MARKET CHAIN ANALYSIS OF TEFF: THE CASE OF ADOLA REDE WOREDA, GUJI ZONE, OROMIA NATIONAL REGIONAL STATE, ETHIOPIA

Abstract Teff is indigenous to Ethiopia and it is an important crop, for farm income as well as food security to its people which is grown primarily as a cash crop. The study attempted to analyze the market chain of Teff in Adola Rede Woreda with the specific objectives of identifying the major constraints and opportunities in Teff production and supply to market, analyzing the structure-conduct-performance of Teff marketing, and identifying major factors affecting smallholders’ Teff market supply in the study area. Both primary and secondary data were used. The primary data were generated by unstructured questionnaire, key informant interviews and personal observation. Accordingly, the primary data were collected from 121 Teff producers. Multi stages sampling technique was applied to select sample frames. Two types of analysis, namely descriptive and econometric analysis were used for analyzing the data collected from farmers and traders in the study area. Multiple linear regression models were employed to estimate factors affecting supply of Teff. Twelve explanatory variables were hypothesized to affect the household level marketed supply of Teff. Among these hypothesized variables that used determine the supply of Teff, econometric result showed that five variables such as Number of oxen owned by farm households, frequency of extension contact, Education level, Improved Seed and Distance nearest to the market were significantly affected the volume of Teff supplied to the market. The results of the study indicated that, Quantity of Teff passed through different marketing agents from farmers to consumers. The Farmers-Collectors-Retailers-WholesalersProcessors-Consumers channel carried the largest volume, which is 59.58% of the total volume followed by Farmers-Wholesalers-Processors-Consumers channel which carried about 22.06% of the total Teff marketed. Structure of Teff market indicates four-firm Concentration Ratio (CR4), that is, the share of the largest four traders in the total volume of Teff purchased. The four largest traders handled 33.03% of the total volume of purchased Teff. This suggested that the Teff market in Adola Rede Woreda shows a weak oligopolistic market. The major barriers to enter into the market were shortage of capital, and information assymetry. Strengthening the existing moreover, extension system through training in a way to serve grassroots level producers in all aspect is important.