ARBA MINCH UNIVERSITY

COLLEGE OF AGRICULTURAL SCIENCE

DEPARTMENT OF AGRICULTURAL ECONOMICS

SENIOR RESEARCH
ON
THE FRUITS’ MARKETING CHALLENGES AND OPPORTUNITIES:
THE CASE OF ARBA MINCH TOWN

Prepared By: -
Hayat Mohammed

Advisor: Gadisha katola (MSc.)

Submitted to the Department of Agricultural Economics, College of Agriculture and Natural

Resource, Arba Minch University, in Partial Fulfillment of the Requirements for the Course
Senior research

May, 2024
Arba Minch, Ethiopia
ACKNOWLEDGEMENT
I would like to express my deepest gratitude to all those who have contributed to the completion
of this senior research work.
Firstly, I am profoundly grateful to my advisor Mr. Gadisha katola for his unwavering support,
guidance, and invaluable feedback throughout this research work. His expertise and
encouragement have been instrumental in the successful completion of this research. I would
also like to extend my thanks to the faculty and staff of the Agricultural Economics department
in the University for providing the resources and support needed for this research.
I am grateful to my family and friends for their continuous encouragement, understanding, and
patience during this demanding period. Their moral support has been a cornerstone of my
perseverance. In addition, I would like to acknowledge my classmates for their collaborative
spirit and insightful discussions that have enriched this research experience.
Finally, I would like to extend my gratitude to all who have helped me in one or another way
during the preparation of the research report.
Key words: fruit marketing, challenges and opportunities, economic development, arba minch

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Table of Contents
ACKNOWLEDGEMENT.............................................................................................................I
LIST OF TABLES......................................................................................................................IV
LIST OF FIGURES......................................................................................................................V
ABBREVIATION AND ACRONYMS.....................................................................................VI
ABSTRACT................................................................................................................................VII
1. INTRODUCTION.....................................................................................................................1
1.1 BACKGROUND........................................................................................................................................................1
1.2 STATEMENT OF THE PROBLEM..................................................................................................................................3
1.3. RESEARCH QUESTIONS............................................................................................................................................4
1.4. OBJECTIVES OF THE STUDY......................................................................................................................................5
1.4.1. General objectives: -.............................................................................................................................5
1.4.2. Specific objectives................................................................................................................................5
1.5. SCOPE OF THE STUDY.............................................................................................................................................5
1.6. SIGNIFICANCE OF THE STUDY...................................................................................................................................5

2. LITERATURE REVIEW.........................................................................................................6
2.1 THEORETICAL LITERATURE REVIEW.............................................................................................................................6
2.1.1. Definition and concept..........................................................................................................................6
2.1.2 Characteristics of Fruit Marketing.........................................................................................................7
2.1.3. Framework for Evaluating Efficiency of Agricultural Marketing System Structure, Conduct and
Performance (SCP) model..............................................................................................................................8
2.1.4. Market Opportunities and Constriction................................................................................................9
2.1.5. Main Constraint of Fruit Marketing......................................................................................................9
2.1.6. Favorable Condition of Fruit Production and Marketing...................................................................10
2.1.7. Market Participants.............................................................................................................................11
2.2. EMPIRICAL REVIEW..............................................................................................................................................12
2.2.1 Factor affecting fruit marketing...........................................................................................................13
2.2.2. Challenges and opportunity of fruit marketing...................................................................................14
2.3. CONCEPTUAL FRAMEWORK...................................................................................................................................15

3. METHODOLOGY..................................................................................................................18
3.1. DESCRIPTION OF THE STUDY AREA..........................................................................................................................18
3.2. TYPES AND SOURCES OF DATA...............................................................................................................................18
3.3. METHOD OF DATA COLLECTION.............................................................................................................................19
3.4. SAMPLING SIZE DETERMINATION AND SAMPLING TECHNIQUE......................................................................................19
3.5. METHODS OF DATA ANALYSIS...............................................................................................................................20
3.5.1. Descriptive statistics analysis.............................................................................................................20
3.5.2. Econometric model.............................................................................................................................21

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 3.6. HYPOTHESIS AND VARIABLES DEFINITION.................................................................................................................22

4. RESULTS AND DISCUSSION...............................................................................................25

4.1. DEMOGRAPHIC CHARACTERISTICS OF THE SAMPLED HOUSEHOLDS................................................................................25
4.2. SOCIO-ECONOMIC FACTORS OF FRUIT MARKETING....................................................................................................26
4.3 ECONOMETRIC MODEL ANALYSIS RESULT...................................................................................................................27
4.3.1 Multiple linear regression model, results and discussion of quantity supply to market......................27
4.3.2. Econometric results of the OLS model...............................................................................................28

5. CONCLUSIONS AND RECOMMENDATION...................................................................33

5.1 CONCLUSION....................................................................................................................................................... 33
5.2. RECOMMENDATIONS............................................................................................................................................33

6. REFERENCES........................................................................................................................35
APPENDIX...................................................................................................................................37

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LIST OF TABLES
TABLE 3.1 POPULATION OF THE STUDY AREA...............................................................................................................20
TABLE3.2 SUMMARIZED VARIABLE............................................................................................................................24
TABLE4.1 CHARACTERISTICS OF SAMPLE RESPONDENTS IN DESCRIPTIVE STATISTICS FOR CONTINUOUS VARIABLES. 25
TABLE4.2 DEMOGRAPHIC CHARACTERISTICS OF SAMPLE HOUSEHOLD FOR DUMMY VARIABLES................................25
TABLE4.3 CHARACTERISTICS OF SAMPLE RESPONDENTS IN DESCRIPTIVE STATISTICS FOR CONTINUOUS VARIABLES. 26
TABLE4.4 MULTICOLLINARITY CHECKING..................................................................................................................28
TABLE4.5 HETEROSCEDASTICITY...............................................................................................................................29
TABLE4.6 SUMMARY RESULTS OF MULTIPLE OLS REGRESSION MODEL TO DETERMINATE OF QUANTITY OF FRUIT
SUPPLIED TO MARKET........................................................................................................................................30

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LIST OF FIGURES
FIGURE 1. CONCEPTUAL FRAMEWORK................................................................................................................................15

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ABBREVIATION AND ACRONYMS
CSA Central Statistics Agency

EHDA Ethiopia Horticulture Development Agency

ERCA Ethiopian Revenue and Customs Authority

FAO Food and Agricultural Organization

GDP Gross Domestic Product

GOE Government of Export

GTP Growth and Transformation Plan

JMCR Journal of Marketing and Consumer Research

LDC Least Developing Countries

MoARD Ministry Of Agriculture and Rural Development

OLS Ordinary Least Square

SNNP South Nation Nationality People

USDA United States Department of Agriculture

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ABSTRACT
To foster growth, economic development, food security, and poverty alleviation, analyzing the
marketing performance of fruits is crucial for ongoing and future fruit development plans.
Despite the policy options provided by the Ethiopian government, there is a lack of empirical
evidence on the fruit marketing system needed to design effective policies for its enhancement in
the study area. This study aims to analyze the fruit market chain in Arba Minch town of Central
Ethiopia State, now part of the Southern Nations, Nationalities, and Peoples' Region (SNNPR),
with specific objectives of identifying and examining the challenges and opportunities within the
fruit marketing sector. To achieve these objectives, both primary and secondary data were
utilized. Data were collected through individual interviews and focus group discussions, using
pre-tested semi-structured questionnaires and checklists. This was complemented by secondary
data from various published and unpublished sources. The Structure, Conduct, and Performance
(SCP) approach was employed to evaluate the avocado and mango markets, and a Multiple
Linear Regression Model was used to identify the factors influencing the marketable supply of
fruit in the study area.

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1. INTRODUCTION
1.1 Background
Worldwide production of fruit and vegetable crops had grown faster than cereal crops and the
total value of fruit traded at present is more than double that of cereal crops (Lumpkin et al.,
2018).They put several reasons for the global increase in production and trade of fruit and
vegetable crops. Among these reasons, farmers involved in fruit production usually earn much
higher farm incomes as compared to cereal producers, and their per capita income is also five
times higher than cereal producers. Globalization and expanding international markets as well as
the fast-growing middle and high income classes in many developing countries offer
opportunities for developing country producers to operate in emerging national and international
markets (Jacques, 2019). This means that producers gain better control over production, trade
and distribution in order to assured the quality and value addition of their products. He also
added that barriers for developing country producers was the lack of an enabling environment
offering institutional and infrastructural support and efficient and effective coordination in value
chains (Jacques, 2019).

