Analysis of Potato Seed Tuber Value Chain: Implication for Private Sector Development: The Case of Small Scale Farmers in Jeldu District of West Shewa Zone, Oromia, Ethiopia

Abstract

The study presents value chain analysis of potato seed tuber based on the data generated from 120 randomly selected farm households, 15 traders and 20 consumers. The analysis was made using descriptive statistics and value chain framework approaches. The value chain analysis revealed that the major actors in the district are input suppliers, producers, cooperatives, collectors and wholesalers. Accordingly, the value chain functions performed by major actors in the study area during the survey period are input supply, production, marketing and consumption. The study shows that the value chain is governed by wholesalers who have high percent share of profit from the produce and capital advantage over the other major chain actors. Therefore, the study confirmed that farmers are forced to capture a lower share of profit margin compared with collectors and wholesalers. Potato seed tuber produced in the study area passes through intermediaries, i.e. cooperatives, collectors/assemblers and wholesalers with little value being added before reaching the end-users. The intermediate buyers (collectors and wholesalers) obtain the potato seed tuber from the small scale farmers at a lower price and sell to the consumers at a higher price and they handle less volume of the product but they get more share of the profit from potato seed tuber. The percentage of the share of profit from potato seed tuber for a quintal of potato seed tuber was 30.0, 3.96, 30.35and 35.62 for small scale farmers primary producers’ cooperatives, collectors and wholesalers respectively. From the finding of the study policies intended to increase small scale farmers and their cooperatives’ bargaining power to increase their profit share from their produce are recommended.

Keywords: value chain, value chain actors and value chain governance.