Market Chain Analysis of Cotton the Case of Arbaminch Zuria District, Gamo Gofa Zone, Ethiopia

Abstract

Both primary and secondary data were used. A total of 123 sample households were selected from three kebeles of Arbaminch zuria district and 26 cotton traders, 9 small and micro enterprises, and one textile company were interviewed using semi structured questionnaire. Descriptive statistics and Econometrics models were used to analyze the data. Descriptive statistics results show that the main cotton market chain actors in the study area are input supplier, producers, local collectors, wholesalers, ginners, cottage level weavers, textile factories and retailers. Market concentration ratio at district level was calculated using HHI and its value was 0.553, which shows that cotton marketing was highly concentrated on hands of few in the study area. Econometrics models analysis shows that six variables, namely; cotton farming experience, size of land allocated to cotton in hectare, use of improved seed and current year cotton price were significant at 1% significance level, whereas number of extensions contact and distance to nearest market were found to be significant at 5% significance level. Provision of new improved cotton varieties, regulation and implementation of cotton price tariffs, strengthening and provision of sustainable and knowledge-based extension service were recommended to improve and strengthening cotton value chain in the study area. Keywords: