Smallholder Potato Producers Market Orientation The Case of Tiyo District Arsi Zone Oromia Ethiopia
Smallholder Potato Producers Market Orientation The Case of Tiyo District Arsi Zone Oromia Ethiopia
To cite this article: Samuel Weldeyohanis Kifle, SisayYefru Derbe, Zegeye Tirfe Mamo, Diriba
Shiferaw Geleta, Samuel Mezemir Yimenu, Bezawit Seifu Woldegiorgis, Dekeba Moges Tola,
Anis Dzankovic & Bernd Müller (2024) Smallholder potato producers’ market orientation: the
case of Tiyo district, Arsi zone, Oromia, Ethiopia, Cogent Food & Agriculture, 10:1, 2325712,
DOI: 10.1080/23311932.2024.2325712
potato production that plays an important role in capital affect market orientation of smallholder farm-
improving food security, increased agricultural reve- ers in Ethiopia. Abera also stated that, farm size and
nues and poverty reduction, generating cash income land slope, number of oxen owned and membership
for smallholder producers (Hirpa et al., 2010; Tesfaye, in extension package program were the major fac-
2016; Wubet et al., 2022). Kolech et al. (2015) indi- tors affecting smallholder′s market orientation
cated that, Potato is considered as a ‘hunger break- significantly.
ing crop’ because it can be grown and harvested Kassaw et al. (2021) showed that commercial
when cereals don’t mature for consumption other farms in Ethiopia are used to grow vegetables over a
crops fail; hence Potato holds great promise for considerable land area for years. According to
improving the livelihoods of millions of smallholder Ethiopian Central Statistical Agency (2021) report,
farmers in the highlands of Ethiopia. the area under Potato production from the total
Despite, Ethiopia has a worthy potential in the grain area was below 0.64% which is nearly 0.64%
production of vegetables; the aim of production is implying that, out of the total land area under culti-
mainly for subsistence, with less market-oriented vation in Ethiopia, land allocated for Potato produc-
activities, and with very weak market linkage- tion is insignificant as compared to other crops at
production (Regasa Megerssa et al., 2020). Potato the national level. Therefore, there is a strong need
production and marketing is constrained by differ- to estimate the factors that affect market orientation
ent production and marketing constraints including among smallholder potato producers in Ethiopia in
lack of wide adaptive improved potato varieties, general and in the study area in particular.
unavailability of improved storage facilities, the high Market orientation has taken its own place in mar-
cost of improved seed tuber, inappropriate agro- keting thinking and business operations of manufac-
nomic practices, low price of produced tuber espe- turing firms. Market orientation of farmers is the
cially immediately during harvest and lack of ultimate result of agricultural commercialization. It
marketing and suitable post-harvest management requires access to emerging high-income agricultural
facilities, pests and disease, low upgrading strategies markets for buying input and selling output (Osmani
to the commodity, Lack of market information pro- & Hossain, 2016). Market orientation is a production
viding institutions, absence of road service, and philosophy which focuses on consumers’ taste, pref-
weak market linkages among market chain actors erences and satisfaction as its basic production and
(Milkias & Keba, 2021; Tesfaye, 2016). Gebremedhin marketing objectives. This is a situation where the
(2013) also identified that; potato production is con- production is aimed at satisfying dispersed popula-
strained by; lack of high yielding varieties tolerant to tion instead of just the household doing the produc-
late blight, poor soil fertility, climatic limitation, tion. Examining the trend of market orientation is a
inadequate seeds, and lack of appropriate cultural method of accessing the smallholder farmers‟ partic-
practices, poor post-harvest management & storage ipation in the output market so that the objective of
problems, and high cost of farm inputs, diseases small-holders’ agricultural commercialization and
and insect pests; and hence these resulted in low market orientation can be justified.
yields of potato. Tefera (2014) on determinants of haricot bean
According to Demeke and Haji (2014), farmers in market orientation stated that, household head edu-
Ethiopia are challenged on subsistence food produc- cation level, access to credit and land per capita pos-
tion and traditional activities that did not fully itively influenced chickpea market orientation while
employ available land and labor, and hence it is being male head of a household and accesses to
contributed for low market orientation in land allo- credit increased the predicted value of haricot bean
cation. According to Gugerty and Schneider (2010), market orientation. Gebremedhin and Jaleta (2012)
market oriented production allows smallholder pro- studies on Market Orientation and Market
ducers to increase their income by producing prod- Participation of Smallholders in Ethiopia and found
ucts from land and labor and using the income that, Household size, labor supply of household,
generated from sales to purchase goods for con- ownership of equine, involvement in Extension the
sumption. However, researches regarding market ori- previous year, rainfall, and altitude, are significant
entation in Ethiopia were mainly focused on cereals correlates with market Orientation. They specified
and pulse crops. that, the market orientation index of the crop in the
According to Gebremedhin and Jaleta (2012) study area was 0.29 and the farmers were found at
household subsistence requirements, market access moderate level of market orientation in the study
and production factors including land, labor and area in Ethiopia. Moreover, Kemisola et al. Study on
Cogent Food & Agriculture 3
on the resource they allocate for Potato since market used followed by Tegengn (2013). Marketing mar-
orientation is also the decision farmers in resource gin was calculated by taking the difference between
(land) allocation for production of a crop Potato producers and retail prices. This can be
(Gebremedhin & Jaleta, 2012). When crops are grown calculated mathematically as, the ratio of produc-
for dual purpose both for commercial and consump- ers’ price to consumers’ price and can be
tion due to proportion of land operated by a farmer, expressed as,
farmers have different market orientation index
depending on their resource allocation (land, labor producers ‘ price Marketingmargin
proucers ‘ share = = 1− (5)
and capital) for the commodity they produce. Based consumers‘ price consumers ‘ price
on the proportion of total amount sold to total pro-
duction at farming system level, a crop specific mar- Gross Marketing margin (GMM):- According to
ketability index (α k) was computed for Potato Mendoza (1995), ‘marketing margins’ should be
produced at farmer level system as follows. understood as the gross marketing margins. He
advises marketing researchers to emphasize on gross
grossvalue of Potato soldbyindividualfarmer / year
CMIi = (2) marketing margins in reporting their findings and
Total valueof Potato produced by individual farmer considered in this study.