Understanding the role of agriculture as most important engine of economic development, the
government of Ethiopia designed agricultural development strategy known as Agricultural
Development Led Industrialization (ADLI) (MOI, 2017). This strategy considers agriculture as
the base of growth on account of its potentiality to create linkages with other sectors, surplus
generation, and potential market creation. The strategy further pointed out that the success of
ADLI can be secured mainly by improving the performance of agricultural marketing system.
Minster of information (2015) indicated that at present, the Federal and Regional governments
are doing their level best to transform the existing subsistence agriculture into market oriented
commercial production system. According to the Rural Development Policy and Strategy
Document (MOI, 2016) the agriculture sector was expected to generate surplus mainly for the
producers to secure better purchasing capacity, and for the development of other sectors as a
source of raw materials, and hard currency. This was for the improvement in both the
organization and efficiency of marketing system.

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In Ethiopia, fruit cultivation occupied over 114,421.81 hectares during the 2018/19 cropping
season, producing a total of 7,924,306.92 quintals. Figure 1 depicts the cultivated area coverage,
production volume, and yield of major fruits from 2008/2009 to 2018/2019, including
strawberries, apples, bananas, papayas, avocados, mangoes, and pineapples. Moreover,
inadequate harvesting and management, disease and insect infestations, erratic weather patterns,
and all of these were linked to the observed fluctuations (CSA 2019). Marketing was one of the
most important factors determining the success of any fruit or vegetable farming enterprise,
encompassing all of the operations and decisions made by producers (Kenkel, Phil, 2020).

Typically, Sub-Saharan African farmers do not have adequate access to market information
(Quisumbing et al. 2015; Barrett et al. 2022). For instance, farmers might not comprehend the
worth of their farm products (FAO 2019; Bokelmann and Adamseged 2016). Ethiopia was no
exception to this truth. For exports of agricultural products like coffee, hides and skin, dairy, and
sesame, market chain analysis was mostly carried out in Ethiopia (Bereda et al. 2016). As a
result, market chain analysis was essential for satisfying demand by improving the level of
competition and increasing the productivity of products like fruits. In various regions of
Ethiopia, some empirical study on the fruit market chain was being done, however it had some
limitations. Firstly, since these studies were primarily focused on Central and Southern Ethiopia
(e.g., Tarekegn et al. 2020; Gebre et al. 2020; Getahun et al. 2018; Mengesha et al. 2019), the
contextual relevance (e.g., institutional and infrastructure) to north-western part of Ethiopia may
be limited.

The consumption of fruit and vegetables could be increased through a combination of supply-
side interventions and behavioral changes with public communications that emphasize the
importance and health benefits that result from regularly eating fruit and vegetables
(Schreinemachers et al. 2018). Investments in sustainable small-scale fruit and vegetable
production could address all forms of malnutrition by increasing the incomes of farmers so they
could purchase more diverse and nutritious foods for their households, and by making available a
greater variety of fruit and vegetables to consumers who had been made aware of the health
benefits of this essential food category (Schreinemachers et al., 2018).

Because fruits are perishable and their prices change seasonally, farmers encounter various
production and marketing challenges that had a significant impact on their farm profitability

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(Tschirley et al. 2010). For instance, market prices fluctuate seasonally based on the variety and
quality of fruit products available. Prices often change dramatically, even within a single day,
particularly in the wholesale and retail markets (Woolfrey et al. 2021). The methods used in fruit
production and the market chain were therefore understudied and need more research. Hence,
using data from participants in the fruit market chain, this study analyses production system and
quantifies the benefit distribution across participants in the Ethiopian apple and mango market
chain. For instance, fruit farming contributes significantly to Ethiopia's economy and supports
about five million rural farmers (GAIN 2018).

Mango and avocado fruits are categorized as the most commercially significant crops grown and
frequently consumed worldwide (Solís-Fuentes and del Carmen Durán-de-Bazúa 2011). Mango
(Mangifera-indica) is regarded as “the king of fruits”, making the crop valuable for ensuring
food security, especially in emerging nations where this issue is still present (Ullah et al. 2010).
Production of mangoes grew globally, going from 24.70 million metric tons in 2005 to 54.80
million metric tons in 2018/2019 (FAO 2020). Mangoes is exported on both a local and global
scale. The main market for Ethiopian mangoes was Djibouti. Mango fruit processing for the
purpose of preservation and value addition was uncommon in the study areas. Mango processing,
on the other hand, was handled by juice houses, cafés, restaurants and hotels. Some of the most
important biotic problems limiting mango yield were insect pests. White mango scale was one of
the most common insect pests of mango plants in Ethiopia, along with the study locations. In the
meantime, pesticides to control white mango scale were developed in Ethiopia, including Folmit
500 SL, Methidathion 400 EC, and Movento 150 OD (Ayalew et al. 2015;
Apple (Malus domestica) production accounts for more than half of the world’s deciduous fruit
tree farming. In 2018/2019, about 86 million tons of apple was produced worldwide
(FAOStat. 2020). “An apple a day keeps the doctor away”. Many highlands in Ethiopia, had seen
an increase in apple fruit production (Tamirat and Muluken 2018). The main varieties planted in
the country are avocado, Apple, Mango (Bekele et al. 2020). In Ethiopia, apple fruit is often
consumed in the form of fresh fruits. As a result, there were no industrial processed apple fruits
consumed locally. In spite of this, consumption of fresh juices and processed apple juice
products imported from the Gulf region was growing in major cities and other urban areas
(CSA 2019).

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1.2 Statement of the Problem
In Ethiopia, the existing income generating capacity of fruits as compared to its immense
potentials at the macro and micro level is not encouraging. Thus, from the total 3.5 million
quintals of fruits produced in Ethiopia, only less than 2% is exported (Joosten, 2007;
MoARD,2005).
According to Yilma (2009), the production potential of fruits was not widely and evenly
distributed across the various regions of the country. The cultivation was also seasonal and the
supply was scanty and volatile even in areas where irrigation was possible. The knowledge gap
on fruit production techniques and processing technologies was wide. Also, knowledge of
domestic consumers of the benefits of fruits was confined to very few varieties of fruits. Hence,
domestic demand, with the exception of few widely known tropical fruits was generally small
and, various studies show that people generally consume fruits and vegetables on a daily basis,
without considering them as basic.
According to World Bank Group (2011), lack of concerted public support, scanty information,
poor understanding of how the market chain works; and lack of systematic documented
knowledge are main threats that hampered the benefit of the sector. Thus, comprehensive data
collection along the chain is a must envisage the direction of input-output flows (Tsegaye and
Ayelech et al., 2011). If these jeopardize are not well addressed right onwards, it is obvious the
country’s competitiveness would trail far behind the existing stage.
Fruit production in Arba minch town was mainly constrained by seasonality where surplus at
harvest was the main characteristics of the product (mainly avocado and mango). The nature of
the product on one hand and lack of organized marketing system on the other often resulted in
low producers’ price. There were different factor that affect fruit markets development in the
Arba minch town. Among these problems some of them were: adulteration of the fruits, lack of
modernized storage, length of the distribution channel levels, and concentration of the traders
mostly retailers in one area.
Even though fruit was economically and socially important, the challenge and opportunity had
not yet been studied and analyzed for the target study area (Arba minch town) where great
potential of fruit market exists. Therefore, this study would have the purpose of investigating
challenge and opportunity of fruit market in Arba minch town which will be narrow the
information gap on the subject and would be contribute to better understand on improved

4
strategies for reorienting fruit market for the benefit of small traders (Tamirat and Muluken
2018).
1.3. Research Questions
 What are the determinants of fruit marketing?
 What are the challenges and opportunities of fruit market?

1.4. Objectives of the Study

1.4.1. General objectives: -

 To identify the challenges and opportunities of fruit marketing in Arba minch town.

1.4.2. Specific objectives

 To analyze the main constraint of fruit marketing in Arba minch town.
 To identify the favorable conditions for fruit marketing in Arba minch town.
1.5. Scope of the Study
The study covered and focused on Arba minch town in general. Specifically, it has concerned
with two kebeles. For the matter of budget, time and human resource; it is restricted to this area
of concern. The area considered for this study was selected from Western Ethiopia, Arba minch
town. The scope of the study was restricted to the title of the study specifically in identifying
challenges and opportunity of fruit marketing.
Due to direct and indirect environmental, human and economic factors, the study had the
following limitations: the study covers only areas of Arba minch town. So this may not represent
to the whole woredas of Arba minch zone.
1.6. Significance of the Study
The main purpose of this study was to identify challenge and opportunities of fruit marketing
strategy and used to develop effective and efficient method that can improve fruit marketing
system. Hence, the users of this study are the producer, wholesaler, retailer, government and
non-government organization, policy makers, fruit processing industries and other bodies who
want to improve fruit marketing system and its product. Further, this study can be used as a
reference material for further research study. In addition, the study would bring significant
change in the town in fruit marketing.

