Analysis of fruit and vegetable market chains in Alamata, Southern Zone of Tigray: the case of onion, tomato and papaya

Abstract

The study was initiated with the objectives of analyzing fruit and vegetable marketing chains in Alamata District, southern zone of Tigray. Specifically the study attempts to assess structure-conduct-performance of fruit and vegetable marketing, analyze market supply determinants, and analyze the institutional support services of extension, input supply and credit. The study also analyzes profitability of fruit and vegetable production and marketing and identifies problems and opportunities in fruit and vegetable production and marketing. Data came from 140 horticulture producing households, 9 horticulture wholesale and 30 retailers. Cobb Douglas (logarithmic function) econometric estimation procedure was employed to identify factors that determine onion, tomato and papaya market supply of the farm households in the area. The net profit obtained by the different market chain actors is indicated as follows. From simple calculation, on the average, a producer profited 11,293.09ETB from onion, 8,823.02ETB from tomato, and 11,432.93ETB from papaya per hectare production (assuming an average price of 1.79 ETB, 0.99 ETB and 2.19ETB per kg prices, respectively). On top of these assemblers, wholesalers and retailers profitability from the aforementioned crops were 35.49 ETB from onion, 24.24 ETB from tomato and 16.80 ETB from papaya for assembles per quintal. Wholesalers and retailers also obtain a profit of 47.80 ETB from onion, 34.30 ETB from tomato and 41.60 ETB from papaya and 30.04 ETB from onion, 24.33 ETB from tomato and 16.50 ETB from papaya, respectively per quintal (assuming an average price of 3.71 ETB for onion, 2.89 ETB for tomato and 3.56 ETB for papaya per kg at retile level). However, this potential benefit is under challenges of imperfect marketing. The market conduct is characterized by unethical practices of cheating and information collusion that led to uncompetitive market behavior even though the calculated concentration ratio did not indicate oligoposony market behavior (24.56%). Therefore some corrective measures are required by the government as well as institutions like cooperatives. Among the different variables that were hypothesized as determining factors for volume of marketable supply the econometric result showed that, number of oxen owned and age of household head for onion while only number of oxen owned for tomato and quantity produced for papaya were significant. All had the expected sign as prior expected. According to the survey result an estimated volume of annual production of 3,552.50 Qt of onion 1,377 Qt of tomato and 255.33 Qt of papaya have been produced. The estimated marketed proportion according to the respondents was 98.99 percent of onion, 99.16 percent of tomato and 84.87 percent of papaya. The Alamata office of Agriculture and Rural Development is the main extension support giving institution. Three development agents are deployed in each Tabaias with the help of whom 1.42 percent of respondents got weekly extension service, 0 .71 percent have got extension service in two weeks, 0 .71 percent have got extension service any time required, 8.57 percent have got extension service with no regular program and the remaining 88.57 percent of respondents reported no extension contact at all. This weak extension support and limited seed supply system largely hinders production and productivity of the crops under study. On top of this, limited accessibility of chemicals, fertilizer and credit within the district are anther key constraints of production and marketing of the stud crops. Therefore it is essential to take some improvement measures by the government as well as private sectors.