3.1.2. Market performance analysis along the From higher NMM or profit of the marketing inter-
potato marketing chain mediaries reflects reduced downward and unfair
To analyze marketing performance of the actors income distribution, which depresses market partici-
involved in Potato market chain, similar steps was pation of smallholders.
Cogent Food & Agriculture 5
3.2. Econometric analysis the farmers in land allocation to produce such crops
during the production of 2021/2022 respectively.
3.2.1. Determinants of smallholder potato
Hence, to analyses market orientation of small-holder
producers’ market orientation
Potato producers, we calculated the market orienta-
The dependent variable analyzed in this paper is
tion index for each sampled household heads during
market orientation index of small holder Potato pro-
the study based on the resource they allocate for
ducers. The econometric model used depends on the
Potato production separately since market orienta-
nature of the dependent variable. For the determi-
tion is also the decision farmers in resource (land)
nants of household market orientation, we use ordi-
allocation for production of a crop.
nary least squares (OLS) model by following
Furthermore, to analyze the benefit share (market-
Gebremedhin and Jaleta (2012). This was because
ing margin) of the major actors along the market
the dependent variable (market orientation index) is
chain of Potato marketing, we used market perfor-
continuous as well as all the producers were involved
mance analysis method and were measured through
both in production and marketing of Potato and had
the price differences of sales prices and average
an index greater than zero. Therefore, multiple
costs of commodity at each stage of the market
regression model was applicable for analysis using
chain to describe economic fitness of major actors
the producers’ market orientation index as depen-
across the chain. We also assessed the marketing
dent variables and indicated below.
challenges faced by small-holder Potato producers
by ranking the problem.
Yi =β 0 + β i X i + ε i(10)
Where Yi = Market orientation index for ith farmer, 4.1. Demographic characteristics of the
β 0 = constantterm, βi = estimated parameters, Xi = the respondents in the study area
explanatory variables influencing market orientation Demographic factors: As it was shown on Table 2
of ith farmer. In our study the explanatory variables above, the demographic factors describe the age of
used includes; sex of the household head, education the household head, sex of the household head,
status of the respondents, family size of the respon- family size in the household and farming Experience
dent, farm size of potato, distance to the nearest of the farmers in the study area. Accordingly, about
market, crop marketability index, livestock excluding 73.68% of the sample households were male headed
oxen and equines, cooperative membership, access to while the rest 26.32% were female headed house-
improved seed and access to extension service. holds where as their average age, average family
size, average farming Experience were 43.41 years,
5.84 person and 13.94 years respectively.
4. Result and discussion Human capital: Education of the household is
In our research we used three stages sampling tech- included under human capital and it influence pro-
niques to select representative Potato producers duction and productivity of producers through adop-
from Arsi Zone, Oromia, Ethiopia. Firstly, one district tion of newly introduced technologies and
namely, Tiyo districts was selected purposively based innovations. The survey result reveled that about
on their production potential. Secondly, a total of 5 83.73% of them were literates and received formal
kebeles (small administrative) were selected ran- education while the rest 16.27% were illiterate.
domly, and finally, a total of 209 sample respondents Hence, literate producers are expected to be in a
were selected randomly using Yamane (1967) sample better position to get and use information which
size determination formula. contributes to improve their farming practices and
In our study we used kobo tool-box to collect the market orientation in production of Potato in the
data from our respondents, and then we transform study area.
the data to STATA version 14. We also analyzed the
data using statistical tools like frequency tables, and
4.2. Potato production and supply in the study
percentages to describe socio- economic characteris-
area
tics of producers.
