choice is negatively and significantly affected by camel production
experiance and number working persons (14–64 ages), relative to collector outlet. Therefore,
these factors must be promoted by developing herders’ commercial camel production system,
access to extension service as a source of information on technology and also assumed to have
direct relation with market outlet choice of camel producers, widens the household’s knowledge
with regard to the use of improved technologies and has positive impact on camel sale volume ,
training about marketing and post harvest handling and coordinating fragmented producers in
to cooperatives. Retail outlet choice also positively and significantly affected by age of
household head, income from camel sale, and volume of goats relative to collector outlet.

Therefore, aged households are believed to be wise in resource use, on the other hand young
household heads have long investment horizon and it is expected to have either positive or
negative effect on volume of camel sales. This variable is also expected to have relationship
with outlet choice decision of camel herders, age of the herders is significant determinant of
the choice to use non-wholesale market channel over other-wholesale market channel, hence
improving herders’ mixed livestock’ production system, advisory services delivery about
saving and credit association to strengthen herders’ bargaining power of supplying their
product to this retail market outlet.

Fifthly, whole seller outlet choice is negatively and significantly affected by camel
production experiance and volume of goats, relative to collector outlet. Wholesalers are
mainly involved in buying camels from collectors and herders in larger volume than any
other actors and supplying them to exporters, retailers and consumers. Therefore, these
factors must be promoted by developing herders’ training about marketing and post harvest
handling and coordinating fragmented producers in to cooperatives. Whole seller outlet

106
choice also positively and significantly affected by age of household head, income from
camel sale, and volume of oxen relative to collector outlet. Therefore, improving herders’
production experiance, providing all required training on marketing and post harvest handling
strengthen herder capacity to supply wholesalers and retail market outlet.

Lastly, retailer outlet choice is significantly and positively affected by owning transportation
facility and Woreda dummy. Therefore, improving transportation access to the farmers is
essential to make camel market efficient in addition to developing road infrastructures. In
addition, government should give special attention to highly market demanded like camel
marketing that traders are not willing to participate by encouraging processing activities and
providing storage facilities. Retail outlet choice also negatively and significantly affected by
educational level of the household head and access to extension service. Therefore, these
factors must be considered in future intervention.

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7. APPENDICES
Appendex A
Appendix table1: The result of multicollinearity test

Variables included in market supply model Variables included in MNL model

Variable VIF 1/VIF Variable VIF 1/VIF
Age of HH 3.230 0.3096 Age of HH 3.230 0.3096
Distance_All_Weather_Road 1.404 0.7123 Distance_All_Weather_Road 1.404 0.7123

116
Family size 2.869 0.3486 Family size 2.869 0.3486
Number_of_Working_Persons 2.959 0.3380 Number_of_Working_Persons 2.959 0.3380
ExpCP 3.673 0.2723 ExpCP 3.673 0.2723
THSize 4.421 0.2262 THSize 4.421 0.2262
Land_Tenure_System 1.197 0.8354 Land_Tenure_System 1.197 0.8354
Post_Harvest_Camel_Lost 1.809 0.5528 Post_Harvest_Camel_Lost 1.809 .05528
Camels_Lost_Dueto_Draught 8.764 0.1141 Camels_Lost_Dueto_Draught 8.764 0.1141
Income_From_Camel_Sales 9.683 0.1033 Income_From_Camel_Sales 9.683 0.1033
Camel_Feed_Sources 1.308 0.7645 Camel_Feed_Sources 1.308 0.7645
Mean VIF 0.45771 Mean VIF 0.45771
Source: Own computation from survey result, 2016/2017

Appendix table 2: Hausman tests of IIA assumption for MNL model

Omitted Chi2 Df P Chi2 Evidence

0 45.153 324 1.000 for Ho
1 40.798 324 1.000 for Ho
4 0.0000 228 1.000 for Ho
Source: Own computation from survey result, 2016/ 2017

117
 Appendix table 3: Conversion factors used to compute tropical livestock units (TLU)

Livestock Category Conversion factor

heifers 0.75
Cows/ Oxen 1.00
Sheep or Goat (Adult) 0.13
Calf 0.25
Sheep or Goat (Young) 0.13
Camels 1.25
Source: Storck et al., 1991

Appendix table 4: Conversion factor used to compute adult equivalent

Age group year Male Female

 10 0.6 0.6
10-13 0.9 0.8
14-16 1 0.75
17-50 1 0.75
 50 1 0.75

Source: Storck et al., 1991

Appendix table 5: Mean land allocation of sample households for Livestock’s herds

Ayssaita Chifra Total t-test

Variables (N=40) (N=100) (N=140)
Mean SD Mean SD Mean SD
Camels 89.82 19.087 82.24 21.191 84.41 20.830 47.946
Oxen/bull 16.98 2.778 15.94 3.117 16.24 3.050 62.981
Cows/heifers 91.15 20.579 83.09 22.945 85.39 22.520 44.866
Calves 8.58 1.567 7.94 1.740 8.12 1.711 56.162
Goats 69.05 18.392 61.42 20.244 63.60 19.969 37.685

118
 Sheep 55.32 16.079 48.46 17.979
50.42 17.677 33.751
Note: *** and ** are statistically significant at 1% and 5% probability

Source: Own computation from survey result, 2016/2017

Appendix table 6: Income sources by woreda

Ranking in
Income sources Ayssaita Chifra Total
(N= 40) (N= 100) (N= 140) X2- test
N % N % N %
Camels 40 28.6% 100 71.4% 14 100.0% X2 = 10.526
0
Livestock’s trading 1 31.2 33 68.8 48 100 % X2=146.398, df=8,
5 % % sig=.000
Small scale Irrigation 1 21.3 37 78.7 47 100 %
0 % %
Livestock’s fodders 9 37.5 15 62.5 24 100 %
supply % %
Agri-products 6 28.6 15 71.4 21 100 %
Trading % %

Note: *** Statistically significance at 1% probability level, X2 is Chi-square.

