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Review on The Challenge and Opportunity of Fruit and Vegetable marketing in Ethiopia By Wakgari Hailu Graduate Assistant II and at Samara University Collage of Dry Land Agriculture department of Horticulture and MSc. Candidate at Bahir Dar University

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Page 1: daagu.org€¦ · Web viewReview on The Challenge and Opportunity of Fruit and Vegetable marketing in Ethiopia By Wakgari Hailu Graduate Assistant II and at Samara University Collage

Review on The Challenge and Opportunity of Fruit and Vegetable marketing in

Ethiopia

By

Wakgari Hailu

Graduate Assistant II and at Samara University Collage of Dry Land Agriculture department

of Horticulture and MSc. Candidate at Bahir Dar University

Page 2: daagu.org€¦ · Web viewReview on The Challenge and Opportunity of Fruit and Vegetable marketing in Ethiopia By Wakgari Hailu Graduate Assistant II and at Samara University Collage

Abstract

Fruits and vegetables are the main and sometimes the only source of many vitamins and minerals. Therefore, vegetable and fruit production is being more widely adopted, primarily to ensure food security and to promote production of high-value crops for the market to improve living conditions of smallholders and their food security. Although Ethiopia has good agro ecology for fruit and vegetable production related to other countries the production of fruit and vegetable is very low. Among the cause of low consumption in the country; lack of marketing facilities is the most common. The main objective of this review is also to review challenge and opportunity of fruit and vegetable marketing in Ethiopia. The major market player in Ethiopia includes producer, rural assemblers, wholesalers, retailers, transporters, brokers and consumer. These different actors have different and complementary marketing function in most part of the country most of vegetables such as tomato, cabbage, onion, garlic, hot pepper, beetroots, Swiss chard, lettuce, and potato are mainly produced for market. There are three fruit and eleven vegetable exporter spatially distributed in different region of the country. On the other hand, the overall export performance of the country will be affected due to petite number of exporters especially in the case of fruit exporters. Ethiopia’s fruit productions and exports play a significant role in the local economy as a means of earning livelihoods for nearly five million farmers, creating jobs and generating foreign exchange revenues. Also, the fruit crops sub-sector is one of the priority strategic sectors recognized by the GOE for its potential for private sector investments and exports. Due to perish-ability, seasonality, high economic value and standardization requirements, characteristic of fruit and vegetable particular features mean that the marketing of these products evolves rapidly and is especially complex. At present the progressive globalization of markets and its repercussion on the organization of different marketing channels supposes a new and decisive challenge for the growers who must accelerate the integration of their operations with the rest of the food chain. Based on this the following section discuss the performance of world trade of fruits and vegetables. The major internal constraint in the fruit exporters is lack of managerial skill whereas for vegetable exporter is lack of commitment by the employee’s. As an Export challenges lack of credit facilities and supply of inputs followed by lack of infrastructure and lack of organized information in the market system. Not only the challenge Ethiopian has also too many opportunities for production and marketing of fruit and vegetable. Such as, strong political will in the promotion of horticultural crops and irrigation, conductive agro-ecology, day to day increase of demand are the major described. To conclude that, to solve the challenges and corresponding to that to use the available opportunity the stake holders; policy makers, producers and retailer should play their role in.

Key term; Fruit, Vegetable, Marketing

I

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Table of ContentList of Table............................................................................................................III1. Introduction...........................................................................................................

1.1. Back ground..................................................................................................2. Challenge and Opportunity of fruit and Vegetable Marketing..............................

2.1. Fruit and Vegetable Value chain......................................................................2.2. Horticulture Marketing in Ethiopia...................................................................

2.2.1. Fruit and Vegetable Marketing................................................................................

2.3. Challenges of fruit and Vegetable Marketing......................................................2.3.1. Local Market challenges..........................................................................................

2.4. Opportunity of fruit and Vegetable Marketing...........................................212.4.1. Strong political will in the promotion of horticultural crops and irrigation............

2.4.2. Conducive agro-ecology..........................................................................................

2.4.3. Day to day increasing of demand............................................................................

3. Measure to be taken (Solution)............................................................................243.1. In policy maker or government side...........................................................243.2. In producer side...........................................................................................253.3. In retailer side.............................................................................................25

4. Summary and conclusion....................................................................................265. Reference.............................................................................................................28

II

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List of Table

Table 1; Area and Production of Major Fruit Crops in Ethiopia from 2013/14 to 2017/18............Table 2. Proportion of experts and their indication of the purpose of vegetable production in all sites (%)......................................................................................................................................Table 3. the amount of fruit and vegetable exported by Ethiopia.................................................Table 4. some fruit exported to different countries by Ethiopia....................................................Table 5. Ethiopia’s Production, Import and Export of Major Edible Fruits (MY Oct-Sep) (Volume in ‘000 Metric Tons).......................................................................................................Table 6. Average price and margins at various levels of chain actors..........................................

List of Figure

Figure 1. Percentage Distribution of Area Under Major Crops; 2013/14 Meher Season................Figure 2. fruit and vegetable Value chain in west shoa zone..........................................................Figure 3. Addis Ababa retail price trends of onions, tomatoes and potatoes (Birr/kg).................

III

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1. Introduction1.1. Back ground and Justification

Fruits are defined as plants that are more or less succulent and luscious and/or plants that are

closely interrelated in botanical constitution which are common eaten as snacks or desserts.

Whereas, vegetables are defined as herbaceous plants in which some part of the plant is eaten

cooked or raw during main part of meal.

Fruits and vegetables are the main and sometimes the only source of many vitamins and

minerals. These are essential nutrients that keep your body healthy and working well. Each

vitamin has a specific function. For instance, vitamin A (found in carrots and apricots) helps

your body produce substances that preserve your skin from sunburn and therefore from skin

cancer, vitamin K (found in broccoli and green salads) keeps the blood flowing and prevents

unwanted clots (like ictus), potassium (found in bananas and tomatoes) makes your muscles

work better and prevent cramps. As each fruit and vegetable has a different amount and

selection of minerals, it is a good idea to eat a different selection of them each day (Kamal,

2018).