We used indexes like crop marketability index and Table 3 above shows Potato production, supply and
market ordination index to analyses the degree of consumption level in the study area. Accordingly, the
marketability of the crops and market orientation of mean value of total land owned by producers were
6 S. WELDEYOHANIS KIFLE ET AL.
Table 1. Sample size of producers from selected areas. supplied to the market to different marketing actors
Name of Total including collectors, wholesalers and consumers by
No kebeles producers Proportions Sample
sample households. Furthermore, from the total
1 Dosha 113 0.258 54
2 Oda_Dawata 78 0.178 37 potato which was produced by sample households,
3 Denkaka_ 90 0.205 43 about 5.28% (1088 quintals) was wasted during har-
Konicha
4 Burka_Chilalo 88 0.201 42
vesting, transporting and marketing while 3.28%
5 Hora_Bilalo 69 0.158 33 (709.75 quintals) was used for house consumption
Total 438 1.00 209 and the rest 16% is left or stored for seed for the
Source: Survey result, 2022.
next production year.
is 29.63% whereas about 16.75% of the respondents As it is shown on Table 5 above, sex of the
were found in the higher category which is above household head and family size were considered
0.5 while majority of the respondents which are as demographic factors contribute to factors
about 43.06% were found in the medium category. affecting farmers’ market orientation in potato pro-
However, the degree of marketability of Potato duction at the study area. Accordingly, about
showed that, about 69.24% of the crop is sold on 26.32% of the sample households were female
average which shows that the crop was important headed while majority of them (73.68%) were male
market orientated crops, even though farmers do not headed households where as the average family
allocate more of their land to this crop in the study size, and average age of the sample household
area, and also the level of crop marketability index were 5.84 person per household and 43.41 years
indicated that about 81.82% of the respondents were on average.
categorized under higher level of marketability index Resource endowment especially availability of
which is above 0.5 while 16.27% of them categorized land for crop production is one of the most import-
under medium level of crop marketability index. ant factors that influence crop production. Land is
Thus, the farmers have moderate level of market ori- the basic asset of the sample farmers in the study
entation in land allocation for Potato production. area. Land is the most and basic assets for farmers in
This result is in line with the study conducted by the study area. The survey revealed that the average
Gebremedhin and Jaleta (2012) who specified that, farm size of sampled households were found 1.78
the market orientation index of the crop in the study hectares whereas the land allocated for potato pro-
area was 0.29 and the farmers were found at moder- duction were 0.63 hectare per a farmer which implies
ate level of market orientation in the study area. from the total land owned by farmers, 35% of the
land is used potato production. Hence, the farmers
at the study area are moderately market ordinated in
4.4. Descriptive analysis of variables used in the
potato production. This aligns with previous research
model (N = 209)
conducted in Ethiopia in 2020, which found that
Table 5 below illustrates the variables used in the smallholder farmers typically owned less than 2 hect-
model and discussed as follows. The independent ares of land for agricultural purposes (Desta, 2020).
variables used to assess the determents of market Furthermore, the allocation of 0.63 hectares for
orientation for smallholder potato producers in the potato production is consistent with a study from
study area are classified in to demographic factors 2021, which highlighted the importance of potato as
(gender and family size), human capital (educational a cash crop for smallholder farmers in the region
status), institutional support serves (access improved (Tadesse, 2021).
seed, access to extension service and distance to the Moreover, the study area is characterized by own-
nearest market), physical assets (land allocated for ership of livestock resources which are useful in the
potato farming and livestock ownership excluding livelihoods of the rural communities. Even though
oxen and equines), social capital (cooperative mem- the holding size varied, all the sampled respondents
bership) and other related factors (crop marketabil- had owned 8.49 livestocks excluding oxen and
ity index) which were decided by the researcher to equines on average by the total sample households
be a factor for market orientation of potato in the study area. Livestock are kept for various eco-
producers. nomic and social reasons in which major economic
8 S. WELDEYOHANIS KIFLE ET AL.
Table 5. Descriptive statistics of variables used in the model The extension services contribute to the realiza-
(N = 209). tion of market orientation objective among small-
Continuous Total sample holder potato farmers in the study area. The survey
Variable Units Mean (N)
result showed that 59.81% the sample respondents
Age of the Years 43.41 209
respondents had access to extension service where the office of
Family size of the Number 5.84 209 agriculture and rural development through its
respondent
Farm size of Hectare 0.63 209 development agents is the major provider of this
potato extension service and advisory service on potato
Distance to the Km 25.79 209
nearest market
production and management practices in the study
Livestock excluding Number 8.49 209 area, however about 40.19% of the respondents did
oxen and not get such agricultural advisor service in the
equines
Dummy variables Response Freq. % Total sample study area. Previous research in Ethiopia has also
(N) identified the importance of extension services in
Sex of the Female 55 26.32 209 promoting market orientation among smallholder
household head Male 154 73.68
Cooperative No 147 70.33 209 farmers. A study by Asfaw et al. found that access
membership Yes 62 29.67 to extension services had a positive impact on
Access to No 84 40.19 209
extension Yes 125 59.81 farmers’ market participation and income from agri-
service cultural activities. Similarly, another study by
Source: Authors computation from survey result of 2022 Tomato Gebreegziabher et al. highlighted the role of exten-
project.
sion services in improving smallholder farmers’
access to market information and enhancing their
reasons include provision or supply of draught market orientation. Moreover, Distance from pro-
power, generation of cash income, food and energy. ducer’s house to nearest market was also the factor
Hence, availability of livestock excluding oxen and which determines smallholder potato producer’s
equines turns away the smallholder farmers to invest market orientation in production. The survey result
more of their land for livestock production than showed that, the average distance needed for pro-
potato production which may decrease their market ducers to travel to nearest market place took an
orientation in producing such crop for the market average of 25.79 kilometres. A study by Minten
(see Table 5). et al. found that distance to markets significantly
Furthermore, membership of the cooperatives affects farmers’ marketing decisions and their ability
is one of the social capital in which the producers to access markets for their agricultural produce.
