International Journal of Arts Humanities and Social Sciences Studies

Volume 4 Issue 8 ǁ Sep-Oct. 2019

ISSN: 2582-1601
www.ijahss.com

Value Chain Analysis of Maize: The Case of Dembecha District,

West Gojjam Zone, Ethiopia
Desalegn Wondim 1*, Tewodros Tefera2, Yitna Tesfaye 3
1*
Department of Agribusiness and Value Chain Management, Burie campus, Debre Markos University,
Ethiopia
2
Departments of Agribusiness and Value Chain Management College of Agriculture, Hawassa University,
Ethiopia
3
Department of Agricultural Economics College of Agriculture, Hawassa University, Ethiopia.

Abstract: This research was aimed to analyze maize value chain in Dembecha woreda, North West, Ethiopia.
The district is known in its maize production. However, maize value chain and related opportunities were not
studied yet. Thus, this study attempts to address mapping and identifying maize value chain actors, roles and
linkages, examines marketing channel, cost margin structure and assessing opportunities in the study area.
Data were collected both from primary and secondary sources using appropriate tools. Primary data were
collected from 155 maize producers, 40 maize grain traders, 10 alcohol processors and 20 consumers using
semi-structure questionnaire. Descriptive statistics and value chain approach were employed for data analysis.
Results indicated that cooperatives, producers, collectors, wholesalers, retailers and processors were found to
be core actors in maize value chain in the study area. Marketing performance analysis indicated that twelve
alternative marketing channels were identified to transact 5160.5Qt of maize through intermediaries. The
largest volume of maize (1356Qt) was passed through marketing channel VIII but not necessarily with largest
marketing margin obtained. The result depicted that total marketing margin in the marketing system was 30%
associated with 70% producers’ share of the margin. Costs and benefits were found to be disproportionally
distributed that the highest average profit margin (25.10%) was went to the processors while 15.25% went to
the producers. The whole value chain was governed by traders particularly the wholesalers. Conducive
environment in the study area, fertile land and presence of organized institutions (district agriculture office with
multipurpose farmer’s) cooperatives were the main opportunities for maize production and marketing in the
district.

Key words: Value chain, actors, maize, margin, opportunities

I. Introduction
In Ethiopia agricultural production, cereals account for 65% of the agricultural value added, equivalent to about
30 % of the national GDP. Grain production in Ethiopia is almost entirely based on rain-fed agriculture and is
characterized by a dominant harvest ( meher) in November and December and a secondary harvest (belg) in
April and May and Cereals contributed 87.29% (about 177,613,365.84qt.) of the grain production and maize
alone accounts for (24.5%) of cereals production in the country (CSA, 2011). Increasing its trend of production,
maize comprised 31 percent of total annual cereal production, with only 21 percent of the cereal area cultivated
in Ethiopia (Getachew et al., 2018).

In the world economy, maize is one of the world‟s three dominant crops along with rice and wheat in which the
global maize industry had revenues of US$219.5 billion in 2015/2016 market value. Maize is the most important
staple food crop in Sub-Saharan African countries with few countries on the take-off to export to the
neighborhoods countries (Daly et al., 2017). Ethiopia is the fourth largest maize producing country in Africa,
and the first in East African region and produces non-genetically modified (GMO) white maize, the preferred
type of maize in neighboring markets(FAO, 2015).

Maize is also the most widely produced crop in Ethiopia in terms of numbers of households involved in its
production, the number of hectares planted and volume of quintals produced per hectare. Maize is the leading
cereal crop in Ethiopia in terms of total production and yield per hectare (Tewodros, 2011). According to CSA

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Value Chain Analysis Of Maize: The Case Of Dembecha District, West Gojjam Zone, Ethiopia

(2017), maize, teff, wheat and sorghum made up 27.02 %, 17.29%, 15.63%, and16.36% of the grain
production, respectively and maize production was 36.75qt/ha

In Ethiopia, among the top maize producing zones are: West Gojjam (5.6 million qt.), East Wellega (4.3 million
qt.),Kaffa (3.8 million qt.), East Shewa (3.1 million qt.), West shewa (2.9 million qt.), West Arsi (2.7 million
qt.),Illubabor (2.7 million qt.), East Gojjam (2.2 million qt.), West Wellega (2.1 million qt.), and West
Harerghe(2.1 million qt.) (ATA, 2013-2017). And also Jimma,Awi, and Sidama are also potential areas in the
country (USAID, 2010).

