MARKET CHAIN

ANALYSIS OF BEEF CATTLE: IN CASE OF CHEHA

WOREDA ,GURAGHE ZONE

COLLAGE OF AGRICULTURAL AND NATURAL RESOURSE

DEPARTMENT OF AGRIBUSINESS AND VALUE CHAIN

MANAGEMENT

DEPARTMENT OF AGRIBUSINESS AND VALUE CHAIN

MANAGEMENT

SENIOR PROPOSAL PROJECT .Bsc

PREPARED BY:IBSA ABRAHIM ID 0785/12

ADVISOR : Ms.SARON. M (Msc)

MAY/2022

WOLKITE ETHIOPIA

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ACKNOWLEDGMENT
First of all, we I would like to thank god for his miraculous time to let us accomplish
everything we start and also for his help to go through every event successfully up to this
time. I would like to acknowledge my advisor ms Saron M For guiding me for checking and
editing my work and giving valuable comments during the senior proposal preparation. Next
we would like to thanks all staff members who work in Wolkite University Department of
Agri-business and Value Chain management lectures; they help us by everything they can.
Finally, our deep, sincere and respectful thanks to all who help and contribute us in one way
or another way to make this proposal is valuable.

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ABREVATION
CSA Central Statistics Authority

FAO Food and Agicultural Organization

AGP Agricultural Domestic Product

GDP Gross Domestic Product

NGO Non-governmenal Organization

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TABLE OF CONTENT

Contents

ACKNOWLEDGMENT
ABREVATION
TABLE OF CONTENT
ABSTRACT
1.INTRODUCTION
1.1.Background
1.2. Statement of the problem
1.3. Research questions
4. Who is/are the beneficiary in the beef cattle market chain?
1.4. General objective of the study
1.5. Specific objectives of the study
1.6. the Significance of Study
1.7. Scope and Limitations of the study
2. LITERATUR REVIEW
2.1. Market and Marketing Concepts
2.2. Beef cattle production system and market sources
2.3. Cattle marketing system in Ethiopia
2.4. Characteristics of cattle marketing in Ethiopia
2.4.1 Cattle marketing system in Cheha District
2.4.2. Characteristics of cattle marketing in cheha district
buy animals. In the terminal market (4th tire), big traders and butchers transact larger number of
mainly slaughter type analysis.
2.5. Empirical Literature Review
2.5.1. Marketing channels

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 2.5.2. Marketable surplus
2.6. The conceptual Frame Work
Figure 1the conceptual frame work beef cattle marketing(From the field servey)
2.6.1 Primary actors in beef cattle value chain.
2.6.2 Secondary Actors/Enablers/
3 METHODOLOGY
3.1. Description the study of area
3.2 Sampling Procedure
3.3. Data Type and Methods of Data Collection
3.3.1 Types of data
3.3. 2. Methods of Data Collection
3.4. Methods of data analysis
3.4.1 Descriptive analysis
3.4.3 Econometrical analysis
4. Work plan
5.Budget plan

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ABSTRACT
Beef Cattle is one of the most important economies in Ethiopia. Ethiopia show that livestock
account of total farm cash income of farmers, indicating the In different parts of the
highland importance of livestock in rural livelihood the main objective of this study analysis
value chain of beef cattle in selective chain actors in cheha district Both qualitative and
quantitative data collects Data from primary and secondary sources to identify important
independent variables that affect beef cattle market supply. . The primary data collecting
through formal survey using structured questionnaire and interview schedule. Data analyzis
information using descriptive statistics, inferential statistics using Statistical Package for
Social Sciences (SPSS) latest version. Findings of our study concludes that Crop production
and livestock rearing in the study area is the major livelihood system. The bases of low
productivity identifiies here simply echo past studies: lack of feed (quality and quantity, and
probably with seasonal volume mismatches), fair selling price, poor provision of veterinary
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health services, and weak service infrastructure are major problem. Depending on the result
of the findings and conclusion make we recommendations as feed shortage is the major
constraint for the area; Introduction of new improvement forage varieties which will help for
fattening and Lack of fair selling price by promotion of livestock marketing study will solve
the problem and bringing all actors along value chain will improve the market access for
optimum benefit of each actors.