where participated or involved for getting differ- Similarly, research by Tadesse et al. (2019) revealed
ent benefits. Cooperatives improve understanding that reducing the distance to markets through infra-
of members about market and strengthen the structure improvements can positively impact small-
relationship among the members. In this study, holder farmers’ market orientation and ultimately
from the total respondents, only 29.67% of them improve their livelihoods.
were members of farmer′s primary cooperatives as
a means of saving and to get guarantee during
4.5. Econometric analysis
their emergency period or urgent cash needs in
the study area while majority of them (70.33%) 4.5.1. Determinants of smallholder potato
were not members of farmer primary coopera- producers’ market orientation
tives. A recent study by Gashaw et al. (2020) con- To examine determinants of market orientation of
ducted in rural Ethiopia found that farmers who smallholder potato producers in the study area, a
were members of cooperatives had better access total of eight (8) explanatory (independent) variables
to agricultural inputs, improved market informa- were used in the OLS model. The model F-tests
tion, and higher incomes compared to applying appropriate degrees of freedom indicate
non-members. In the study area, absence of being that the overall goodness of fit of the OLS model is
a member of farmers’ cooperatives, respondent statistically significant at 1% level of significance
loss the opportunities from fast input delivery, fair (Table 5). This shows that the independent variables
farm gate output price, easy access to credit and included in the OLS model regression explain the
some of bargaining power in the study area (see market orientation determinants of small holder
Table 5). potato producers in the study area.
Cogent Food & Agriculture 9
Table 6. OLS estimation results for determinants of market orientation in the study area i.e. (β = −0.0091;
orientation. p = 0.087). A unit increase in family size decreases the
Explanatory Robust market orientation of smallholder potato producers
variable Coef std. err t p>|t|
by 0.91%. This result is in line with Gebremedhin and
Sex of the −0.0073 .0269 −0.27 0.788
respondents Jaleta (2010) who indicated that, large household
Age of the (−0.0029)*** .0010 −2.98 0.003 sizes diminish households from market orientation
respondents
Family size per (−0.0091)* .0053 −1.72 0.087 due to its effect on increasing household domestic
household consumption requirements; and it is also in line with
Distance to the −0.0014 .0017 −0.79 0.431
nearest market
the findings of Abate et al. (2020) who stated that as
Access to 0.0248 .0255 0.97 0.332 the family size increased by one adult equivalent, the
extension probability of being market oriented would be
service
Cooperative (0.0668)** .0308 2.17 0.031 decreased by 14.53% remaining other factors con-
membership stant. Cooperative membership has significant and
Potato farm size (0.2522)*** .0271 9.30 0.000
Livestock excluding (−0.0039)** .0016 −2.49 0.014 positive effect in inducing market orientation for
oxen and Potato smallholder farmers. The results of OLS esti-
equines
Constant term 0.3571 0.0622 5.73 0.000 mation show that membership of cooperative which
Source: Authors calculation from Survey result of 2022 of Tomato proj- is any of agricultural cooperatives is correlated sig-
ect. Obs. = 209, F(8,200) = 11.97, Prob. > F = 0.0000, R-squared = nificantly and positively with the smallholder potato
0.3274, Root MSE = 0.17973. Note: ***, ** and * indicate 1%,5% and
10% significance levels, respectively. producer’s market orientation in the study area at
5% level of significance where β = 0.0668; p = 0.031
The coefficient of multiple determinations (R2) indicating that smallholder farmers’ market orienta-
was found to be 0.3274 indicating that explanatory tion is increased by 6.68%, if they are member
variables had a significant influence on market orien- farmers’ cooperative in potato production. This result
tation in Tiyo district. This indicated that, 32.74% of is in line with Onubuogu and Onyeneke who found
the variation in market orientation of smallholder that membership to cooperative societies which is a
potato producers is explained by the explanatory social capital had a positive coefficient with market
variables. Regarding relationship of the variables with orientation of root and tuber crop production indi-
the market orientation of potato producers; member- cating that root and tuber crop farmers that are
ship of the cooperative and farm size allocated for members of cooperative societies had higher market
potato production affects smallholder potato produc- orientation than their counterparts who are not
er’s market orientation positively whereas age of the members of cooperative societies. Moreover, the
respondents, family size of the households, and live- result of OLS estimation found that, there is a strong
stock ownership excluding oxen and equines had significant and positive relationship between farm
negative relationship with smallholder potato pro- size of potato and market orientation in the study
ducers’ market orientation. Thus, using the above area at 1% level of significance i.e. (β = 0.2522;
mentioned explanatory variables, we regressed the p = 0.000). This indicates that if farmers’ farm size is
average market orientation index of the respondents increased by one hectare, farmers’ market orientation
using OLS estimation method to identify the factors will be increased by 0.2546 at 1% significance level,
affecting farmers’ market orientation in potato pro- at 1% significance level. This implies that, a unit
duction in the study area (see Table 6). increase in potato farm size increases smallholders’
According the results shown in Table 6, Age of the market orientation 25.22%. The fact might be that
household head affects the farmers’ market orienta- farm households with large farm size could allocate
tion in potato production negatively in the study their land for Potato production giving them better
area at 1% level of significance. It is found that there position to participate in the output market. This
is a significant and negative relationship between study is in line with Abate et al. (2020) who found
family size and market orientation in the study area that, the larger land size for wheat production led to
i.e. (β = −0.0029; p = 0.003), which indicated that as the farmers more likely to be a market oriented in
the farmer′s age increases by one year, their market wheat production which led farmers to supply more
orientation decreases by 0.29%. Family size of the and produce based on market signals in Ethiopia.