In Ethiopia only two regions, Amhara and Oromia, account about 82 percent of maize production of the country
(Rashid, 2010).

Maize value chain in Ethiopia involves multiple actors, including: input suppliers, producers, traders (local
assemblers and wholesalers), retailers, processors and consumers and there are many actors between the
producers and the consumers all performing various activities at different scales of operation and the finding
reported by IFPRI indicates inefficiencies in maize value chain (IFPRI, 2010).

Currently, the majority of actors in the agricultural value-chain are small and informal, with limited resources,
gaps in funding and technical skills. This imposes extremely high barriers to agricultural growth characterized
by: inefficient scale of activities, high transaction costs, and insufficient information flow from end market to
producer. Input needs of the producers are not satisfied both in terms of volume and coverage and highly
fragmented midstream aggregation and trading impairs the links between farmers and markets as well as
management and governance challenges along the value chain (BMGF, 2010).

II. Statement of the Problem

Among cereals, maize is the staple cereal crop with the highest current and potential yield from available inputs,
at 2.2 tons per hectare in 2008/09 with a potential for 4.7 tons per hectare based on farm field trials, when
cultivated with fertilizer, hybrid seed, and farm management practices. Considering this yield gap and tapping
into latent demand sinks, smallholders could increase their income from approximately USD 60 per hectare
today to USD 350 to USD 450. If yield potentials are realized, maize can also contribute towards improving
food security and reducing land degradation through producing an incremental 1 Million tons on 30 percent less
land, and increasing the aggregate revenue (Rashid et al., 2010).

However, currently the sector of agriculture in Ethiopia face different challenges and constraints like
environmental degradation, recurring drought, low level of utilization of modern agricultural inputs, inadequate
infrastructure and market information services in general and lack of universally acceptable and enforceable
quality standards that reduce transaction costs, weak producers‟ organizations and limited participation in maize
seed production, distribution and marketing of members‟ output, inadequate access to credit facilities by grain
traders are some of constraints particularly for maize(USAID, 2010)

Agro-industry value chain in Ethiopia faces many challenges due to limited market outlets, limited efforts in
market linkage activities and poor market information among actors in the value chain. The small scale,
dispersed and unorganized producers are unlikely to exploit market opportunities, as they cannot attain the
necessary economies of scale and lack of bargaining power in negotiating prices (Abraham, 2013).

Moreover, particularly in the country series of constraints span maize value chain in production, aggregation and
trading, and demand sinks, or the end markets due to various challenges such as lack of a fully functioning
maize market, reflecting a weak industry structure in the country (IFPRI, 2010). Regarding value chain actors,
Bill and Melinda Gates Foundation (BMGF) indicated that, currently all actors in Ethiopia, along the entire
agricultural value chain, from input supply, and distribution, through aggregation of smallholder production and
trading, to downstream processing and export needed to be supported by identifying their particular problems
through value chain analysis (BMGF, 2010).

In Ethiopia, agricultural commodity prioritization for agro industrial development is important for the sector
development. And thus, different commodities prioritize based on relevance in terms of national food security;
the population involved in production, marketing, processing and related services especially from income
generation and employment perspectives; productivity and commodities that can achieve significant
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improvements along the value chain without requiring major infrastructure investments etc. In this line, among
twenty-two commodities prioritize in the country, cereals are in the first category (wheat, maize, teff and barley)
(UNIDO, 2009).
In Dembecha woreda, maize play an indispensable role as food consumed alone or mixed with other crops
especially with teff and wheat, used to prepare local alcohol drinks known as areki, and tella processing input at
which both alcohol processing‟s play a significant role in income generation and employment creation
particularly for females.
Hence, mainly many researches were focusing on production aspects which is non-comprehensive and research
regarding the topic did not conducted in the study area and thus, to understand the situation and extent of maize
value chain in the study area, the researcher need to identify and map value chain actors, their role and linkage,
identifying marketing channel, actors welfare via market performance analysis as well as major production and
marketing opportunities in the study area.