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1.INTRODUCTION

1.1.Background
Beef Cattle plays an important role in economics and livelihood of farmers and pastoralists.
The agricultural sector in Ethiopia, engaging 85% of the population, contributes 52% to gross
domestic products (GDP) and 90% to the foreign exchange earnings beef cattle a total of 3.1
billion litters of milk and 0.331 million tone of meat annually CSA 2012 in cited Belete, et
al.,2017). In addition to, 14 million tones of manure are used annually primarily for fuel.
About six million oxen provide the drought power required for the cultivation of cropland
(Adages and Alemu, 2012); Befekadu andBirhanu2010 and cited Belete 2011). Livestock are
therefore closely linked to the economic, social and cultural lives of millions of resource poor
farmers for whom animal ownership ensures varying degrees of sustainable farming and
economic stability

. Beef Cattle significantly contributes to the pastoralists economy and is the major source
house hold wealth and supply end products that include milk,meat and hides and skins and
used as however, challenges of beef cattie producers is very complex and complicated with
policies and institutions related with the sector,this challenge are not technical (Too et al
2012) . They contribute to the livestock have multiple use aside from income generation;
including, cash and large ruminant animals further emphasize the significance of livestock in
the economy(sintayew et al 2013).Ethiopia is also recognized to have the largest population
of livestock in Africa (Halderm 2010), Ethiopia has 52 million cattle including 10.5 million
dairy cattle and 47 million shoat(CSA,2013).As the country has the largest livestock
population which ranks first in Africa and tenth in the world. It has much to gain from the
growing global Markets for livestock products. With this Imense and potentially productive
resource with such influence on house hold incomes as well as the national it is the
imperative for the Ethiopian to maximize the Economic value of their animal assets,
including use of the animal for value added products (AGP,2013).

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Meat production offers opportunity to serve a vast export market as well as Ethiopian
domestic market. It also drives much of the rest of the livestock value chain in Ethiopia
particularly hides, skins and leather (Brane,2014).

The major challenges to livestock production in Ethiopia were severe food shortage, high
disease prevalence, high predatory, poor market, genetically less productive breed, severe
water shortage and high shortage of laborer (Massena et al 2010).

Cheha district also contributes many amounts of Gross domestic product and foreign
currencies.specailly some animals which can resist high temperature and drought are
available.like sheep and cattles. But many of them use traditional way of rearing
animal.becuase they are pessimistic to have many animals simoltaneously and morely
illitrants.For the future they Will use systematic or modern way of rearing animals in harsh
environment.(source from Questionnaire)

The study will improve the market chain of live animals, implying value chain is important
beef cattle production and marketing;lack of well-defined breeding program and production
systems, lack of an integral connection between the stakeholders involved in the production
chain, limited access to market-related information (e.g. on prices, value chains, competitors,
consumer preferences) and lack of awareness about value chain in the area make production
and marketing inefficient.

1.2. Statement of the problem

Recently, several of cattle marketing development abattoirs are establishing in Ethiopia
response to the cattle export emerging cattle export opportunities to the right direction to

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increase Ethiopians foreign exchange earnings and improving the livelihood of livestock
marketers and other actors who engage on the livestock related activities.Also in cheha
district will appear in the next year's because they hope as their environment ,temperature
and educational facilities regarding rearing of animals specially beef and milk bearing cattle.

Historically, the small scale communal producers have found themselves in a difficult market
position because individually they lack sufficient volumes of cattle to attract buyers to their
farms (Jooste, 2013). Although a number of market outlets do exist in the province pointed
that pastoralists sell their cattle mainly through informal marketing channel which in most
cases have low purchasing power and as a result farmers get relatively low prices for their
animals. Thus the challenges to livestock farming in pastoral areas is making use of
marketing channels that offer the best cattle prices and hence highest returns. Also these
decisions require reliable information about cattle prices, the right selling time, the channel
available, cattle breeds and age of cattle that give the highest return (Daniel,2012)

The study will improve the market chain of live animals, implying value chain is important
beef cattle production and marketing;lack of well-defined breeding program and production
systems, lack of an integral connection between the stakeholders involved in the production
chain, limited access to market-related information (e.g. on prices, value chains, competitors,
consumer preferences) and lack of awareness about value chain in the area make production
and marketing inefficient.