household has negative relationship with smallholder Furthermore, the result revealed that ownership of
tomato producers’ market orientation in the study livestock excluding oxen and equines affects the
area. It is found that there is a significant and nega- smallholder potato producer’s market orientation
tive relationship between family size and market negatively at 1% level of significance at the study
10 S. WELDEYOHANIS KIFLE ET AL.
area implying that a unit increase in livestock exclud- processors directly. Based on the survey result, about
ing oxen and equines decreases the farmers’ market 8 channels were identified for each of potato pro-
orientation by 0.39%. This is because, as the number duces in the study area. These includes, producers to
of animals increases (excluding oxen and equines), consumers, producers to collectors, producers to
the probability of market orientation towards market wholesalers, producers to processors, producers to
oriented crop production is expected to decrease consumers and collectors, producers to collectors
since the alternative income as well as food could be and wholesalers, producers to consumers and whole-
found from animals. This result also in line with salers, producers to collectors and wholesalers, and
Tegengn (2013) who found that, farmers who have a producer to consumers, collectors and wholesalers
number of livestock were specializing in livestock (see Table 7).
production so that they allocated large share of their From the total 13,452 quintal produced by sample
land for pasture. respondents in the study area (Tiyo district, see Table
1), about 9508 quintal of potato were supplied by
209 farmers to different buyers of Potato. This indi-
4.6. Potato market channels of the study area
cates that from the total produced a single farmer
Table 7 above shows alternative marketing channels supply about 45.49 quintals to the market on aver-
for potato produce by sample producers in the study age. Furthermore, as it was shown on the Table 6
areas. As the starting point for the distribution of above; the main buyers of Potato from producers
Potato from the producer to final consumer, respon- were wholesalers, consumers, collectors, and proces-
dents were asked where they were selling their pro- sors with an estimated percentage of 49.7% (5028
duce/commodity what they have produced during quintal), 7.7% (318 quintal), 2.4% (266 quintal), and
the production year (see Table 6). According to the 1% (105 quintal) respectively. Nearly 50% of the pro-
respondents’ result, majority of them (49.8%) sell ducers prefer selling their produce to wholesalers.
their produce to wholesaler followed by consumer This is due to the fact that wholesalers pay price
(7.7%), collector (2.4%), and processors (1%) respec- above the producers’ average selling price (966.87
tively. Furthermore, they also sell their produce to birr per quintal) in the study area and, the bulk of
different market channels at the same time. the produce is sold to the wholesalers followed by
Accordingly, 26.3% of the respondents sell their pro- consumers.
duce to consumer and wholesaler, about 4.31% of Furthermore, farmers were in charge of selling
them sell their produce to consumer and collectors their produce to different buyers as the same time.
whereas 6.22% and 8.90% of them sell their produce Accordingly, the survey result showed that, about
to consumer, collector and wholesaler market chan- 26.3% (2599 quintal) of Potato was sold to consum-
nels at the same time respectively (Table 6). ers and collectors, about 4.3% (133 quintal) of the
Furthermore, marketing of potato includes differ- Potato produced was sold to consumers and whole-
ent marketing channels or the producers sold their saler, about 2.39% (386 quintal) was sold to Collectors
produce to consumers, collectors, wholesales and and wholesalers, and about 6.2% (673 quintal) of the
Cogent Food & Agriculture 11
produce was sold to three potato marketing actors middlemen involved in the chain, wholesalers have
namely Consumers, collectors & wholesalers at the the largest share of Gross marketing margin followed
same production year. by collectors and that of retailors with gross market
margin (GMM) of 26.67%, 18.02%, and 13.33%
respectively. Regarding share of profit of actors or
4.7. Market performance analysis along potato
net market margin (NMM) of market chain actors
market chain
along potato market chain wholesalers are highly
In this study, to analyze marketing performance or positioned while retailors are poorly positioned i.e.,
marketing margin of the actors along the potato the share of profit of wholesalers was found to be
marketing chain, first we collected the purchase and 12% whereas that of collectors and retailors got a
selling price of potato marketing actors including profit of 8.24% and 4.21% respectively along the
collectors, wholesalers and retailers; and then we marketing chain. These results also aligns with the
also collected the marketing cost incurred in market- findings of study conducted by Alemu and Haji,
ing activity with potato marketing from each actors; which found that a significant portion of the market
finally the gross marketing margins of collectors, margin in potato value chains in Ethiopia goes to
wholesalers and retailers were computed using traders and middlemen. This indicates that the mar-
Equation (6) or Equation (8) while the share of pro- ket power is concentrated in the hands of these
ducers was computed using Equation (5). The total intermediaries, potentially leading to reduced returns
gross market margin (TGMM) of middlemen which is for producers.