III. Methodology
Description of the study area

Dembecha is currently one of the fourteen districts in West Gojjam Zone of the Amhara Region of
Ethiopia. The district had 29 Kebeles of which 25 were rural and 4 were urban and had a total population of
151,023 of which 75559 were men and 75464 were women. From this total population, 14 % (21143) were
urban dwellers whereas 86 %( 129880) were rural residents. The district has an area of 971.29 square kilometers
and had a population density of 133 persons per square kilometer and has on average 4 persons per household.
The district agro ecology comprises Woinadega (83%), kola (6%) and Dega (11%). Regarding its topographical
structure 60% of the district is plane whereas 6% and 34% are valley and hill respectively (Source: Dembecha
district office of Agriculture, 2018).

Table 1.Common cereal crops in the district.

Major 2016 2017 2018
crops Area(Ha) Production Area Production in Area(Ha) Production in
in quintal (Ha) quintal quintal

Maize 13047 902430.75 15434 1095939.72 16481.97 1186701.84

Wheat 7216 69095.5 7810 402448 10216 5455797
Teff 6006.75 108452 6866 125052 6870 134069.38
Barley 4587.55 21997.875 4800 402437.2 4800 263302.3
Source: Woreda Office of Agriculture, 2018

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Value Chain Analysis Of Maize: The Case Of Dembecha District, West Gojjam Zone, Ethiopia

Figure 1.Map of the study area

Types and sources of data: In this study, qualitative and quantitative data types were used from primary and
secondary data sources. The primary data were collected from maize producers, traders, processors and
consumers. Moreover, all the necessary secondary data on different issues were collected from published and
unpublished documents from district office of agriculture and Natural resource annual reports, bulletins, charts
posted on the wall of the district office of agriculture, district trade and industry office, websites, CSA data as
well as district cooperative‟s promotion office documents in the study area.

Sampling procedure and sample size: Dembecha woreda was selected purposively because of its maize
production potential known from fourteen districts in West Gojjam zone. By consulting with district agricultural
development office the district has currently 25 rural kebeles and almost all kebeles are maize producers of
which 14 kebeles are identified (purposively) as highly maize producers. From 14 producer kebeles, four
kebeles were selected randomly. Sample size was selected from each maize producer Kebeles on the bases of
proportional to the size (PPS) sampling technique. Finally, 155 maize producers, 40 maize grain traders, 10
maize processors and 20 consumers selected from the district.

Data collection and method of analysis: A semi structured and independent questionnaire was designed and
used for maize producers, maize grain traders, processors and consumers owing to their marketing capacity to
purchase and activities were differ. The primary data was collected by the method of individual interview using
piloted questionnaire schedule along with observation. Additional data were gathered through informal method
of focus group discussion (FGD) and key informant interview using checklist. These informal techniques were
also implemented to get additional information during data collection and were used for rectifying mistakes
from the primary data. Two focus group discussions (FGD) were undertaken with a total of 13 members. One
with model farmers and experienced maize producers and the other with agricultural development office staffs
and Woreda cooperative promotion office to collect additional data on maize producer‟s constraint and
opportunity from input usage and marketing aspect as well as on different issues regarding maize based on the
appropriate guideline designed. Key informant interview was conducted with model farmers, cooperatives staff
workers (chairman), and district office of agriculture staff workers. The collected data were analyzed using
descriptive statistics and value chain approach. The actors‟ performance was analyzed using total marketing
margin.

