Professional Documents
Culture Documents
ARIS UNVIRERSTY
BY:
CHAIMISO DEMISSE
ADIVISOR:
January, 2018
ARIS, ETHIOPIA
ACRONYM
ACRONYM.................................................................................................................................................i
TABLE LIST..............................................................................................................................................iv
1. INTRODUCTION...............................................................................................................................2
6 APPENDEX...........................................................................................................................................20
TABLE LIST
Table 1; duration of time table plan ………………………………
Table 2 personal cost………………………………………………
Table 3 stationary cost……………………………………………..
Table 4 budget summery…………………………………………...
1. INTRODUCTION
Cereals are the most important food crops of the world and they provide the world with a
majority of its food calories and about half its protein. They are staple foods in the diets of most
population. In the year 2011, 2352.9 million metric tons of cereals were produced globally from
658.5 million hectares of land with an average productivity of 30.83 quintals per hectares (FAO,
2011). According to FAO (2O11), the world cereal production in the year 2011, was increased
by more than 5% from previous year production. In the same year, Africa’s contribution to the
world output was 6.35% (about 133.1 million tons).
In Ethiopia, Cereal production and marketing is the means of livelihood for millions of
smallholder households and it constitutes the single largest sub-sector in economy. Cereal
accounts for roughly 60% of rural employment, 80% of total cultivated land, more than 40% of a
typical household’s food expenditure, and more than 60% of total caloric intake. The
contribution of cereals to national income is also large. According to available estimates, cereal
production represents about 30% of gross domestic product (GDP). This calculation follows
from the fact that agriculture is 48% of the nation’s GDP (World Bank, 2007), and that cereals’
contribute to agricultural GDP is 65% (Diao et al, 2007)
In the country, cereals are also the major stable food crops taking a significant share of area
cultivated and volume of production obtained. Out of the total grain crop area, 79.69% (8.7
million hectares) was covered by cereals.
Barley (Hordeum vulgare L.) is an annual cereal crop, which belongs to the tribe Triticeae of
family Poaceae (Harlan, 1976; Martin et al., 2006). It is a diploid (2n=14) plant with high degree
of self-fertilization.
Barley is the most widely grown crop over broad environmental conditions. It has persisted as a
major cereal crop through many centuries and it is the world’s fourth important cereal crop after
wheat maize and rice (Martin et al., 2006). Barley has a long history of cultivation in Ethiopia
and it is reported to have coincided with the beginning of plow culture (Zemede, 2000). It is the
most important crop with total area coverage of 1,129,112 hectares and total annual production
of about 1.7 million tons in main season (CSA, 2010). Barley is also a principal Belg season crop
second to maize in area coverage and production (Birhanu et al., 2005; CSA, 2008). In the
highland of the country barley can be grown in Oromia, Amhara, Tigray Regional States and part
of SNNP in the altitude range of 1500 and 3500 m, but it is predominantly cultivated between
2000 and 3000 masl (Berhane et al., 1996). Under extreme marginal conditions of drought, frost
and poor soil fertility, barely is the most dependable cereal and is cultivated on highly degraded
mountain slopes better than other cereal crops in the highland of Ethiopia (Ceccarelli et al.,
1999). As barley is early harvested crop, it is popular hunger breaker or relief crop during season
of food shortage in some parts of the country (Baye and Berhane, 2006).
In Ethiopia, barley types are predominantly categorized as food and malting barley based on
their uses while the highest proportion of barley production area is allocated for food barley.
Food barley is principally cultivated in the highland where the highest consumption in the form
of various traditional foods and local beverages from different barley types (Zemede, 2000).
Ceccarelli et al. (1999) also indicated that barley grain accounts for over 60% of food for the
highland in Ethiopia, for which it is the main source of calories. According to Birhanu et al.
(2005) barley is used in diversity of recipes and deep rooted in the culture of people’s diets.
Besides its grain value, barley straw is an indispensable component of animal feed especially
during the dry season in the highland where feed shortage is prevalent (Girma et al., 1996).
Barley straw is also used in the construction of traditional huts and grain stores as thatching or as
a mud plaster, as well as for use as bedding in the rural area (Zemede, 2000).
After wheat, teff and maize, barley (Hordeum vulgare L.) is the most important small grain in
Ethiopia.
It is mainly used for consumption, production of malt (which is used for brewing of beer), animal
feed and pearl barley. A very small part of the Ethiopian barley crop is generally less suitable for
malting purposes and as such is used for human consumption. On average the annual commercial
production in Ethiopia is about 220 000 tons while the local consumption requirements for barley
are around 265 987 ton per year (CSA, 2010).