Will allievate deperse Markets in remote areas; lacking price information. Generally, the
number of animals offered in a market is usually greater than the number demanded, so there
is excess supply. This effectively suppresses producer prices since the more mobile trader is
better informed on market prices, while better information combined with excess supply
place the trader in a better position during price negotiation.Will improve the harsh
environmental, social,a consideration of the people's on marketing .These animals more often
are sick, dehydrated and emaciated resulting in some being condemned at ante-mortem/post-
mortem inspection and generally poor carcass quality.

Also, the entire supply chain in Ethiopia is further characterized by numerous

intermediaries /actors namely: brokers, collectors; agents; animal trekkers, small, medium

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and big traders; wholesalers; abattoirs; butcheries; exporters; local authority and Department
of Veterinary . This makes the supply chain unnecessarily long with increased transaction
costs and without significant value added activities (Negassa, 2012).

1.3. Research questions

1. What looks like market channel of beef cattle?

2. What are the major constraints and opportunities of beef cattle market chain?

3. Who are the stakeholders participated in the beef cattle market chain?

4. Who is/are the beneficiary in the beef cattle market chain?

1.4. General objective of the study

The general objective of the study is will be analyzing market chain of beef cattle in cheha
district.

1.5. Specific objectives of the study

1. To Will assess the market channel of beef cattle in the study area.

2. To Will identify major constraints and opportunities of beef cattle market chain.

3.To Will assess the actors involved in the market chain.

4.To Will assess share of actors across market channel in the market chain

1.6. the Significance of Study

The study will helps to provide information on market chain analysis of beef cattle. This
information will help the farmers, traders, marketing agents, and others, who need
information for different purposes such as improve their beef cattle marketing system, in
order to increase their customer, facilitate their marketing channel and etc. Also, both
governmental and nongovernmental organizations(NGO) that are engaged in the marketing of
beef cattle sub sectors will be benefited from the result of this study. This study also will

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support us as a source of document and reference materials for researchers to embark on the
studies of the same or related kinds in other parts of the countries.

1.7. Scope and Limitations of the study

The study will express particular area of study on market chain analysis of beef cattle. It will
be restrict to undertake in cheha district particularly on cattle market. The study will also

limits to assess the market channel of beef cattle in the study area and to identify
major constraints and opportunities of beef cattle market chain due to financial problem and
lack of time.

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2. LITERATUR REVIEW
2.1. Market and Marketing Concepts
Value chain : Is a full range of activities that are connected together from production up to
consumption and disposal after use.

Market is an area in which one or more sellers of a given product or services and their close
substitutes exchange with and compete for the patronage for a group of buyers. Originally,
the term market stood for the place where buyers and sellers are gathered to exchange their
goods, such as village square. A market is a point or a place or a sphere where within which
price-making force operates and in which exchanges of title tend to be accomplice by the
actual movement of the goods affected (Backman and Davidson, 2010). The concept of
exchange and relationships leads to the concept of market. It is the set of actual and potential
buyers of a product (Kotler and Armstrong, 2011). Conceptually, however, a market can be
visualized as a process in which ownership of goods is transferred from sellers to buyers who
may be final consumers or intermediaries. Therefore, market involves sales locations, sellers,
buyers, and transactions

Marketing as a process by which individuals and groups obtain what they need and want by
creating and exchange products and values with others involves work. According to Kotler
and Armstrong (2010), marketing is managing markets to bring about profitable exchange
relationships by creating value and satisfying needs and wants. In addition to those
definitions, Lele and Jain (2011), defined the marketing concept, as philosophy of business,
which states that customers want satisfactions, is the economic and social justification for a
firm’s existence. Consequently, all the firms’ activities will devote to finding out what the
customers want, and then satisfying those wants while still making a profit over the long run.

Marketing chain is used to describe the various links that connect all the actors and
transactions involved in the movement of agricultural good from producer to the consumers
(Lunged et al.,2010).

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The definition of market channel is formally, business structure of independent. Organization
that transport the products from point of production origin to the customer for the purpose
moving products to the final consumption (kolar,.et al,2013).

