Haramaya university school of graduate studies

1.3. Objective of the Study

The general aim of this thesis is to examine the vegetables marketing system in the Kombolcha district to draw policy recommendations that improve the performance of vegetables markets.

The specific objectives of the study are:

1. To analyze the market structure, conduct and performance of vegetable market;

2. To analyze the major determinants of marketable supply;

3. To analyze market integration between the secondary and the reference markets; and

4. To identify the principal constraints and opportunities in the marketing of vegetables

1.4. Scope and Limitations of the Study

Attempting to analyze the entire vegetables and markets are an impossible action given the limited resources and human skill. Thus, the research was narrowed down to concentrate on the production area Kombolcha and major receivers Jigjiga . The types of vegetables were limited to potato and cabbage for their increasing coverage and the marketing problem they used to face.

Moreover, these crops accounted for the major proportion of vegetable production and passed through a number of marketing stages. Other vegetable crop types are left, because either their production is limited, or they did not pass through a number of stages.
Different market levels, determinants of marketed supply, price discovery and bargaining characteristics of producers, buying and selling strategies, and traders’ behavior in the marketing process were seen.

1.5. Significance of the Study

The primary significance of the study is to all actors in the marketing system. Analysis of the whole system and identifying clearly the challenges will benefit policy makers and implementers in indicating the area of advantage for what should be done to improve vegetable marketing.

Apart from this, the study used Heckman two stage model to identify determinants and extent of market participation, to adjust the selection bias.
Due to shortage of budget, and logistics, the researcher couldn’t cover all vegetables producing PAs and vegetables markets found in the study areas. And also due to lack of secondary data on all sample markets the study was unable to evaluate the market integration among all markets.

1.6. Organization of the Study

With the above brief introduction of the research paper, the remaining part of the thesis is organized as follows. The next main section reviews detailed literature on relevant topics on the study of production, marketing, and challenges of vegetables. The successor deals with the research methodology starting with description of the study Woreda and end up with definition of econometric variables. The second from the last section explains results and discussions, including data presentation on respondents’ socio economic characteristics, and econometric analysis of detriments and extent of market participation. The final section obviously summarizes the findings of the study with some recommendations.

2. LITERATURE REVIEW

In this chapter, the basic concepts of market, marketing, agricultural marketing, approaches to the study of agricultural marketing, vegetables, characteristics of vegetables and its marketing, vegetable production and marketing in Ethiopia, structure-conduct- performance, market integration, measures of market concentration and integration and analysis of factors affecting market supply are discussed.

2.1. Concepts and Definitions

Market: The word “market” has many connotations. Bain and Peter (1988), define “markets” as a single arrangement in which one thing is exchanged for another. A market is also thought of as a meeting point of buyers and sellers, a place where sellers and buyers meet and exchange takes place, an area for which there is a demand for goods an area for which price determining forces (demand and supply) operates. For McNair and Hansen (1956), “market is another name for demand”. Others define market as a system or an atmosphere or a mechanism that facilitate price fixation and thereby exchange of goods and services.
Marketing: In its simplest form is defined as the process of satisfying human needs by bringing products to people in the proper form, time and place (Branson and Norvel, 1983).
Marketing has an intrinsic productive value, in that it adds time, form, place and possession utilities to products and commodities. Through the technical functions of storage, processing and transportation, and through exchange, marketing increases consumer satisfaction from any given quantity of output Mendoza (1995). Kotler (2003) also stated shortly marketing as the task of creating, promoting, and delivering goods and services to consumers and businesses.
Agricultural Marketing: It is defined as agriculturally oriented marketing. It embraces all operations and institutions involved in moving farm products from farm to consumers Pritchard (1969). It covers all the activities associated with the agricultural production and food, feed, and fiber assembly, processing, and distribution to final consumers, including analysis of consumers’ needs, motivations, and purchasing and consumption behavior (Branson and Norvell, 1983).
It is both a physical distribution and an economic bridge designed to facilitate the movement and exchange of commodities from farm to fork. Food marketing (of branded foods) tends to be inter-disciplinary, combining psychology and sociology with economics, whereas agricultural marketing (of unbranded products) is more mono disciplinary, using economics almost exhaustively (Kohls and Uhl, 1985).
Marketable and marketed surplus: Marketable surplus is the quantity of produce left out after meeting farmers‟ consumption and utilization requirements for kind payments and other obligations (gifts, donation, charity, etc). Marketed surplus shows quantity actually sold after accounting for losses and retention by farmers, if any and adding previous stock left out for sales. Thus, marketed surplus may be equal to marketable surplus, it may be less if the entire marketable surplus is not sold out and farmers retain some stock and if losses are incurred at the farm or during transit (Thakur et al., 1997). The importance of marketed and marketable surplus has greatly increased owing to recent changes in agricultural technology as well as social pattern. In order to maintain balance between demand for and supply of agricultural commodities with rapid increase in demand, accurate knowledge on marketed/marketable surplus is essential in the process of proper planning for procurement, distribution, export and import of agricultural products (Malik et al., 1993).