MADDA WALABU UNIVERSITY

COLLEGE OF AGRICULTURAL AND NATURAL RESOURCE

DEPARTMENT OF AGRICULTURAL ECONO0MICS
RESEARCH PROJECT REPORT ON MARKET CHAIN
ANALYSIS OF HONEY PRODUCT: THE CASE OF SEYO
NOLE DISTRICT, WEST WOLEGA ZONE, OROMIA
NATIONAL REGIONAL STATE, ETHIOPIA.
PREPARED BY
WABI DEREJE……………………………..UGR/25039/13
TOLESA ABEBE…………………………. UGR/ 25009/13
 1.INTRODUCTION
BACK GROUND OF THE STUDY
Beekeeping is an important activity that helps rural communities to
raise additional income to improve their livelihoods process.
In addition to it is a sustainable form of agriculture beneficial to the
environment and these activities due to the presence of dense natural
forest with different species of flora and fauna
Honey is major production of apiculture industry in worldwide and
produced in nearly all countries.
Among the content of the world, European accounted for the largest
 Cont....

 Also through worlds countries level provide China, Turkey, United

states America, Iran and Russia federation are ranked for the top 5
honey producer and exporter countries in the world.
 In Africa traditional beekeeping are more common than modern
beekeeping
 Countries such as Uganda, Somalia and Ethiopia largely use
traditional beehives compared with countries such as Kenya, South
Africa and Tunisia among other.
 In comparison of European, bee keeping in Africa is practices as a
supplemental income source to households.
 In addition, it is often male dominated in most of African countries
such as in case of Uganda and Zambia.
 several African countries are major production of honey but
nothing is exported due to quality, just now only 4% of African
production is exports
 Cont…
 Ethiopia has a high potential for beekeeping as the climate is favorable for grow
different vegetation and crops, which are good sources of nectars and pollen for
honey bees.
 Ethiopia is an important honey and bee wax producing country; it is the leading
producer of honey and bee wax in Africa and is the tenth largest honey producer
and fourth largest bee wax producer in the world.
 The production amount of honey in Ethiopia is estimating to 45,300 metric tons
 There are over 10 million honey bee colonies in Ethiopia that makes the country
with the largest honey bee population in Africa.
 There are an estimated 5.15 million traditionally produced bee hives in Ethiopia.
Approximately there are around 1.5 million beekeepers found in Ethiopia.
 cont...
 95 present household farmers are estimated to keep bees using traditional hives
 The rest 5 present of honey production is done using transitional and modern hives .

 The average production capacity of traditional hives estimated to be five to eight

kilograms per year, while production capacity of the improve hive like transitional
and modern bee hives reaches from 18-30 kg per year .
 Honey is a cash crop for almost all beekeeper households in Ethiopia; they keep bees
for the purpose of income generation.
 For household consumption, they use less than 10% just now of their total harvest at
home mainly for medicinal and cultural ceremonies, and the remaining 90% is
available for sale.
 currently the largest portion of the market honey estimated 70% goes to the
production of local beverage called tej’ and 'birz' the remain small portion is used as a
table honey.
 Cont…
 Despite of having the highest bee density and being the leading honey producer as
well as one of the largest beeswax exporting countries in Africa.
 Currently the Ethiopian honey production estimate represents only 8.6% of the
countries production potential.
 Western part of Ethiopia has great potential for beekeeping activities.
 West wollega zone have greater potential of beekeeping activities
 All the zone woreAda believed to have diverse types of vegetation & cultivated
crops and expected to be the areas that have considerable potential for bee keeping
activities & honey production in west wollega zone.
 The major of honey production as a source of main income from honey selling as
bee keeping doesn't need large area, big initial capital and fertile soil.
 It contributes 50% of the total income in the household
 Statement of the Problem

 Ethiopia is endow with natural resources such as natural vegetation, water, suitable
climatic conditions which create favorable conditions to undertake honey
production activities and make the country one of the potential country for
apiculture sub-sector.
 However, it has not success in exploit its natural capacity for honey production.

 It will have able to fully benefit from its comparative advantage in the honey sector
due to some constraint.
 The prevail production constraint in the honey sector of the country will vary
depend on the agro ecology of the areas where the production is carried out.
 Honey and honey by products are economical and socially important no adequate
study will be made in the study are to improve the sectors.
 Therefore, this study will be attempted to contribute to filling the information gap
by investigation honey market chains.
 cont...

