Is Potato Market Efficient in Ethiopia? Evidence From Farta District of Amhara Region

Grassroots Journal of Natural Resources, Vol.5 No.
3 (Sept 2022)
ISSN: 2581-6853 | CODEN: GJNRA9 | Published by The Grassroots Institute
Website: http://grassrootsjournals.org/gjnr | Main Indexing: Web of Science
ISSN 2581-6853 | 5(3) Sept 2022
M – 00307 | Research Article
Is Potato Market Efficient in Ethiopia? Evidence from Farta District of

Amhara Region
Gedefaw Kindu Wubet1, Asmiro Abeje Fikadu2, Mengistu Negussie Amare*3

1
Department of Agricultural Economics, Debre Tabor University, Debre Tabor, Ethiopia.
Email: [email protected] | ORCID: https://orcid.org/0000-0001-9218-4588
2
3
*Corresponding Author
How to cite this paper: Wubet, G.K., Fikadu,

A.A. and Amare, M.N. (2022). Is Potato Market Abstract
Efficient in Ethiopia? Evidence from Farta The study aimed to explore the structure and conduct of the potato
District of Amhara Region. Grassroots Journal of market in the Farta District of Amhara Region in Ethiopia. Data was
Natural Resources, 5(3): 18-30. Doi: collected from 123 potato producers, 30 traders and 13 consumers
https://doi.org/10.33002/nr2581.6853.050302 selected through a two-step random sampling procedure. Four major
value chain actors that held about 49.2 percent of the total quantity
Received: 26 July 2022 of potato purchased were identified. It was found that the Farta potato
Reviewed: 20 August 2022
market was weakly oligopolistic. The study showed that competition,
Provisionally Accepted: 25 August 2022
Revised: 31 August 2022 commercial licenses and limited capital are the main obstacles to
Finally Accepted: 11 September 2022 enter the potato market. About 47.11 percent of the overall gross
Published: 30 September 2022 margin of marketing was added to potato prices in the value chain.
Copyright © 2022 by author(s) Approximately 19.5% of total gross margins were absorbed by
collectors, while retailers and wholesalers accounted for 15.6% and
This work is licensed under the Creative 11.9%, respectively. The actors in the value chain of potatoes
Commons Attribution International generated positive profits, but the barriers to entry, the structure of
License (CC BY 4.0). oligopoly markets and the inability to determine price sets the potato
http://creativecommons.org/licenses/by/4.0/
market inefficient.
Keywords
Concentration ratio; Farta district; Potato; SCP model; Oligopoly;
Editor-in-Chief Value
Prof. Dr. G. Poyyamoli
Executive Editor
Dr. Hasrat Arjjumend
Associate Editors
Dr. Maja Manojlovic
Ms. Areej Sabir
Dr. Usongo Patience
Grassroots Journal of Natural Resources, Vol.5, No.3 (September 2022), p.18-30 | ISSN 2581-6853 | CODEN GJNRA9
Doi: https://doi.org/10.33002/nr2581.6853.050302
Introduction
Ethiopia is considered to be one of Africa’s most important regions with the greatest potential for potato
production that plays an important role in improving food security, increased agricultural revenues and
poverty reduction (EARO, 2000; Tesfaye, 2016). Currently, potatoes can be consumed not merely as a
native food item, but also as processed foods. The consumption of potato chips appears to be growing in
Ethiopia at the household level, in the hotels, restaurants, and supermarkets. Many of the retailers process
French fries for selling in their establishment (AgroBIG, 2016). Ethiopia's potato production zone is
relatively young and is confronted with low output, insufficient supply of agricultural inputs, limited
provision of extension services, weak association with the actors in the value chain, damage to production,
poor class of the product fluctuation of prices, low prices received by farmers, and relatively deprived
infrastructure accessibility. There are inadequate opportunities for marketing and value adding as a result of
poor marketing and processing services (Bymolt, 2014; Kemaw et al., 2017).
The South Gondar Zone in Ethiopia is considered one of the Amhara's primary potato production zones
(Deressa et al., 2017). In the southern Gondar Zone, the total area under potato is 6,125.49 hectares engaging
96,262 small farmers with production of 935,059.17 quintals (Qt), and the mean productivity is 152.65
quintal per hectare (Qt/ha) (CSA, 2016).
The Farta District is a highly favorable area in the south Gondar Zone in which smallholder farmers produce
high-quality potato to earn cash income and ensure food security (Wubet et al., 2022). However, there is
limited scientific evidence regarding potato marketing behaviour (structure conduct and performance
analysis) and its profitability (benefit cost-analysis) (Wegi et al., 2017; Geremewe, 2018; Aliyi et al., 2021;
Oyka, 2020; Dessie et al., 2019; Mirie et al., 2018; Hailegiorgis and Hagos, 2016).
As explained before, potato is highly produced in the Farta district both in rain-fed and irrigation seasons.
Potato has many economic benefits used as food and cash crop in the Farta district. Even though the Farta
district has enormous potential for potato production, the kinds of storage, condition for market information,
product quality, market linkage, the status of potato production, marketing, market performance, and
expected profit from potato products have not been studied yet and documented. The previous studies
(Chanie et al., 2017; Geremewe, 2018; Milkias and Keba, 2021) were focused on the types of potato seed,
characterization, productivity and amount of production, and potato marketing constraints, respectively, but
no studies were conducted on the marketing and profit aspects in Farta district.
Therefore, this study was initiated to address the above-mentioned gaps and produce documents for further
study with the objective of analyzing the structure, conduct, and performance of the potato market in the
study area. In this effect, this paper is oriented to assess the structure, conduct and efficiency of potato
market through quantifying the costs, profit margins and describing the challenges and prospects as well.
Research Methods
Area, Types, Sources and Collection Methods of Data
This study was conducted in the Farta district of southern Gondar in the Amhara region of Ethiopia (Figure
1).
Gedefaw Kindu Wubet, Asmiro Abeje Fikadu, Mengistu Negussie Amare 19