Analyzing total marketing margin is based on the price paid by the final destination of the product or the end
buyer and expressed in percentage (Mendoza, 1995). Finding the price variations at different segments and then
comparing them with the final price to the consumer. Therefore, consumer price was considered as the base for
all margin computation after collecting relevant data from value chain actors that was identified in value chain
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Value Chain Analysis Of Maize: The Case Of Dembecha District, West Gojjam Zone, Ethiopia

mapping in analysis. Total growth marketing margin (TGMM) was calculated first in order to compute gross
marketing margin (GMM) of different actors, net marketing margin (NMM) and total marketing cost (TMC)
that help to investigate who get what amount?, who incur what amount, to see the product flow and helps to
understand who is in a disadvantageous position which is useful for intervention for improvement

…………………….3
The first seller of the product is known, the producer and therefore, the i node or actor in the chain along the
product flow GMM was computed as;

Here producers share was calculated as, 1-TGMM or

Where, TGMM Total Growth Marketing Margin

GMM Growth Marketing Margin
NMM Net Marketing Margin
MC Marketing cost
SPi Selling price at ith actor and
PPi Purchase price at ith actor.

IV. Results and Discussion

Maize value chain map, actors role and linkage

Since value chain is not a „‟pragmatic construct‟‟ and thus as generic value chain, this survey results
also revealed five major stages in the current value chain namely input suppliers, producers, processers, traders
and consumers.
The first stage i.e. input suppliers, multipurpose farmers cooperatives play significant role by supplying
improved seed and fertilizers to each kebeles by opening its warehouses nearby with the collaboration of woreda
agricultural and cooperative promotion offices.
The second stage i.e. production, local smallholder farmers were the main maize producers by using inputs
delivering from their own multipurpose farmer‟s cooperatives and they were the main source of maize grain
supply to the market. The processing stage was traditional local alcohol makers (locally called areki) were one
of the main users of maize grain as maize is one of the major components for local alcohols. In marketing
activities local collectors, rural and urban wholesalers and retailers were observed in the study area and
consumption of maize another common activity both in rural and urban areas. Rural and urban prefixes were
taken from their license registration name in their respective operating areas. The map was sketched after
discussion and identification the following basic questions from main actors and key informant interviewee
direction.
1). Where or who delivers your factor of production (inputs)? to local farmers, 2).Where or to whom to sold
your maize grain? Again for local maize producers, 3). To whom for each category of traders sold and who
support either directly or indirectly from woreda agriculture development and rural extension and cooperative
promotion offices.

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Figure.2 Maize value chain map in the study area

Source: Own map following product flow during Survey, 2018

Regarding actor‟s linkage, Survey result revealed that 38.7% of sample respondents accessed market
information about daily marketing price directly from traders. Wholesaler traders have power by purchasing
large quantity and they can also discussed and decide on market issues unlike unorganized smallholder farmers.
On the other hand, traders particularly wholesalers had relationship with farmers by giving credit especially
during sowing and harvesting seasons even for one week till the farmers meet ex anti finance for the purchase of
input and labour by selling crop, livestock or livestock products. Smallholder farmers do not have alternative
than taking the market price and thus wholesalers‟ govern the chain activity in the study area. Survey result from
traders showed that about 42% of traders create linkage with their suppliers by giving short term credit. Survey
result indicated that 74.8% sample households accepted the price determined by the buyers but only 25.2% have
chance to take a negotiating price.
This implies farmers had limited bargaining power, weak market information and weak integration and driven
by the buyers or traders.

V. Marketing channels

In the study area 12 alternative frequently transacted marketing channels were identified. The total estimated
amount of maize that supplied by sample respondents to ultimate users through various intermediaries was
5160.5 quintals in the year 2018 production which was about72% of total production. The identified market
channels were:

Channel I: Farmers – consumers (428.32Qt)

Channel II: Farmers -rural retailers- consumers (111.47Qt)

Channel III: Farmers – rural wholesalers- urban wholesalers- urban retailers- consumers (1252 Qt)

Channel IV: Farmers–rural wholesalers–urban wholesalers– urban retailers–processors (436.46Qt)

Channel V: Farmers– collectors–consumers (17Qt)

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Channel VI: Farmers– collectors– urban wholesalers– urban retailers– consumers (43.73qt)