 There is honey production gap in Ethiopia; it is estimation about 150257.6 tons

in 2020/21, up from 66221.8 tons in 2021/22production years (CSA, 2021/22)
comparing the production potential.
 Seyo Nole is one of the districts known by honey production and potential in
West Wollega Zones.
 The district produces 110 tons of honey with an average honey yield of 6.5kg
per hive which is less than the estimated national honey production level of
16.6 kg hive
 This indicates that the smallholder honey production and productivity in the
district it is low.
 Smallholder farmers operating at a significantly lower efficiency level are
constrained by a number of demographic, socioeconomic, institutional and
 Cont…
 For instance, age education level, family size, distance from the market, lack
modern beehives technology installed, inadequate extension service, and small
areas of irrigated land were cited factors which influence technical efficiency of
smallholder farmers.
 As a result, increasing agricultural production, productivity, and efficiency
remains a major development problem in Ethiopia
 Production, productivity and efficiency of smallholder can be increased by one
or more of the following ways: introduction of modern technologies or by
improving the efficiency of inputs used with the existing technology.
 To date, some studies have been conducted on technical efficiency of honey
producing farmers in different part of the country.
 However, as my knowledge there are limited studies on the economic
efficiencies of smallholder honey producer farmers and their determinants at
 cont...

 This is the major lacuna that this study has attempted to address.
 empirical evidence oriented analyze on the level and determinants
of economic efficiency of honey producing farmers in Seyo Nole
district can serve as a source of input for policymakers and other
concerned bodies.
 this study tries to measure the level of economic efficiency of
honey producing farmers and identifies its determinant factors in
the case of Seyo Nole District, West Wollega zone, Oromia
National Regional State, Ethiopia.
 Objective of Study
General objective of the study
• The general objective of this study is to analysis honey market chains in SEYO NOLE district.

specific objective
 To identify honey market chain actor

 To analyze the structure, conduct and performance of honey market supply in the study
area
 To identify mass per house and per hives of production in the study area.

Research Questions
 What is the major actor of the honey market chain?

 What are the market situation and performance of the actor?

 What are the performances product and marketing of hives in this areas?
 Scope of the study

 The area coverage of this study was limited only to seyo nole
district.
 it was focus on the function of the market and relationship
among the actors within the market chains, transportation,
market information, finance, institutions involved in honey
marketing.
 Different market levels, role of actors in the channel, and
bargaining characteristics of producers, buying and selling
strategies, and trades' behaviors in the whole marketing process.
 By taking the problem of time, budget/finance and other related
materials take in to consideration, the study is give more
emphasis on factor affecting the performance of honey
marketing in the study area
 Significance of the Study
 This study would generate useful information in order to formulate
honey marketing development and guidelines for interventions that
will improve the efficiency of honey marketing system.
 The potential users of this finding would be farmers (producers),
traders, government and non-government organizations, that have
an interest to intervene in honey marketing system.
 Researchers who want further investigations on honey marketing
would can use the result from this study.
 Conceptual Framework of the Study

 There are many factors that affect the Market chain analaysis of honey
product
 Based on the literature the independent variables for this study are the
Market chain analaysis of honey product are affected by the dependent
variable are:
 Market Structure
 Conduct
 Performance Analysis (S-C-P)
 Market Chain actors.
cont...
 3.RESEARCH METHODOLOGY

Description of the Study area

 The study was conducted in Seyo Nole district, West Wollega Zone, Oromia National
Regional State, Ethiopia.
 It is located at 509 Km from Addis Ababa and 68 km from Gimbi zonal capital city.

 Seyo Nole district is bordered with Ilu Abba Bor zone in the South, Kelem Wollega
Zone in the West, Genji district in the North, Yubdo district in the North-West, Haru
district in the north east and Nole Kaba district in the East.
 Debbesso is the district administrative center

 The district has a total population of 105,723 of whom 52,227(49.4%) are males and
53,496 (49.6%) are females which is almost equal of its population were rural dwellers.
 cont...

 The number of households headed in the district are 21,215 of whom 19,118
(90%) are male and 2,096 (10%) are female household headed.
 Seyo Nole district has 33 rural kebeles and 3 urban kebeles with an agro-
ecological setting of midlands (86%) and lowlands (14%).
 The majority of the district has an intermediate plateau topography that highly
ideal for farming, which lies within altitude range of 1400-1860 m.a.s.l.
 The district has a longitude of 35 38'10'' 0 and a latitude of 8 59'4' ' 0,
respectively.
 Cont…
 The temperature of the district is range between 20°C and 30°C with 1600 to 2000
millimeters annual average rain fall.
 The main rainy season of the district stretches from March to September and
experienced an annual average rainfall of 1800 mm for 7 months. The district has an
estimated area of 68,503 ha of this 14,332ha crop land, 11,260 ha forest land, 11770
ha coffee and the remaining land is allocated for grazing, construction or buildings,
irrigation and for other purposes.
 The farming systems in the Seyo Nole are mainly mixed crop-livestock production.
 The major crops grown in 29 Seyo Nole districts are maize, coffee, sorghum, finger
millet, red pepper and haricot-been.
 Seyo Nole have to huge potential of natural resources such as fertile soil, dense
forest, surrounded with Birbir, Meti and Sari rivers, large number of bee colonies,
high opportunities of coffee production activities that can conserve vegetation.
 cont...
 For these endowed with natural resources opportunities the district is suitable for
honey production.
 Out of 33 rural kebeles of the district 25 kebeles are honey producers.