Source: Own computation from survey result, 2016/2017

Appendix table 7: Means of transportation for sample respondents

Ayssaita Chifra Total χ2-test

Variables Items (N=40) (N=100) (N=140)
N % N % N %
Vehicle - - - - - - X2=144.000,
Back of 40 28.6% 100 71.4 140 100% df=2,sig=.000
Transportation Animals %
s Man Power - - - - - -

119
 Vehicle and - - - - - -
Animals
Note: *** Statistically significance at 1% probability level, X2 is Chi-square.
Source: Own computation from survey result, 2016/2017

Appendix table 8: Market place for selected Camels

Variables Items Ayssaita Chifra Total

(N=40) (N=100) (N=140) χ2-test
N % N % N %
Camels Farm gate - - - - - - X2= 288.000.
Market 40 100% 100 100% 140 100% df = 4, sig= .000
Note: *** Statistically significance at 1% probability level, X2 is Chi-square.
Source: Own computation from survey result, 2016/2017

Appendix table 9: Quantity purchased and income of Camel consumers

Variables Ayssaita Chifra Total

(N=21) (N=19) (N=40)
Mean SD Mean SD Mean SD
Income 3904.05 728.67 4257.89 389.37 4064.88 637.43
Income proportion 428.13 509.71 465.61 40.18
Amount of Camels Livestock’s) consumed per week

120
 Oxen/bull
Cows/heifers
Calves
Goats
Sheep
Camels
Note: *** Statistically significance, SD value

Source: Own computation from survey result, 2016/2017

Appendix table 10: Source of extension service

Ayssaita Chifra Total

Advisors (N=40) (N=100) (N=140)

χ2-test
N % N % N %
DA and OoARD 33 26.4% 92 73.6% 125 100%
Neighbors’ and
friends X2 = 146.803, df =
Research centers 5 45.5% 6 54.5% 11 100% 6,
(specify) Sig = .000
DA, and Neighbors’ - - - - - -
and friends
Development agents 2 50.0% 2 50.0% 4 100%
(DAs)
Note: *** Statistically significance at 1% probability level, X2 is Chi-square.
Source: Own computation from survey result, 2016/2017

Appendix table 11: Source of credit by sample households’ herder

Sources Ayssaita Chifra Total

χ2-test
(N=40) (N=100) (N=140)
N % N % N %
Micro finance - - - - - -
Cooperatives - - 1 100% 1 100%

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 Traders - - - - - - Constant
Relatives - - - - - --
Micro finance - - - - - -
and
cooperatives
Source: Own computation from survey result, 2016/2017

Appendix table 12: Need of respondents to expand camels production and marketing

Variables Items Ayssaita Chifra Total

(N=40) (N=100) (N=140) χ2-test
N % N % N %
Herding Yes 40 28.6% 100 71.4% 140 100% X2 =144.000, df= 2,
sig= .000
No - - - - - -
Sell Yes 40 28.6% 100 71.4% 140 100% X2 =144.000, df= 2,
No - - - - - - sig= .000
Note: *** Statistically significance at 1% probability level, X2 is Chi-square.

Source: Own computation from survey result, 2016/2017

Appendix table 13: Marketing problems mentioned by traders

Ayssaita Chifra Total

Marketing problems (N=9) (N=9) (N=18) χ2-test

N % N % N %

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 - - - - - -
Price setting power
- - - - - -
Supply shortage X2 = 22.800,
- - - - - - Df= 6,
Lack of storage Sig=.001
- - 2 100% 2 100%
Asymmetric information flow
- - - - - -
Product quality
9 60.0% 6 40.0% 15 100%
Lack of support from
government
Other - - 1 100% 1 100%
Note: *** Statistically significance at 1% probability level, X2 is Chi-square.

Source: Own computation from survey result, 2016/2017

Appendix Table14: MNLinear Regression Coefficient Correlationsa

Distance Camel Income

Post Land to all Number of Lost Due from
Camel Feed Harvest Tenure weather Working Age of to Camel
Sources Family size ExpCP Lose System Road THSize Persons HH Draught Sales

123
Camel Feed
1.000
Sources

Family size .075 1.000

ExpCP -.057 .053 1.000

Post Harvest
.068 -.110 -.105 1.000
Lose

Land Tenure
-.364 -.022 .062 .058 1.000
System

Distance to all
.037 -.081 .431 .014 .045 1.000
weather Road

THSize .197 .137 .078 -.006 -.166 .014 1.000

Number of
Working -.079 -.761 .008 .087 .012 .200 -.015 1.000
Persons

Age of HH .078 .025 -.817 .109 -.076 -.304 -.035 -.021 1.000

Camel Lost Due

-.285 -.044 .213 -.156 .047 .193 -.172 .119 -.092 1.000
to Draught

Income from
.122 .011 -.195 -.131 .060 -.090 -.412 -.046 .090 -.712 1.000
Camel Sales

a = Dependent Variable: Volume of Camel Sales

Appendix Table 15: MNLogit Model Parameter Estimates

B Std. Error Wald df Sig. Exp(B) 95% Confidence Interval for

Exp(B)

124
 Lower Bound Upper Bound

Intercept 83.610 131.722 .403 1 .526

ExpCP -11.963 320.307 .001 1 .970 6.379E-6 1.443E-278 2.820E267

AgeHH 7.506 316.658 .001 1 .981 1819.331 5.255E-267 6.299E272

Volume_Of_Oxen 2.743 76.323 .001 1 .971 15.535 1.679E-64 1.437E66

Volume_Of_Goats 4.082 102.764 .002 1 .968 59.245 1.996E-86 1.759E89

Number_Working_Persons 5.127 109.622 .002 1 .963 168.431 8.236E-92 3.445E95

Income_from_camel_sale 3.895 67.152 .003 1 .954 49.179 3.403E-56 7.108E58

ACredit 7.629 150.638 .003 1 .960 2056.447 1.229E-125 3.441E131

Death_Dueto_Draught -17.358 91.137 .036 1 .849 2.895E-8 7.683E-86 1.091E70

MCooperative -3.274 31.905 .011 1 .918 .038 2.634E-29 5.438E25

Trainning -2.921 10.183 .082 1 .774 .054 1.157E-10 2.509E7

EduStatHH 2.479 2.969 .697 1 .404 11.934 .035 4016.560

AExtension 17.398 19.984 .758 1 .384 3.596E7 3.514E-10 3.680E24

Source: Own computation from survey result, 2016/2017

Significant variables: ExpCP, AgeHH, Volume_Of_Oxen, Volume_Of_Goats,

Number_Working_Persons, ACredit, Income_from_camel_sale, Death_dueto_draught and
MCooperative