Supply chain: A network between company and it's suppliers to produce distribute a specific
product to the final buyers.

Supply chain management: Is a crucial process because an optimized supply chain results in
lower cost and faster production cycle.

2.2. Beef cattle production system and market sources

A types of cattle used for meat. Based on integration of livestock with crop production, level
of input and intensity of production, agro-ecology and market orientation, livestock
production systems in Ethiopia is categorized as pastoral, agro-pastoral, mixed crop-livestock
farming, urban and peri-urban farming and specialized intensive farming systems
(Mohammed et al., 2011;Yitay, 2010). However, the livestock production systems are
predominantly categorized as the mixed crop–livestock system in the lowlands. Traditionally,
fattening of animals in both systems concentrates on male animals and on females which are
either infertile or have finished their reproductive cycle. During the wet season, when crop
residues are scarce in the highlands, male animals are taken to the lowland areas for grazing
There is little evidence of strategic production of livestock for marketing except some sales
targeted to traditional Ethiopian festivals(Eliaset al., 2012).

The livestock marketing structure follows a four-tier system, of which different actors
involve in buying and selling of beef cattle in the market system .The main actors of the 1st
tier are local farmers and rural traders who transact at farm level with very minimal volume,
1–2 animals per transaction irrespective of species involved. Those small traders from
different corners bring their livestock to the local market (2 nd tire). Traders purchase a few
large animals or a fairly large number of small animals for selling to the secondary markets.
In the secondary market (3rd tier), both smaller and larger traders operate and traders and
butchers from terminal markets come to buy animals. In the terminal market (4 th tire), big
traders and butchers transact larger number of mainly slaughter type animals. From the
terminal markets and slaughterhouses and slabs, meat reaches consumers through a different
channel and a different set of traders/businesses (Kotler and Armstrong, 2013)

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Historically, the small scale communal producers have found themselves in a difficult market
position because individually they lack sufficient volumes of cattle to attract buyers to their
farms (Jooste, 2013). Although a number of market outlets do exist in the province pointed
that pastoralists sell their cattle mainly through informal marketing channel which in most
cases have low purchasing power and as a result farmers get relatively low prices for their
animals. Thus the challenges to livestock farming in pastoral areas is making use of
marketing channels that offer the best cattle prices and hence highest returns. Also these
decisions require reliable information about cattle prices, the right selling time, the channel
available, cattle breeds and age of cattle that give the highest return (Daniel)

2.3. Cattle marketing system in Ethiopia

According to (Ayele,2017), livestock marketing in Ethiopia follows a three- tier system ;
primary, secondary and terminal markets through which animal go in to the hands of small
traders and then to the large traders, finally to the buyers which includes butchers, meat-
processing factories, fattening farms or live animal exporters, purchase livestock at any stage.
The Ethiopian livestock marketing enterprise and state-owned pastoralist exports beef
animals mainly to the Middle East countries parameter fencing to facilitate tax collection.
Markets are dispersed with remote markets lacking price information. Generally, the number
of animals offered in the local market is usually greater than the number demanded, so there
is excess supply.

2.4. Characteristics of cattle marketing in Ethiopia

According to the result of a base line survey report by ACDI/VOCA (2016b According to the
result of a base line survey report by ACDI/VOCA (2016b), social and cultural relationships
with the people across the boarders and weak economic and market bondages with the
country Will create conducive situations for market links across the borders.

Livestock are generally traded by ‘eye-ball’ pricing, and weighing livestock is uncommon.
Prices are usually fixed by individual bargaining and depend mainly on supply and demand,
which is heavily influenced by the season of the year and the occurrence of religious and
cultural festivals (TilahunFekade, 2011)

2.4.1 Cattle marketing system in Cheha District

According to the research livestock marketing in cheha district follows a three- tier system ;
primary, secondary and terminal markets through which animal go in to the hands of small
traders and then to the large traders, finally to the buyers which includes butchers, meat-

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processing factories, fattening farms or live animal exporters, purchase livestock at any stage.
, where only some have parameter fencing to facilitate tax collection. Markets are dispersed
with remote markets lacking price information. Generally, the number of animals offered in
the local market is usually greater than the number demanded, so there is excess supply. This
effectively suppresses producer prices since the more mobile trader is better informed on
market prices, while better information combined with excess supply place the trader in a
better position during price negotiation(Sintayehu, 2013) buy animals. In the terminal market
(4th tire), big traders and butchers transact larger number of mainly slaughter type animals

2.4.2. Characteristics of cattle marketing in cheha district

According to the result of a base line survey report location advantage, proximity to the
strategic cattle markets and sea ports; similarities, same language, social and cultural
relationships with the people across the boarders and weak economic and market bondages
with the country have created conducive situations for market links across the borders.