Figure 1: Study area
This study used primary and secondary data. The primary data were collected from sampled households and
dealers at different levels, from agricultural agents and regional wholesalers. Structured questionnaires were
used, and it was pre-tested and modified. Secondary data was collected from the Farta District Agriculture
Office, Amhara Region Agriculture Bureau, and some peer-reviewed journals.
Sampling Technique and Methods of Sample Size Determination
In order to select potato producers, a two-step random sampling technique was used. First, out of 37 kebeles
(the lowest government administration level in Ethiopia) in the district, approximately 4 kebeles were
selected using simple random sampling technique. Then, using the list of producer farmers of sample
kebeles, potato farmers were randomly selected on the basis of probabilities proportional to the population
size of the selected kebeles.
The sample size was determined by using Yamane's (1967) sampling formula by considering 95%
confidence, and 5% precision levels as follows:
N 46,812
n= ,n = ~ 123 Eq(1)
1 + N ( e) 2
1 + 46,812 (0.09) 2
where, n is the sampled potato producers, N is the total number of potato farmers in sampled kebeles existing
in the selected district, and e is the correction factor used.
Based on the flow of potato products, three markets such as Debre Tabor, Gassay and Kimirdinigay were
purposively selected as they are the major potato marketing centers in the district. All lists of traders in the
towns were obtained from the District Trade and Transport Office. From 58 collectors, 9 collectors were
selected randomly; from 62 wholesalers, 10 wholesalers were randomly selected; from 35 retailers, 8
retailers were selected, in addition to 3 processors sampled in Debre Tabor town. Thus, total 30 traders from
three towns were selected. Finally, data from 13 consumers were also randomly selected from the respective
towns.
Table 1: The distribution of sample potatoes producers in designated Kebeles

Name of identified kebeles Total no. of potato farmers No. of sampled potato farmers
Mokish 1462 30
Minet 1806 38
Kanat 1569 33
Limado 1040 22
Total 5877 123
Table 2: The distribution of sampled traders and consumers of potatoes