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2. LITERATURE REVIEW
In this chapter, definition of basic concepts approaches to study fruit marketing, empirical
review, characteristics of fruit marketing, market opportunities and constriction, main constraint
of fruit marketing and marketing and market participants of fruit marketing challenges and
opportunity were discussed. In relation to these issues, the chapter highlights about the
production and marketing of fruit in the Ethiopia and others country. Review of empirical
literature on fruit marketing analysis in Ethiopia and other parts of the world would also include.
2.1 Theoretical Literature Review

2.1.1. Definition and concept

What is Market?
Market is a place where sellers were situated and buyers come and exchange good for money at
right place, right time, right quality, right quantity and right price. Wholesale and retail fruit and
vegetable markets i.e. Fruit and Vegetable (Mandi and Retail 2018). Identification of needs and
wants of the customers and satisfy them in order that they want to i.e. Quality, Quantity (Pack
size), Price Delivery etc. It following combination of basic elements needs to be considered for
the formulation of effective marketing strategy which is called Marketing Mix or4 P’s of
marketing: Product –activities relating to the product to be offered, Price - activities relating to
the price to be charged for the product, Place – activities relating to the distribution of the
product (Physical distribution & channel of distribution)and Promotion-activities relating to
promotion (advertising, personal selling, sales promotion & publicity) of the product (Retail
2018)

The term market have many definitions by many authors. According to (Emana and
Gebremedhin, 2015), market refers to giving answers to questions of what to produce, how to
produce, how much to produce, and how to distribute. In some cases the market may mean the
place where buying and selling, or the commodity traded Larson et al. (2012).

The market system

The market system is the overall picture of how a sector operates. The market system includes
the supply-demand transactions in the core value chain from producer to processor to retailer to
end consumer and the ‘supporting functions’ and ‘rules and regulations’ that shape the way in

7
which businesses and employees work in this core chain (Minten et al. 2020). In the same year
the market system therefore take a broader scope, because different actors in the value chain do
not operate in a vacuum: their commercial success or well-being of the target group were
influenced directly and indirectly by what happens in their surroundings. For example, access to
financial services, which is a supporting function, does not directly operate within the fruits and
vegetables value chain, but strongly influences how businesses set-up, grow and operate(Retail
2018)

Some terminologies were defined as the following:

Fruits: are perennial (ones planted, no re-plantation for long time) tree crops like avocado,
banana, mangoes, orange, papaya and etc. (Shishodia et al, 2006). Fruit were important
nutritional requirements of human beings as these foods not only meet the quantitative needs to
some extent, but also supply vitamins and minerals which improve the quality of diets and
maintain health. It was therefore, necessary to make them available for consumption throughout
the year in fresh or processed form (Shishodia et al, 2006).

Marketing: In its simplest form, it is defined as the process of satisfying human needs by
bringing products to people in the proper form, time and place (Kotler and Arms tong, 2003).
Also stated shortly marketing as the task of creating, promoting, and delivering goods and
services to consumers and businesses (Kotler and Arms tong, 2013).

Agricultural marketing: was defined as agriculturally oriented marketing. It involves all

operations and institutions involved in moving agricultural products from farm area to consumer
and marketing of production supplies to farmers like fertilizers, improved seeds, pesticides
chemicals, tools and equipment (Griffin and LowenbergDeboer, 2005)

2.1.2 Characteristics of Fruit Marketing

Being produced both by commercial and a number of factors that can be attributed to production,
product and market characteristics influence producers’ fruit marketing. (Emana and
Gebremedhin, 2007) identify this attributes as:
Perish ability: as many fruits are highly perishable, they start to lose their quality right after
harvest and continued throughout the process of transportation until consumption. This behavior
of fruits exposed the community not to be held for long periods and fresh produce from one area

8
was often sent to distant markets without a firm buyer or price. Due to their perish ability most
fruits were deteriorated easily even at the time of transportation (Emana and Gebremedhin,
2007).
Product bulkiness: Since fruits are produced and marketed in bulk quantities they need every
cure and large storage. Management from the time of harvest until the products are marketed to
reach final consumer would be decreased due to many factors such as lose of value, time of
display, length of channel distributers and etc. it is frequently believed a fruit not only remain
attractive to consumer it must also have a shelf life of few days after having purchased by
consumer (Emana and Gebremedhin, 2007)
Seasonality: Fruits have seasonal production directly influencing their marketing. Normally they
have limited period of harvest and more or less a year round demand. This seasonal production
of fruits encounters producers, traders and consumers on its supply and demand that create price
fluctuation in the market (Emana and Gebremedhin, 2007).
Supply: Market supply refers to the amount of produce actually taken to the markets irrespective
of the need for home consumption and other requirements were as the market surplus was the
residual with the producer after meeting the requirement of seed, payment in kind and
consumption by peasant at source (Kotler and Armstong, 2003).
Price/quantity risks: Due to perishable nature and biological nature of production process there
is a difficulty of scheduling the supply of fruit to the market. The crops were subject to high
price and quantity risks with changing consumer demands and production conditions. Unusual
production or harvesting weather or a major crop disease could influence badly the marketing
system (Emana and Gebremedhin, 2007).

2.1.3. Framework for Evaluating Efficiency of Agricultural Marketing System Structure,

Conduct and Performance (SCP) model
The basic view of this approach is that, given certain basic conditions, the structure of an
industry or market determines conduct of buyers and sellers which influence its performance.
The basic conditions refer to characteristics which were exogenous to the market, for example
infrastructure, legal and policy environment and available technology. Efficiency factors could
be evaluated by examining marketing enterprises for structure, conduct and performance (Abbott
and Makeham, 2021). SCP model is one of the most common and pragmatic methods for
analyzing marketing system. It analyzed the relationship between functionally similar firms and

9
their market behavior as a group and, it is mainly based on the nature of various sets of market
attributes and relations between them and their performance (Scarborough andKydd, 2022). This
analytical method is based on the theory that market structure and market conduct determine the
performance of a marketing system ( Ayelech, 2011).

2.1.4. Market Opportunities and Constriction

The Government of Ethiopia, in recognition of the role of the private sector in the economy, has
revised the investment law over three times for the last twenty years to make it more transparent,
attractive and competitive. Major positive changes regarding foreign investments had been
introduced through investment Proclamation No.280/2002 and Regulations No.84/2003. As a
result of the implementation of the above mentioned policies and strategies, agricultural and
industrial production, investment and export trade were growing steadily from year to year both
in terms of variety and volume (Nimon, 2017)
The most critical component to the survival of small farms was the price received for the product
produced (Pirog, R., and Benjamin, A. 2005). This was obviously the same quandary that fruit
growers find. Other concerns or impacts (for example, housing availability, educational capacity,
taxes) were largely determined by the extent to which the construction work the available
housing supply, leading to building development and speculation, inflationary prices in the
housing market, and related potential adverse impacts. Based on the researched done through by
journal, books, and some other reference. Project delay could be causes. It was because the
market rate was keeping increased. The regional supermarkets were still receptive but returns are
not very promising.

2.1.5. Main Constraint of Fruit Marketing

Fruits and Vegetables production and marketing is not a new sector in Ethiopia; it has been
undertaken for decades. Even if marketing of horticultural crops like Avocado, mangoes, orange,
tomato, onion and banana had been increased over the last few years, there were so many market
related problems (Muluneh Bekeleet, al, 2016).
Major types of fruit; vegetable and horticultural crops currently growing in the district were
onion, tomato, potato from vegetables and avocados, mangoes, papaya, banana and other many
fruits. The production of those fruit crops was mainly for market, but the productions system is
very random and fragment specially of avocadoes and mangoes which were over supply

10
seasonally. There were so many production and marketing problems that challenge fruits and
vegetables development in the site. The nature of the product (perishable), production
seasonality, insufficient product handling techniques, limited supply of products, unfair pricing,
lack cooperatives that work in the area of fruit and vegetable marketing were some of the
problems raised by avocadoes and mangoes retailers and consumers as well lack of transport,
storage post-handling facilities and lack of organized market system, Lack of standards, disease
and pest problems have resulted in low and unstructured income( JMCR-Vol.22 2016).
A number of factors are influences competitiveness of marketing fruit and vegetable crops in the
area. So data on factors that affect competitiveness of fruit and vegetable market is essential for
the design of any strategy that has an objective of intervention. Identification, classification and
valuation of market constraints help’s to remove obstacles that affecting performance and to
strengthen good sides. Although fruits and vegetables were economically important commodities
and study made on fruits and vegetables marketing was vital to identify the key constraints and
potentials on the system in the district. There is no adequate information on the supply of
avocadoes mangoes and banana. It is also essential that the marketing system of a commodity
operates efficiently. In the light of the above aspects, the present research work is initiated to
study the challenges and opportunities of marketing mangoes, avocadoes and banana and to give
alternate solution for identified problem and to aware the concerned body to use the
opportunities (JMCR-Vol.22 2016).