Livestock are generally traded by ‘eye-ball’ pricing, and weighing livestock is uncommon.
Prices are usually fixed by individual bargaining and depend mainly on supply and demand,
which is heavily influenced by the season of the year and the occurrence of religious and
cultural festivals.

2.5. Empirical Literature Review

2.5.1. Marketing channels
According to Giles (2012), the term ‘channels of distribution’ refers to the system of
marketing institutions through which goods or services are transferred from the original
producers to the .ultimate users or consumers. Most frequently a physical product transfer is
involved, but sometimes an intermediate marketing institution may take title to goods without

According to Stroebel (2013), constraints affect the efficient marketing of livestock in

Eastern of Africa are mainly the poor marketing infrastructure, lack of marketing herd size,
high transportation costs, low purchasing power of buyers and shortage of feed for livestock
consumption. This implies that marketing of livestock is probably one of the most complex
policy issues to be addressed for enhancing sustainable small holder agriculture (Jooste,
2012).

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actually handling them. Kohl’s and Uhl (2011), cited in DucHai, (2011) define channels
marketing as “alternative routes of product flows from producers to consumers”.

They focus on the marketing of agricultural products, as does this study. Their marketing
channel starts at the farm-gate and ends at the consumer’s front door. The marketing channel
approach focuses on firm’s selling strategies to satisfy consumer preferences.

Kotler (2012) also explains marketing channels as a set of interdependent organizations

involved in the process of making a product or services available for use or consumption.
Most producers do not sell their goods directly to the final users; between them stands a set of
intermediaries performing a variety of functions. These intermediaries constitute a marketing
channel also called a trader channel or distribution channel.

2.5.2. Marketable surplus

Marketable surplus can be defined as the residual production of agricultural produce left with
the producer after meeting his requirements of family consumption, farm needs (seed and
feed), kind

Payments, etc. The importance of increasing marketable surplus for meeting the increasing
demand for food, raw materials and other agricultural products by the non-farming
population. If the size of marketable surplus in an economy does not rise, it may well
contribute a fundamental limiting factor on the development by reducing supplies available
for urban consumption, for industries and markets

2.6. The conceptual Frame Work

The conceptual frame of analysis beef cattle marketing efficiency in Gasore and Buchach
Kebele, South Nation and Natioalities and People region state of beef cattle value chain
actors were identified from farmers (producer), middleman, traders, butcheries,
supermarkets/hotel and end up with the consumer. It was conceptualized that farmers may
trade with a number of actors depending on time, place and situation. It was conceptualized
that farmers may trade with a number of actors depending on time, place and situation., the
market will be efficient since the profitability between one actor and the other will be
substantial.

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 Production Trading Retailing Consumption

Traders

Marketin
g
Supermarket/ Final
Efficienc
Hotels consumer
y Middle Men

Farmers

Butcheries

Abattoir

Profitability

Figure 1the conceptual frame work beef cattle marketing(From the field servey)

2.6.1 Primary actors in beef cattle value chain.

Primary actors: are those actors who directly involved in beef cattle value chain starting from
input suppliers, producers, local collectors, traders, butchers, hotels, and resturants to end
users of beef cattle marketing(From the field survey)

Each of these actors adds value in the process of changing product tittle.

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Suppliers of inputs: at this phase of value chain there are many actors among other who are
directly involved in input supply for beef cattle production. including ,supply of credit cattle
for fattening purpose, animals feed, veterinary science, training and advisory services.

Prducers: Is one among value chain actors who are involved in fattening of different age
categories of cattle for a limited period of time usually 3-6months& finally supply for sell
when the cattle condiones.