Therefore, vegetable and fruit production is being more widely adopted, primarily to ensure

food security and to promote production of high-value crops for the market to improve living

conditions of smallholders and their food security. As a result, the expert’s, researchers, and

other all concern stakeholders should participate in developing the systems of production of

fruits and vegetables for the contribution of food security in specific location (Deribe &

Mintesnot, 2016).

Ethiopia has a comparative advantage in a number of horticultural commodities due to its

favorable climate, proximity to European and Middle Eastern markets and cheap labor.

However, the production of horticultural crops is much less developed than the production of

food grains in the country. On average more than 2,399,566 tons of vegetables and fruits are

produced by public and private commercial farms, this is estimated to be less than 2 percent

of the total crop production (CSA, 2014) (Figure 1).

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Figure 1. Percentage Distribution of Area Under Major Crops; 2013/14 Meher Season

Source; (CSA, 2014)

And also fruit crops grown by the private peasant holders cover only a small taken area and

production in the country. The number of holders practicing fruit farming is much less than

that of grains or cereals. About 71,507.13 hectares of land is under fruit crops in Ethiopia.

Bananas contributed about 57.84% of the fruit crop area followed by mangoes that

contributed 14.47% of the area. More than 4,991,837.64 quintals of fruits were produced in

the country. Bananas, Papayas, Mangoes and Oranges took up 68.11%, 6.33%, 14.46% and

6.25% of the fruit production, respectively (CSA, 2014).

According to CSA, the area under all vegetables grown by smallholder farmers increased

from 351,000 ha in 2010 to about 397,000 ha in 2013 in Ethiopia, representing an increase of

about 16%. Total production also increased by 87.5%, from about 2.4 million tons in 2010 to

about 4.5 million tons in 2013. The aggregated average yield of all vegetables is used as the

indicative aggregate productivity of all vegetables, though the yield of individual crops is

notably very different. The result showed a staggering trend between 2010 and 2012,

increasing from 6.7 tons/ha in 2010 to 7.6 tons/ha in 2011 and then declined to 6.4 tons/ha in

2012 and finally increased to 11.3 tons/ha in 2013. For non-root type vegetables, the average

yield over the four years’ period were 4.0 ton/ha in 2010, 5.3 ton/ha in 2011, 4.7 ton/ha in

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2012 and 4.4 ton/ha in 2013, showing a relatively stagnant and low yield trend over the

periods.

Ethiopia has highly-diversified agro-ecological conditions which are suitable for the

production of various types of fruit and vegetables. As a result, vegetable and fruit production

is being more widely adopted, primarily to ensure food security and to promote production of

high-value crops for the market to improve living conditions of smallholders. With regard to

horticultural production, 46% of the vegetable- producing area is planted with potato followed

by pepper and sweet potato. Traditional varieties of vegetables such as taro, yam and

‘enchote’ are also grown but their production and consumption is declining. Among fruits,

avocado, banana, orange, papaya and guava are common. Commercial horticultural crop

production is carried out mainly in the central rift valley and eastern part of the country.

Cereals contribute about 75% of the Ethiopian diet (Deribe & Mintesnot, 2016).

In Ethiopia different studies indicates that, there is limitation of awareness for fruit and

vegetable consumption. The study survey of Tsegaye, et al. (2009) indicated that high

proportion of households in Afar (82.3%) did not see any of the vegetables mentioned in the

nearby markets. Most households in Afar (79.5%) and in Tigray (67.5%) reported that they

have not seen any fruit in the nearby markets over the year preceding Most households in

Afar (79.5%) and in Tigray (67.5%) reported that they have not seen any fruit in the nearby

markets over the year preceding the survey. Overall, among all the index children studied in

nine regions, 38.1% did not eat any of the common vegetables (kale, spinach, cabbage, carrot,

tomato and pumpkin) over the week preceding the survey. The proportion of index children

who did not eat any vegetable was high in Afar (85.0%), Tigray (77.6%), Amhara (61.8%)

and Addis Ababa (59.3%) and relatively low in SNNPR (7.0%), Dire Dawa (15.6%) and

Oromiya (18.6%). Among all the children studied in nine regions, 36.5% did not eat any of

the common fruits (mango, papaya, oranges, avocado and banana) over the week preceding

the survey. The proportion of index children who did not eat fruits was high in Tigray

(88.1%) and Afar (83.5%) and was relatively low in Harari (23.3%).

Bickford, (2018) Also found that, Ethiopia’s per capita consumption of fresh fruits is one of

the lowest in the East Africa region. This is mostly because of low income and weak dietary

habits resulting from inadequate awareness on nutritional benefits.

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Ethiopia’s per capita consumption of fresh fruits is approximately 7 kg per person per year.

This is far below the WHO and FAO recommended minimum level of dietary intake (i.e., 146

kg per person per year). Also, Ethiopia’s per capita consumption is eight times lower than the

average figure for the East Africa region, which stands at 55 kg per person per year. Likewise,

Ethiopia’s consumption level is well below neighboring countries such as Sudan with 79 kg

per person and Kenya with 55 kg per person. However, local consumption is expected to

increase as the country’s economy continues to grow. In addition, burgeoning population and

urbanization trends are expected to drive consumption up. Furthermore, rising disposable

income, expanding hospitality industry, and presence of large expat community would further

increase demand for fresh fruits.