Channel VII: Farmers– collectors–urban wholesalers- urban retailers–processors (15.24Qt)

Channel VIII: Farmers–cooperatives–union/food aid institutions/other union (1356.7Qt)

Channel IX: Farmers– urban wholesalers– urban retailers –processors (228.66Qt)

Channel X: Farmers – urban wholesalers – urban retailers–consumers (656.24Qt)

Channel XI: Farmers –rural wholesalers- urban wholesalers– consumers (403Qt)

Channel XII: Farmers- urban wholesalers-consumers (210Qt)

Figure 3.Marketing channel of maize in the study area

Source: survey result, 2018

Regarding channel comparison using volume of transaction from farmers‟ hand through traders as shown above,
channel III carried the largest volume (1252 Qt) due to the high capacity of rural wholesalers directly purchased
from farmers and passes through intermediaries to consumers. The smallest volume of maize was passed
through channel VII about (15.24Qt). This was due to the small capacity of collectors in rural village markets

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purchased smaller quantity than wholesalers. Farmers sold (1356.7Qt) of maize to their cooperatives without the
involvements of intermediaries but the rest 65.41 %( 3375.48Qt) passed through traders.

Costs and Margin Analysis at different marketing channel of maize

Farmers incur costs at different phase of maize production starting from land preparation, production
and marketing activities. „‟As most of rural households used their own family labour, oxen and land using an
opportunity cost of production‟‟ is important (Beza et al., 2016). In the study area, producers incur different
costs for input, labour and land. Opportunity cost of family labour and oxen ploughing per a day and in turn in a
year (season) for another farm working as daily labour were considered. An opportunity cost value for land was
also considered as in the study area rental value in one production year (season). Moreover, producers incur
costs for package, transporting to the market and even though one package or sack used for numbers of loads to
the market they incur costs for package. As survey result indicated, cost for land was the highest (40.2%) among
other costs of production.

Table 2.Maize Production cost per quintal in 2018

Production cost items Cost per qt. in Birr Percentage share

Input
Fertilizers 71.00 17.84
Improved seed 16.00 4
Land value 160.00 40.2
Labour 151.00 37.94
Including land preparation,
ploughing, weeding,
harvesting and shelling

Total production cost 398 100

Source: Own survey result. 2018

Table 3.Production cost of local alcohol makers

Cost items per qt of maize Cost/qt of maize % share

processed

Labour 200 20.30

Other component 560 56.85
(wheat and buckthorn)

Mill cost 25 2.54

Firewood 200 20.30
Total 985 100
Source: Own survey result. 2018

Traders jointly incur an operating expense 11.95 times less than that of maize producers‟ operating costs.
However, in the stream of benefit distribution jointly, traders‟ profit share was found to be 3.2 times greater than
the producers‟ share which implies the disproportional flow of benefits along the product flow in the value

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chain. Moreover, processors‟ operating cost was found to be about 29.16 times greater than maize grain traders
operating costs but processors‟ profit share was 1.94 times less than traders (jointly) profit share in the chain
which indicated disproportional flow of both costs and benefits in the chain as shown in Table 4. Generally,
actors in the value chain incurred 50.96% of total marketing cost for transportation of which urban wholesalers
added more transportation cost (15.7 birr /quintal). Processors had the highest share of market margin (24.57%)
and profit margin (25.1%). Traders took a total of 84.75% out of the total profit margin.