Barley contains about 75% carbohydrate, 9% protein and 2% fat. In energy terms, each gram
provides about 3.3 calories. Barley grain is rich in zinc (up to 50 PPM), iron (up to 60 ppm) and
soluble fibers, and has a higher content of Vitamins A and E than other major cereals.
During the last decade there has been increasing interest in barley to improve human health,
mainly in industrialized countries and major urban areas of developing countries. This is
boosting barley food-products and consumer interest in such products. The effectiveness of
barley beta-glucans in lowering blood cholesterol and barley’s low glycemic index in diets for
people with Type II diabetes is widely accepted. Barley is a rich source of tools, which are
known to be capable of reducing serum LDL cholesterol through their antioxidant action.
Barley bran flour accelerates gastrointestinal transit time, and is therefore said to reduce the
incidence of colon cancer. In North and East Africa, producing and marketing such processed
foods is becoming a common source of income for women (USDA, 2012).
Even if Ethiopia produce high amount barely yield in the world there are gaps in value chain
analyzed map. Therefore the main objective of this study is to fulfill gap in production,
productivity and marketing problems of several barley farmers in the steady area, through
Cognizant of these facts, the objective of this review will be Barley production and consumption
in the country; Marketing channels of barley; participants in the barley value chain and its map;
Opportunities and constraints of barley value chain in steady area.
Research questions
This research is designed in order to answer the following research questions.
1. What are the malt barely value chain actors and who is more benefiting from malt barely
value chain?
2. What are the existing market channels on malt barely value chain?
3. What are major constraints and opportunities in the value chain activities of malt barleys
production in the study area?
A value chain describes all the activities, functions, roles and organisations involved in the
production, delivery and consumption of products from raw materials to final consumption
and back again through reverse flows (Hastings et al., 2016). Colloquially, this system is
often described as ‘farm gate to plate’, or ‘beef to burger’, simple descriptors for what are
dynamic and complex systems (Hearnshaw and Wilson, 2013).
Dagevos and Ophem (2013) offer a helpful four-way classification of value (which they term
Food Consumption Value – FCV) that incorporates a view of consumer sentiment aligned with
the consumer centric view of value chains outlined in the previous section. These four views are
1. Product value –This adopts the traditional view of product attributes and characteristics
important to the consumer.
2. Process value – This focuses on the processes and practices used within the value chain
to produce the product.
3. Location value – This includes the point of purchase or consumption value but may
include value placed on how products get to the point of sale including the operational
activities of the supply chain.
4. Emotive value – This includes the consumer’s emotive response to consumption as well
as the brand/product story and any associated post-consumption moral/ethical
reinforcement or dissonance.
Value chain analysis (VCA) can be a useful tool as a firm seeks to achieve competitive
advantage. It describes the roles of the different actors involved in the production and trade of a
commodity, and the costs, benefits, opportunities and/or constraints accrued/faced by each actor;
and it also describes the relationships between these different actors in the chain. A value chain
is a way of conceptualizing the activities that are needed in order to provide a product or service
to a customer. It depicts the way a product gains value (and costs) as it moves along the path of
design, production, marketing, delivery, and service to the customer.( Value Chain Analysis and
Competitive Advantage Prescott C. Ensign 2012)
However, value chains can also be seen as a vehicle by which new forms of production,
technologies, logistics, labor processes and organizational relations and networks are introduced.
(Jacques H.Trienekens, 2011)
Value chain actors: The chain of actors who directly deal with the products, i.e. produce,
process, trade and own them.
Value chain supporters: The services provided by various actors who never directly deal with
the product, but whose services add value to the product.
Barely Value Chain encompasses the full range of activities and services required to bring the
produce from farm to sale in local, national, or international markets. The value chain includes
input suppliers, producers, market actors, and buyers. (Khalid, eta. 2014)
Market performance can be evaluated by analyzing the costs and margins of marketing agents in
different channels. A commonly used measure of system performance is the marketing
margin or price spread. Margin or spread can be a useful descriptive statistics if it used
to show how the consumer’s food price is divided among participants at different levels
of marketing system
Marketing margin; is percentage of final weighted average selling price taken by each stage of
marketing chain. It is a commonly used measure of the performance of a marketing
system (Abbott and Makeham, 1981). It is defined as the difference between the price the
consumer pays and the price that is obtained by producers, or as the price of a collection of
marketing services, which is the outcome of the demand for and supply of such services
(Cramers and Jensen, 1982 and William and Robinson, 1990; Holt, 1993).