-They fatten cattle by traditional fattening system through utilizing available feed resources
mostly in sem-intensive types of feeding system. Brokers:Are mediators between sellers and
buyyers in beef cattle market.

Farmer traders: Are usually buying beef cattle from farmers at farm gatte and same times
from bush markets to sell on to butchers, hotels,& restaurants consumers and small & large
trader in the sudy areas.ther main functions include: purchasing ,price setting, controlling the
marketing process and providing market information.

Small traders: Are Traders who purchase beef cattle from producers and farmer traders at
local markets through broker inte rferences.After they purchase mostly they sell to butchers,
hotels, and restaurants owners, large traders who transport to other large cities outside of the
study area.

Large traders: Are those traders purchasing mostly the beef cattle from farmer trader,small
trader,and sometimes from producers at local market through high broker interferences.Their
Main functions include; buying market searching,controlling market processes,providing
market information,and beef cattle for local consumers out of study areas and export market
mainly to the middle east and other african countries.

Butchers:Are those among beef cattle value chain actors who usually purchase fattened beef
cattle from producers, farmer traders,and small traders to slaughter at abbatior and provide
same part beef for hotel and resturant &the other for local consumer at aspecified place.

Hotels and resturant owners: Are Those who invest control the hotel or resturant business
Consumer which belongs to the sole proprietor or partnerships: Are the final users who buy
beef directly from butchers or value added beef product from hotel and restaurants or who as
groupbuy beef cattle either from producers or farmer traders to slaughter and share beef

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during the holidays, ceremonies, festivities and other informal institutional occasions in the
study areas.

2.6.2 Secondary Actors/Enablers/

In Value Chain ,enablers include all chain specific actors providing regular support services
or representing the common interest of the value chain actors.

The supporting function players are those who are not directly related to the beef cattle value
chain but provide different supporter

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3 METHODOLOGY

3.1. Description the study of area

To This study will be undertaken in Cheha district which found in South Nation and
Nationalities and peoples regional state .The district is found 197 km from Addis Ababa in
south direction and far away about 30 km from Wolkite town Cheha district is located
between 7.99-8.25 latitude north and 37.59-38.06 East. The mean maximum and minimum
temperature is 27 and 18 respectively. The district receives a rainfall between 900-1500. It
has a total of 39 kebeles, total population of Cheha district 115951 for the year 2007of
whom 56851 male and 59100 female. It also covers a total of 57315 hectares (ha). Majority
of the area is part of the weyena dega agro-climate zone covering about 80 % of the total land
and followed by dega with a total coverage of 20 % .Cheha wereda is bordered by Abeshge
district at the North, Gera and Enemor districtat the south, Ezha and Gumer district as at the
East and both Yem especial district and Oromiya region at the west. Agriculture and Rural
Development Office (ARDO) (CWARDO, 2017).

This research we will use survey research design. Since this research focuses on general
discussion and pretest with more in emphasis on participant observation and reviewed vireos
documents in order to identify the beef cattle marketing problem in Buchach and Gasore
Kebele

3.2 Sampling Procedure

In this study,we will use two-stages of sampling procedure. In this study,we will use two-
stages of sampling procedure . In the second stage sample households from each kebele have
to use simple random sampling procedure. This study applies a simplified formula provided
by (sample size because the households in the area are homogeneous Yamane, 1967) with
90% confidence level with 10% level of precision is used in order to reduce characteristics.

The formula is given as; n= N/ 1+N (e) 2

Sample Kebeles Total number of farming Sampled HHS

HHS

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 Gasore 490 55

Buchach 344 38

Total 834 93

N= 834

e=0.1 n=834/1+834(0.1)2

n= 834/9

n= 92.6666

n≈ 93

Where:

n = sample size

N = the population size and

„e‟ = the level of precision (i.e. 0.1) According to the above formula, the sample size was
approximately 93

A simple proportion formula is then used to calculate for the number of households who are
interviewed in each selected kebeles as follows

Gasore= is selected from 55hh

Buchach 344 = is selected from 38hh

Randomly sampling procedure will be used to select sample households

Therefore, the sample size consists respondents from Gasore 55 and from Buchach 38
respectively.

