Structure, Conduct and Performance of Groundnut Markets: The Case of Fogera Woreda, South Gondar Zone of Amhara Regional State

This paper looks at and assesses the structure, conduct and performance of groundnut markets in Fogera Woreda, South Gondar Zone of Amhara Regional State. Households and traders concerned in groundnut were interviewed for obtaining primary data. The study was conducted by incorporating from two kebeles of 175 groundnut producing households and seven markets of 34 traders. A multi stage sampling procedures were employed to select sample producers while for groundnut traders snowball sampling techniques was used. The result shows that nine major groundnut marketing channels were identified and using the respondents a total of 7432.8 quintals of groundnuts were transacted in 2015/16 production season and among its rural assemblers and urban wholesalers purchased about 66.7% and 29.33% of the total produce respectively. The analysis of the market structure indicates that the concentration ratio of 76.61% at Bahirdar market, which shows an oligopolistic market structure and which resulted in a groundnut market conduct characterized by a market strategy in which the traders have an upper hand in fixing the price of the groundnut as well as effecting payment by the time in favor of the traders. Concerning the market performance, the findings show that the benefit from groundnut marketing is skewed to few actors in the market chain. Notably, street vendors had the highest gross marketing margin with estimated share of 51% found in the channel III and followed processors and urban retailers with estimated share of 43.7% and 38.89% in channel I and II of the consumer’s price respectively. The highest total gross marketing margin found in channel IX which accounts for 64.81% of the consumer’s price and followed by channel VII and VIII which accounts each with estimated share of 64.05% of the consumer’s price. The lowest producers’ share is appropriated in channel IX which accounts 35.19% of the consumer’s price. The findings from this study, so strongly recommended that establishing well organized cooperatives for reducing the inefficiency due to high marketing margin as well as the oligopolistic market structure.