Total marketing margin is the difference between what a consumer pays and what a producer
receives for the product. In other words it is the difference between retail price and arm gate
price (Cramer and Jensen, 1982). Marketing margin in an imperfect market is likely to be
higher than that in a competitive market because of the expected abnormal profit. But
marketing margins can also be high, even in competitive market due to high real marketing costs
(Wolday, 1994).
Supply chains are concerned with what it costs and how best we can utilize our capacity
profitably. The main objectives of supply chain management are to maximize capacity utilization
and the focus is on pie-sharing, capacity and profit optimization, maintaining status-quo.(Worku
Tessema and Yemisrach Getachew,2012
2.1.5 Value Chain Actors
1. Production actors the actors whose roles are directly associated to basic
agricultural production, starting from input provision, for elaborating the market chain’s
product(s). This category can comprise pre-production, production, harvest, or extractive
activities.
2. Post-harvest and processing: the actors whose roles are directly linked to post
harvest management (cleaning, sorting, and packaging) or processing of primary
goods into value added products.
3. Trading actors: the actors whose tasks are connected to the buying and selling
of the market chain’s product(s).
4. Provider of business development services: include individual actors, organizations, or
companies that offer business development services to the market chain.
Producer
It is principal link in the marketing chain of agricultural products. The producer produces the
products and supply to the next agent. From the movement he/she decides what to produce, how
to produce, how much to produce, when to produce, and where to sale.
Wholesalers
Wholesalers obtain large quantities of products from producers, store them, and break them
down into cases and other smaller units more convenient for retailers to buy, a process called
“breaking bulk.” Wholesalers get their name from the fact that they resell goods “whole” to
other companies without transforming the goods.
Brokers, or agents;
They don’t purchase the products they sell (take title to them). Their role is limited to negotiating
sales contracts for producers.
Retailers
Retailers buy products from wholesalers, agents, or distributors and then sell them to
consumers. Retailers vary by the types of products they sell, their sizes, the prices they
charge, the level of service they provide consumers, and the convenience or speed they offer.
Consumer
It is the last link in the marketing chain. The participants and their respective functions often
overlap. The widest spread combinations are: traders- wholesalers that collect the commodity
and supply it to retailers, wholesalers-retailers (wholesalers that also sell directly to
consumers and wholesalers- exporters).
Study by Ayelech (2011) on fruits market chain analysis reported that the small scaling
deduction, quoting of lower prices, lack of market information and deficiency in capital and
credit availability are the major problems in the study area.
A study by Abel (2011) on farmers‟ involvement on value added produce finds out several
issues limiting the exploitation and maximization of value-added products. Some of them are
growers sold all their produce, and therefore did not see a clear need to become involved in
adding value to the remaining produce, lack of resources preventing them from adding value to
their foods, the lack of physical facilities to process food, the absence of financial means,
sanitary and other requirements are currently impeding many farm operators to fully optimize or
maximize their food production. And suggested that the involvement of government to assist
different growers to become beneficiary from their produces.
A study by Aoudji et al (2012) on teak poles value chain, the study employed cost accounting
and gross profit analysis method for the study and pointed out that the value-added on the chain
was positive and farmer who grow teak pole has increased their wealth. In addition to this the
study also finds out that transportation was the main issue for the value chain efficiency.
Chuong (2011) have conducted a study on value chain of white leg shrimp exported to the U.S
market. The researcher tried to identify the activities conducted by different actors in the value
chain and the corresponding costs and earning of those activities, evaluation of the distribution of
revenue, cost and profit and determining factors that protect shrimp farmers from dealing directly
with processing firms. He analyzed the date through profitability analysis. The result of the
findings showed that before shrimp exported to the U.S market, they have undergone the
farming, procurement, and processing. Concerning the distribution of costs, revenue and profit
along the chain, the result showed that distribution was in sync with expectations and the
research also revealed three basic reasons why farmers dependent on middlemen including lack
of facilities, delayed payment policy and risk aversion
A study by Ferdous et al (2012) on fish marketing and value chain reveals that the value chain of
fish is long and very complex and the lack of good road and transport networks with the landing
(assembling) centers deprives fishery to get fair price. In addition to this, middlemen in the fish
marketing chain bear the most cost of marketing while retailers enjoy the lion’s share of the
profit. Farmers receive relatively higher share (approximately 70%) of the retail value for all
species under study.
In addition a study made by Juhani (2012) who conducted study on value chain analysis of
potato in Tanzania with the objectives of examining the value chain of potatoes, factors that
prevent the industry’s development and in addition evaluating agricultural policies affecting
potato and presenting production and marketing chain in comparison with other crops. The result
revealed that the government does not affect much to neither the operation nor the development
of the chain and also confirmed that there are no straight policy barriers that are hampering the
conditions of smallholders. Regarding the problems, the result revealed that bad seed quality is
the major challenge followed by difficulty of getting loans and lack of investments in case of
production and poor road network being the biggest infrastructural issue in potato production.