Insignificant variables: Trainning, EduStatHH and AExtension

Parameter Estimates

Camel herders that mainly choose to sell their Camels to Retailers

Marketing Outlet a B Std. Wald Df Sig Exp(B) 95% Confidence

125
 Error . Interval for Exp(B)
Lower Upper
Bound Bound
Intercept 79.397 4868.293 .000 1 .987
Volume_Of_Goats 9.894 49.102 .041 1 .840 19805.516 3.172E-38 1.237E46
ExpCP -18.916 243.381 .006 1 .938 6.092E-9 4.157E-216 8.929E198
Income_from_camel_sale 5.396 49.773 .012 1 .914 220.473 9.475E-41 5.130E44
ACredit -22.866 87.474 .068 1 .794 1.174E-10 4.092E-85 3.368E64
Number_Working_Persons -9.674 44.555 .047 1 .828 6.292E-5 7.475E-43 5.295E33
AgeHH 11.343 320.990 .001 1 .972 84343.846 4.997E-269 1.424E278
Death_dueto_draught -23.548 38.425 .376 1 .540 5.934E-11 1.164E-43 3.026E22
Trainning -2.921 10.183 .082 1 .774 .054 1.157E-10 2.509E7
MCooperative 9.001 17.162 .275 1 .600 8108.567 1.999E-11 3.288E18
Volume_Of_Oxen 17.042 20.766 .673 1 .412 2.519E7 5.305E-11 1.196E25

AgeHH, ExpCP, Income_from_camel_sale, Volume_Of_Goats and Number_Working_Persons

Parameter Estimates

Camel herders that mainly choose to sell their Camels to Whole sellers

126
Marketing Outlet a B Std. Wald df Sig. Exp(B) 95% Confidence
Error Interval for Exp(B)
Lower Upper
Bound Bound
Intercept 83.610 131.722 .403 1 .526
Volume_Of_Goats -4.112 84.504 .002 1 .961 .016 1.923E-74 1.393E70
ExpCP -11.963 320.307 .001 1 .970 6.379E-6 1.443E-278 2.820E267
AExtension 5.050 4.412 1.311 1 .252 156.099 .027 888232.808
Income_from_camel_sale 10.926 51.084 .046 1 .831 55595.181 1.830E-39 1.689E48
ACredit -44.899 68.364 .431 1 .511 3.167E-20 2.038E-78 4.919E38
Number_Working_Persons -21.459 79.490 .073 1 .787 4.791E-10 1.043E-77 2.201E58
AgeHH 7.506 316.658 .001 1 .981 1819.331 5.255E-267 6.299E272
EduStatHH 2.479 2.969 .697 1 .404 11.934 .035 4016.560
Death_dueto_draught -22.715 44.681 .258 1 .611 1.364E-10 1.265E-48 1.472E28
Trainning -29.343 34.044 .743 1 .389 1.806E-13 1.897E-42 1.719E16
MCooperative 14.623 19.137 .584 1 .445 2241536.019 1.152E-10 4.363E22
Volume_Of_Oxen 3.844 67.390 .003 1 .955 46.697 2.028E-56 1.075E59
Volume_Of_Goats, ExpCP, Income_from_camel_sale, AgeHH and Volume_Of_Oxen

Parameter Estimates

Camel herders that mainly choose to sell their Camels to Collectors

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Marketing Outlet a B Std. Wald df Sig Exp(B) 95% Confidence
Error . Interval for Exp(B)
Lower Upper
Bound Bound
Intercept 83.610 131.722 .403 1 .526
ExpCP -11.963 320.307 .001 1 .970 6.379E-6 1.443E-278 2.820E267
AgeHH 7.506 316.658 .001 1 .981 1819.331 5.255E-267 6.299E272
Volume_Of_Oxen 2.743 76.323 .001 1 .971 15.535 1.679E-64 1.437E66
Volume_Of_Goats 4.082 102.764 .002 1 .968 59.245 1.996E-86 1.759E89
Number_Working_Persons 5.127 109.622 .002 1 .963 168.431 8.236E-92 3.445E95
Income_from_camel_sale 3.895 67.152 .003 1 .954 49.179 3.403E-56 7.108E58
ACredit 7.629 150.638 .003 1 .960 2056.447 1.229E-125 3.441E131
Death_dueto_draught -17.358 91.137 .036 1 .849 2.895E-8 7.683E-86 1.091E70
MCooperative -3.274 31.905 .011 1 .918 .038 2.634E-29 5.438E25
Trainning -2.921 10.183 .082 1 .774 .054 1.157E-10 2.509E7

EduStatHH 2.479 2.969 .697 1 .404 11.934 .035 4016.560

AExtension 17.398 19.984 .758 1 .384 3.596E7 3.514E-10 3.680E24

ExpCP, AgeHH, Volume_Of_Oxen, Volume_Of_Goats, Number_Working_Persons, Income_from_camel_sale, ACredit,

Death_dueto_draught and MCooperative

Table 22: The Multiple Regression Model

Estimates

128
Model Unstandardized Standardize T Sig. 95% Confidence Interval for B
Coefficients d
Coefficients
B Std. Error Beta Lower Bound Upper Bound
1 (Constant) 5.396 1.184 4.560 .000 3.055 7.738
Age of HH -.046 .019 -.358 -2.459 .015 -.083 -.009
Distance to All -.078 .148 -.051 -.526 .600 -.370 .215
Weather Road
Family size .099 .049 .276 2.008 .047 .001 .197
Number of -.226 .068 -.463 -3.322 .001 -.360 -.091
Working Persons
ExpCP .071 .041 .271 1.743 .084 -.010 .152
THSize -.002 .001 -.222 -1.304 .194 -.005 .001
Land Tenure .000 .051 .000 .005 .996 -.101 .102
System
Post Harvest Lose .056 .093 .066 .602 .548 -.129 .241
Camel Lost Due to .214 .245 .209 .873 .384 -.271 .700
Draught
Income from Camel - .000 -.226 -.898 .371 .000 .000
Sales 4.588E
-5
Camel Feed Sources .017 .136 .012 .128 .898 -.253 .287
a. Dependent Variable: Volume of Camel
Sales

Appendex B

129
 I. Camel (Livestock’s) Herder’s Interview Schedules

Appendixes
Camel Supply Chain Actors Interview Schedule
Mekelle University
College of Business and Economics
Department of Management
Masters of Business Administration (MBA) Program
This questionnaire/interview schedule is prepared to collect data from Camel (Livestock)
owners (pastoralists), Camel (Livestock) traders, consumers, and government officials and
Non-Governmental Organizations for the purpose of assessing the “Camel Supply Chain
Management in the Awssi-Resu (Asayita and Chiffera Woredas), Afar Region, Ethiopia,” by
Arefayne Eshete for the partial fulfillment of the award of Masterate degree in business
administration (MBA).
This questionnaire/interview schedule is used only for the academic purpose. Therefore, I
will keep the information confidentially and will not be transferred to third party without
prior consent of you.
Thank you for your honest response!!!!!