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 Cheha Woreda

purposively

Gasore(55)
Randomly

Buchach(38)

93
Respondet Randomly

3.3. Data Type and Methods of Data Collection

3.3.1 Types of data
This is study uses qualitative and quantitative types of data. Regarding sources of data, both
primary and secondary sources we use To collect valuable and relevant data.

collecte from reports of different organizations, including government institutions like

agricultural offices (regional, zonal and district), individuals and from different researches

3.3. 2. Methods of Data Collection

Primary data will be collected through structured interviews, and personal observations.
Secondary data will be gathered from written documents like books, newspaper available in
library and internet browser. Primary data will be collected from different stakeholders who
participated in the production and marketing of the beef cattle like farmers or producers,
middlemen (traders and broker), and consumers

3.4. Methods of data analysis

Method of data analysis refers to how data is going to organized, analyzed, and interpretes by
the use of various types of methods and systems. To meet the objective of the study, a brief
16
descriptive statistics method like percentage, figure, and table will be used to analyze and
other methods like value chain Descriptive analysis and Econometrical analysis.

3.4.1 Descriptive analysis

Descriptive analysis: Descriptive statistics (percentage, frequency, mean and standard
deviation) and inferential statistics (independent ,t- test and z- test) will be used for the
analysis of quantitative data.

Value chain Analysis: Is a process of breaking a chain in to its constituents in order better
understand its structure and functioning.

Estimates of the marketing margin are the best tools to analysis performance of market.

Marketing margin will be calculated by taking the difference between producers and retailer
prices. The producers share is the commonly employed ratio calculated mathematically as;
the ratio of producers price to consumers price.

Mathematically, Ps= Pp/CP=1-MM/Pp where Ps is producers share;Pp,is producers

price; CP, consumers price and MM, is market margin.

The above equation tells us that a higher marketing margin diminishes producers share and
vice versa. It also provides an indication of welfare distribution among production and
marketing calculating the Total marketing margin Will be done by using the following
formula computing the total gross marketing margin (TGMM) is always related to the final
price paid by the end buyer and is expressed as a percentage (Mendoza,1995).

TGMM= consumers price- Producers price/consumers price*100%

Where; TGMM is total Gross marketing margin,

Net marketing margin (NMM) is the percentage over the final price earned by the
intermediary as his net income once his marketing costs are deducted.The equation tells us
the higher marketing margin diminishes the producers share and vice versa.It also provides an
indication of welfare distribution among production and marketing agents.

NMM=Gross marketing margin-marketing cost/consumers price*100%. From this measures

it is possible to see the locative efficiency of markets higher NMM or profit of the marketing
intermediaries reflects reduced downward and un fair income distribution which desperse

17
market participation of small holders.An efficient marketing system is where the net margin
is near to reasonable profit

3.4.3 Econometrical analysis

Econometrical analysis: This part of study deals with the understanding of determinants of
volume per quantity of the beef cattle supplied to the market. Selection of Econometrical
model requires taking in to account the nature of dependent variable among others. Hence,
the appropriate Econometrical model that help to identify the factors affecting the quantity of
beef cattle supplied to the market is OLS model .If participation of all households in
marketing of the commodity is not expected using OLS model by excluding Nonparticipants
from the analysis introduces selectivity bias to the model. Econometric model specifications
of supply function in matrix notation will be expressed as:

Y= B+B1x1+B2x2+B3x3+.....Bnxn + €i. Where,

Y: quantity of beef cattle supplied to the market

B: a vector of estimated coefficient of explanatory variable.

X: a vector explanatory variable.

€i: Error terms.

Econometric results: prior to fitting multiple linear regression model the hypothesizes
variables will be checked for the existing of Multicollinearity, Heteroscedasticity, and to end
ogeniety of problem. Among the variables sex, age Educational level, family size , Access to
market information,

3.7. Definition of Variables and Hypothesis

Determinants of the participation decision and level of participation of smallholder milk
producers in beef market supply and beef value addition including their response effects
were hypothesized as follow:

3.7.1. Dependent Variable

Amount of beef cattle supply to the market, which is continuous variable measured in
number. Variable specification and hypotheses:- In the way of identifying factors

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influencing beef cattle supply to the market, the main task is exploring which factors
potentially influence and how these factors are related with the dependent variables.

