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Analysis of Factors Affecting Potato Farmers' Gross Margin in Central Ethiopia: The Case of Holeta District

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  • Mersha, Mesfin
  • Demeke, Leykun

Abstract

Markets are important for economic growth and sustainable development of a given country, but, emphases in development policies in agrarian countries have usually been placed on increasing agricultural production to serve as a base for rural development. In the absence of well-functioning markets, agricultural production can experience several drawbacks. The title of the study is Analysis of Factors Affecting Potato Farmers’ Marketing Gross Margin in Central Ethiopia: the case of Holeta District. Therefore, the general objective of this study was to examine factors affecting potato farmers' gross margin in the Holeta district and specifically to examine the effects of farmers demographic characteristics, factors of production, institutional factors, production cost and livestock ownership on the potato producing farmers’ gross margin. The research was bound to the production area which is 35 hectares of potato in Welmera, Goro and Arebot Kebeles of Holeta district. The statistical result showed that age, land size (owned and contracted), potato farm land size (owned and contracted), input costs (land preparation, chemicals and harvesting) and livestock ownership, access to irrigation, credit, extension services, potato output and sales revenue had significant outcome on farmers’ gross margin. Moreover, the result from the OLS (Ordinary Least square) regression showed that education level of household head, household size, potato cultivated land size, quantity of potato produced, input cost, livestock ownership and access to market information had expected sign and significantly affect sampled potato farm household gross margin. The study 2 imply the introduction of modern technologies for the efficient use of the irrigation water, controlling disease and pest practices should be promoted to increase production; strengthening efficient and area specific extension systems by giving continuous capacity building trainings and separating extension work from other administrative activities increases potato farmers’ gross margin.

Suggested Citation

  • Mersha, Mesfin & Demeke, Leykun, 2017. "Analysis of Factors Affecting Potato Farmers' Gross Margin in Central Ethiopia: The Case of Holeta District," MPRA Paper 92366, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:92366
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    References listed on IDEAS

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    1. Peter Timmer, 2009. "Rice Price Formation in the Short Run and the Long Run: The Role of Market Structure in Explaining Volatility," Working Papers 172, Center for Global Development.
    2. Pritchard, Norris T., 1969. "A Framework for Analysis of Agricultural Marketing Systems in Developing Countries," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 21(3), pages 1-8, July.
    3. Heytens, Paul J., 1986. "Testing Market Integration," Food Research Institute Studies, Stanford University, Food Research Institute, vol. 20(1), pages 1-18.
    4. Goetz, Stephan J. & Weber, Michael T., 1986. "Fundamentals of Price Analysis in Developing Countries' Food Systems: A Training Manual to Accompany the Microcomputer Software Program 'MSTAT'," Food Security International Development Working Papers 54742, Michigan State University, Department of Agricultural, Food, and Resource Economics.
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    Cited by:

    1. Koblianska, Inna & Seheda, Serhii & Khaietska, Olha & Kalachevska, Larysa & Klochko, Tetiana, 2022. "Determinants of potato producer prices in the peasant-driven market: the Ukrainian case," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 8(3), June.

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    More about this item

    Keywords

    Potato farmers; Gross margin; Holeta District;
    All these keywords.

    JEL classification:

    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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