2.1.6. Favorable Condition of Fruit Production and Marketing

Ethiopia has a comparative advantage in production of horticultural commodities on account its
favorable climate, proximity to European and Middle Eastern markets and cheap labor. Low
cost, disciplined and trainable Labor force and the size of its domestic market and the numerous
river basins affording great potential for irrigation. The status of horticulture production
including indigenous one and consumption in the country yet need further improvement.
According to Ethiopian Investment Agency (2012) on average more than 2,399,566 tons of
vegetables and fruits were produced by public and private commercial farms, this is estimated to
be less than 2 percent of the total crop production (Abebe Assefa, et, al, 2008).
Ethiopia are agro-ecologically diverse and has a total area of 1.13 million km2. Many parts of the
country are suitable for growing temperate, sub-tropical or tropical fruits. For example,
substantial areas in the south and south-western parts of the country receive sufficient rainfall to

11
support fruits adapted to the respective climatic conditions. In addition, there are many rivers and
streams which can be used to grow various horticultural crops. Despite this potential, however,
production-market chore of fruits has remained immature in Ethiopia (Joosten, 2007) mainly due
to traditional focus which is in favor of cereals. Serious lack of information and ‘on and off’
productions has also played their deterring role (Naamani,2007). Realizing these gaps, lately
however, the government of Ethiopia has launched enabling environment to encourage chain
actors. As a result, the Ministry of Agriculture has elevated the horticulture sub-sector from a
small section to a level of agency (World Bank,2004; Joosten, 2007; Kahsay et al., 2008).
SNNP had diverse agro ecology and many areas are suitable for growing temperate, subtropical
or tropical fruits. Substantial areas receive sufficient rainfall and many lakes, rivers and streams
could also be used to support fruit production. Despite this potential, the total land area under
fruits was very small and mainly smallholder-based. According to CSA (2009), the area under
fruits was about 18313 hectares (Ayelech, 2011).
Bananas, mangos, and avocados are the top produces contributing to 67%, 14%, and 10%,
respectively, of the total fruits productions. These fruit crops also occupy relatively larger area of
farming land (CSA, 2017/18)
According to recent information obtained from the Central Statistics Authority, the total area
under fruits and vegetables was about 12,576 hectares in 2011. Of the total land area under
cultivation in the country during the same year, the area under fruits and vegetables was less than
one per cent (i.e. 0.11%), which was insignificant as compared to food crops (CSA, 2009) and
(MOA (2005).
Fruit, vegetable and horticultural produce is a high value item. Diversity of fruits and vegetables
are demanded by consumers, such growth provides major opportunities for farmers and retailers
to diversify increase their incomes. Such opportunities may be especially valuable for women,
who are the primary producers and marketers/retailers of horticultural produce throughout
Ethiopia. Finally, from the farming through retailing, fruits and vegetables employs about twice
as much labor as cereals per hectare of production; small farmers, rural laborers, and the urban
poor stand to gain extremely from these employment opportunities (Munguzwe and Tschirley,
2014).

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2.1.7. Market Participants
This study point out the existence of different market participants in the exchange functions
between farmers and final consumer. Market participants in the study areas include
farmers/producers, farmer traders, wholesalers, retailers and brokers/commission agents (Kotler
and Armstong2013).
Brokers: brokers were agents who work a commission on behalf of other participants. They
specialize in bringing the buyer and sellers together. They enhanced the buying and selling
activities between producers and wholesalers without handling any product for sale and
disseminate price and other information to market participants. They get their commission on the
basis of their agreements whether per quintal or by the number of sales made ((Kotler and Arms
tong, 2013).
Wholesalers: wholesalers were someone who buys large quantities of goods and resells to
merchants rather than to the ultimate consumers. They were the major actors in the marketing
channels. They buy fruits from farmers, and commercial farms with a larger volume than any
other marketing actors do. They relatively spend their full time in wholesale buying throughout
the year in and out of the wored (Kotler and Arms tong, 2013).
Retailers: retailers were person that sells commodity to the end users, ultimate consumers. The
majority of retailers in the terminal market were characterized by small storing shops for trading
fruit purchased from wholesalers. The major buyers of retailer were the final consumers, hotels,
restaurants and etc. (Kotler and Arms tong, 2013).
Consumers:-Consumers usually buy Onion, Tomato and banana from retailers as they offer
according to requirement and purchasing power. They had their own quality criteria to purchase
fruits and vegetables. Survey data indicated that consumers prefer small to medium onion size
which was undamaged; they also prefer red color with medium size tomato and free from any
types of damages/crack. The major buyers of Onion, Tomato and Banana from retailers were the
final consumers (households), hotels and restaurants (J MCR, Vol.22, 2010) and (Muluneh
Bekeleet, al, 2010).
2.2. Empirical Review
Bezabih and Hadera (2017) stated that the production of vegetables is seasonal and price is
directly related to supply. The situation is worsened by the perishability of the products and poor
storage facilities. Farmers’ bargaining power is low due to lack of alternative market outlet. They

13
also found that the most common marketing channel immediately available to the farmer was
through brokers i.e. up to three brokers between the producer and the trader which was an
indication of long marketing channel. They recommended that the more the farmers organize
themselves and access the terminal market, the more they benefit.
Bezabih (2017) also identified that lack of markets to absorb the production, low price for the
products, large number of middlemen in the marketing system, lack of marketing institutions
safeguarding farmers' interest and rights over their marketable produces (e.g. cooperatives), lack
of coordination among producers to increase their bargaining power, poor product handling and
packaging, imperfect pricing system and lack of transparency in market information
communications as major marketing challenges.

2.2.1 Factor affecting fruit marketing

According to Beyene and Phillips (2017) has designated that, absences of research and market
information in Ethiopian honey value chain have wasted the nation‟s incalculable benefits.
Simultaneously Abay(2016) The potential and challenges of fruits and vegetables marketing
Infrastructure development - Physical infrastructure Financial activity Marketing information &
price setting - Poor communication - Poor transparency Knowledge gap - Of employee - Of
customer Technological determinant market demand Nature of product Seasonality Perishability
Price /quantity risks Product bulkiness identified the major factors that affect the supply of fruit
(mango and avocado) at arba minch town.
According to FAO (2016), mango producer in ethiopia were suffering from poor post-harvest
handling which affected their income where farmers were compelled to sell their product
immediately after harvest. Thus hastened ripeness of avocado at room temperature has
aggravated ethylene release and necessitated immediate utilization explore use of low level of
improved agricultural technologies, risks associated with weather conditions, diseases and pests,
as the main reasons for low productivity. Moreover, due to the increasing population pressure the
land holding per household was declined leading to low level of production to meet the
consumption requirement of the household. As a result, intensive production was becoming a
means of promoting agroenterprise development in order to increase the land productivity.
Horticultural production gives an opportunity for intensive production and increases small
holders‟ farmers‟ participation in the market (FAO 2017).

14
Additionally, Bezabih and Hadera (2017) stated that production is seasonal and price is directly
related to supply. During the peak supply period, the prices increase. The situation was worsened
by the perishability of the products and poor storage facilities. Along the market channel, 25
percent of the product was spoiled. Perishability was also one of the bottlenecks that hampered
easy product flow along the chain and reported to require fervent attention.

2.2.2. Challenges and opportunity of fruit marketing

Bezabih and Hadera (2017) identified pest, drought, shortage of fertilizer, and price of fuel for
pumping water as the major constraints of fruit production and marketing in Eastern Ethiopia.
Other problems which they reported also include poor know how in product sorting, grading,
packing, and traditional transporting affecting quality. Million and Belay (2014) indicated that,
lack of market outlets, storage and processing problems, lack of marketing information, capital
constraints, high transportation cost and price variation were some of the important constraints in
vegetable production. Tesfaye, (2015), assessment of post-harvest loss for perishable produces
from wholesalers to consumers, revels the same study
According to FAO (2016), in the developing countries, absence of basic infrastructure and
knowhow in post-harvest handling have been identified as significant drivers in the formation of
food loss, both currently and foreseeable future.
According to Zelalem (2019), challenges and prospects of the commodity exchange in Ethiopia.
The data reveals infrastructure development, macroeconomic stability, government policies,
commercial and financial sectors has challenges to the Ethiopia commodity exchange (ECX).
From these reviewed literatures severe production seasonality, seasonal price fluctuations, poor
pre-and post-harvest handling, prevalence of pest and diseases, poor market access, lack of
marketing information, poor know how in product sorting, grading, packing, and traditional
transporting affecting quality, lack of storage added with infrastructure development,
macroeconomic stability, government policies, commercial and financial sectors are the factors
of fruits and vegetables market system in Addis Ababa as well as on study area in company.