Traders Debre Tabor Gassay Kimirdingay Total
Local collectors 3 2 4 9
Wholesalers 3 4 3 10
Retailers 4 2 2 8
Processors 3 0 0 3
Consumers 7 2 4 13
Total 20 10 13 43
Methods of Data Analysis
Descriptive statistics like frequency, percentages, mean, standard deviation, etc. were used to classify the
data and the significance was tested through t-test and χ2 test. The relationship between market structure,
conduct and performance was studied and with the assessment of market efficiency. In addition,
concentration ratios and analysis of marketing margins were used to describe potato market structure and to
assess market performance (Kohls, 1955).
Market Structure
Market structures are defined as the characteristics of market organizations that strategically affect
competition and pricing in the market (Pender, 2005). The characteristics most often employed are the
number and size of firms distribution, the size of market, the barriers for free entry and exit to the market,
and the nature of product diversity, as stated by Kohls and Uhl (1985). Market concentration and entry
barriers were used to estimate the structure of the Farta district’s potato market. The most common methods
to measure the market concentration and structure are three, such as concentration ratio (CR), Herfindahl
Hirschman Index (HHI), and Gini coefficient (Orwin and Boyle, 1927). From the types of approaches of
market concentration, since its most understandable measure, a pervasive measure of market power and
market concentration, its popularity stems from its simplicity, in terms of calculation as well as in terms of
user friendliness. The concentration ratio (CR) was used for this study.
The market concentration is measured by following formula:
𝑄𝑖
𝑀𝑆𝑖 = 𝐸𝑞(2)
∑𝑄𝑖
Where 𝑀𝑆𝑖 is the market share of firm i; Q𝑖 is quantity of potatoes held by firm i; and
ΣQ𝑖 is total sum of quantities of potatoes held.
𝑟
𝐶 = ∑ 𝑆𝑖 𝑖 = 1, … … 𝑛 𝐸𝑞(3)
𝑖=1

Where, C = concentration ratio handle

𝑆𝑖 = percentage share of ith firm
r = number of the first largest firms for which the ratio is considered.
Market Conduct
Market conduct refers to the behaviour that a company adopts to adapt or regulate its market for purchases
and sales. In this study, market behavior indicators such as price setting and purchasing and selling strategies
were taken into account (Kotler and Armstrong, 2012). It refers to the patterns of behavior that firms follow
in adapting or adjusting to the markets in which they sell or buy. Such a definition implies the analysis of
human behavior patterns that are not readily identifiable, obtainable, or quantifiable. Thus, in the absence
of a theoretical framework for market analysis, there is a tendency to treat conduct variables in a descriptive
manner, or as a spill-over in the assessment of market performance. The conduct of a market can be
characterized by the following practices: Pricing strategy predatory, exclusionary, collusive, product
strategy, responsiveness to change. The following indicators had been considered for this study: traders’
price setting, purchasing and selling strategies.
Market Performance
Estimating marketing margins and costs is the best tool for analyzing market efficiency. Marketing margin
is computed by compiling the difference among producer farmers and final retail prices (Baker, 1991).
The total marketing margin was calculated using the following formulae:
𝐸𝑛𝑑 𝑏𝑢𝑦𝑒𝑟 𝑝𝑟𝑖𝑐𝑒−𝐹𝑎𝑟𝑚𝑔𝑎𝑡𝑒 𝑝𝑟𝑖𝑐𝑒
𝑇𝐺𝑀𝑀 = ∗ 100 Eq(4)
𝐸𝑛𝑑 𝑏𝑢𝑦𝑒𝑟 𝑝𝑟𝑖𝑐𝑒
The producer’s margin or share in the consumer price GMMP is calculated as:
𝑃𝑟𝑖𝑐𝑒 𝑝𝑎𝑖𝑑 𝑏𝑦 𝐸𝑛𝑑 𝑏𝑢𝑦𝑒𝑟𝑠 − 𝐺𝑟𝑜𝑠𝑠 𝑀𝑎𝑟𝑘𝑒𝑡𝑖𝑛𝑔 𝑀𝑎𝑟𝑔𝑖𝑛

𝐺𝑀𝑀𝑝 = ∗ 100 𝐸𝑞(5)
𝑃𝑟𝑖𝑐𝑒 𝑝𝑎𝑖𝑑 𝑏𝑦 𝐸𝑛𝑑 𝑏𝑢𝑦𝑒𝑟𝑠
The producer’s share is the proportion of the farm gate price to the end-user’s price. It is stated as:
𝑃𝑝 𝑀𝑀
𝑃𝑆 = = 1 − 𝐸𝑞(6)
𝑃𝑐 𝑃𝑐
Where, PS = the producer’s share
Pp = Producer price
Pc = Consumer price
MM = Marketing margin
The price share of potato market intermediaries is calculated as:

𝑆𝑃−𝐵𝑃
𝐺𝑀𝑀 = 𝐸𝐵𝑃 ∗ 100 Eq(7)
Where:
GMM = Gross Marketing Margin (%)
SP = Selling price at each level
BP = Buying price
EBP = End buyer price

Results and Discussion
Sample Characteristics
Among the samples, about 76.7 percent were male, while 23.3 percent were female indicating that women
were less involved in the potato trade. The mean age of traders was 32.5 years indicating a young and
energetic age group, and the standard deviation was 9.7. About 86.7 percent of the traders were married and
the remaining 13.3 percent were single. The results for the educational level of traders showed that about
86.67% of the traders attended formal education while the mean educational level in terms of year of
schooling was 6.3 years at a deviation of 3.4. Furthermore, the mean potato trading experience of the
sampled traders was 6.5 years. The mean initial capital of the traders to start and expand potato trading was
24,152.67 Birr while the current average capital of the sampled traders was 34,796.67 Birr.
Table 3. Demographic Characteristics of Sampled Traders

Variable Mean Standard Minimum Maximum
Deviation
Age 32.5 9.7 21 54
Family size 3.5 1.7 1 8
Education level 6.3 3.4 0 12
Trading experience 6.5 5.08 1 19
Initial capital 24,152.67 33,074.21 100 11,0980
Current capital 34,796.67 45,100.51 1200 145,000
Sex Frequency Percent
Male 23 76.7
Female 7 23.3
Total 30 100
Marital status Frequency Percent
Single 4 13.3
Married 26 86.7
Total 30 100
Scenario of Potato Trade
The transaction processes of potato marketing from producers to final consumers are illustrated through
diverse marketing networks. It includes direct sell of the product to final consumers and the involvement of
various intermediaries between producers and consumers. Accordingly, in the research area, eight
alternative channels are identified as below:
1. Producers Consumer
2. Producers Retailers Consumer
3. Producers Collectors Consumers
4. Producers Wholesalers Consumers
5. Producers Processor Consumer
6. Producers Collectors Retailers Consumers
7. Producers Wholesaler Retailers Consumer
8. Producers Collectors Wholesaler Retailers Consumer

Producers (2050.5Qts)
26.9%
0.15% 15.84%
Collectors
15.33% 48.61%
Processors 9.01%
17.1% Wholesalers 52.57
Retailers %
100% 100% 82.9% 31.59%
Consumers
Figure 2: Marketing channels of potato in Farta District
Farmers sold 48.61 percent potatoes to wholesalers, 26.9 percent to collectors, 15.33 percent to consumers,
9.01 percent to retailers and 0.15 percent to processors. Wholesalers capture and dominate the market and
play the crucial role in price determination. During the survey, sampled farmers reported that the wholesale
market had two types of benefits. Firstly, farmers can sell a large volume of potato, especially in surplus
production periods, and, secondly, obtaining a reasonable price than other traders. The outcome displays
that farmers have linkages with collectors, consumers, and retailers and they made an assessment about the
information on the price and the market before choosing a particular market. Farmers used different market
centers to sell their products. The result of this study depicted that 39.02% of producers sold potatoes at
Debre Tabor market, 39.84% at Gassay, 17.07% at Debre Tabor and Gassay, and 4.07% farmers sold at
Gassay and Kimirdingay markets.
Structure - Conduct - Performance of the Potato Market
Potato Market Structure
The concentration ratio of four-firm (CR4) above 50% is considered a strong oligopoly; CR4 between 33
percent and 50 percent is considered a weak oligopoly, and a CR4 of less than 33% is not a concentrated
market. The study showed that the potato market at the research area was a feeble oligopoly market (Table 4).
Although potato trading is a profitable business activity in the study area, most of the big traders play a
game of imperfect competition to hinder other small/new traders engaged in potato trading. According to
the report obtained from the Trade and Transport Office, 58 percent of potato traders have a trading license
based on the amount of trading (the current capital asset) they have. The license acts as the main entry
barrier.