This indicates as in many other low-income countries, fruit and vegetable (FV) consumption

is very low in Ethiopia. Consequently, micronutrient deficiencies, such as for Vitamin A, are

widespread, and more than half of young Ethiopian children suffer from anemia. Efforts to

increase FV consumption in Ethiopia have focused on improving consumer knowledge of the

health benefits of FV and other nutritious foods. While these interventions have been

successful in improving knowledge and ultimately improving dietary diversity, diets remain

extremely monotonous across the country. Recent international research in Ethiopia suggest

that high relative prices of FVs could be another important constraint. To shed more light on

this issue, we assess the affordability of FVs in Ethiopia. Using expenditure and price data

collected by the Central Statistical Agency of Ethiopia, we find that the average Ethiopian

household would have to spend 11 percent of their income to meet the international

recommendation of two servings of fruits and three servings of vegetables per person per day.

This share is more than 2.5 times higher for households in the poorest quintile, indicating that

meeting these guidelines is currently out of reach for the poorest households in Ethiopia.

More investments and research attention to the production of fruits and vegetables is urgently

needed to improve supplies and, hence, their affordability (Kalle, 2018).

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Vegetable and fruit production is being more widely adopted, primarily to ensure food

security and to promote production of high-value crops for the market to improve living

conditions of smallholders (Deribe & Mintesnot, 2016).

In some of Ethiopia parts vegetable production is integrated into mixed farming system where

different types of crops are produced on the same plot of land or in sequence with other crops

in rotation. Depending on availability of land and crop suitability for intercropping, some

vegetables are grown either as sole or intercropped with other vegetables or cereals.

According to (Emana, et al. 2015) Vegetables such as tomato, beetroot, Swiss-chard, lettuce,

carrot, cabbage, onion, garlic, kale, sweet potato and hot pepper are dominantly grown as sole

crop whereas Ethiopian mustard and pumpkin are dominantly intercropped with maize and

other annual or perennial crops, and with Irish potato especially in homesteads in West

Shewa, Gurage and Hadiya zones and Yem-Special district. Emana and his friends added that,

integrating vegetable production in a farming system has contributes substantially to food and

nutrition security as the vegetables complement stable foods for a balanced diet by providing

vitamins and minerals. Due to such benefits, some projects such as “better potato for better

life” project are supported by USAID and implemented by the International.

Reciting official GOE figures reported by the Central Statistics Agency (CSA), Bickford,

(2018) described that, annual fruit production for MY 2017/18 is estimated roughly at

780,000 metric tons. This is slightly lower than production figures for previous crop year

mainly due to reductions in banana acreage. In MY 2017/18, fruit crops occupied a total area

of 104,000 hectares, down by 4% over preceding year. The total acreage and production

volume of fruits represent is very small when compared to grains production. Table indicates

Area and Production of Major Fruit Crops in Ethiopia.

Table 1; Area and Production of Major Fruit Crops in Ethiopia from 2013/14 to 2017/18

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Source: CSA Ag Survey

The table above indicates that, total area planted and production quantities in the last five

years have expanded approximately by half. However, national average yields shown

fluctuation and this significantly varies across fruit crops.

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. A brief description of production situations of the three major fruit crops is

presented below (Bickford, 2018)

In Ethiopia there is different agro ecology helps to cultivate crops can be produced in all agro

ecological back ground. Although, there is limitation in using production technologies such as

improved variety, crop protection and irrigation. Vegetables can be grown in two seasons,

namely in the wet season (locally known as ‘meher’ season) using rainfall with supplemental

irrigation or under full irrigation during the dry season. As Fikadu, et al. (2015) mentioned

most of vegetables have been growing under irrigation in their study area (Humid tropics of

Ethiopia Article) records high yield related to rain fed. For example, onion, garlic, hot pepper,

beetroot, carrot, sweet potato and potato registered higher yields under irrigation production

compared to rain-fed production. And also there are crops which are difficult to produce

under rain fed due to their pest and disease susceptibility. In addition to that even though

some crop can grow both under rain fed and irrigation there is irrigation limitation due to lack

of technology. Most of humid tropical region producers are using rain fed for fruit and

vegetable.(Emana et al., 2015)

The main constraint with regard to fruit and vegetable production is that, because of market

and food security concerns, rural farmers prefer to produce cereals and pulses.

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Other constraining factors include low production and productivity, lack of adequate pest

control, poor soil fertility management practices, lack of attention to product quality and

prevention of physical damage, as well as the lack of storage, packaging and adequate

marketing facilities (Deribe & Mintesnot, 2016).

1.2. Objective

1.2.1. To review challenge and Opportunity of fruit and vegetable production in

Ethiopia.

2. Challenge and Opportunity of fruit and Vegetable Marketing

In its simplest form is defined as the process of satisfying human needs by bringing products

to people in the proper form, time and place (Branson and Norvel, 1983).

2.1. Fruit and Vegetable Value chain As (WB, 2013) sited by Yeabsira, (2014) by 2030, in Sub Saharan African countries

agribusiness and agriculture is expected to be a $1 trillion industry and thus they must be top

agenda for the fast economic development and transformation of these countries.

Agribusiness can play a major role in shoot start of economic development and transformation

by agriculture basing industries which can bring in a much diversified employment and

income opportunities. However, to achieve the developmental goals of the agriculture sector,

agribusiness should not be isolated from the focus of production agriculture.

The major market players include producers, rural assemblers, wholesalers, retailers,

transporters, brokers and consumers(Adugna, 2009). The cause study on Et fruit by Cheru,

(2011) indicate that the major marketing actors identified in the fruit and vegetable marketing

systems were categorized into four levels, namely the producers, wholesalers, retailers and

consumers. Each of these actors adds value in the process of changing product title. Some

functions or roles are performed by more than one actor, and some actors perform more than

one role. Supporting actors are those who provide supportive services including training and

extension, information, financial and research services. (Akalu & Durr, 2016)

These different actors have different and complementary marketing functions. These include

production, facilitation, buying and selling, transporting, packing, sorting and, processing, etc.

It is interesting to note that some key functions such as packaging, sorting and processing are

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poorly developed and the sense of value adding is practically not observable. The changes in

the value of products as they move away from production along the marketing channel to the

consumers is the increased utility by making the goods available rather than adding value in

terms of increased shelf life or increased safety.(Cheru, 2011)

Figure 2. fruit and vegetable Value chain in west shoa zone.

