ANALYSIS OF ONION MARKETING: THE CASE OF KOBO DISTRICT, NORTH WOLLO ZONE, AMHARA NATIONAL REGIONAL STATE, ETHIOPIA

The study attempted to examine onion marketing in Kobo District of Amhara National Regional State with specific objectives of analyzing the structure-conduct-performance of onion market, the determinants of onion marketed surplus and the spatial market integration between the district market and other destination markets (Mekele, Dessie and Bahir Dar). Both primary and secondary data were used for this study. Multistage sampling procedure was employed to select sample onion producers while traders were selected on census and purposive way. Primary data for this study were collected from 156 onion producer farmers and 54 onion traders using pre-tested structured questionnaire. Secondary data were collected from the office of district Agriculture and Rural Development, Kobo Girana Valley Development Program office and Central Statistical Agency. Both descriptive and econometric analysis were used in data analysis. In the structure conduct analysis, Concentration ratio of top four firm for onion wholesalers of 50%, shows district level onion wholesale market was concentrated and exhibit oligopolistic market. Onion Price setting in the district was dominated by traders and the total gross margin was higher in channels where the onion marketing channel is relative long due to the inclusion of rural and urban assemblers. The multiple linear regression model result revealed that seven variables land allocated for onion, family labor, experience in onion production, credit use, and education level of household head, frequency of extension visits and cooperative membership significantly and positively affected onion marketed surplus while the distance to the nearest market significantly and negatively affected it. In the analysis of spatial market integration, results of Vector Error Correction Model revealed that in Kobo-Mekele, Kobo-Dessie and Kobo-Bahir Dar market pairs, following a shock that creates any disequilibrium between each market pairs, Kobo adjusts by 27.2%, 34% and 42.4% respectively. However, there was no significant short run relationship between these pairs of markets. Policy implications drown from the findings of this study includes: improving onion productivity, facilitating experience sharing, strengthening and expanding adult education programs, extension and credit institutions, improve market information and road networks in the district.