 A total of 4,346 honey producers, 16,673 traditional hives, 2,076 transitional hives
and 397 modern hives will exist in the district and a total of 140tons of honey
produced and generating 16.8 million ETB.
 This will be indicates that market honey production in the district is one of the
important economic activities for livelihood of smallholder farmers in the district.
 Types and sources of data
• In this study, both primary and secondary data was collected
 Primary data: The primary data were collected using two types of interview
schedule (one for producers and the other for traders). The primary data
collected from socioeconomic characteristics of households, price setting
strategies, term of payment and factors affecting honey market supply
 primary data collected from traders includes type of business (retailer,
assembler, etc.), buying and selling strategies, source of market information,
socioeconomic characteristics of the traders and other related data are
collected.
Secondary data published and unpublished sources, such as government
institutions, the District Office of Agricultural Development (DOAD)
 distinct fish property production office, tax office and distinct marketing
agency reports and websites
 Cont…

 The sample size will be calculated using Yamane formula (1967) with 90
percent confidence level
N=N/1 ＋ Ne
Where,
N=number of targeted population
n=required sample size
e=margin of error at 10% (standard value of 0 .1)
The sample size for each kebele will be calculated proportional to the respective

/ )
population size as: ni=(Ni N
Sample size from Seri Lomicha kebele =28*36/56=18
Sample size from Debeso cheracha kebele = 28*36/56=18
n =18+18=36
N=28+28= 56
Where, n=n1+n2

N=N1+N2ni , is sample size of ith kebele

 Cont…

3.3.2. Methods of Data Analysis

 In this study, descriptive statistics were used for analyzing the data collected from
honey producers and traders.

3.3.2.1 Descriptive statistics

 This method of data analyze used tables, minimum, maximum, frequency,
percentages, means, ratios and standard deviations.
 explains and interprets the data obtained from sampled households and traders
socio-economic characteristics and by uses S-C-P analysis, like structure of the
market ,conduct and performance of the honey markets.
 Variables in the Study
Dependent variable:
 Market Chain Analysis Of Honey Product

Independent Variables
 Actors such as: Farmers, Local collectors, Retailers, Teji
brewers, Consumers.
 Market structure
 Market conduct
 Market performance
 4.RESULTS AND DISCUSSION
4.1. Socio-demographic and economics of honey producer
4.1.1.demographic and socioeconomic characteristics of dummy variable

Variable Value Frequency Percent (%)

Sex Male 16 80

Female 4 20

Access to market Yes 7 35

information

No 13 65

Education Illiterate 8 40

Literate 12 60
 cont...

 It shows that 80% of the honey producers were male while the rest 20% were
female.
 thats show honey production usually requires a lot of energy and/or techniques
 especially the trapping of queen, afraid of bees;
 female could not climb trees and cultural barriers and beekeeping was considered
as a man's occupation.
 The producer has access market information are 35%
 while 65% has no access information
 out of the sampled honey producing household heads 40% did not attend formal
education.
 More than half (60%) attended formal education.
 cont...
Descriptive statics about continuous variable
Variable Min Max Mean standard deviation

Age 22 58 40 1.28

Experience No of 10 20 15 1.58
beehive

 Aged households are believed too wise and acquired skills

in beekeeping produce much and supply more.
 This shows that the activity was introduce and started in the
area about many years ago
 Having cumulative knowledge of how to keep bees is a pre
requisite to the ability to obtain process and use
information related to the practice.
 Socio-demographic and economic Characteristics of Traders
 Socioeconomic characteristics of traders (continuous
variables).
Variable

Min Max Mean Standard deviation

age (in year) 22 52 37 1.8

education level(in year 0 10 5 1.04

schooling)

 It show many traders around that district are youth and adults.
 The average educational level of the sample traders was 5.
 10% of sampled traders attended elementary school (1 to 4 grades),
 The majority of traders 50% attended secondary school (5 to 8
grade) and the remaining 30% attended grade 9-12.
 cont...
Socio demographic &economic characteristics of trader (dummy variable).
Variable Frequency Percentage

Sex Male 8 80%

Female 2 20%

 most of the traders who engaged in honey trading in the study area were males.