Source; (Emana et al., 2015)

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2.2. Horticulture Marketing in Ethiopia In most part of the country especially () most of vegetables such as s tomato, cabbage, onion,

garlic, ho pepper, beetroots, Swiss chard, lettuce, and potato are mainly produced for market.

Table 2. Proportion of experts and their indication of the purpose of vegetable production in all sites (%)

Source; (Emana et al., 2015)

Not surprisingly, most households producing vegetables for the market also consume a

portion at home. However, only vegetables preferred as part of the regular diet are produced

mainly for consumption by the household. As shown in (Table 2), kale, pumpkin and

Ethiopian mustard are largely produced for consumption. Sweet potato (tuber is mostly

consumed as a side dish) is considered as food security crop during periods of drought due to

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its drought-tolerance characteristics. In the study sites, sweet potato is considered

predominantly as a key crop for resource poor farmers. Although, most vegetables are also

grown by resource poor farmers, the scale of production is low and the purpose is largely for

home consumption.

The major reason for this observation is the lack of adequate capital to access inputs such as

vegetable seeds, land, irrigation facilities, as well as agro-chemicals; the prices of which are

unaffordable to these farmers. Analysis of the survey data indicated that the rich and medium

wealthy household groups produce a variety of vegetables largely for sale while a portion is

also consumed at home. Vegetables are consumed more by the relatively higher income group

and better educated consumers, mostly in urban cities than resource poor and uneducated

farmers.

Except for garlic and potato which are produced only by rich and medium class farmers due

to the high cost of planting materials, all other vegetables were produced by all income

classes.

2.2.1. Fruit and Vegetable Marketing

In most of Ethiopia parts fruit and vegetable marketing, producer has no opportunity to be

connected to retailer from capital cit. the only retailer they can touch with are the retailer

those who sells around the production area with low price. Due to that the retailer forced to by

low price from the farmers. As Adugna, (2009) said, 50%, 78.9% and 65.2% of onion, tomato

and papaya producing farmers, respectively sold their produce at the farm level.

In Ethiopia, there are 3 fruit and 11 vegetable exporters spatially distributed in different

regions of the country where most of them are concentrated in the nearby surrounding cities

of the capital city; Addis Ababa. The sector has been well emphasized and there is a growing

interest in the sector by the government as one of the crucial areas for the expansion of

foreign exchange earnings. On the other hand, the overall export performance of the country

will be affected due to petite number of exporters especially in the case of fruit exporters.

Similarly, there are limited varieties of exports; i.e. strawberry from fruit exporters and beans

and snow peas, and potato, cabbage, chilies and tomatoes from vegetable exporters, where in

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case of market fluctuations, it would be difficult for the exporters to cop up with the changing

market with a single variety of product especially for fruit exporters.(Yeabsira, 2014).

According to Bickford, (2018) Ethiopia’s fruit productions and exports play a significant role

in the local economy as a means of earning livelihoods for nearly five millions farmers,

creating jobs and generating foreign exchange revenues. Also, the fruit crops sub-sector is one

of the priority strategic sectors recognized by the GOE for its potential for private sector

investments and exports. The GOE Second Growth and Transformation Plan (GTP II

covering 2015-2020) provided a greater emphasis aimed at increasing production of fruit

crops nearly by half. Production is projected to reach approximately one million metric tons

by the end of 2020. SNNP, Oromia, and Amhara regional states are the major growing areas

of edible fruits. These regions have the largest potential for production increases using rain-

fed as well as irrigated commercial farming systems.

Table 3. the amount of fruit and vegetable exported by Ethiopia

Source; Bickford, (2018)

Table 4. some fruit exported to different countries by Ethiopia

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Source; Bickford, (2018)

The major fruit crops produced and exported are bananas, mangos, avocados, citrus,

pineapples, papayas, and strawberries. Fresh fruits’ contribution to Ethiopia’s export earnings

is fairly small but it is growing quickly. According to National Bank of Ethiopia, fresh fruits

combined with vegetables generated US $56 million in export sales, accounting for about two

percent of Ethiopia’s total agricultural exports in MY 2016/17. During the same period, total

exports of fresh fruits reached 21,000 metric tons valued at US $8 million. Although imports

are growing faster than exports, Ethiopia is a net exporter of fresh fruits. Exports are mainly

destined to low-end regional markets such as Djibouti, Somalia, and Sudan. Meanwhile

Ethiopia imports fresh fruits from Saudi Arabia, France, and South Africa. Table 3 below

summarizes annual productions, imports, and exports of major edible fruits.(Bickford, 2018)

Table 5. Ethiopia’s Production, Import and Export of Major Edible Fruits (MY Oct-Sep) (Volume in ‘000 Metric Tons)

Source: Central Statistics Agency (CSA) and Ethiopian Revenue & Customs Authority

(ERCA). * Trade data for 2017/18 is FAS estimate.

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2.3. Challenges of fruit and Vegetable MarketingFruit and vegetables have special characteristics: perish-ability, seasonality, high economic

value, standardization requirements, the importance that consumers confer to test produce in

their diets and the great competition between producing regions. These particular features

mean that the marketing of these products evolves rapidly and is especially complex. At

present the progressive globalization of markets and its repercussion on the organization of

different marketing channels supposes a new and decisive challenge for the growers who must

accelerate the integration of their operations with the rest of the food chain. Based on this the

following section discuss the performance of world trade of fruits and vegetables.(Cheru,

2011).

2.3.1. Local Market challenges

The nature of fruit and vegetableAs fruits & vegetables are highly perishable. They start to lose their quality right after harvest

and continued throughout the process until it is consumed. For this s purpose elaborated and

extensive marketing Charles, facilities and equipment’s are vital. This behavior of fruits &

vegetables exposed the commodity not to be held for long periods and fresh produce from one

area is often sent to distant markets without a firm buyer or price.(Cheru, 2011) in addition to

that, Adugna, (2009) Since the products are very perishable in nature right after harvest they

are sold either at PA and/or Woreda market.