E- mail: arefayneeshete@gmail.com Mobile:

+251912392602
+251902003850

Section I. Camel (Livestock’s) Herder’s Interview Schedules

A. General Information about the respondents (demographic Characteristics)

1. Name..................................................... (Optional)

2. Zone:
1 [____] Awssi-Resu

2 [____] Kilbetti-Resu

3 [____] Fentti-Resu

130
 4 [____] Gebbi-Resu

5 [____] Habessi-Resu

3. Woreda:
0 [____] Ayssaita
1 [____] Chifra

4. Age of the respondent: [ ] years

1 [___]  25years old
2 [___] 25 – 35 years old
3 [___] 36 – 45 years old
4 [___] 46 – 55 years old
5 [___] >55 years old

5. Sex of the respondent (√):

1[ ] Male
2[ ] Female

4. Education level of the respondent (√):

1[ ] No formal education
2[ ] 6th grade or less
3[ ] 7th to 12th grade
4[ ] Certificate
5[ ] Diploma
6[ ] Degree

5. Marital status (√):

1[ ] Single
2[ ] Married
3[ ] Divorce
4[ ] Widowed

6. Distance of your residence from the nearest market centre: [ ] hrs walks:

131
 1[___]  6 hrs walks

2 [___] 6 – 12 hrs walks

3 [___] 12 – 18 hrs walks

4 [___] 18 – 24 hrs walks

5 [___]  24 hrs walks

7. Distance of your residence to the nearest development centre: [ ] hrs walks:

1 [___]  6 hrs walks

2 [___] 6 – 12 hrs walks

3 [___] 12 – 18 hrs walks

4 [___] 18 – 24 hrs walks

5 [___]  24 hrs walks

8. Distance to all weather roads: [ ] OR [ ] hrs walk:

1 [___]  6 hrs walks

2 [___] 6 – 12 hrs walks

3 [___] 12 – 18 hrs walks

4 [___] 18 – 24 hrs walks

5 [___]  24 hrs walks

9. What is your major means of income generation? (Rank in order of importance):

1[ ] Cattle production
2[ ] Goat production
3[ ] Sheep production
4[ ] Camel herding
5[ ] Agricultural production
6[ ] Pulses production

132
 7[ ] Livestock’s trading
8[ ] other (specify)...............................................................................................

10. How long have you practiced production of Camel products? ---------------- Years
1 [___]  5 years
2 [___] 5 – 10 years
3 [___] 10 – 15 years
4 [___] 15 – 20 years
5 [___] 20 – 25 years
6 [___]  25 years

11. Are you a member of any cooperative? (√):

0[ ] No
1[ ] Yes

12. If your answer for Q.11 is yes, what is the name of the cooperative __________?

B. Household and Resource Data

1. Family size: [ ] Male [ ] Female [ ] Total

2. Number of working persons (14-64 ages): [ ] Male [ ] Female [ ] Total

3. Number of children in school: [ ] Male [ ] Female [ ] Total

4. Number of dependents (< 14 and >64 ages): [ ] Male [ ] Female [ ] Total

5. Do you have livestock’s? (√):

0[ ] No
1[ ] Yes

6. If your answer for Q.5 is yes, livestock Number:

1 [____]  50 Livestock’s
2 [____] 50 – 100

133
 3 [____] 100 – 150
4 [____] 150 – 200
5 [____] 200 - 250
6 [____] 250 - 300
7 [____] 300 – 350
8 [____]  350 Livestock’s

7. Do you have your own transportation facilities? (√):

0[ ] No
1[ ] Yes

8. If your answer for Q. 7 is yes, what type? (√):

1[ ] Vehicle
2[ ] Transport animals
3[ ] Cart

Camel (Livestock’s) Herding

1. How many camels (livestock’s) did you harvested in last season? ............

1 [___]  5 Camels

2 [___] 5 – 10

3 [___] 10 – 15

4 [___] 15 – 20

5 [___] 20 - 25

6 [___]  25 Camels

2. What type of Livestock’s do you herd? Variety and herding during last season?

1 [___] Only Oxen/bull, Cows/heifers, Calves, Goats, and Sheep

2 [___] Only Camels

3 [___] Camels with all other Livestock’s

134
3. What is the source of labor used for Camels herding? (√) (Multiple responses is possible):

1[ ] Family labor

2[ ] Labor exchange

3[ ] Hired labor

4[ ] Cooperation

4. What type of species of camels do you use? (√):

1[ ] Local

2[ ] Improved

3[ ] Both

5. If you have ever encountered problems with the use of improved camel species, what type?
(√):

1[ ] There is cross breading problem

2[ ] Unknown origin

3[ ] Low quality (taste)

4[ ] High price

5[ ] others (specify)............................................................................................................................................

6. What type of camel herding system do you adopt?

1[ ] Sole herding

2[ ] Mixing different Livestock’s

3[ ] others (specify)...........................................................................................................................................

7. How is the trend of volume of camel (Livestock) herding during the past 5 years? (√):

135
 1[ ] Increasing

2[ ] Decreasing

3[ ] Same

8. If the herding increases, what are the reasons?

1 [____] Increase in demand of camel

2 [____] There was advisory service provider

3 [____] There was market information service

9. If the herding decreases, what are the reasons?

1 [____] Inaccessibility of advisory services

2 [____] Lack of market information

3 [____] Decrease in demand of camels

10. Would you like to expand Camel (Livestock’s) herding? (√):

0[ ] No
1[ ] Yes

11. If your answer for Q.10 is yes, why?

1 [___] To generate income
2 [___] For our family consumption
3 [___] To be influential in our community

12. If your answer for Q.10 is No, why?

1 [___] There is no financial access
2 [___] There is infrastructural problem
3 [___] There is no government support

13. What are the Camel (Livestock’s) herding constraints on your farm?

136
 1[ ] Camels Shortage
2[ ] Diseases
3[ ] Drought
4[ ] Lack of drugs
5[ ] others (specify).........................................................................................................