3.7.2. Independent Variables

The explanatory variables that will hypothesize to influence the smallholder beef producer
probability and intensity of beef cattle market supply and beef value addition were the
following.

Age of the household head (AGHH):-This is a continuous variable measured in years. The
expect sign was positive. As an individual stays long, he/she have better knowledge and
decide to allocate more size of land, produce more and supply more. Hence, direct relation
was assumed between age and amount sold Wubshet (2010).

Sex of household head (SHH); this is dummy variable (takes a value of 1 if the household
head is male and 0 otherwise). The variable is expected to have a positive relation with milk
market entry decision. The tshiunza eta (2008); the determinant of beef cattle market chain
analysis.

Educational level of the household (edulevel): It is a continuous variable measured in

number of years of formal schooling and hypothesized to have a positive relationship with
probability and intensity of beef market supply and value addition. Education can enhance the
knowledge and skills of farmers and enables them to perform the farming activities in an
appropriate way accordingly. Moreover, formal education enhances the information sharing
and technology implementation abilities of the farmer, thereby improving the quality of
decision making (Fakoya et al., 2007).

Family size of the household (thousehsz): is a continuous variable measured in number and
assumed to influence positively the level of participation of smallholder beef producer
households in milk value addition. This is assumed due to the fact that when the number of
family size increases, the probability of work force availability per household increases and
thereby increase level of participation in milk value addition since there may not be lack of
work force. Finding of Kumar (2015)

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Access to market information (ACMIF): This is a dummy variable and takes a value of 1 if
a farmer has market information and 0 otherwise. Farmers marketing decisions are based on
market price information, and poorly integrated markets may convey inaccurate price
information, leading to inefficient product movement. Therefore, it is hypothesized that
market information is positively related to amount to sold..

Distance from market/urban centers (distance home): is a continuous variable measured

in hour from the home of milk producer households to the market centre and hypothesized to
affect negatively households’ probability of participation and level of participation in milk
market supply, but hypothesized to influence positively households’ decision of participation.
It is a continuous variable measured in hour. The closer market the lesser the transportation
charges, reduced transaction costs, and reduce other marketing cost.

Price: This is the price offer a farmer got from selling his produce. It is a continuous variable
measured in Birr per cettle and expect to influence supply decisions positively. The study of
Wolelaw (2005), on determinants marketed supply of rice found a significant positive
relationship between rice sold and current price.

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Farm size (FARMS): This is a continuous variable expresses in hectare indicating the total
land owned by a farmer. It is expects to take positive sign implying that the larger land size a
farmer owns the more land size was allocate for the cattle of interest. Increase in size of land
is assumed to directly influence supply. Branson and Novell (1983) and DNIVA (2005)
found expanding the area under crop increasing the marketed supply of the cattle.
Access to credit (ACCR): This is a dummy variable that represents access to both formal
and informal credit for farm related purposes. It was measured as 1 if a farmer has access to
credit and 0 otherwise. Access to credit is an important source of financing the agricultural
activities of smallholder farmers (Kinde, 2005). Hence, access to credit is predicted to have a
direct relationship with the supply.

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4. Work plan

Months

No. Plan of activities Dec Jan Feb Mar Apl May June

1 Collecting information 

2 Visiting study area 

3 Proposal submission 

4 Preparing questionnaire 

5 Data collection 

6 Data analysis 

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7 Data editing 

8 Report writing 

9 Submission of final report 

10 Presentation 

5.Budget plan
No. Item Unit Quantity Price/unit Total price/unit

1 Paper Pack 1 150 150 birr

2 Pen No. 4 15 60

3 Binder ,, 1 25 25

4 Flash ,, 1 120 120

5 Ruler ,, 1 5 5

6 Printing Page 100 100

7 Typing ,, 25 5 125

8 Transport Km 3times 100 300

9 Pencil No. 1 2 2

1o Contingency Day 11 10 110

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 11 Mobile card No. 4 25 100

Total 1097 Birr

Table: 6 Budget summary

No Categories Sub-total (ETB)

1 Stationary cost 487.00

3 Perdiem cost 170.00

4 Transportation cost 800.00

Total (ETB) 1448.00

Contingency (10%) 110

Grand total (ETB) 1558.00

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