The study revealed that, 78.9 percent, 61.7 percent and 50 percent of onion, tomato and

papaya producers sold at PA market (farm field) in that order. The remaining, 21.1 percent of

onion, 34 percent of tomato and 40.6 percent of papaya producer sold at Woreda market.

Due to perishable nature of production process there is a difficulty of scheduling the supply of

fruits & vegetables to market demand. The crops are subjected to high price and quantity risks

with changing consumer demands and production conditions. Unusual production or

harvesting weather or a major crop disease can influence badly the marketing system.

SeasonalityFruits & Vegetables have seasonal production directly influencing their marketing. Normally

they have limited period of harvest and more or less a year round demand. In fact, in some

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cases the cultural and religious set up of the society also renders demand to be seasonal. This

seasonality al so worsened by lack of facilities to store. Storage and packaging facilities are

the basic requirements in the marketing of fruits and vegetables.

Product bulkinessSince water is the major components of the product, it makes them bulky and low value per

unit that is expensive to transport in fresh form every time. This, therefore, exposed farmers to

lose large amount of product in the farm unsold. It demands a regular marketing preparation

process like washing, cooling, proper management from the time of harvest until the produce

is put on di splay (Cheru, 2011).

Lack of off-set structures Smallholder farmers do not have access to on-farm infrastructure such as store-rooms and

cold-rooms to keep their products in good condition after harvest. Lack of access to facilities

such as post-harvest and processing facilities constitutes a barrier to entry into agricultural

markets, since the emphasis of buyers is more on quality. Access to storage facilities increase

farmers’ flexibility in selling their products, as well as their bargaining power.

Lack of barraging power The barraging power of the small producers is especially low since they have poor access to

market information and limited access to financial markets, which prevents them from selling

their products at the most profitable time. Their lack of bargaining power may lead them to

undervalue their production and obtain a smaller share of the added value created in the

commodity chain. Small farmers have particularly low bargaining power when they operate in

long supply chain, where the specificity of the product transformation assets leads to the

creation of oligopsony (e.g. the oil-palm and cotton sectors in West Africa) (Bienabe et al.,

2004).

Un appropriate place for marketing Literatures identified that, lack of an appropriate place for marketing is the challenges that

both producers and retailers are facing in Ethiopia. According to Mosisa, (2018) most of

retailers in ambo town are selling their commodities along the road side and in area where

there is inconvenient for perishable products. This facilitates the post-harvest lose which is the

major problem of the developing countries. Saying that, due to lack of different know how

about the post-harvest handling practice, absence of shade and storage, physical damage

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during transportation and other related factors leads to low price and deterioration of the

product untimely.

Mosisa, (2018) added that 53.1% of the respondents confirmed that post-harvest loss of their

product is lost due to solar radiation. This was not surprising that since the marketing of the

horticultural crops in open road side without any shade in the entire three places. When the

handling at transportation and market place is poor, these products lose their moisture

contents, and get shriveled or wilted. A such sound economic loses is visible in other either

capital city or towns of entire.

Lack of transportationComparing with other cash crops like serials and pulses horticultural crops spatially fruit and

vegetables are costly to transport due to their bulky nature. As Mohamed, (2018) said, since

water is the major components of the product, it makes them bulky and low value per unit that

is expensive to transport in fresh form every time. Fruits and vegetables from the production

zones are supplied to one or more of the domestic and export markets.

Domestic markets include central markets, local nearby markets, and village markets.

Djibouti is the only export destination for a limited volume of some of the fruit types like

Banana and Mango. Markets where smallholders sell their products include farm gates,

village markets and some local markets. As a study by IDE (2006) depicts, about 76 and 13

percent of vegetable and fruit farmers in Arbaminch and Chencha areas sell at farm gates and

village/nearby local markets, respectively.

There is no individual or farmer’s organization to directly supply to central or regional

markets. Bulkiness fruits and vegetables to transport, high transport cost and barrier to enter

main markets as supplier are major causes for sales of the lion’s share at farm gates. The

buyers of the produces from the smallholders at these markets include cooperatives regional

traders, local market traders, village market traders/assemblers and sometimes direct

consumers. Unions usually have(Worako, n.d.).

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Unfair price quotationIn some area of Ethiopia there is un faire price and the farmers has no the option to decide

their price. According to Adugna, (2009) in the study area (Alamata) repeated low pricing

was reported at peak supply periods that were not based on the actual supply and demand

interaction but information collusion created by buying actors. The intermediaries used to

decide on the price of products particularly onion products. The benefit of Wholesalers

overweighs than others and they control the market chain. In other hand broker interference is

another challenging issue to farmer to decide. Broker is the person who works for commission

at any level of value chain.

Kasso and Bekele (2016) reported that logistics along the value chain of horticultural

marketing are very conventional. As a result, the sellers are forced to sell in traditional prices.

The support given to maintain the nutritional quality and reduction of post-harvest loss of

horticultural crops from the concerned bodies is nil. In addition, Dessalegn et al. (2016) stated

that at higher temperature the shelf-life of horticultural crops were short because it enhances

the ripening process and subsequently leads to deterioration. Therefore, effective, efficient

strategies and urgent intervention to the existing problems is extremely required.

The research conducted in Samara logia by Muluneh, (2016) also indicates that, unfair pricing

was reported which were not based on the actual supply and demand interaction but the

complicity created by brokers. Those brokers used to decide on the price of products

especially on onion and tomato.

On the other hand, as retail price analysis indicates farmers are still unable to receive fair

prices for their products. For instance, the retail price for bananas in Gamo Gofa has remained

far below Addis Ababa price. Producers obtained about 50 percent less than the Addis Ababa

retail price on average, during 2008-2015. Producers prices in Sidama were also 20 percent

lower from Addis Ababa retail price over the same period.(Worako, n.d.)