the sum of the gross marketing margins of collec- Table 9 above presents Potato marketing con-
tors, wholesalers and retailers was computed using straints affecting the marketing activity of potato
Equation (7) whereas the gross marketing margin of producers in the study area. In this study, sampled
producers (GMMP) was computed using Equation (5) farmers were asked about the presence and types of
which is the difference of 100% and TGMM, and marketing problems. The types of marketing prob-
finally the net marketing margin or profit of actors lems they faced were reported as from the most to
was computed using Equation (9) respectively as it the least problematic factor was observed.
was shown on Table 7. Accordingly, lack of fair sale price due to brokers
According to the survey result, the total cost (21.53%), lack of market information (16.75%), low
incurred by retailors was higher (36.7%) followed by price of the product (15.31%), lack of market (13.88%),
wholesalers (30.9%) and collectors (20.9%) respec- Perishability of the product (13.88%), poor linkage
tively whereas the total cost incurred by farmers was with other value chain actors (9.57%), lack of storage
found to be the least of all (11.5%) during the survey facility (5.74%), and lack of transportation facility
year. The market margin is used to show distribution (3.35%) were subsequent marketing problems or
of the various actors’ share as potato produce move challenges of farmer or Potato producers in the study
from smallholder farmers to different market chain area at Tiyo district (Table 8). Recent studies in
actors and was calculated by subtracting the pur- Ethiopia have also identified similar marketing con-
chase price from sale price of the commodity in per- straints affecting potato producers. In a study con-
centage. Recent studies in Ethiopia have also shown ducted by Abro et al. (2020) in the Amhara Region of
comparable findings in terms of the distribution of Ethiopia, lack of fair sale price due to intermediaries,
costs and market margins along the potato market lack of market information, and low price of the
chain. According to a study by Gebrehiwot et al., product were identified as major constraints affect-
retailors and wholesalers incurred higher costs com- ing potato producers. The study also found that poor
pared to farmers, similar to the survey result. This linkage with other value chain actors and lack of
demonstrates the consistent trend of higher costs storage and transportation facilities contributed to
being borne by downstream market actors, ulti- the marketing challenges faced by potato producers
mately impacting the profitability of smallholder in the region. Similarly, another study by Tadesse
farmers. et al. (2019) in the Tigray Region of Ethiopia found
Accordingly, the market performance analysis of that lack of market access, low prices, and poor mar-
Potato along the market chain showed that, about ket information were key constraints affecting potato
58% of the total gross marketing margin (TGMM) is producers. Additionally, perishability of the product
goes to the traders or middlemen while the rest 42% and inadequate storage and transportation facilities
is goes to producers according to the computed were also identified as significant challenges in mar-
result. The findings of this study revealed that, from keting potatoes.
12 S. WELDEYOHANIS KIFLE ET AL.
4.8. Limitations of this study market orientation among the producers suggesting
that tomato is an important component of the
Some potential limitations of the study:
household cash source at the study area.
The unfamiliarity of data collectors with the data
The econometrics result showed that age of the
collection tool (Kobo Toolbox) takes long time during
household head, family sise in the household, and
interviewing the respondents. Furthermore, the geo-
ownership of livestock excluding oxen and equines
graphical distance posed logistical challenges for
affects smallholder potato producès market orientation
data collectors; weather-related challenges during
significantly and negatively. Hence, intervening these
data collection which is the rainy season during data
variables enhance the farmers’ orientation in the study
collection restricted access to remote areas.
area. Moreover, land size allocated for Potato produc-
tion and membership of the cooperative, affects mar-
5. Conclusion and recommendation ket orientation of smallholder Potato producers
significantly and positively; hence, promoting these
5.1. Conclusion
factors increases farmers’ market orientation in resource
The present study examines the market orientation allocation for Potato production, and increases the
determinants, and marketing performance of small- farmers’ bargaining power in the study area.
holder Potato producers in Tiyo district, Ethiopia. The Smallholder potato producers of the study area
calculation of household market orientation index have four main potato marketing channels namely;
reveald that farmers allocate about 29.63% of their consumers, collectors, wholesalers and processors
cultivable land for potato production indicating that where larger amount (49.8%) of Potato were sold to
farmers in the study area are nearly moderately mar- wholesaler whereas the least value (1%) of the potato
ket orientated in potato production. The crop mar- is sold to processors. Hence, even though producers
ketability index showed that 69.24% of Potato have different marketing channels, they prefer to sell
produced is supplied to the market indicating that, their produce through to the wholesaler marketing
there is need to focus attention on improving Potato channels due to the higher price.
Cogent Food & Agriculture 13
The market performance analysis revealed that chains in the study area. Therefore, Efforts to
the smaller value of total gross marketing margin strengthen the bargaining power of small-
(42%) is goes to producers while the larger value holder farmers and improve their access to
(58%) is goes to the traders indicating that there is markets should be prioritized to ensure a more
higher price difference among Potato producers and equitable distribution of benefits along the
traders in the study area where producers receive value chain.
lower profit. • Generally, policies focusing on reducing illegal
Generally, our findings points out that; lack of fair brokers, increasing farmers’ awareness to allocate
sale price due to brokers, lack of market information, more cultivable land, reducing the price differ-
low price of the product, lack of market, Perishability ence among producers and traders, enhancing
of the product, poor linkage with other value chain farmers to join agricultural cooperatives, strength-
actors, lack of storage facility, and lack of transporta- ening market linkages among the marketing par-
tion facility were subsequent marketing problems or ticipants should be implemented to improve
challenges faced by smallholder Potato producers in smallholder tomato producers’ market orientation
the study area which are prevalent issues that need and marketing performance to the study area in
to be addressed in order to improve the marketing particular and at the country level in general.
activity of potato producers.
