Whole-Milk Marketing Channels and Determinants of Market Participation: The Case of Bishoftu Town. East Shewa Zone, Oromia Regional State, Ethiopia

Abstract

The aim of this paper was to analyze fresh whole-milk marketing channels and determinants of market participation in Bishoftu town. Using random sampling techniques, 141 smallholder milk producer households were selected and 76 milk traders from different marketing actors were involved in the sample. The required data were collected from both secondary and primary sources and analyzed using descriptive and econometric methods of data analysis. The core fresh whole-milk marketing actors identified in the study area were input suppliers, producers, collectors, wholesalers, processors, retailers, and consumers. Marketing margin among the actors was analyzed across the main milk marketing channels. The benefit share of producers ranges from 28.42% (in channel 3) to 100% (in channel 1). Regarding traders, cafes /hotels were the highest benefited market actors for the share of GMM in channel 3 (62.1%). To analyze the determinants of smallholder milk producer household’s milk market participation decision and their level of participation, Tobit regression model was used. The results of the Tobit regression model revealed that out of thirteen independent variables, about seven independent variables significantly affected the probability and level of participation of smallholder milk producers in milk market supply. . These variables were education level of the household, land holding size, the volume of milk allocated for home consumption, access to credit, experience in milk production, distance from market centers and the amount of milk produced.