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Lack of a reliable marketVegetables are also sold at local markets in villages and district capitals. Lack of a reliable

market in all the zones appears to be another critical bottleneck of vegetable farming.

Discussions particularly with producers and traders revealed that the existing market

infrastructure and poor transport and warehouse facilities do not suit the perishable nature of

vegetables as a result of which the quality of vegetables such as tomato and onion

deteriorates. During the peak vegetable production season, farmers are forced to sell the

products at extremely low prices particularly for tomato, and onion (because of lack of

appropriate storage structure to avoid sprouting) thereby discouraging farmers from producing

in the immediate subsequent season (Emana et al., 2015).

According to Worako, (n.d.) smallholders also lack markets to sell what is produced given

limited access to potential marketing centres because of high transportation costs for moving

the products. This in turn spoils their motivation to embark on additional investment in the

sub-sector.? Market power is controlled by a few wholesale and retail market traders who

manipulate prices using their strong network from farm gate to retail markets. Lack of strong

and functional institutional arrangement for the sub-sector further exasperate the situation.

It is well known that nearness to towns reduces transaction costs in agriculture, since farmers

need to access input and output markets. The more prosperous farmers in the Kombolcha

district indicated that when producing cabbage and potato in bulk, they sometimes supplied to

fresh produce markets in the Harar town which is situated 16 kilometers away. Majority of

farmers lack logistical infrastructure such as cold rooms, pack houses and refrigerated

transport to keep their products in good quality particularly for long distance markets (Meron,

2015).

Lack of standardBased on the survey result there was repeated weight cheating and lack of price

discrimination was common problem practiced by both wholesaler and brokers. Lacks of

proper sorting and cleaning or sanitation by producers were also another problem which leads

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to low quality standard of the produce. So as a general there are no clear and well known

standards in the market/areas.(Muluneh, 2016)

Lack of strong cooperativesThe survey result indicated that there are no existed cooperatives on horticultural crops

marketing in the study area. Due to this reason, local traders/retailers controlled all the

marketing activities.(Muluneh, 2016)

It can be concluded that the multipurpose cooperatives do not provide significant support to

the vegetable growers in the study area. Specifically, they are not providing services like

credit facilities, transportation facilities, storage facilities and alike (Alem, 2008).

Lack of transparency in market informationThe process of onion, tomato and papaya selling had its own selling procedures. Onion is sold

through cooperatives, local assemblers, farmer brokers, direct to wholesalers and friends and

by farmers themselves at PA level. Contracts between farmers and rural traders are informal,

based on verbal agreements.

In the case of a conflict, the transaction costs of resorting to formal institutions (such as the

police, courts) are usually higher than the costs involved in the informal mediation. In such a

situation, traders know that farmers have little room to influence their price setting. Besides,

the traders have established personal relations for decades so that no trader wants to violate

the decision of another. These conditions together with lack of financial system to support

producers to invest more on their production, farmers are precluded from motivation and

investment on innovative technologies. Therefore, the future of the sector hinges on

strengthening producers’ organizations (POs) and building their capacities to collectively

bargain and secure a proper share of market prices.(Worako, n.d.) An efficient and integrated

marketing system may greatly contribute to increase in the marketable surplus by scaling

down the losses arising from inefficient processing, storage, and transportation. It guarantees

better prices to farmers for their products and induces them to invest their net surpluses for the

purchase of modern inputs to increase productivity.

Most of the farmers are getting marketing information by their effort. The farmers become

mostly aware of the price upon their arrival at the market place. Farmers don’t have equal

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marketing information with the traders in the central market. Farmers are the price takers in

the market, where as wholesalers are the price makers.(Alem, 2008)

Lack of modernized storage In recent years Ethiopia has experienced a historically high level of general inflation where

food prices of most commodities increased by three fold in the last 10 years. The graph below

indicates nominal price trends of onions, tomatoes and potatoes from 2001 to 2015 for Addis

Ababa (Markato) vegetable and fruit market. Their prices remained highly volatile mainly in

the later periods. This may be accounted for the shorter span of shelf life because producers as

well as traders have limited room to speculate for better prices keeping the products longer

because of their perishable nature. According to Alem, (2008), Almost all the farmers used

ordinary rooms for storage with ground/soil floor and with no shelves. The storage facilities

are in poor conditions. Cooling and preservation systems are unavailable, and perhaps

unaffordable. After harvest, the commodities are directly spread on the floor and this created

the quality problem to the product. Some of the mechanisms include keeping product on

soiled floor, with no exposure to air and sunlight.

Figure 3. Addis Ababa retail price trends of onions, tomatoes and potatoes (Birr/kg)

Source: CSA, 2001-2012

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g) Demand and supply time incompatibility

Vegetables are usually grown in two seasons, namely in the wet season (locally known as

‘meher’ season) using rainfall with supplemental irrigation or under full irrigation during the

dry season. (Emana et al., 2015) Vegetables such as pumpkin, Ethiopian mustard, hot pepper,

sweet potato, and some others are predominantly grown under rain-fed conditions. Irrigated

farming is considered costly due to the intensive use and high cost of diesel fuel for pumping

water, agro-chemicals and hired labor costs. Vegetables and fruits have seasonal production

directly influencing their marketing. Normally they have limited period of harvest and more

or less a year-round demand. In fact, in some cases the cultural and reli- gious set up of the

society also renders demand to be seasonal. This seasonality also worsened by lack of

facilities to store. Therefore, it case blow potential production demand and supply time

incompatibility.

Prices of vegetable products show significant variations depending on the supply situation.

During harvesting time, the price falls quite significantly. When compared to onion and

potato, the price of tomatoes is found more unstable (the variation in prices around mean was

32 %). Most of the production sites in the rural areas are not accessible by car during the rainy

season. Most of farmers use donkeys, vehicles and local carts to transport their products to the

market centre (Alem, 2008).