15
2.3. Conceptual Framework

factor
affecting and
challenge and
opportunity of
fruit
marketing

socio
socio economic
demographic characterstic
characterstics

-income
-quantity product
dummy variable -price
continouse variable -farm land
-sex of household
-access to market -age -distance to market
information -education status -cost of transportation

-family size

Figure 1. conceptual framework

16
3. METHODOLOGY
This part is concerned with the methodological design of the study. It is organized in to five
sections. These are: describing the study area, types of data and source of data, method of data
collection, Sampling Size Determination and Sampling Technique and method of data analysis.
3.1. Description of the Study Area
Arba Minch (formerly called Ganta Garo) is a city and separate woreda in the southern part
of Ethiopia. "Arba Minch" means "40 Springs", originated from the presence of more than 40
springs. It is located in the Gamo Zone of the Southern Nations, Nationalities, and Peoples
Region about 500 kilometers south of Addis Ababa, at an elevation of 1285 meters above sea
level. It is the largest town in Gamo Zone. It is surrounded by Arba Minch Zuria woreda. This
Town has plenty of natural gifts including the bridge of God, Crocodile ranch, crocodile market,
different fruits and vegetables, different fishes farmed from Chamo and Abaya Lakes, more than
40 springs, different cereals, and crops, surprisingly having the two big Lakes in the country,
lake Abaya and Chamo, respectively, next to Lake Tana, etc. This makes the town one of the
tourist destinations in Ethiopia, which comprises Nech Sar National Park, home to the country's
varied wildlife and plant species.
Based on the 2007 Census conducted by the CSA, this town has a total population of 74,879, of
whom 39,208 were male and 35,671 female.
Mixed farming (crop production and livestock rearing) is the predominant sources of livelihood
for the majority of the population in the district area. The major crops produced in the district
are: Maize, Sorghum; among food crops, and horticultures are Tomato, Onion, Pepper, Head
cabbage, Carrot, Potatoes, Sweet potato, Mango, Banana, Papaya and Avocado (BDARDO,
2012)
3.2. Types and Sources of Data
Two types of data were collected for this study. These were primary and secondary data. Primary
data incorporated the entire situation of marketing system directly from the producer, retailers
and wholesalers while secondary data was gathered from published and unpublished documents,
records, internet search and other references.

18
3.3. Method of Data Collection
Primary data collection, that are: (I) Questionnaire; this were used for collecting data from
marketer in relation to the study were conducted. These questionnaires were prepared for 96
respondents. (II) Observation; in this case different observation techniques were used.
In secondary data various in depth literatures, documents, and journal search were conducted to
gather information. This information were given further insight to field research and as
additional background study.
3.4. Sampling Size Determination and Sampling Technique
Simple random sampling technique was used to collect primary data of the given area. Arba
minch town was purposively selected based on the intensive fruit marketing generation as a
result of rapidly over population through the flow of the community from different districts in
the zone and from other zones and regions. This was by considering or understanding of the
availability of fruit markets, the problem of fruit market in the district and infrastructure
availability of the area.
Hence, fruit marketing challenges and opportunity is a serious problem in the town due to lack of
infrastructure, lack of quality and quantity, lack of awareness, absences of appropriate
government policies and socio-economic condition. The study population were classified into
three parts based on their job categories. Their names:- farmer, trader, and civil servants. After
categorized, simple random sampling was employed to select the representative households.
Questionnaire was also employed to collect this primary data from both retailers and wholesalers
by researcher himself through personal interview.
The sample size was determined by following the Yamane 1967 standard for sample size
determination formula. A total of population living in the study were obtained from the two
kebele. The total sample respondent used for this study were 96 traders randomly selected (44
and 52 traders from 01 and 02 kebele respectively) by following the Yamane (1967) standard
formula and calculating as:

19
 n= ___ N___
2
1+N(e )
Where:
n=desired sample size,
N= the estimated population size and
e = is level of precision (0.05).
Table 3.1 population of the study area

Number Keble name Total number of Sample

populations

1 01 1100 44

2 02 1300 52

Total 96

n = N/1+N(e^2)

= 2400/1+2400(0.1^2)

=2400/25

=96

3.5. Methods of Data Analysis

The data that used in this study were included primary and secondary sources that were analyzed
as a descriptive data analysis which consist qualitative and quantitative data using statistically,
like tabulation, percentage, and argumentative statemen

3.5.1. Descriptive statistics analysis

Descriptive statistics describe the main features of a collection of data quantitatively. It aims to
summarize a data set quantitatively. Descriptive statistical used to describe coefficient of
variation, variance, standard deviation, standard error etc. So, we have used the descriptive

20
statistics to describe how much occurs within the data collect relate to fruit marketing challenges
and opportunity. It could also employ to describe variance using t- tests or ANOVA and to
describe the standard error of the parameters of our econometric model which was essential to
assess how closely our sample related to the population. We have used the descriptive statistical
analysis simply to describe what is going on in our data and to present the quantitative
description of the factor affecting of fruit marketing i.e. producer, midlemen and consumer. For
descriptive statistical analysis, we have used percentage, average and t-statistics to our
quantitative data number.

3.5.2. Econometric model

We have to analyze the fruit marketing opportunities and challenges to use multiple linear
regression model of OLS (ordinary least square) estimation. It could be an essential method of
econometric analysis to recognize and realize patterns of the influencing factors. The most
important variables that could determine factor affecting of fruit marketing include access to
information, income, transportation cost, family size e.t.c.

Multiple regression model specification

this model were specified as following

E ( u i u j )=0 for i ≠ j

In our case they were analyzed

Yi= βo + βiXi + ui

Where Yi = the dependent variable (quantity supplied to market) whichi was abrivated by
(QSTMA)

βo and βi = parameter of the variable and intercept and coefficient slope respectively

Xi = the explanatory variable

Xi= (AGE, ACMAI, QPRO, PRIFR, COTRA, SEXHH, EDLHH, FSHH, Y, FARMLA,
DISTOMA )

Ui = error term disturbance term

21
 3.6. Hypothesis and Variables Definition
This part of the study tries to hypothesize factors that influenced on both the participation
decision of farmers and level of fruit supply to the market. In the course of identifying fruit
marketing challenges and opportunity, the main task was to explore which factors potentially
influence and how (the direction of the relationship) these factors related with the dependent
variables. Therefore, potential variables, which were supposed to influence (challenges) fruit
marketing participation and intensity of amount were explained. Thus, the list of variables
expected to have influence (challenges) on both the farmers’ participation decision and volume
of quantity fruit marketing supplied to markets was defined.
Dependent variable and Independent variable

Dependent variable

The dependent variable for this study were fruit marketing challenges and opportunity perception
in the study area
Quantity Supplied to Market (QSTMA): It was a continuous variable that represents the
marketable supply of fruit like, avocado, mango, papaya, onion and banana by individual
households to the market, which was measured in quintals (Abay, 2007) and Adugna, 2009).
Independent variables
On the other hand, the following variables were hypothesized to affect fruit marketing challenges
and opportunity perception: -
Age (AGE) - Age of the household, a continuous variable, which refers to the age of the trader’s
head measured in years and taken as one of the explanatory variables to influence quantity
supplied to market. The expected sign was positive as age one of the parameters of human
capital. As an individual stay long, he will have better knowledge and decided to participate
(Abay, 2015).
Access to Market Information (ACMAI): It was a continuous variable measured in walking
time (minute) which farmers spend time to sell their product to the market. If the farmer were
located in a village or distant from the market, he was poorly accessible to the market. The closer
to the market the lesser would be the transportation cost and time spent. Therefore, it is
hypothesized that this variable was negatively related to quantity supplied to market. A similar
study was conducted by Holloway et al (1999 in the Ethiopian highlands. His result indicates that

22
distance-to market causes market surplus to decline. Similar issue was studied by Wolday (1994)
on food grain market in the case study of Alaba Siraro, he identified that poor market access has
negative effect on quantity of food grain supplied (Ayelech, 2011).
Quantity of product (QPRO): -This variable has important influence on market supply. It was
expected to influence it positively. It was a continuous variable measured in quintals. The higher
the produce, the more likely the household would supply to market (Abay, 2015).
Cost of Transportation (COTRA): This variable was hypothesized to have a negative
significant impact on the fruit marketing (Abay’ 2007).
Sex of the household head (SEXHH): - This was a dummy variable taking zero if traders was
female and 1 if traders male was one variable to be considered. No sign could not be attached
with the variable (Adugna, 2009).
Education level of household head (EDLHH): this was a continuous variable measured in
years. Education increases farmers and traders ability to get and use information. Since
households who have better knowledge were assumed to adopt better production practices, this
variable was assumed to have positive relation with quantity supplied to market (Adugna, 2009).
Family Size the household head (FSHH) – This was the total number of family members that
could be taken as a proxy for level of consumption. This continuous variable was expected to
influence dependent variable and supply negatively. In this study, the number of persons the
household head administers/supposed to manage will be considered as family members,
regardless of blood relationship (Adugna, 2009).
Income of household (Y): - Refers to total annual income obtained from daily activities by the
traders head measured in birr (Adugna, 2009).
Price fruit: This continuous variable expressed by birr. Farmers are motivated to produce and
supply more if the price of fruit was high in the market the previous year. As a result, it was
anticipated that the price of fruit in the preceding year will be positively correlate with the
amount of marketable excess (Awol, 2010).
Distance to market: It was a continuous variable and the distance of the fruit producer
households from the woreda fruit market and it was measured in kilometers The lower the transit
costs, shorter walking distances, lower other marketing expenses, and better access to market
facilities result from nearby markets. value of fruit sales and access to fruit service
positively(Gebremedhin and Jaleta, 2012).