Table 4: Potato Traders’ Concentration Ratio in Farta District

Number of Percent of Quantity Total quantity Percent share Percent of
traders (A) traders purchased in purchased in Qt of purchase cumulative
A Qt(F) (G)= G purchase
C= Si =
( AXF )  r

 C =  Si 
30 126055
 i =1 
1 3.33 20000 20000 15.87 15.87
1 3.33 15000 15000 11.90 27.77
1 3.33 14000 14000 11.10 38.87
1 3.33 13000 13000 10.31 49.18
1 3.33 12500 12500 9.92 59.1
1 3.33 10800 10800 8.57 67.67
1 3.33 10000 10000 7.93 75.6
1 3.33 9000 9000 7.14 82.74
1 3.33 8000 8000 6.35 89.09
1 3.33 8000 8000 6.35 95.44
1 3.33 900 900 0.71 96.15
2 6.67 800 1600 1.3 97.45
1 3.33 750 750 0.6 98.05
1 3.33 600 600 0.48 98.53
1 3.33 500 500 0.4 98.93
1 3.33 400 400 0.32 99.25
2 6.67 120 240 0.2 99.45
1 3.33 110 110 0.09 99.54
1 3.33 100 100 0.08 99.62
1 3.33 80 80 0.06 99.68
1 3.33 75 75 0.06 99.74
1 3.33 65 65 0.05 99.79
3 10 60 180 0.14 99.93
1 3.33 55 55 0.04 99.97
2 6.67 50 100 0.08 100
30 100 126055 100
Note: C=concentration ratio; Si= share of the four largest firms
Conduct of Potato Market
The result of the study showed that 26% of sampled respondents stated that the market price was set with
negotiation to traders; 32% responded price was set by the market; and the remaining 42 percent replied
price was set by traders. Most farmers agree that prices are the factor in deciding who will sell their products
and where. Due to the absence of a stable price-setting strategy and the perishable nature of the product, the
potato market price leads to seasonal price fluctuation and resulted in producers' dissatisfaction. The result
was in line with the findings of Negussie et al. (2022) on Teff.

Traders attract sellers by providing reasonable prices with negotiation between the two sides. The marketing
approach of traders is carried out systematically by investigating the market where the demand of the
product increase and price also rises, and they communicate with buyers about the quality and amount of
product with mobile and other information media before supplying the product to the respective market
outlet.
Performance of the Potato Market
Table 5 shows average production cost and profitability analysis of potato in both Birr per quintal and Birr
per hectare. The survey results indicated that farmers incurred an average production cost of 140.65 Birr per
quintal and 15,963.83 Birr per hectare.
Table 5: Profitability Analysis and Average Production Cost of Potato

Production activities Cost Birr/quintal Cost Birr per hectare Share %
Inputs buying cost
Seed, fertilizer, and equipment 27.62 3134.87 19.64
Land cost (rental value) 24.53 2784.2 17.44
Labor cost (hired value)
Land preparation cost 16.05 1821.43 11.41
Planting/sowing cost 13.74 1559.22 9.77
Digging/wedding cost 16.83 1909.93 11.97
Harvesting/collecting cost 13.42 1522.92 9.54
Packaging material cost 12.35 1401.7 8.78
Transportation cost
Transportation to their home cost 6.42 728.67 4.56
Transportation to market cost 8.81 999.9 6.3
Taxes payment cost 0.89 101 0.63
Average total cost Birr/qt 140.65
Average total cost Birr/ha 15,963. 83
Average selling price Birr/qt 238.00
Average selling price Birr/ha 27,013
Average gross profit in Birr/qt 97.35
Average gross profit in Birr/ha 11,049.17
Note: Converting Birr/qt into Birr/ha using average productivity of sample potato farm households̕ =113.5
quintal per hectare.
The land cost is a prospect cost of land which is the rental value of land farmers can have. More than 75%
of farmers produced potato using family labour. The input cost represented 19.64 percent of the overall cost.
The average gross profit was 97.35 Birr per quintal and Birr 11,049.17 per hectare.
Analysis of Marketing Costs and Margin
The marketing cost of potatoes mainly involves the cost of post-harvest activities incurred before reaching
the consumer. Generally, these components constitute a large share in the total margin between the final
retailer price and the cost of production. Marketing margin can be used to measure the share from the final
selling price captured by a particular actor in the value chain. To calculate the marketing margin of an actor,
the average price of potato for that particular actor was taken. For example, the buying price of consumers
was obtained by taking the average purchasing price of consumers.