To supply the produce during the demand time and/or to the demand place it requires good

storage and transportation technology. But rural farmers have no appropriate storage

mechanisms. Adugna, (2009) found that, The lack of modern post-harvest handling practice

and short shelf life of onion, tomato and papaya crops forced producers to sell at prevailing

prices. Mosisa, (2018) also added that seasonal supply of horticultural crops is common in

ambo town. Knowing this, wholesalers put pressure on producers to sell at low price. Weight

defaulting by wholesalers and brokers to producers and watering onion on farm prior

uprooting by producers are some of the unethical manner exercised by the different marketing

actors.

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Vegetable marketing is also constrained by lack of market information systems, poor market

linkages, low institutional support, lack of value chain development to ensure participation

and benefit to the smallholders. This necessitates looking into the whole vegetable system

development via a value chain upgrading/development approach.(Emana et al., 2015) He also

realized that, Brokers and wholesalers in the terminal market determine prices and even

sometimes refuse buying harvested produce.

Due to the dominance of rain-fed production system, supply of vegetables and fruits is

subjected to high fluctuation with variability of weather condition and consequently prices. Its

supply declines during the main rainy season between June and mid-September. As a result,

prices are usually high during these months. Conversely, between October and January there

is a moderate supply of fresh vegetables but starts to rise in February and reaches its peak

level in April and May when prices are relatively lower.(Worako, n.d.).

2.3.2. Export challenges

The major internal constraint in the fruit exporters is lack of managerial skill whereas for

vegetable exporter is lack of commitment by the employee’s. while, externally fruit and

vegetable exporters are constrained by lack of credit facilities and supply of inputs followed

by lack of infrastructure and lack of organized information in the market system. In addition,

the study found out that start up support and follow-up services and integration of supports

provided for the exporters are not well gratifying. To conclude the export performance of fruit

and vegetable exporters is in its infancy and there is yet much to be done to increase the gains

from the sector and thus solving those challenges could possibly enhance the export

performance of fruits and vegetable exporters in Ethiopia.(Yeabsira, 2014)

2.4. Opportunity of fruit and Vegetable Marketing There are ample opportunities to vegetable production at different stages in the value chain.

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2.4.1. Strong political will in the promotion of horticultural crops and irrigation

The government has given emphasis to horticultural crops and irrigation in the second growth

transformation plan. As Ethiopia Investmet Agency, (2012) reported, the Government

emphasized the priority given to agricultural development through its policy document

entitled Agricultural Development Led Industrialization (ADLI). This policy focuses on the

development of agriculture both as a source of production for direct consumption and of raw

materials for industrial processing, on the one hand, and as a major source of consumer

products coming out from the industrial sector, on the other.

2.4.2. Conducive agro-ecology

The climatic and edaphic conditions of the country are within the range of the requirements of

most horticultural crops growing environment.

2.4.3. Day to day increasing of demand

Fresh and processed Fruits and vegetables have a large domestic market in Ethiopia,

significantly higher than the exported volumes. The size of the Ethiopian population is

currently estimated at about 80 million. This is a strong indication of the existence of large

potential demand for fresh fruit and vegetable crops in the country.

The other customer of Ethiopian fresh fruits and vegetables is processing plants, i.e., wineries,

tomato processing plants and vegetable canning factories which require grapevine, tomato and

various types of vegetables for processing. Processing of fruit juice into concentrate near the

source of the fruit either for export markets or to the local manufacturers is also an area of

investment available in the country 2. Ethiopia exports fresh fruits and vegetables to the

international markets.

Ethiopian fresh fruits and vegetables are the European Union, the Arab countries and the

regional markets. Ethiopia is very well known in some parts of Europe especially for her

green beans, climbing beans, cut flowers, okra, melon and passion fruits. Thus, there is a

reliable demand for these Ethiopian products during a particular period and a great volume is

re-exported. Therefore, there is strong business image for Ethiopian vegetables and flowers in

the European markets. The demand for Ethiopian wine is also high both in domestic and

export markets. Currently, the winery receives fresh grapes from Guder, Nura Era, Merti and

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Zewai Vineyard. Grape production in a great volume for the domestic winemaking plant is,

therefore, an attractive area of investment in the. Ethiopia is exporting the majority of its

horticultural products to EU,however, it is exporting it high quality flowers, fruits vegetables

to more than 100 market destinations throughout the world among which Netherland,

Germany, Saudia Arabia, Norway etc. (Ashebre, 2015)

In some area of the country there is demand supply imbalance due to the production status of

some areas. Akalu & Durr, (2016) identified that, highly demanded vegetables are supplied

through imports from other regions of Ethiopia to Yayu zone because the local supply is low.

Even though it is bitter truth for Yayu consumer it is an opportunity for producer. In addition

to that the gross marketing margin shown in Table indicates the price advantage.

Table 6. Average price and margins at various levels of chain actors

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Source; Akalu & Durr, (2016)

Gross marketing margin analyses in the table above indicate that 50, 55, 50, 23.1 and 27.3 %

of the total marketing margin are added to onion, tomato, cabbage, garlic and ginger prices

when they reached to consumers. The marketing margin can be decreased by producing

vegetable in Yayu area. It can also enhance the consumption of vegetable by decreasing

marketing margin and thereby bring nutrition security in yayu area. Of the marketing margin

of vegetables, distributors absorb a higher proportion of the total margin.

In Ethiopia, fruit processing is limited mainly to extraction of fresh juice which is sold on the

local market. The Merti processing factory is the only plant producing fruit juice for the local

market. At present, a range of fruit juices are imported into the country. The demand for fruit

juices on the local market is high as indicated by the volume of imports. This is a strong

indication of the existence of investment opportunities in fruit juice processing for the local

market. The most popular fruit juices imported into the country are shown in Table (Ethioian

Investment Agency, 2012).