23
Farm land This was a continuous variable that was measured by hectares. Bellemare and Barret
(2013) indicated that the more land owned the more would be the chance to allocate and more to
supply. Therefore, it was hypothesized that farm land was positively related to of fruit supplied
to market of household Bellemare and Barret (2013) .
Table3.2 summarized variable

Abbreviated Description of Type Measurement Expected sign

Dependent variable
QSTMA Quantity Supplied Continuous positive
To Market
AGE Age Continuous Year Positive
ACMAI Access to Market dummy 1= enough information Negative
Information 0= no

QPRO Quantity of product continuous Quintal Positive

SEXHH Sex of the household Dummy 1= yes negative
head 0= no
EDLHH Education level of continuous Year Positive
household head
FSHH Family Size of Continuous Adult equivalent Positive
household head ratio
Y Income continuous Birr Positive
FARMLA Farm land size continuous Hectare positive
DISTOMA Distance to market continuous killometer Positive
COTRA Cost of continuous Birr Negative
Transportation
PRIOFFRU Price Of Fruit CONTINUOUS Birr Positive

24
4. RESULTS AND DISCUSSION
This chapter was depending on data analysis, presentation and interpretation. It provides detail
explanations of the challenges and opportunities of fruit marketing in the study area.
4.1. Demographic Characteristics of the Sampled Households
Table4.1 Characteristics of sample respondents in descriptive statistics for continuous
variables
Variable Obs Mean Std. Dev. Min Max
EDLHH 96 7.5 2.93078 1 12
AGE 96 38.9375 6.54991 25 50

Age and education level were important demographic characteristics that could affect fruit
marketing at the household level. The adult age was participated in this study and they were most
profitable of fruit marketing, because the adult age was able work more hours as compared to the
old age. The adult age could work more hours, and they were more producers rather than the
oldest age.
Therefore, age of households was positive factor and challenge and opportunity in the study area.
According to the above table 4.1 shows, from the out of the total sample household, the mean
(average) age of household was, 38.9375 with the standard deviation 6.5499 and their maximum
(largest) of 50 and a minimum (smallest) of 25.
According to the above table 4.1 shows, from the out of the total sample household, the mean
(average) education level of household was 7.5 with the standard deviation 2.9307 and their
maximum (largest) of 12 and a minimum (smallest) of 1. In this study both respondent were
literate and positively affect fruit marketing in the study area.

Table4.2 Demographic characteristics of sample household for dummy variables

25
Variable description frequency percentage

Sex of household Male 59 61.46

female 37 38.54
Access to market If yes 69 71.88
information If no 27 28.12
Total 69 100

As described in the above table 4.2, from of 96 respondent sample household’s from male were
more than female, with 59 (61.46%) were male and 37 (38.54%) were female. As observed from
the table, male household heads had been observed to have not a better tendency than female
household heads to enter into fruit marketing.
Access to market information: In the case of, access to market information most respondents
were access to market information. As the table 4.2 show that from the total respondents 69
household were access to market information where as other 27 of respondents were not access
to market information with percentage of 71.88% and 28.12% respectively.
4.2. Socio-Economic Factors of Fruit Marketing
Table4.3 Characteristics of sample respondents in descriptive statistics for continuous
variables

Variable Obs Mean Std. Dev. Min Max

QUOPR 96 10.33333 2.179651 5 14
IOHH 96 39166.67 4571.46 27000 48000
FARML 96 .478125 .1724151 .1 .8
PRIFR 96 4522.917 949.8453 3400 7000

Quantity of product was an important factor in affecting the fruit production, because the
increase size of land holding provides large amount of product and there was positively affect
fruit supply to market. The result showed that in table 4.3 the average quantity product of the
respondent was 10.3333 quintal with standard deviation of 2.1796 with maximum earning of 14
quintal and minimum earning of 5 quintal.

26
Income of the House-hold the basic hypothesis was that since agricultural cooperative group
engages households in entrepreneurship activities that might be considered as increasing
household income and it help them achieving socioeconomic development. The respondents of
those kebele answered as they were in a position to have, on average, higher incomes than non-
members of similar household characteristics since they have got better training fruit marketing.
The result showed that in table 4.3 the average income of the respondent was 39166.67 birr per
quintal with standard deviation of birr 4571.46 with maximum earning of 48000 birr per quintal
and minimum earning of 27000 birr per quintal. It was assumed that the respondent who has
higher income saves more than respondents that that has less income
Farm land size was an important factor in affecting the fruit production, because the increase size
of land holding provides sufficient income and there by funds for investment on modern farm
inputs. As the indicated, from the total of household headed shows table 4.3, the mean (average)
farm land size in hectare was 0.4781 with the standard deviation 0.1724 and their maximum
(largest) of 0.1 and a minimum (smallest) of 0.8 in the study.
Price fruit was positively affecting of quantity of fruit marketing supply in the local and world
market. Farmers would be motivated to produce and supply more if the price of fruit was high
in the market. As the indicated, from the total of household headed shows table 4.3, the mean
(average) quantity of product was, 4522.9170 with the standard deviation 949.8453 and their
maximum (largest) of 7000 and a minimum (smallest) of 3400 in the study.
4.3 Econometric model Analysis result

4.3.1 Multiple linear regression model, results and discussion of quantity supply to market
The econometric analysis of this paper mainly deals with the analysis; interpretation and
discussion were based on the dependent and explanatory variables that were used in econometric
model parts to analyze the challenge and opportunity of quantity supply to market. Econometrics
analysis was important for testing the significance of the explanatory variable on the dependent
variable. To challenge and opportunity of quantity supplied to market among hypothesized
explanatory variables that are influence on households, the OLS model was estimated using a
statistical package known as STATA version 8. Different types of goodness fit confirmed that
the model fits the data well. There are many factors that determine quantity supplied to market;
the hypothesized factors that affect quantity supplied to market in the study area are summarized

27
in the following table. From those factors nine of them are continues were as other two of them
are dummy variable.

4.3.2. Econometric results of the OLS model

Multi-collinearity
Before interpreted the result you should have to check whether the variable multicollinearity or
not: As we are producing multiple correlations and regression model we need to be aware of
certain features of the multicollinearity. That means, when two or more independent predictors
are highly correlated with each other this were known as multi collinearity. Correlation matrix
illustrates bivariate relationship between two independent and/or independent- dependent
variables. Correlation matrix examines the extent or direction of relationship among two
variables and how one variable is related to another. Correlation matrix also indicates problem of
multicollinearity. The decisions rule of multicollinearity as a rule of thumb states that the
individual VIF< 10 and mean VIF<5 shows absence of multicollinearity, so mean of VIF is 3.28
which is less than 5 shows absence of multicollinearity.show below the table.
Table4.4 multicollinarity checking

. vif

Variable VIF 1/VIF

QUOPR 8.65 0.115547

AGE 4.98 0.200680
FARML 4.76 0.210048
PRIFR 4.45 0.224671
IOHH 3.92 0.254853
EDLHH 3.05 0.327904
COTR 1.59 0.627893
ACCTMI 1.30 0.769239
FSHH 1.15 0.870159
DISTOMA 1.13 0.887397
SEXHH 1.06 0.943394

Mean VIF 3.28

Source; Own field survey, 2024

The OLS model estimated results of the variables that were expected to determine quantity
supplied to market are presented in Table4.4. Out of 11 explanatory variables, 7 were found to
significantly influence the fruit quantity supplied to the market. Accordingly, income of
household, quantity product of fruit, Price of fruit, Education status of the Household Head,
access to market information, size of farm land, Age of head of household significantly affected
the quantity of fruit supplied to market.

28
Heteroscedasticity
Heteroscedasticity problem in the data set, the parameter estimates of the coefficients of the
independent variables cannot be BLUE. Therefore, to overcome the problem, Robust OLSt
analysis with heteroscedasticity consistent covariance matrix was estimated. If prob > chi2 is less
than 5% then there is not heteroscedasticity, while if the prob > chi2 is greater than 5% then
heteroscedasticity happen. Therefore, in this study prob > chi2 is about 87.54 % so
heteroscedasticity is happen shown below the table.
Table4.5 Heteroscedasticity

Breusch-Pagan / Cook-Weisberg test for heteroskedasticity

Ho: Constant variance
Variables: fitted values of QSTM

chi2(1) = 0.02
Prob > chi2 = 0.8754
Goodness of fit: the overall goodness of fit of the regression model was measured by the
coefficient of determination (R2). It tells what proportion of the variation in the dependent
variable, or regress and, was explained by the explanatory variable. R2 lies between 0 and 1, the
closer it is to 1, and the better was the fit. Hence, the overall model goodness of fit represented
by model count R2 for quantity supplied to market were very good that are 0.9716 indicating that
97.16% of the sample households were correctly explained out of 96 sample household heads of
each commodity, while about 2.84% are un explained by the household head of each commodity
as shown table 4.6 below.