 The result indicates that 80% of the traders were males and only 20% of them were females.

 This may be related to the gender dimension of household activities

 In such society products from honeybees are assumed to be marketed more by males.
 4.2. Market channel and Actors functions in honey
markets
Actors and their functions in honey markets
 There are a variety of actors in honey marketing in the study area they are;-

i. Farmers:they are initial actors the initial actors and all of them are smallholder farmers who produce
honey and supply.
ii. Village Assemblers:-They collect the honey from producers and they resell it to retailers, teji makers
and consumers.
iii. Retailers:-they purchase honey either directly from producers or local collectors and deliver to teji
makers and other consumers. all of them in the study area were not licensed.
iv. Teji brewers: buys honey from farmers, local collectors and retailers to brew teji/beers and resell to
the customers.buy with high pollen content /less quality honey which is considered to speed up, to
change the color and enrich the process of fermentation.
v. Consumers:-are the final actors,buy honey from honey producers, local collectors and retailers for
their own consumption only.
 cont...
4.2.2 .Honey marketing channels
 The honey passes in the production-to-consumption path.
 Marketing channels is deliberated to know the point of origin
to final destination.
 The initial links for honey marketing channels are producers
 The final destinations in the districts are consumers.
 cont...
During the survey, the following honey marketing channels were identified.

Channel 1: Producers - honey collectors – retailers - consumers

Channel 2: Producers - honey collectors’- teji makers - consumers

Channel 3: Producers - retailers’- consumers

Channel 4: Producers – retailers - teji makers’- consumers

Channel 5: Producers - consumers

Channel 6: Producers - honey collectors- consumers

Channel 7: Producers - teji makers- consumers

Channel 8: Producers - honey collectors- retailers - teji makers- consumers

 4.3. Structure, Conduct, and Performance of honey Marketing

4.3.1.Market structure
Degree of market transparency
 The Reliability and timeliness of market information that the actors have for their
marketing decision.
 market transparency for honey in SEYO NOLE district
 The survey result indicates that only 35% of producers have adequate, timely and
reliable market information in the study area
 the remaining 65% of the honey producers lack adequate, timely and reliable
market information in the study area.
 70% of the traders mentioned that they have adequatetimely and reliable market
information in the study area
 The remaining 30% of the traders have no adequate, timely and reliable market
information.
 The result found out that traders have better exposure to information than the
producers.
 there is information asymmetry between the buyers and sellers in honey market in
the area.
 Cont…

Degree of market concentration

 Concentration ratio is expressed in terms of CRx ,stands for the percentage
of the market sector controlled by the biggest X firms.
 Four firms (CR4) concentration ratio is the most typical concentration ratio
for judging the market structure.
 CR4 of over 50% is generally considered a tight oligopoly

 CR4 between 25% and 50% is generally considered a lose oligopoly

 CR4 of fewer than 25% is competitive

 Market concentration ratio of honey traders will be presented

 cont
Concentration ratio for honey
 Concentration ratio for honey market was calculated by taking the annually purchased volume
of honey
 Calculated by taking the annually purchased volume of honey by market participants in
kilogram
 measured using the common measures of market concentration that is Concentration
Table 6 Concentration ratio of honey market at SEYO NOLE District
Number Quantities purchased %share of purchased %cumulative of purchased

By kg
1 700 15.09 15.09

2 500 10.78 25.87

3 480 10.34 36.21

4 450 9.70 45.91

5 450 9.70 55.64

6 450 9.70 65.31

7 420 9.50 74.36

8 400 8.62 82.98

9 400 8.62 91.60

10 390 8.40 100
Total 4640 100 100
 Cont…
 The above table shows that the concentration ratio for honey is 45.9%

 This indicates that honey markets in the districts were characterized as weak (lose) oligopoly
market behavior.

Barriers to entry and exit

 Market barriers in the study area variables like working capital and license

 The main source of capital and license of trader is considered to discuss the barriers of the
market.
 The two agent of market barrier to entry revealed in the area summarize in this table.

Table 7 barrier to entry &exit of honey traders

Barrier Frequency Percentage

Own capital 6 60%

Working capital browed from friend 4 40%

gift from relative 0 -

Licensed 10 100
License not licensed - -
 Cont…

4.3.2. Market conduct

 conduct of traders in honey market is presented and discussed in terms of
price setting and terms of payment.
Price setting: This is vital in honey trading action
 To know dominant setters of price /nature of the market actors either price
taker or price makers in the district.
 The price was set by demand and supply interaction via the negotiation of
sellers and buyers is 40%.
 The remaining 60% was set by the traders themselves.