Table 6: Cost of Potatoes marketing for variety of actors (Birr/Qt)

Cost of marketing in Birr Actors
Local collectors Wholesalers Retailer
Purchase Price 244.4 259.4 271.0
Labor cost packaging 5.78 4.7 5.25
Loading/Unloading 5.3 4.5 6.63
Transportation fee 7 8.2 11.88
Sorting cost 3.56 3.8 4.5
Storage cost 4.78 4.1 6.25
Loss in transport and storage 11.11 9.1 11.63
Processing cost 3.2 5.4 5.5
Telephone 11.22 10.3 9
License and tax cost 0 18.3 12.86
Total cost 296.39 327.5 344.5
Selling price 326.22 380 450
Table 7: Analysis of Potato Marketing Margin for its Value Chain Actors
Actors Selling price Production/mark % GMM Gross profit % Profit share
Birr/qt eting cost (Birr/qt)
Producers 238 140.65 52.89 97.35 34.14
Collectors 326.22 296.39 19.5 29.83 10.46
Wholesalers 380 327.5 11.9 52.5 18.41
Retailers 450 344.5 15.6 105.5 36.99
Total 100 285.18 100
As indicated in Table 7, the total gross marketing margin added to the price when it passes through the value
chain was 47.11%. From the total gross marketing margin obtained, 19.5 percent had gone to collectors,
11.9 percent for wholesalers, and 15.6 percent for retailers. Compared to farmers, retailers received a large
part of the profit margin. Because retailers had not incurred extra operating costs as other actors did. Even
though there was positive profit for all potato value chain actors, farmers are not as such benefited as retailers
and also the structure and conduct of potato market indicated oligopoly market structure and misconduct in
pricing strategy and also there are barriers to entry to potato market. Therefore, all these are indicators of
the deviation of the potato market from the standards of the competitive market structure.
Conclusions and Recommendations
The main objective of the study was to analyze the structure, conduct, performance, and efficiency of the
potato market in the Farta District, Ethiopia. The structure of the potato market was analyzed by taking the
share of the four largest firms from the total volume of potatoes purchased by sample traders. The four-firm
concentration ratio (CR4) indicated that the four largest traders handled 49.18 percent of the total volume of
purchase. Therefore, the structure of the potato market in the study area is a weak oligopoly market, which
means the potato market is dominated by limited traders. It revealed that there was an imperfect market
competition between traders in the market. In the process of the potato market, every actor incurs costs for
production and marketing activities. Marketing costs constitute a large share in the total margin between the
final retailer price and the cost of production. The total gross marketing margin added to potato price when
it passes through the value chain was 47.11 percent. Compared to farmers, retailers received a large
proportion of profit since retailers had not incurred much cost as other market actors. Most big traders play
a game of imperfect competition to hinder other small/new traders engaged in potato trading. The license
issuance acts as the main entry barrier for small sized traders. Due to the absence of a stable price-setting
strategy and the perishable nature of the product, the potato market price leads to seasonal price fluctuation
and resulted in producers' dissatisfaction. Even though all actors received positive profit in the potato market
since the market is oligopolies and also there are barriers to entry, the potato market in the study area
deviated from competitive market standards. Government and concerned institutions should strengthen
effective market information system; creating a competitive market structure; and assuring stable prices to
improve producers’ return. It is also essential that support producers intensify their bargaining power and
set rules to other value chain actors for governing their informal marketing practice for improving market
competitiveness and efficiency by reducing the level of an oligopolistic market.
Acknowledgements
The authors heartily acknowledge Farta Woreda’s Agriculture, Trade and Industry Development Office for
their relentless support in creating favorable conditions to get the respondents for data collection. The
authors also admit respondents for their honest assessment of the research interview.
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Contribution Author 1 Author 2 Author 3
Conceived and designed the research or analysis Yes Yes Yes
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Editing of the article/paper Yes Yes Yes
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Project Administration Yes No No
Funding Acquisition Yes No No
Overall Contribution Proportion (%) 45 25 30
Funding
Debre Tabor University contributed for the research conducted for writing this paper.
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Research involving animals (ARRIVE Checklist)