29
Table4.6 Summary results of multiple OLS regression model to determinate of quantity of
fruit supplied to market

Source SS df MS Number of obs = 96

F(11, 84) = 261.15
Model 449.754874 11 40.8868068 Prob > F = 0.0000
Residual 13.1513755 84 .156563994 R-squared = 0.9716
Adj R-squared = 0.9679
Total 462.90625 95 4.87269737 Root MSE = .39568

QSTM Coef. Std. Err. t P>t [95% Conf. Interval]

AGE .0435866 .0138356 3.15 0.002*** .016073 .0711002
SEXHH -.0736405 .0854296 -0.86 0.391 -.2435266 .0962456
FSHH -.0260749 .0249103 -1.05 0.298 -.0756117 .023462
EDLHH .0719134 .0241895 2.97 0.004*** .0238098 .1200169
QUOPR .46708 .0547921 8.52 0.000*** .35812 .57604
COTR -5.14e-07 .0000183 -0.03 0.978 -.0000368 .0000358

IOHH .0000692 .0000176 3.93 0.000*** .0000342 .0001042

ACCTMI -.1960002 .1024105 -1.91 0.059* -.3996547 .0076544

DISTOMA .0030764 .0155823 0.20 0.844 -.0279107 .0340635
FARML 1.537511 .5137472 2.99 0.004*** .5158684 2.559154
PRIFR .000368 .0000902 4.08 0.000*** -.0005473 .0001887

_cons .3935193 .7779194 0.51 0.614 -1.153459 1.940497

Note: *, ** and *** refers to significant at 10%, 5% and 1% significance level, respectively.
From the econometric model result; size of farm land, Price fruit, Education level of household,
age of household, quantity product of fruit, distance to market, income of household signs are
expected to be positive; because they have direct relationship with quantity supplied to market
but the signs of Access to market information, cost of transportation, sex of household, family
size of household, are expected to be negative signs, because they have inverse relationship with
quantity supplied to market and they affect it adversely. But sex of household, Access to market
information, family size, cost of transportation, distance to market is insignificance.
The contribution of each individual variable to the explanation of the determinants of household,
quantity of quantity supplied to market in conjunction with other independent variable using the

30
multiple OLS regression analysis, shows that, seven variables, among the 11 explanatory
variable that were included in the model, were found to be statistically significant at various
probability levels. Age of household, education level of household, quantity of product, income
of household, access to market information, size of farm land, price of fruit use were found
important factors that influence household quantity supplied to market in the study area. The
remaining four variables were not statistically significant at the conventional levels of
significance.
Quantity of fruit product: As hypothesized, the multiple linear regression result shows that
marketed surplus was significantly affected quantity supplied to market at 1% level. The positive
coefficient indicates that a unit increase in quantity of fruit product will increase the marketable
supply of farmers. The result also implied that, a unit increase in the quantity of fruit product has
caused an increase of 0. 4670 qt of marketable fruit shown on above table.
Price of fruit: The coefficient of price of fruit which shows a positive relation to the quantity of
fruit sold or supplied to market. Producers checked the price of fruit for their best benefit and this
directs to the determinant to be significance at 1% level. The positive and significant relationship
between the variables indicates that as the price of fruit at market rises, the quantity of fruit sold
at the market also rises, which in turn increases quantity of fruit sold per household. The
coefficient of the variable also confirms that a unit price increase in the fruit market directs to the
household to increase yearly fruit sales by 0.000368 quts shown on above table.
Education level of HHH: Education has showed positive effect on fruit quantity sold with
significance level at 1%. On average, if fruit producer gets educated, the amount of fruit supplied
to the market increases by 0.0719 quintal. The result further indicated that, education has
improved the producing household ability to acquire new idea in relation to market information
and improved production, which in turn enhanced productivity and there by increased
marketable supply of fruit shown on above table.
Age of household; Age of household had been a significant and positive effect on the quantity of
fruit supplied to market with 1% level of significance. As the average age of the person is adult
age, if the market participation and quantity of fruit supplied to market had been increase due to
young (adult) age. Old age of the respondents could less participate quantity of supplied than
younger respondents in the market. this implies that the Age of household increased by one year

31
the performance producers to quantity of fruit supplied to the market is increase by 0.04358 units
as shown in the table 4.6 above.
Income of household head
Income of household is continues variable stating whether a household is in a position of
achieving quantity supplied to market. A household with greater income level is certain to
increase quantity supplied to market than a household whose income level is less and the
variable income of household is positive and consistent with theory. This implies that the income
of household increased by one unit the performance producers to quantity of fruit supplied to the
market is increase by 0.0000692 units as shown in the table 4.6 above.
Market information: Market information has shown negative effect on fruit quantity supplied
with significance level at 10%. On average, if fruit producer gets market information, the amount
of fruit supplied to the market decreased by 0.1960 Quintal shown on above table 4.6 .
Size farm land: farm land has shown positive effect on fruit quantity supplied to market with
significant level at 1%. A household have greater size of farm is certain to increase quantity
supplied to market and the variable income of household is positive. this implies that the farm
size of household increased by one unit the performance producers to quantity of fruit supplied
to the market is increase by1.537511 units as shown in the table 4.6 above.

5. CONCLUSIONS AND RECOMMENDATION

5.1 Conclusion
Ethiopia has a great potential for fruit production. Fruits production and marketing is not a new
sector in Ethiopia; it has been undertaken for decades. The main objective of the study was to

32
analyse the challenges and opportunities of fruit marketing. A number of factors may have
affected the amount of marketable supply of fruits at farm level in the country. Given the large
potential for fruit production in the country, their contribution to the total GDP had been
extremely low for many reasons. The most cited reasons include lack of market-oriented
production which is too traditional and poorly supported by scientific recommendations,
excessive margin mainly due to inefficient and costly transport, absence of fruit market
information, inadequate government interventions and absence of market regulations and
legislations and its marketing activity is principally attributed to poor actors’ skill. As a result,
fruit marketing needs due attention in any on-going or future fruit marketing development plan.
In the case of arba minch town to identify challenges and opportunities that affect farm level
marketable supply of fruit, OLS regression analysis was employed. About 11(independent)
variables were hypothesized to affect farm level dependent variable (quantity supplied to market)
in the two kebeles. Seven variables were found to be significant variables in affecting quantity of
fruit supplied to market. Quantity of fruit product, education level of the household head, income
of household, price of fruit and size of farm land influenced the quantity of fruits supplied to
market positively and market information affect negatively by household as predictable.
5.2. Recommendations
Based on the results of the study the following recommendations are made
 Generally, traders are not capable of sourcing market information from different sources
whereas poor farmers rely on other farmers and government extension staff for the same
information. Therefore, there is a great need to make information available on market
farmers at the right time and place in response to this challenge; it is also good to develop
an integrated agricultural marketing information system that will be linked to Woreda
information center, and to link them to government’s program.
 The quantity of fruit produced at the farm level affected quantity fruit supplied to market
positively and significantly. However, farmers are working under limited plots of land by
natural as well as socio-economic factors without using improved technologies and
agricultural inputs like fertilizer, seed, pesticide, herbicide etc. fruit producers in arba
minch town used little inputs like fertilizer, seed, pesticide, herbicide etc. Hence,
increasing production and productivity of fruit per unit area of land is better alternative to
increase quantity supplied to market. Introduction of improved varieties, application of

33
 chemical fertilizers, using of modern technologies, controlling disease and pest practices
should be promoted to increase production.
 Promoting level of education in production and marketing of fruit product is a crucial
factor in improving the marketing performance of the producers. If producers have
knowledge about the advantage of the market, they do not need only immediate economic
advantages from the sale of their product. In case of production, household heads that
have very limited education encounter in successfully managing, fertilizer and pesticide
applications. So, stakeholders’ and Agricultural and Rural Development Offices have to
create awareness about the market and continuously trained in production and marketing..
 Fruit price was factors or challenges that affect quantity of fruit supplied to market
positively. It need for strength research-farmer-extension linkages to get improved
varieties of input and improved management practices so as to overcome the current
production pitfalls to address the wider observed yield gaps.
 Income of household also affected quantity of fruit supplied to market positively. It need
for getting improved and affordable postharvest handling and storage structures to
prolong shelf life and minimize postharvest losses.
 Build the capacity of farmer’s cooperatives/unions so as to provide cooperatives with
much better opportunities for integrating smallholders into vegetable value chains so that
the profit margins of the farmers could be improve.