Herding Services
A. Input Supply and Access to Credit
1. Have you ever used livestock’s herding inputs for the herding of Camel (Livestock’s)? (√):
0[ ] No
1[ ] Yes

2. If your answer for Q.1 is No, what was the main reason behind?
1 [____] Inaccessibility of fodder suppliers
2 [____] Inadequacy financial accesses to fulfil herding inputs
3 [____] There is no camel value addition advisory services
2 [____] I do not know about camel herding inputs

3. Did you borrow money for Camel (Livestock’s) herding before? (√):
0[ ] No
1[ ] Yes

4. If your answer for Q.3 is Yes, from where and for what purpose did you collect the credit?
(√):
1[ ] Micro finance
2[ ] Cooperatives/unions
3 [ ] NGOs
(specify)...............................................................................................................
4 [ ] Bank
(specify)...............................................................................................................
5[ ] Trader
6[ ] Relatives
7[ ] Iqub/Iddir

137
 8 [ ] others
(specify)............................................................................................................

5. If your answer for Q.3 is yes, have you paid the loan? (√):
0[ ] No
1[ ] Yes

6. If your answer for Q.3 is No, what was the reason?

1 [____] No access to microfinance
2 [____] I do not want to borrow due to my religion
3 [____] The cost of interest is high to pay

7. Did you face any problem in accessing credit? (√):

0[ ] No
1[ ] Yes

8. If your answer for Q.7 is yes, what was the problem? (√)
1[ ] Limited supply of credit
2[ ] Limited access to transport
3[ ] Huge bureaucracy
4 [ ] others (specify)...............................................................................................................

10.How did you solve these

problems?..........................................................................................

B. Information/knowledge flow
(i) Advisory service
1. Did you get advisory service on Camel (Livestock’s) herding practices before? (√):
0[ ] No
1[ ] Yes

2. If your answer for Q.1 is No, why? (√) (Multiple responses is possible):
1[ ] No service provider nearby

138
 2[ ] Possessed the required information
3[ ] Availability of contact farmers
4[ ] Do not have time to get the service
5[ ] others (specify).........................................................................................................

3. If your answer for Q.1 is yes, for how long do you get the service? ___________years
1 [___] 1 to 5 years
2 [___] 6 to 10 years
3 [___] 11 to 15 years
4 [___] 16 to 20 years
5 [___]  20 years

4. Who provides the advisory service? (√) (Multiple responses is possible):

1[ ] Development agents (DAs)
2 [ ] NGOs (specify)..............................................................................................................
3 [ ] Research centers (specify)...............................................................................................
4[ ] Woreda OoARD experts
5[ ] Neighbours and friends
6 [ ] others (specify)...............................................................................................................

5. How do you get the advisory service? (√) (Multiple responses is possible):
1[ ] Farm to farm visit by the development agent
2[ ] experience sharing tour
3[ ] Visit to demonstration/ model farmers’ site
4[ ] Training
5[ ] others (specify)..............................................................................................................

6. How frequent were you visited by development agents last year? (√):
1[ ] Once per month
2[ ] Twice per month
3[ ] Three times per month
4[ ] Four times per month
5 [ ] others, specify.................................................................................................................

139
(ii) Research
1. Source of camel (Livestock’s) herding, marketing and consumption research/innovation
in your area? (√) (Multiple responses is possible):
1 [ ] Agricultural Research Centre (specify).........................................................................
2[ ] NGOs (specify)............................................................................................................
3[ ] Afar Pastoral and Agro-pastoral Institute
4[ ] Universities
5[ ] OoARD
6[ ] other (specify)...............................................................................................................

2. Have you ever participated in problem identification and/or research-planning?

0[ ] No
1[ ] Yes

3. If your answer for Q.2 is yes, specify the organization, year and Number of
times....................
1 [___] Afar Pastoral and Agro-pastoral Institute
2 [___] Afar PCDP
3 [___] Universities

4 [___] OoARD

(iii) Marketing
1. Did you sell Camel before? (√):
0[ ] No
1[ ] Yes

2. If your answer for Q.1 is No, why you did not sell?
1 [___] Decrease in demand of Camels
2 [___] Price was not attractive

3 [___] other (specify)

140
3. If your answer for Q.1 is yes, how much and to whom did you sell your camel?
1 [___] ETB 5 000.00 to Consumers
2 [___] ETB 6 000.00 to Retailers
3 [___] ETB 7 500.00 to Collectors
4 [___] ETB 10 000.00 to Whole sellers

4. To whom do you sell most of your Camels?

1[ ] Retailers
2[ ] Whole sellers
3[ ] Consumers
4[ ] Brokers
5[ ] Collectors
6 [ ] others (specify)..............................................................................................................

5. Why have you preferred the mentioned buyers/markets to sale your camel (Livestock’s)?
.................................................................................................................................................
.....

6. To which one of the following marketing center do you have access? (√):
1[ ] Ayssaita
2[ ] Chifra
3 [ ] other (specify)...............................................................................................................

7. Means of transportation used;

1[ ] Vehicles
2[ ] Manpower
3[ ] Back of animals
4 [ ] others (specify).............................................................................................................

8. If you used vehicles, was it easily accessible? (√):

0[ ] No
1[ ] Yes

141
9. If you did not used vehicles, why?
1 [___] I have no financial access to use vehicles
2 [___] The market centre is nearby the road
3 [___] Transport costs is too costly to use by herders

4 [___] The vehicles are not specifically designed to carry Livestock’s

10. How is the trend of camel (Livestock’s) price per head (unit) of sales during the last 5
years? (√): 1 [ ] Increasing
2[ ] Decreasing
3[ ] the same

11. If increasing, why? -------------------------------------------------------------------

12. If decreasing, why? ------------------------------------------------------------------

13. Would you like to expand Camel (Livestock’s) selling? (√):

0[ ] No
1[ ] Yes

14. If your answer for Q.13 is yes, why? ____________________________

15. If your answer for Q.13 is No, why? -------------------------------------------------------------

16. Do your Camel (Livestock’s) herd have preferred qualities by buyers? (√):
0[ ] No
1[ ] Yes

17. If your answer for Q.16 is No, what interventions are needed to improve quantity and
quality of Camel (Livestock’s) herd to attract better
prices? ........................................................................