Has this research involved animal subjects for experimentation? No
Research involving Plants

During the research, the authors followed the principles of the Convention on Biological Diversity and
the Convention on the Trade in Endangered Species of Wild Fauna and Flora. Yes
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Grassroots Journal of Natural Resources, Vol.5 No.

ISSN 2581-6853 | 5(3) Sept 2022

M – 00307 | Research Article

Is Potato Market Efficient in Ethiopia? Evidence from Farta District of

Gedefaw Kindu Wubet1, Asmiro Abeje Fikadu2, Mengistu Negussie Amare*3

How to cite this paper: Wubet, G.K., Fikadu,

Area, Types, Sources and Collection Methods of Data

Gedefaw Kindu Wubet, Asmiro Abeje Fikadu, Mengistu Negussie Amare 19

Figure 1: Study area

Sampling Technique and Methods of Sample Size Determination

Table 1: The distribution of sample potatoes producers in designated Kebeles

Table 2: The distribution of sampled traders and consumers of potatoes

Methods of Data Analysis

Gedefaw Kindu Wubet, Asmiro Abeje Fikadu, Mengistu Negussie Amare 21

Where, C = concentration ratio handle

𝑃𝑟𝑖𝑐𝑒 𝑝𝑎𝑖𝑑 𝑏𝑦 𝐸𝑛𝑑 𝑏𝑢𝑦𝑒𝑟𝑠 − 𝐺𝑟𝑜𝑠𝑠 𝑀𝑎𝑟𝑘𝑒𝑡𝑖𝑛𝑔 𝑀𝑎𝑟𝑔𝑖𝑛

The price share of potato market intermediaries is calculated as:

Gedefaw Kindu Wubet, Asmiro Abeje Fikadu, Mengistu Negussie Amare 22

Results and Discussion

Table 3. Demographic Characteristics of Sampled Traders

Scenario of Potato Trade

Gedefaw Kindu Wubet, Asmiro Abeje Fikadu, Mengistu Negussie Amare 23

100% 100% 82.9% 31.59%

Figure 2: Marketing channels of potato in Farta District

Structure - Conduct - Performance of the Potato Market

Potato Market Structure

Gedefaw Kindu Wubet, Asmiro Abeje Fikadu, Mengistu Negussie Amare 24

Table 4: Potato Traders’ Concentration Ratio in Farta District

Conduct of Potato Market

Gedefaw Kindu Wubet, Asmiro Abeje Fikadu, Mengistu Negussie Amare 25

Performance of the Potato Market

Table 5: Profitability Analysis and Average Production Cost of Potato

Analysis of Marketing Costs and Margin

Gedefaw Kindu Wubet, Asmiro Abeje Fikadu, Mengistu Negussie Amare 26

Table 6: Cost of Potatoes marketing for variety of actors (Birr/Qt)

Conclusions and Recommendations

Gedefaw Kindu Wubet, Asmiro Abeje Fikadu, Mengistu Negussie Amare 28

online at: http://iiste.org/Journals/index.php/JMCR/article/download/32249/33138 [accessed on 11

Gedefaw Kindu Wubet, Asmiro Abeje Fikadu, Mengistu Negussie Amare 29

Authors’ Declarations and Essential Ethical Compliances

Authors’ Contributions (in accordance with ICMJE criteria for authorship)

Research involving human bodies (Helsinki Declaration)

Research involving animals (ARRIVE Checklist)

Research involving Plants

Research on Indigenous Peoples and/or Traditional Knowledge

Competing Interests/Conflict of Interest

Rights and Permissions

Gedefaw Kindu Wubet, Asmiro Abeje Fikadu, Mengistu Negussie Amare 30

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