Abstract:
Gamo Gofa zone is the second largest cotton growing area in the country after the Amhara Region, but cotton marketing had been a challenge for the farmers as they were getting low prices from the local middlemen. Value chains can be seen as a vehicle by which new forms of production, technologies, logistics and organizational relations and networks are introduced. This study was conducted on cotton value chain analysis the case of Arbaminch Zuria district of the zone with general objective of this study was to evaluate value chain of cotton in Arbaminch Zuria District. Specific objectives of the study were: to identify actors and their roles along cotton value chain, to identify cotton value addition activities and to develop value chain map, to analyze the structure, conduct and performance of the cotton market, to identify constraints and opportunities in cotton production and marketing and to analyze factors affecting market supply of cotton at farm level in the study area. For this study, both primary and secondary data were used. A total of 123 sample households were selected from three kebeles of Arbaminch zuria district and 26 cotton traders, 9 small and micro enterprises, and one textile company were interviewed using semi structured questionnaire. Descriptive statistics and Econometrics models were used to analyze the data. Descriptive statistics results show that the main cotton value chain actors in the study area are input supplier, producers, local collectors, wholesalers, ginners, cottage level weavers, textile factories and retailers. Market concentration ratio at district level was calculated using HHI and its value was 0.553, which shows that cotton marketing was highly concentrated on hands of few in the study area., long existing tradition of cotton farming and governmental and NGO support were cotton production opportunities while, substituting cotton by other crops, lack of access to new and improved cotton varieties were cotton production challenges of the study area. Increased market demand, proximity to and existence of textile factories and establishment of new industry parks were cotton marketing opportunities while, production and supplying of cotton with in similar period, bulkiness, and spoilage, were cotton marketing challenges in the study area. Econometrics models analysis shows that size of land allocated to cotton in hectare, use of improved seed and current year cotton price and number of extension contact were significant and positively related whereas cotton farming experience and distance to nearest market were found to be significant and negatively related to quantity of cotton supply. Provision of new improved cotton varieties, regulation and implementation of cotton price tariffs, strengthening and provision of sustainable and knowledge based extension service and monitoring land planning of farmers were recommended to improve and strengthening cotton value chain in the study area.