18. Do you consider quality requirement of your customers in your camel (Livestock’s)
herding process?
0[ ] No

142
 1[ ] Yes

19. If your answer for Q.18 is Yes, what quality requirement do you consider for; camel
(Livestock’s)? ..............................................................................................................................
.....

20. What was your source of information about quality requirement of your customers?
----------.........................................................................................................................................
..................

21. Do you have any value addition on your Camel (Livestock’s) herding? (√):
0[ ] No
1[ ] Yes

22. If your answer for Q.21 is yes, what are those value adding activities? (*Multiple
responses are
possible).......................................................................................................................................

23. Linkage with commercial value chain actors: (√): (Multiple responses is possible)
1[ ] Retailers
2[ ] Whole sellers
3[ ] Consumers
4[ ] Brokers
5[ ] Collectors
6 [ ] others (specify)..............................................................................................................

24. Do you have marketing information in last year? (√):

0[ ] No
1[ ] Yes

25. If your answer for Q.24 is yes, from whom did you get the market information? (√):
1[ ] DAs
2[ ] Kebele administration
3[ ] Woreda experts
143
 4[ ] Radio
5[ ] Brokers
6[ ] from market
7 [ ] others (specify).............................................................................................................

26. What type of information did you get? (√):

1[ ] Price information
2[ ] Market place information
3[ ] Buyers’ information
4 [ ] other (specify)..............................................................................................................

27. At what time interval do you get the information? (√):

1[ ] Daily
2[ ] Weekly
3[ ] Monthly
4 [ ] other (specify)..............................................................................................................

28. Was the information you get is valuable? (√):

0[ ] No
1[ ] Yes

29. Did you know the market prices before you sold your Camels (Livestock’s)? (√):
0[ ] No
1[ ] Yes

30. Did you know the nearby market price before you sold? (√):
0[ ] No
1[ ] Yes

31. Did you face difficulty in finding buyers when you wanted to sell Camels (Livestock’s)?
√):
0[ ] No
1[ ] Yes

144
32. If your answer for Q.31 is Yes, due to: (√):
1[ ] Inaccessibility of market
2[ ] Lack of market information
3[ ] Low price offered
4[ ] others (specify)............................................................................................................

33. What are the Camel marketing constraints? Rank

horizontally...................................................

34. What do you do if you did not get the expected price for your Camel (Livestock’s)
supply? (√): 1 [ ] Took back home
2[ ] Sold at lower price
3[ ] Took to another market on the same day
4[ ] Sold on other market day

35. Do you have any contract market for your Camel (Livestock’s)? (√):
0[ ] No
1[ ] Yes

36. If your answer for Q.35 is yes, with whom? ---------------------------------------------

37. Who sets your selling price for Camel (Livestock’s), in last season? (√):
1[ ] Yourself
2[ ] Buyers
3[ ] Set by demand and supply
4[ ] Negotiations
5[ ] others (specify)........................................................................................................

Non-farm and off-farm activities

1. Do you also purchase and sell Camel (Livestock’s)? (√):
0[ ] No
1[ ] Yes

145
2. Do you practice trading activities other than trading of Camel (Livestock’s)? (√):
0[ ] No
1[ ] Yes

3. How much do you earn from such trading per market day?
Birr..................................................

4. Number of market days in a month....................................................................................

5. Did you perform other income generating activities? (√):

0[ ] No
1[ ] Yes

6. If your answer for Q.5 is yes, what are these sources of income..........................................

7. Did you participate on Productive Safety Net programs (PSNP) as livelihood source? (√):
0[ ] No
1[ ] Yes
8. If your answer for Q.7 is yes, who was involved on this program? (Multiple responses is
possible) (√):
1[ ] Yourself
2[ ] Wife/husband
3[ ] your daughters
4[ ] your sons
5[ ] other (specify)..............................................................................................

9. What were the specific PSNPs you/and any of your family member involved in? (√)
(Multiple responses are possible);
1[ ] Food for work
2[ ] Cash for work
3[ ] others (specify)..............................................................................................................

10. What percent of your household expenditure was covered by these incomes generating
activities cover? ...........................................................................................................................
146
Name of enumerator: -------------------------- Signature: ----------------------- Date: ---------------

II. Camel Traders Interview Schedule

Section II. Traders Interview Schedule

A. General Information
1. Trader: Name ……………………… Age ------------- Sex ______

2. Address: Region ---------------- Zone ----------------- Woreda --------------- Town -------------

3. Type of trade: (√): 1[ ] Retailer 2[ ] Wholesalers 3[ ] Exporter 4[ ] Collectors 5[ ]

others (specify) --------

4. Marital status (√): 1[ ] Single 2[ ] Married 3[ ] Divorced 4[ ] widowed

5. Family size: [ ] Male [ ] Female [ ] Total

6. Educational level of the respondent --------------------------------------------------------

7. Position of respondent in the business (√): 1[ ] Owner- manager 2[ ] Spouse of owner

3[ ] Employed manager 4[ ] Daughter of the owner 5[ ] Son of the owner 6[ ] Relative
to the owner 7[ ] other (specify) -----------

8. How long have you been operating the business? ------------------------- Years

9. Did you trade alone or in partnership? (√); 1[ ] Alone 2[ ] Partnership 3[ ] other

(specify) --------------

10. If partnership, how many are you in the joint venture? --------------------------- Persons
11. Total number of peoples employed in your business:

Male Female Total

147
 Family member

Non family
member

total

12. Do you participate in camel (Livestock’s) trading year round? (√); 1[ ] Yes 2[ ] No

13. If your answer to Q.12 is yes, at what period of the year do you participate? (√): 1[ ]
When purchase price becomes low 2[ ] during high supply 3[ ] other (specify)
---------------------