Thus, poor seed quality, low access to loans
Value chain study conducted on mango by Dendenaet al. (2009) indicated that the subsector
faces some challenges. Among others: highly disorganized and fragmented industry with weak
value chain linkages, long and inefficient supply chains, inadequate information flows and lack
of appropriate production are explained as the major problems. The study recommended
institutional innovation to reduce the above challenges.
From these reviewed literatures severe production seasonality, seasonal price fluctuations,
transportation, lack of stable seed supply system, lack of market information, weak extension
support, poor pre-and post-harvest handling, prevalence of pest and diseases, lack of storage are
some of the critical problems encountered agricultural commodities production in Ethiopia.
Value chain study conducted on barley value chain by Rashid et al. (2014) indicated that there
are production and productivity, determinants of quantity supplied and some value chain aspects
of barley.
Value chain study conducted on malt barley value chain by Samuel Welde etal.(2017) indicated
that there are literacy of household head, family size, land allocated for malt barely; farming
experience, oxen ownership, access to improved seed, access to credit service, productivity of
wheat and agricultural input cost are important determinants of malt barley producers’ market
orientation. Therefore, policy aiming at improving farmers’ access to credit, access to improved
seed, cooperative performances and strengthening actors’ linkage can enhance the development
of malt barley value chain and farmers’ market orientation.
3. RESEARCH METHODOLOGY
The study will be employed both primary and secondary data source. Primary data will be
collected from by personal interview, and by using semi structured questioners. The secondary
data will be through review published and unpublished book, annual reports, governmental
document and other written like research paper. So, both methods will be relevant for obtaining
data from farmers, development agent and administrative bodies, institution, traders and end
consumers.
A researcher will be used both Probability and non-probability sampling techniques to delineate
the study population and draw household respondents. 1 st the researcher will select woreda from
Aris zone by judgment sampling techniques. Totally in tiyo woreda there are 35 kebeles from
those kebeles the researcher will select 2 kebeles by using Judgment (purposive) sampling. The
reason for using this sampling method was that the shortage of time and resource.
In those kebeles there are 13, 802 populations in numbers from those 750 HH are target
population (barely value chain actors). The researcher will applied systematic sampling method
to select 73 respondents by using Solvent formula. The reason to select this method was because
to spread evenly over the entire population. It is also an easier and less costly method of
sampling and can be conveniently used even in case of large populations.
N; is target population,
From those respondents the researcher will take Marly barely producer, trader (collectors,
wholesalers & retailers), processors and end consumers with proportional to total target
populations in a study area.
NO ACTIVITIES 2 0 1 0 E C
M O N T H
NOVE DECEBE JANUR FEBRUR MARC APPRI MAY JU
R Y Y H L N
1 Title selection X X
5 Data analysis X
6 Research writing X X
7 Research X
submission
8 Research X
presentation
4.2. BUDGET PLAN
8 Telephone No. - - 50
Subtotal 1277
5. REFERENCE
AnjaFaße, Ulrike Grote, Etti Winter 2010 value Chain Analysis Methodologies in the Context of
Environment and Trade Research Discussion Paper No. 429
AyelechTadesse, 2011. Market chain analysis of fruits for Gomma woreda, Jimma zone, Oromia
National Regional State.M.Sc thesis presented to School of Graduate Studies, Haramaya
University.p110.
CSA (2010). Central Statistics Authority Report on Area and Production of Crops. Statistical
Bulletin of Agricultural Sample Survey, Volume IV, No. 446, Addis Ababa, Ethiopia.
CSA. June 2008. Agricultural Sample Survey 2007/2008 (2000 E.C.): Volume I - Report on
Area and Production Crops (Private Peasant Holdings, Meher Season). Statistical
Bulletin 417. Addis Ababa:
DendenaGetachew, EfremLema and Lema Belay, 2009.Fresh mango value chain analysis in
Arbaminch area. Organization of value chain competency. Addis Ababa, Ethiopia.
Jonathan Mitchell, etal. (2009) Trading Up: How a Value Chain Approach Can Benefit the
Rural poor. COPLA Global: Overseas Development Institute, 111 Westminster Bridge
Road, London SE1 7JD, UK
Samuel Welde etal.(2017 malt barely value chain analysis Journal of Economics and Sustainable
Development ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online) Vol.8, No.13, 2017
6 APPENDEX
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