Determinants of Rice Market Supply and Profitability along the Rice Value Chain: A Case of Pawe, North-Western Ethiopia

Abstract

Rice is a new crop in Ethiopia, and its demand is increasing. Currently, rice growing areas are quite far from their potential, and the government is forced to import huge quantities of rice to meet domestic consumption due to insufficient production and market supply. The study focused on the factors influencing rice supply in the market and profitability among smallholder paddy farmers in Pawe, North Western Ethiopia. Purposive and simple sampling techniques were used to choose target kebeles and respondents. Quantitative data were gathered from 185 farmers and 16 traders and analyzed with IBM SPSS and Stata software to analyse and discus the descriptive
and econometric results respectively. The results will next be triangulated through focus group discussions and key informant interviews. The quantitative data used for gross margin analysis were analyzed using descriptive and inferential statistics. A multiple linear regression model was used to analyze the factors associated with rice supply in the market while the profitability of the smallholder paddy framers was determined through gross margin analysis. Study findings show that farmers, local traders, wholesalers, and retailers were the main actors in rice marketing in Pawe. Findings further show that retailers obtained the highest gross profit of 289.25 birr from
paddy and 580 birr/0.1tons from milled rice. The regression analysis revealed that education level, farming experience, rice-allocated land, productivity, training, lagged price, and frequency of extension contact are all positively and significantly associated with rice supply in the market y, whereas household size and market distance have been negatively and significantly associated with market supply. Therefore, stakeholders like professionals and others needs placing greater focus on each positive and significant variable in order to improve rice market supply and better connect it to rice value chains, ensuring farmers sustainability of market supply