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Market channel comparisons in margin distribution were mad among major value chain actors. According to
Mendoza (1995) computing the total Gross Marketing Margin (TGMM) is always related to the final price paid
by the end buyer and expressed as a percentage. Thus, total gross marketing margin (TGMM) was highest in
channel VII (38.37%) of the consumers‟ price followed by channel IV (37.79%). Total gross marketing margin
was lowest at channel II (13.85%) without considering channel I, farmers directly sold to consumers. On the
other hand, producers‟ gross marketing margin (GMMp) or producers share was highest in channel II( 86.15%)
without considering channel I that producers directly sold to the ultimate consumers and received the whole
channel portion. Whereas producers GMM was lowest at channel VII (61.63%) when producers sold to
collectors and passé through intermarries to processors. Regarding to producers‟ share or (GMMp), as the
number of middlemen between the two ends (farmers and consumers) increases the share of farmers‟ decrease.
For instance, without considering channel I, (GMMp) or producers‟ share is maximum (86.15%) at channel II
when the number of intermediaries minimum between the two ends and the producers‟ share (GMMp) minimum
(61.63%) at channel VII when the number of intermediaries maximum in number between the two ends. This
proves the general truth, as the number of intermediaries between the two ends increases the share of the
farmers‟ decrease. On the other hand, the type of value addition activities undertaken by the last actor
determines the value of the producers‟ share in the chain. Survey result indicated that number of intermediaries
remain equally three between the two ends in channel III, IV, VI and VII. However, producers‟ share (GMMp)
in channel IV and VII (62.21% and 61.63%) respectively when the last actors were processors less than GMMp
in channel III and VI (65.24% and 64.63%) respectively when the last actors were consumers. Local alcohol
makers add more form value on the product and thus added more cost to accomplish the tasks before reaching in
the hands of the consumers and thus lower producer‟s share due to increasing intermediaries. This implies
processors are in advantageous position in taking consumers price in marketing of maize by adding more value
to the product. And thus, producers should added form utility to different valuable products to capture maximum
consumers‟ price in the market than selling the grain form.

Unlike urban wholesalers, rural wholesalers had no more alternative market channel to deliver
significant amount and thus supplied more amount only through urban wholesalers and obtained the higher
GMM at channel XI (10.37%) and the lower at channel IV (9.88%). Urban wholesalers involved in more
numbers of alternative marketing channels next to the producers and obtained the largest GMM at channel XII,
which accounted 29.88% and the lowest at channel VII, which accounted 15.12%. Urban retailers were among
the main value chain actors that distribute maize grain to the ultimate consumers and processors at different
price level and received the highest and lowest GMM at channel IV, VII and IX equally (12.79%) and channel
X (8.34%) respectively.

From maize grain trader‟s stream, the highest net marketing margin (NMM) was received by urban wholesalers
at channels XII (1.73%) and lowest at III, IV and VI (0.02%) and the poorest at channel VII (-0.07) due to the
fact that processors need high quality maize for alcohol processing than consumers. But at this channel urban
wholesalers purchased mixed maize from local collectors that purchased from different producers and have
different defects than other traders‟ sale.
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Depending on results from market performance analysis, channel II indicated highest producers‟ share but small
volume of maize as compared to other channels in the market. Thus, largest volume does not necessarily mean
highest producers share and vice versa. Producers should deliver value added maize at channels with minimum
intermediaries.

As survey result shown, the total marketing margin in the marketing system was 30% associated with 70%
producer‟s share of the margin. This result indicated that total gross marketing margin of maize less than hot
pepper 40.61% (Mekdes et al., 2017), chickpea 45.8% (Tewodros, 2014), and durum wheat 57.9% (Haymanot,
2014) but better than teff at Halaba especial Woreda 21.3% by (Muhammed, 2011).

VI. Opportunities for Producers

As explained by district office staffs during FGD, cooperatives and model farmers, presence of conducive
environment in general for maize production, fertile land, availability of organized institutions at different level,
from kebele level (Mengstawi budn) to district agriculture and cooperative offices for input supply and different
trainings is an opportunity for maize producers.

As survey result revealed about 99.4% of sample households were members of multipurpose farmers‟
cooperative and get seed, fertilizers and different service for maize production and marketing. Since no more
cash crops in the study area and cereals play a significant role especially maize. As survey result indicated about
97.4% of sample households answered that they produced maize for its high productivity and have high
contribution for food security.

Another opportunity for maize production in the area was its different uses (society consumption pattern). About
95.5% of sample householders explained that they produced maize for its various uses starting from maize grain
to the by-products as fire wood and animals feed as well as presence of potential traders and processors in the
study area. Price was one of the discouraging factors for cereal producers due to ups and downs at different
seasons. However, about 93.5% of sample respondents reported that price of maize was increasing due to
increasing the purchasing power of the cooperatives and traders in the study area.