14. Do you practice trading other than Camel (Livestock’s)? (√): 1[ ] Yes 2[ ] No

15. If your answer to Q.14 is yes, what? --------------------------------------------------------

16. Number of market days in a week? __________________

17. What was the amount of your initial working capital when you start this Camel trade
business? Birr. --------------

18. What is the amount of your current working capital? Birr---------------------------------------

19. What is your source of working capital? (√); 1[ ] Own 2[ ] Loan 3[ ] Gift 4[ ]
Share
5[ ] others (specify) ------------

20. If it was loan, from whom did you borrow? (√); 1[ ] Relative/family 2[ ] Private money
lenders 3[ ] NGO (specify) 4[ ] Friend 5[ ] other traders 6[ ] Micro finance
institution 7[ ] Bank 8[ ] others ---------------

21. How much was the rate of interest? ____ % for formal & --------------- % for informal.

148
22. What was the reason behind the loan? (√): 1[ ] to extend Camel trading 2[ ] to
purchase camel transporting vehicles/animals 3[ ] others (specify) --------------

23. How was the repayment schedule? (√): 1[ ] Monthly 2[ ] Quarterly 3[ ] Semi-
annually
4[ ] When you get money 5[ ] others (specify) ---------------

24. Is there change in accessing finance for Camel trade these days? (√): 1[ ] Improved 2[
] Deteriorated 3[ ] No change

25. What mode of transportation did you use? Give in percentage ---------------------------------

26. Do you carry out any physical treatment to maintain product quality? (√): 1[ ] Yes 2[
] No

27. If your answer to Q.27 is yes, mention; ---------------------------------------------------------

28. Asset owned; ------------------------------------------------------------------------

29. Are there entry barriers in Camel trading? (√): 1[ ] Yes 2[ ] No

30. If your answer to Q.30 is yes, what are the reasons? (√): 1[ ] Capital 2[ ] Information
collusion 3[ ] Administrative problems 4[ ] Stiff competition with unlicensed traders 5[
] High monopoly with prior control of farmers 6[ ] other (specify) ------------------
31. Linkage with commercial value chain actors: (√) (Multiple response is possible): 1[ ]
Farmers (Pastoralist) 2[ ] Retailers 3[ ] Whole sellers 4[ ] Consumers 5[ ] Local
collectors 6[ ] Brokers 7[ ] others (specify) _______

B. Purchase practice
1. From which market and supplier did you buy Camels (Livestock’s)? (*Multiple market
area is possible, ** Multiple answers are possible and write the codes in correspondence to
the market area and other answers should be written in accordance)
1[ ] Herders 2[ ] Retailers 3[ ] Wholesaler 4[ ] Collectors 5[ ] Cooperatives
149
6[ ] Brokers 7[ ] Unknowns 8[ ] others (specify) -------------------------------------

2. From which market do you prefer to buy most of the time? -----------------------------------

3. Why do you prefer this market? (√): 1[ ] Better quality 2[ ] High supply 3[ ] Shortest
distance 4[ ] others (specify)

4. Are all your purchasing centers accessible to vehicles? 1[ ] Yes 2[ ] No

5. If your answer to Q.4 is No, what proportions are accessible? -------------------- % .

6. How do you measure your purchase? (√): 1[ ] live weighing (kg) 2[ ] by necked eye 3[ ]
others (specify) ___

7. Who sets the purchase price? (√): 1[ ] myself 2[ ] Set by demand and supply 3[ ]
Sellers 4[ ] other (specify)

8. Who purchase Camel (Livestock’s) for you? (√): 1[ ] myself 2[ ] Broker 3[ ]

Commission agent 4[ ] Family members 5[ ] Friends 6[ ] others (specify) ________

9. How do you attract suppliers? (√): 1[ ] Giving better price 2[ ] by visiting them 3[ ]
Fair scaling /weighing 4[ ] Extending credit 5[ ] Using brokers 6[ ] Advertising using
influential peoples 7[ ] other (specify) -----------

10. Do you consider quality requirement of your customers in purchasing activities? 1[ ] Yes
2[ ] No

11. If your answer to Q.10 is Yes, what quality requirement do you consider for; Camel
(Livestock’s) ---------------------------

12. What was your source of information about quality requirement of your customers?
----------------------------------

150
13. Which are the months of the year when Camel prices are lowest?
---------------------------------------------------------------------------------------

14. Which are the months of the year when Camel prices are highest?
--------------------------------------------------------

15. Is your purchasing price higher than your competitors? (√): 1[ ] Yes 2[ ] No

16. If your answer to Q.15 is yes, what was the reason? (√) (Multiple answers are possible);
1[ ] to attract suppliers 2[ ] to buy more quantity 3[ ] to kick competitors 4[ ] to get
better quality 5[ ] others (specify) ---------------------

17. How many regular suppliers do you have? Herders ________, Collectors _______,
Processors _____, Wholesalers ________, Retailers _________, others (specify) ----------------------

18. Have you ever stopped purchasing due to lack of fund? (√): 1[ ] Yes 2[ ] No

19. If your answer to Q.18 is Yes, for how long? Please specify ----------------------
20. Is obtaining sufficient volume a problem? (√): 1[ ] Yes 2[ ] No

21. Have you ever stopped purchasing due to lack of supply? (√): 1[ ] Yes 2[ ] No

22. If your answer to Q.21 is Yes, for how long? Please specify ----------------------

C. Selling Practices
1. How did you sale your camel (Livestock’s)? (√): 1[ ] Direct to the purchaser 2[ ] through
broker 3[ ] other (specify) ---------------

2. When did you get the money after sale? (√): 1[ ] As soon as you sold 2[ ] after some
hours 3[ ] on the other day after sale 4[ ] other (specify) _________

3. What do you do, if the camel (Livestock’s) is not sold on time? (√): 1[ ] Took back home
2[ ] Took to another market 3[ ] Sold it at lower price 4[ ] Sold on other market day

151
4. When did you sell? (Give proportion in percentage): 1[ ] Stock and sell when price rises
2[ ] Sell as soon the purchase 3[ ] Sell in pieces as buyers comes 4[ ] Sale before
purchase 5[ ] other categories (specify) -------------

5. How did you attract your buyers? (√): 1[ ] by giving better price relative to others 2[ ] by
visiting them 3[ ] by using brokers 4[ ] by fair scaling 5[ ] Advertising 6[ ] others
(specify) -------------------------

6. How many regular buyers do you have?

Wholesalers_____, Consumers_______, Processors ______, Assembler _____, Retailers
_____, Exporters _________, others (specify) _________

