DEBRE TABOR UNIVERSITY

FACULITY OF AGRICULTURAL AND

ENVIROMENTAL SCIENCES
DEPARTMENT OF AGRICULTURAL
ECONOMICS
 1. INTRODUCTION
1.1. BACKGROUND
• Global fruit and vegetable production has experienced an outstanding
increase (FAOSD, 2013).
• Demand for horticultural products tends to grow very rapidly with
urbanization and increased income.
• Exports of vegetable products from Ethiopia have increased from
25,300 tons in 2002/03 to 63,140 tons in 2009/10 (EHDA, 2011).
• The marketing of vegetables in Eastern Ethiopia is characterized by
seasonal gluts and shortages which in turn affect the marketing
behavior of producers, traders and consumers (Jema, 2008).
Conti….
• Vegetable as a group of crops from the horticulture category has a
very wide importance both as a source of food and health care.
• On the contrary, the level of consumption is very low for reasons of
unavailability and market imperfection.
• The production of vegetables varies from cultivating a few plants in
the backyards, for home consumption, to large scale production for
the domestic and home markets.
• The productivity of crops is very low compared to the potential yield
obtained in the research centers and on farmer's field technology
verification studies.
2.1.Theoretical reviews
2.1.1. Actors and their Role in Vegetable 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, producers,
traders(collector or aggregator , retailer or broker , wholesaler) and
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.
2.1.2. Status of Vegetable Production in Ethiopia

• Ethiopia has a variety of vegetable crops grown in different agro ecological zones
by small farmers, mainly as a source of income as well as food.
• Vegetables are produced for market and consumption and are important cash
crops in the country.
• According to the result of this study, all sample households are good suppliers of
the vegetables to the market.
• Analysis of factors affecting farm level marketable supply of vegetables was found
to be important to identify factors constraining vegetables supply to market.
• 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.
2.1.3. 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.
• 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.
2.1.4. Performance of vegetables market

• The performance of vegetable market was evaluated by considering

associated costs, returns and marketing margins.
• The methods employed for analysis of performance were channel
comparison and marketing margin.
• The analysis of marketing channels was intended to provide a
systematic knowledge of the flow of goods and services from its origin
of production to final destination (ultimate consumers).
Conti…

• Marketing
• Market efficiency assesses whether profits are too high for different market actors.

• To test market efficiency, we calculate the net marketing margins, i.e., comparing
the difference in prices between two prices, minus marketing costs. Payments to
transporters and market taxes are the highest marketing costs of traders, followed
by loading and unloading, personal travel to markets, labor and storage costs.

• margins