Based on the findings of the research the following • Value chain analysis of potato and the enabling
recommendations are forwarded. environment to diversify its production and
value addition
• Increasing the size of land may not be an alter- • Determinants of smallholder potato producers
native for market orientation of potato produc- market channel choice decision in Ethiopia
tion since land is a limited and fixed resource.
Therefore, implementing process upgrading
Acknowledgements
strategy by government and non-government
organization as well as private enterprises The TOMATO project team, represented by the dedicated
through promoting and provision of improved members from Arsi University and Weihenstephan-Triesdorf
University of Applied Sciences, wholeheartedly acknowl-
technology packages and better practices would
edges the German Academic Exchange Service (DAAD)
increase the productivity of potato production for its pivotal role in enabling the realization of the
which can be increase the farmers’ market orien- TOMATO project. The financial support provided by the
tation in potato production. esteemed DAAD Award has been instrumental in driving
• Family size in the house was found to be signifi- the success of this initiative, for which we are profoundly
grateful.
cantly and negatively affecting market orienta-
We extend our sincere appreciation to Weihenstephan-
tion of smallholder potato producers’ market Triesdorf University of Applied Sciences, Germany, and Arsi
orientation. Hence, promoting family planning University, Ethiopia, for their invaluable contributions and
among the farmers will increase their market ori- unwavering support in facilitating the practical implemen-
entation in Potato production in the study area. tation of the TOMATO project.
• Strengthening functions of farmer’s cooperatives, Furthermore, we express our gratitude to all those who
have collaborated with us, as their dedication has played
increasing market linkages among potato
an integral part in driving the synergy of this and related
market chain actors, improving farmers bargain- ventures.
ing power by supporting farmer’s cooperatives
and improving the information dissemination
about different marketing aspects of potato pro- Disclosure statement
duce should be done at marketing stage by all No potential conflict of interest was reported by the
responsible bodies to reduce the marketing con- author(s).
straints in the study area.
• The findings of market performance emphasize
the need for interventions and policies to Funding
address the unequal distribution of costs and This work was supported by the Deutscher Akademischer
market margins in along the potato market Austauschdienst.
14 S. WELDEYOHANIS KIFLE ET AL.
About the authors of Plant Sciences. He has played a vital role in the potato
project, a collaborative effort between Arsi University and
Samuel Weldayohanis Kifle is an academic Germany’s Weihenstephen University of Applied Sciences,
and researcher at Arsi University College funded by DAAD. He has also made significant contribu-
of Agriculture and Environmental Science, tions to entrepreneurship and agricultural development
and he has been a valued member of the
through his involvement as a trainer in the GIZ project for
institution’s Department of Agribusiness
development. Furthermore, he has been actively engaged
and Value Chain Management Since 2017.
in scholarly activities, serving as an Associate Editor and
Graduating with an MSc degree in
Reviewer for Arsi University Journal of Sciences and
Agribusiness and Value Chain Management
Innovations (AJSI) and as a reviewer for the Ethiopian
from Jima University and a BSc degree from Hawassa
University in 2011, Samuel’s expertise lies in conducting Academy of Sciences (EAS). He is a member of the
research on value chain analysis, market orientation, and Ethiopian Horticulture and Coffee Sciences Societies, and
factors influencing market supply in Ethiopia, with a focus his expertise extends to community services and research
on crops such as coffee malt barley, Potato and Tomato. projects both within Ethiopia and internationally.
His research interests extend to value chain finance, mar- Samuel Mezemir Yimenu has a Ph.D. in Food Biotechnology
ket development, price integration, Agricultural entrepre- from the University of Science and Technology (UST),
neurial development and others. Since 2021 he was a South Korea, and is currently an Assistant Professor from
member of the TOMATO project, funded by DAAD, and he
March 2019–present at the Department of Food Science
contributes to innovative research initiatives. Additionally,
and Postharvest Technology, Arsi University, Ethiopia.
his dedication to entrepreneurship is demonstrated by his
Previously, Head of the Department (April–June, 2014) at
training as a Trainer at the Ethiopian Entrepreneurship
Adama Science and Technology University, Ethiopia. Dr.
Development Institute since 2023.