7. Do you know the market prices in different markets (on farm, village market and other
areas) before you sold your Camel (Livestock’s)? (√): 1[ ] Yes 2[ ] No

8. What is your source of information? _______________________________

9. What percent of the total camel (Livestock’s) is sold on local/woreda market? -----------%

10. What percent of the total camel (Livestock’s) is sold to domestic market (Chifra, or
Ayssaita)? ------------- %

11. What percent of the total camel (Livestock’s) was exported? ------------%

12. Who sets selling price? (√): 1[ ] myself 2[ ] Set by demand and supply 3[ ] Buyers 4[
] other (specify)

13. Are there charges (taxes) imposed by government or community officials at the market?
(√): 1[ ] Yes 2[ ] No

14. If your answer to Q.13 is yes, what are they and what is the basis of payment?

Types of taxes Amount Bases of Rate of payment

152
 (birr) payment (birr)
By Weighting
Per head
Simply on daily bases
Per track bases
Based on purchased value of
products
Based on sales value of products
Others (specify) _____

15. Do you want to expand Camel (Livestock’s) trading? (√): 1[ ] Yes 2[ ] No

16. If your answer to Q.15 is yes, why? -----------------------------------------------------------

17. If your answer to Q.15 is No, why? -----------------------------------------------------------

18. Are there problems on Camel (Livestock’s) marketing? (√): 1[ ] Yes 2[ ] No

19. If your answer to Q.18 is yes, what are the problems?

Problems
Camel Ox/Calf Cow Sheep Goat Bee’s Others
hive
Credit
Price setting
Supply shortage
Storage problem
Lack of demand
Information flow
Quality problem
Government policy
Telephone cost
Lack of government support to

153
 improve Camel (Livestock’s)
marketing
Others (specify)

20. What do you think are the causes of the problems? 1[ ] Yes 2[ ] No

D. Marketing Services
1. Is Camel (Livestock’s) trading in your locality needs a trading licensed? (√): 1[ ] Yes 2[
] No

2. If your answer to Q.1 is yes, how do you see the procedure to get the license? (√): 1[ ]
Complicated 2[ ] Easy

3. Did you have Camel (Livestock’s) trade license? (√): 1[ ] Yes 2[ ] No

4. If you do not have specific Camel (Livestock’s) trading license what is your joint trading
license? (√):1[ ] Grain 2[ ] General 3[ ] Consumers supply license 4[ ] other (specify)
----------

5. How much did you pay for Camel (Livestock’s) trade license for the beginning? _____birr

6. How much is the yearly renewal payment? ________birr

7. Are you restricted by Woreda or administrative boundary to operate? (√): 1[ ] Yes 2[ ]

No

8. Are there restrictions imposed on unlicensed Camel (Livestock’s) traders? (√): 1[ ] Yes
2[ ] No

9. Did you use barracked (shade area) for Camel (Livestock’s) before you sold? (√): 1[ ]
Yes 2[ ] No

10. If your answer to Q.9 is yes, for how long did you use barracked (shade area) for Camel
(Livestock’s) in the store?

154
 Camel Others
Ox/Calf Cow Sheep Goat Bee’shiev (specify
Maximum
hrs/days

11. Are you organized in any of the following organization? (*Multiple responses is possible)
Organization If yes, what is Benefits Option for
1. Yes the name of the (write codes)* benefit
2. No organization?

Social
association 1. Accesses to credit
(iqub, idir etc) 2. Encourage to save
3. Facilitate joint marketing
4. Got market information
5. Coordinate purchase and sale
6. Credibility
7. No benefit
8. Others (specify)

Market cooperative
Trade association

III. Camel Consumers Interview Schedule

Section III. Consumers Interview Schedule

A. General Information
1. Name …………………… Zone: ----------------- Woreda: ------------------ Kebele: ___________
Village: __________

155
2. Age of the respondent: [_______] years

3. Sex of the respondent (√): 1[ ] Male 2[ ] Female

4. Education level of the respondent (√): 1[ ] No formal education 2[ ] 6 th grade or less

3[ ] 7th to 12th grade 4[ ] Certificate 5[ ] Diploma 6[ ] Degree

5. Marital status (√): 1[ ] Married 2[ ] Unmarried 3[ ] Divorce 4[ ] Widowed

6. Distance to nearest town: [______] OR [______] hrs walk

7. What is your major means of income generation? 1[ ] Farming 2[ ] Trade 3[ ]

Employment 4[ ] others (specify) _____

8. How much do you earn per year (estimate based on weekly, monthly income):______Birr

9. Is Camel (Livestock’s) consumed in your family? 1[ ] Yes 2[ ] No

10. Experience in Camel (Livestock’s) products consumption? _____ Years

11. Do you fatten and consume or purchase? 1[ ] Purchase 2[ ] Fatten

12. If you purchase, what is the proportion of your income used for purchase of Camel
(Livestock’s)?

13. If no consumption of Camel (Livestock’s), why? ________________________

B. Demand for the Camel (Livestock’s) products

1. What type of Livestock’s purchased for consumption? Please respond to the following
questions. (*Multiple responses is possible)
1= Camel 2= Ox/Calf 3= Cow 4= Sheep 5= Goat 6= Bee’shiev 7=
Others(specify) -----------

156
2. Do you consider any quality requirements to purchase Camel (Livestock’s)? 1[ ] Yes
2[ ] No

3. If your answer to Q.2 is yes, what quality requirement do you consider for; Camel,
Ox/Calf, Cow, Sheep, Goat, Bee’s hive, others (specify) ---------------------------

4. What are the constraints hindering consumption of Camel (Livestock’s)? Rank horizontally
(1= most severe, 2= second severe and etc)

Livesto Supply Incom Lack High Poor Lack of Perishabil Others

ck Shorta e of price produc market ity (specif
type ge shorta stora of t informati y)
ge ge at produ handli on
home ct ng

Came
l
Ox/
Calf
Cow
Sheep
Goat
Bee’s
hive
Other
s

5. Do you know the benefits of consuming Camel (Livestock’s) product? 1[ ] Yes 2[ ]

No

6. Do you think there is problem with consumption of Camel (Livestock’s) product? 1[ ]

Yes 2[ ] No

157
7. What should be done to increase Camel (Livestock’s) product consumption?
--------------------------------------------

158