VII. Opportunities for Traders

Not only constraints are available to retard the business but also there are numbers of avenues or opportunities
that helps business to develop if able to exploit the existed opportunities. Among available opportunities,
presence of potential maize producers and suppliers in the study area is the basic opportunity for traders
business. As survey result revealed all sample respondents (100%) answered that presence of potential
producers in the woreda contributed crucial role for traders. Presence of local alcohol makers and consumers is
another opportunity in the study area. Alcohol makers used a quintal of maize per week per one process and thus
create great linkage with traders. As survey result indicates, about 98% of respondents explained that presence
of alcohol makers motivates them to stay in their business and also pulls others in to the business. And also
consumers are another important user of the product almost maize present in most foods and drinks in the area
and this in turn an opportunity for traders.
Presence of potential traders nearby towns namely, Amanueal, Debremarkos, Bichena, Dega segn and
Debre guracha were also existed opportunities as reported by supplier traders operating from the study area
towns. About 96% of respondents reported that they had good relationship with their customers expressed by
frequent purchase and this relationship mainly depends on stretching credit in the market.
Not only constraints are available to retard the business but also there are numbers of avenues or
opportunities that helps business to develop if able to exploit the existed opportunities. Among available
opportunities, presence of potential maize producers and suppliers in the study area is the basic opportunity for
traders business. As survey result revealed all sample respondents (100%) answered that presence of potential
producers in the woreda contributed crucial role for traders. Presence of local alcohol makers and consumers is
another opportunity in the study area. Alcohol makers used a quintal of maize per week per one process and thus
create great linkage with traders. As survey result indicates, about 98% of respondents explained that presence
of alcohol makers motivates them to stay in their business and also pulls others in to the business. And also
consumers are another important user of the product almost maize present in most foods and drinks in the area
and this in turn an opportunity for traders.
Presence of potential traders nearby towns namely, Amanueal, Debremarkos, Bichena, Dega segn and Debre
guracha were also existed opportunities as reported by supplier traders operating from the study area towns.
About 96% of respondents reported that they had good relationship with their customers expressed by frequent
purchase and this relationship mainly depends on stretching credit in the market.
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VIII. Conclusion and recommendation

Results from value chain analysis approach showed that input suppliers (multipurpose farmers‟ cooperatives),
maize producers, collectors, retailers, wholesalers and consumers were the main maize value chain actors
identified in the study area. These actors play different roles in the value chain. Producers had different
alternative marketing channels and disproportional flow of costs and benefits was observed. Among alternative
marketing channels TGMM was highest in VII (38.37%) of the consumers‟ price when farmers‟ maize grain
passes via middlemen‟s to processors. On the other hand producers‟ gross marketing margin (GMM) was
highest in channel II (86.15%) without considering channel I that producers directly sold to the ultimate
consumers and received the whole channel portion and lowest at channel VII (61.63%). In traders‟ stream, the
highest net marketing margin (NMM) was received by urban wholesalers at channels XII (1.73%) and the
poorest at channel VII
(-0.07%) due to value chain marketing problems that poor quality product sometimes incur loss.
Traders in general govern the value chain by controlling actors in credit and particularly the urban wholesalers
govern by volume transacted and quality control criteria in the market. Production and marketing opportunities
were identified include fertile land, availability of organized institutions for input delivery in production stream
as well as presence of potential maize producers and suppliers in the study area is the basic opportunity for
traders business in the value chain. Thus, value chain development intervention practitioners in maize area
should take in to account the main value chain actors in the study area while devising initiative strategies.
Finally, further research should undertake on maize value chain upgrading, maize seed value chain and local
alcohol by products economic contribution and its disposal in the study area.

Reference
[1.] Abraham Tegegn. 2013. Value Chain Analysis of Vegetables in Habro and Kombolcha Woredas in
Oromia region, Ethiopia. MSc Thesis, School of agricultural economics and agribusiness, Haramaya
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