Samuel has published over 12 peer-reviewed journal arti-
SisayYefru Derbe is professionally an Agricultural Economist, cles, 6 scientific papers and 5 poster presentations, and is
and serving as a lecturer and researcher in the department serving as reviewer of different Journals. Besides, he is
of agricultural economics at college of agriculture and serving as UIL and Consultancy Coordinator. Team member
environmental sciences, Arsi University. He holds his MSc in DAAD project ‘TOMATO-project-2021–2024’, Chairperson
and BSc degree in Agricultural Economics from Haramaya of Postgraduate Committee (since 2021), and research eth-
University and has a long years of academic and research ical committee (since 2019). Samuel has consulted LVIA–on
experience both at Adama Science and Technology the performance evaluation of different prototypes of pho-
University and Arsi University. Moreover, he served as a tovoltaic cell-assisted solar dryers’, on storage and process-
Coordinator of University-industry Linkage in Arsi University ing of fresh vegetables and fruits (January–March, 2022).
for over four years. Currently, he is offering courses for
His research areas include sustainable food systems, tradi-
undergraduate students enrolled at Arsi University and also
tional foods bioprocessing and commercialization, food
engaged in different research and community service
safety, quality, and shelf-life management, Time-Temperature
activities with Arsi University as well as with partner uni-
monitoring techniques and prediction modeling.
versities both from in country and international. In addi-
tion, he is currently in charge of coordinating TOMATO Bezayit Seifu Woldegiorgis is a Lecturer and researcher at
Project which is funded by DAAD since 2021. Furthermore, the Food Science and Post-Harvest Technology department
he was certified by UNDP –UNCTAD for EMPERTEC in Arsi University. She has worked in teaching, research
(Entrepreneurship) Training of Trainers (TOT). and consultancy for more than eight (8) years. Her research
Zegeye Tirfe Mamo is an assistant professor of Agricultural interest is on postharvest technology and value addition of
Economics at department of Agricultural Economics, School agricultural commodities.
of Agriculture and environmental Science, Arsi University, Dekeba Moges Tola (Ph.D. candidate) is a senior lecturer of
Ethiopia. He has enough experience in teaching and
Food Science and Technology in Arsi University. As his own
research. His research interests are topics related to
research activities, he was and is working in different
Agricultural Economics such as Economic efficiency, Food
research activities including: post-harvest loss reduction
Insecurity, Food Quality and Safety, Agricultural Policy,
through cost effective postharvest technologies, process
Rural Land planning and Marketing, and Agribusiness Value
optimization for diverse and balanced nutrients food prod-
Chain Management. This paper focused on smallholder
farmers, so its finding has an important role as a reference ucts, and currently working on exploring underutilized
for related research projects that will be conducted some- crops toward food and nutrition security as his PhD
where else. research work. As a group, he is working on Harnessing of
efficient vegetable and fruit production, processing and
Diriba Shiferaw Geleta (Ph.D., Associate Professor of marketing systems of which our current Article is part of it,
Horticulture) is an academic with a strong focus on agricul- and Performance Evaluation of different solar drier technol-
tural education and research. Currently serving as an ogies for adding value to vegetables and expanding mar-
Associate Professor at Arsi University’s College of Agriculture ket opportunity.
and Environmental Science, he previously held the position
of Vice Dean for Academic Affairs at the same institution. Anis Dzankovic has master’s degree Agriculture, Agriculture
With expertise in Horticulture, he has actively contributed Operations, and Related Sciences. He is a member of
to the improvement of education quality in the Department Tomato project at Germany.
Cogent Food & Agriculture 15
Bernd Müller (Ph.D.) has been the deputy head of the Gebremedhin, W. (2013). Potato variety development strate-
International School since February 2021. In this role, he gies and methodologies in Ethiopia [Paper presentation].
focuses on the establishment and implementation of fur- Seed potato tuber production and dissemination:
ther education programmes. In a team with nine col- Experiences, challenges, and prospects. Proceeding of
leagues, he manages research and exchange projects with the National Workshop on Seed Potato Tuber Production
partner universities in Africa and Southeast Asia. He is also and Dissemination (pp. 45–59).
responsible for lectures in the study programmes on agri- Gugerty, M. K., & Schneider, K. (2010). The impact of
culture and international agricultural management at the export-driven cash crops on smallholder households.
Weihenstephan-Triesdorf University of Applied Sciences https://doi.org/10.21955/gatesopenres.1116269.1
(HSWT). His research focus is on food supply chain man- Hirpa, A., Meuwissen, M. P., Tesfaye, A., Lommen, W. J.,
agement. Before joining HSWT in 2018, he finalised his Oude Lansink, A., Tsegaye, A., & Struik, P. C. (2010).
doctoral thesis on agricultural policy at the University of Analysis of seed potato systems in Ethiopia. American
Gießen and managed two agricultural farms in southern Journal of Potato Research, 87(6), 537–552. https://doi.
Germany. He also worked as a managing director and advi- org/10.1007/s12230-010-9164-1
sor on organic farming for an organic growers’ association Kassaw, H. M., Berhanie, Z., & Alemayehu, G. (2021).
in Germany. Determinants of farm level market supply of tomatoes
in Fogera district, in Amhara Region, Ethiopia. Ethiopian
Journal of Science and Technology, 14(2), 155–170. https://
ORCID doi.org/10.4314/ejst.v14i2.5
Kolech, S. A., Halseth, D., De Jong, W., Perry, K., Wolfe, D.,
Samuel Weldeyohanis Kifle http://orcid. Tiruneh, F. M., & Schulz, S. (2015). Potato variety
org/0000-0002-1500-5037 diversity, determinants and implications for potato
breeding strategy in Ethiopia. American Journal of Potato
Research, 92(5), 551–566. https://doi.org/10.1007/
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