Table 8 price setting of traders

Price setting strategy Number of respondents (N=10) Percentage
Negotiation 4 40%

Set by traders them selves 6 60%

 cont,…

Terms of payment: considerable in oney trading activity

 The 90% of Traders indicate that they pay the price as soon as they buy the
honey.
 The remaining 10% pay the price on the other day in 2022/2023.

 To compute with their competitors the traders pay the price as soon as they
buy the honey.
 but in rare cases they intended to pay the price another day .

4.3.3. Market performance

 Market performance of the honey in terms of the marketing margin will be
presented and discussed.
 Cont…
Table 9 market performance of honey
Market Actor Selling price GMM%

Producer 50 55.6

Local collector 62.5 13.9

Retailer 70 8.3

Teji brewer 90 22.2

Consumer 90 -

 GMMp=100%-TGMM.

 TGMM= (End buyer price-First seller price)/ (End buyer price) *100%.

 GMM=(Selling price-Purchase price)/(End buyer price) *100%.

 The final consumer price is shared by producer, collector, retailer and teji
brewer is 55.6%, 13.9%, 8.3%, 22.2% respectively.
 Firm which producer gets higher margin and retailer get lower margin
compared that of others actor.
 4.4. Mass per house hold and per hives of honey product in the study areaa
4.4.1. Mass per household of amount honey product in the study area
Table 10 mass per household hives amount of honey product

Types of Colony/household Number ofMin Max Mean S.D

respondent
Traditional hives colony5 8 40 24 2.93
/HH
Transitional hive colony/HH - - - - -

Traditional and Transional 3 10 14 12 1.41

hives colony/HH
Traditional and modern 5 5 30 17.5 2.89
hives colony/HH
Transional and modern hives3 10 20 15 2.23
colony/HH
Traditional, Transional and4 9 24 16.5 2.2
modern colony/HH

 In table 10 above many honey producer uses traditional hives and no honey producer transitional
hives alone
 The survey also indicates some honey producer uses the three types of hives.
 Some modernize honey producer uses only modern hives.
 4.4.2. Mass per hives of honey product in the study area

Table 11 mass per hives of honey product

Types of hives Amount of per hives in the study area(Kg)

Min Max Mean standard

deviation
Traditional 2 10 6 0.7

Transition 20 30 25 1

Modern 40 50 45 1

 The survey indicates modern have highly productive than the other.

 Modern hives is effective if producers use

 Modern per hives mean 45 kg, from Transition per hives mean25kg, and Traditional
per hives mean 6kg.
 CONCLUSION AND RECOMMENDATION

CONCLUSION
 The study was conducted at SEYO NOLE district to analyze the honey market chain

 The study also identified eight marketing channels for transaction of honey

 Among the channels producer- honey collector -retailer- teji maker-consumer marketing
channel .
 Honey marketing in SEYO NOLE district is characterized by oligopoly market behavior

 Due to asymmetric information between buyers and sellers that indicate in the calculation
of concentration ratio.
 with respect to behaviors of the actors/conduct of honey the majority of honey price is set
by honey trader themselves in the market.
 Starting from production up to marketing, every farmer produce and sold on individual
basis.
 Large of the honey producers practiced cash in hand system and take the price

 There is differential performance of the honey market in the market channels.

 Cont…
 It has the gross margin 55.6, 13.9, 8.3, 22.2 of producer, collector, retailer, brewer respectively.

 Among this study producer have highest and processor is the next one and retailer are the
lesser.
 The study also shows mass per household and per hive of the area.

 many honey producers use traditional hives and this hives gives very low product compared to
modern and transitional.
5.2. RECOMMENDATION
The following points were recommended to improve marketing chains of honey so as to enhance
its production, productivity and marketing in the study area.
 Improving productivity of the household, sale volume of the commodity can be expanded, due
to the introduction of modern beehives.
 Concerned bodies should focus on increasing production and productivity of the honey by
supplying improved because majority of the households produce honey using traditional bee
hives.
 The result also shows that there is information asymmetry between the honey producers and
traders.
 CONT…
 strengthening marketing organizations or dissemination of relevant information

 cooperatives, and other honey marketing institutions is crucial to involve in

communicating the honey producers to increase their bargaining capacity and
competitiveness in the honey production .
 Honey production is traditionally defined as a men’s work.

 Women should be encouraged to participate and receive training and institutional

support/credit service in beekeeping activities.