6. REFERENCES
Abay, A, 2007. Vegetable marketing chain analysis in the case of Fogera Wereda, in
Amehara National regional state of Ethiopia. An MSc Thesis Presented to School of
Graduate Studies of Haramaya University.
Admassu S (2004). Post-harvest sector challenges and opportunities in Ethiopia. Internet africa

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Ayalew G, Fekadu A, Sisay B. (2015 Appearance and chemical control of white mango scale (Aulacaspis
tubercularis) in central rift valley. Sci TechnolArts Res J.; 4(2):59–63.
Barrett C, Reardon T, Swinnen J, Zilberman D.(2019) Structural transformation and economic development:
insights from the agri-food value chain revolution, Working paper Dyson School of Applied
Economics and Management. Cornell: Cornell University;
Bereda A, Yilma Z, Asefa Z, Kassa F. (2016) Livestock and livestock products and by-product trade in
Ethiopia: a review. Dev Country Stud.
Beyene Tadesse and D. Philips, (2017). Ensuring Small Scale Producers in Ethiopia to Achieve Sustainable
and Fair Access to honey markets. International Development Enterprises and Ethiopian Society of
Appropriate Technology
Bezabih Emana and Hadera Gebremedhin, (2017). Constraints and Opportunities of Horticulture Production
and Marketing in Eastern Ethiopia DCG Report No. 46.

CSA. (2019) Agricultural sample survey. Area and production of major crops. Central Statistical Agency of
Ethiopia (CSA). Addis Ababa.

FAO. (2019) Developing sustainable value chains for small-scale livestock producers. In: G. Leroy, M.
Fernando (eds). FAO animal production and health guidelines 21.
GAIN. (2018) Ethiopia Fresh Fruits Market Update Report. Global Agricultural Information Network
(GAIN) Report Number: ET1827. Addis Ababa..
Kenkel, Phil. (2020) Tennessee Farm Labor Regulations and Legal Issues. AE & RD #75, Department of
Agricultural Economics, University of Tennessee, http://economics.ag.utk.edu/
pubs/resource/ae&rd75.pd

Lundy M, Becx G, Zamierowski N, Amrein A, Hurtado Bermúdez JJ, Mosquera Echeverry EE, et al. LINK
(2018) methodology: a participatory guide to business models that link smallholders to markets.
Citeseer.
Mengesha S, Abate D, Adamu C, Zewde A, Addis Y (2019). Value chain analysis of fruits: the case of mango
and avocado producing smallholder farmers in Gurage Zone, Ethiopia.
Mossie M, Gerezgiher A, Ayalew Z, Elias A. (2021) Food security effects of smallholders’ participation in
apple and mango value chains in north-western Ethiopia. Agricul Food Secur. 10(1):1–15
Orr A, Donovan J, Stoian D (2018) Smallholder value chains as complex adaptive systems: a conceptual
framework. J Agribusiness Deve Emerg Econ..

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Shishodia, S., Adams, L., Bhatt, I.D. and Aggarwal, B.B.2006.Anticancer potential of pomegranate.
In: Pomegranates. Ancient Roots to Modern Medicine, 1stedn. Taylor and Francis Group,
Boca Raton, FL, USA, pp. 107-116
Tarekegn K, Asado A, Gafaro T, Shitaye Y. (2020) Value chain analysis of banana in bench maji and sheka
zones of Southern Ethiopia. Cogent Food Agricul.
Tilaye Bekele (2010), How to Involve Smallholder Farmers in Commercial Agriculture /Horticulture
Ethiopia, Country Position Paper (EHPEA), October 25, 2010, Addis Ababa, E
WHO. COVID-19 (2020) and Food Safety: Guidance for Food Businesses. World Health Organization
Woolfrey S, Bizzotto Molina P, Ronceray M. (2021) AgrInvest-Food Systems Project– Political economy
analysis of the Ethiopian food system: Key political economy factors and promising value chains to
improve food system sustainability. Food and Agricultural Organization of the United Nations (FAO).
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Zelalem, (2011), challenges and prospects of the commodity exchange in Ethiopia thesis submitted to Addis
Ababa university

APPENDIX
Survey Questionnaire
Dear Respondents, we would like to thank in advance for your cooperation in filling the
questionnaire. The objective of this questionnaire is to collect data on fruit marketing challenges
and opportunity in Gamo zone, arba minch town. The information you provide would be very

36
crucial for the study. Therefore, you are kindly requested to be honest and frank in filling all the
items provided in the questionnaire
PART I: SOCIO - DEMOGRAFIC FACTORS
1. Sex 0. Female 1. Male
2. Age? _______
3. Education status 1. Illiterate 2. Grade 1-8 3. Grade 9-12 4.
Above
4. Family size: what is your family size? ___________

PART II: SOCIO -ECONOMIC FACTORS

1. Access to Market Information
1. Do you have marketing information? (√) 0. [ ] No 1. [ ] Yes
2. If your answer for Q.1 is yes, from whom did you get the market information? (√) 1. [ ]
Kebele administration 2.[ ] Woreda experts 3. [ ] Radio/Television
4. [ ] Brokers 5. [ ] Cooperatives 6. [ ] Others (specify) ……………
3. What type of information did you get? (√) 1. [ ] Price information 2.[ ] Market place
information 3.[ ] Buyers’ information 4. [ ] Other (specify) …………..
4. Did you have information on market price for your fruits before you sell it? (√)
0. [ ] No 1.[ ] Yes
5. If your answer for Q.4 is yes how do you obtain information on the central market price? (√)
1. [ ] Telephone 2.[ ] Radio 3. [ ] From other traders
6. At what time interval do you get the information? (√)
1. [ ] Daily 2.[ ] Weekly 3.[ ] Monthly 4. Other (specify)__________
2. Quantity and farm land of products
1. How many hectares of land was covered with all fruits? ____________
2. How many quintals of fruits did you produce? ___________
3. Distance of market and Cost of transportation
1. Distance of your home from the mostly used market center in km? ____________
2 How do you transport fruit from farm to home and from home to market center________? 0.
Human back or head 1. Pack animal 2 .Hand cart 3. Animal cart
4.Vehicle 5.Other
3. Was the transportation cost for fruit is very high (costly)?

37
 0. Yes 1. No
4. Estimate the total amount of cost incurred per quintal of fruit production when sold to the
nearest market? ___________
4. Income of the household and price of fruit
1. Did you perform other income-generating activities other than fruit production? 0.[ ] No
1 [ ] Yes
2. If yes, what are these sources of income? ________________Which occupation other than
farming did you have? 0. Handcraft 1. Local brewery 2 .Trade
3.Government/NGO employment 4.Other (specify)________
3. What is the total income (birr) you earned from the total fruit production? ________
4. What is the total income you earned from other crops production than fruits (cereal crops,
chat, vegetables, crop residue etc)? ___________
5. What is the total price of fruit you earn from the total fruit production?
PART III: GENERAL TRENDS AND PROBLEMS THAT MAY INFLUENCE FRUITS
MARKETING
1. What are the major actors along the fruits marketing?.................
2. What are the major constraints fruits marketing? .....................
3. What are major opportunities of fruits marketing?........................
4. What are the determinants of quantity of fruits supplied to the market? …………….
|
QSTM AGE SEXHH FSHH EDLHH QUOPR COTR
-------------+---------------------------------------------------------------
QSTM 1.0000
AGE 0.8954 1.0000
SEXHH 0.0959 0.1041 1.0000
FSHH 0.1598 0.2384 0.0895 1.0000
EDLHH 0.8290 0.7359 0.1064 0.1398 1.0000
QUOPR 0.9670 0.8590 0.0921 0.1530 0.7992 1.0000
COTR -0.5500 -0.5214 0.0227 0.0045 -0.4749 -0.5330 1.0000
IOHH 0.7328 0.6655 0.1137 0.0602 0.5877 0.7191 -0.3688
ACCTMI 0.0016 -0.0593 -0.1145 -0.1991 -0.0358 0.0214 -0.0965
DISTOMA 0.0878 0.1237 0.0822 0.1032 0.0493 0.0471 -0.1842

38
 FARML 0.8888 0.7957 0.1111 0.1710 0.7593 0.8459 -0.5405
PRIFR -0.7778 -0.7080 -0.0850 -0.1874 -0.6129 -0.7501 0.4783

IOHH ACCTMI DISTOMA FARML PRIFR

-------------+---------------------------------------------
IOHH 1.0000
ACCTMI 0.1605 1.0000
DISTOMA 0.1249 -0.0384 1.0000
FARML 0.6404 0.0148 0.1580 1.0000
PRIFR 0.3008 0.0780 0.0408 0.7348 1.0000

39