The demand for Ethiopian wine is also high both in domestic and export markets. Currently,

the winery receives fresh grapes from Guder, Nura Era, Merti and Zewai Vineyard. Grape

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production in a great volume for the domestic winemaking plant is, therefore, an attractive

area of investment in the country.

3. Measure to be taken (Solution)3.1. In policy maker or government side

Sound policies favoring small farms and related rural industries are a necessary condition for

rural poverty reduction, for coping with domestic and international competition in the home

market, and for taking advantage of market opportunities (Alem, 2008).

An efforts required to support these retailers from different stakeholders on fruits and

vegetable storage, transportation, infrastructures establishment, in sanitation of the market

place through training and capacity development in the logistical supply chain to reduce loss.

Perhaps, this can be addressed through simplified training targeting the level of their

education. Organizing unity amongst retailers and producers so that they can work as

partners; building both retailers and producers’ business capacity, helping them to overcome

their constraints and facilitating their use of market information, correcting the market

through institutionalization of the marketing system, coordinating the functioning of market

brokers, implementing a grades and standards system, and improving the system by

improving the transparency in the price setting. The most important is the concerned

government body should provide the appropriate market place for selling fruits and

vegetables.

Engage government and policy makers in frequent dialogues to increase their awareness so as

to enhance widespread implementation of vegetable seed certification policy/regulations to

support vegetable value chain development so that farmers get sustainable incentive to

increase production.

Develop improved and affordable postharvest handling and storage structures to prolong shelf

life and minimize postharvest losses.

Training on pre and post-harvest handling has to be given to the producers hence improve the

shelf life of the study crops that can generate a better income to producers/retailers and

relatively even supply for consumers.

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Though, marketing of onion, tomato and banana seems profitable as indicated from the survey

result and hence great attention should be given to the mode of marketing side to seek stable

income from it for all market players and for the government. Therefore, it is essential to take

some improvement measures by the government as well as private sectors.

Governments often intervene in domestic agricultural markets by setting official prices, by

engaging directly in commercial activities, by holding stocks, or simply through tax policy.

These interventions, while sometimes legitimately aimed at securing stable, low prices for

urban consumers, must give due weight to the interests of small-scale rural producers. If they

are aimed at supporting agriculture, they should favor the poorer producers. Price fluctuations

in vegetable products are major problems for smaller farmers. A combination of risk

management and insurance schemes, as well as use of buffer stocks, could help stabilize farm

gate prices, thereby extending to smaller producers the security routinely enjoyed by big

companies and traders. These initiatives would, however, require a substantial injection of

ideas and finance from international institutions (Alem, 2008).

3.2. In producer side Producers needs to use scheduled production with neighborhood. Which means in a season

one produces tomato others have to produce potato or cabbage and vice versa. This helps to

maintain the balance of demand supply. In another cause, farmers need to follow the

modeling and guide line prepared by experts.

3.3. In retailer side Rather than trying to achieve separately team work is good to get whatever success needed.

In cause of fruit and vegetable marketing the peoples selling near the road should coordinated

together and ask for facility and loan from government. Therefore, lack of place for

marketing, lack of storage technology will be solved. Additionally, the quality and safety of

produce can be maintained.

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4. Summary and conclusion

Fruits and vegetables are the main and sometimes the only source of many vitamins and

minerals. Therefore, vegetable and fruit production is being more widely adopted, primarily to

ensure food security and to promote production of high-value crops for the market to improve

living conditions of smallholders and their food security. Although Ethiopia has good agro

ecology for fruit and vegetable production related to other countries the production of fruit

and vegetable is very low.

In Ethiopia different studies indicates that, there is limitation of awareness for fruit and

vegetable consumption. Among the mentioned issues lack of marketing facilities is the most

common. The main objective of this review is also to review challenge and opportunity of

fruit and vegetable marketing in Ethiopia.

The major market player in Ethiopia includes producer, rural assemblers, wholesalers,

retailers, transporters, brokers and consumer. These different actors have different and

complementary marketing function in most part of the country most of vegetables such as

tomato, cabbage, onion, garlic, hot pepper, beetroots, Swiss chard, lettuce, and potato are

mainly produced for market. There are three fruit and eleven vegetable exporter spatially

distributed in different region of the country where most of them are concentrated in nearby

surrounding cities of capital city; Addis Ababa. The sector has been well emphasized and

there is a growing interest in the sector by the government as one of the crucial areas for the

expansion of foreign exchange earnings. On the other hand, the overall export performance of

the country will be affected due to petite number of exporters especially in the case of fruit

exporters. Ethiopia’s fruit productions and exports play a significant role in the local economy

as a means of earning livelihoods for nearly five million farmers, creating jobs and generating

foreign exchange revenues. Also, the fruit crops sub-sector is one of the priority strategic

sectors recognized by the GOE for its potential for private sector investments and exports.

Due to perish-ability, seasonality, high economic value and standardization requirements,

characteristic of fruit and vegetable particular features mean that the marketing of these

products evolves rapidly and is especially complex. At present the progressive globalization

of markets and its repercussion on the organization of different marketing channels supposes a

new and decisive challenge for the growers who must accelerate the integration of their

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operations with the rest of the food chain. Based on this the following section discuss the

performance of world trade of fruits and vegetables. The major internal constraint in the fruit

exporters is lack of managerial skill whereas for vegetable exporter is lack of commitment by

the employee’s. As an Export challenges lack of credit facilities and supply of inputs followed

by lack of infrastructure and lack of organized information in the market system.

Not only the challenge Ethiopian has also too many opportunities for production and

marketing of fruit and vegetable. Such as, strong political will in the promotion of

horticultural crops and irrigation, conductive agro-ecology, day to day increase of demand are

the major described.

To conclude that, to solve the challenges and corresponding to that to use the available

opportunity the stake holders; policy makers, producers and retailer should play their role in.

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5. Reference

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Akalu, T., & Durr, J. (2016). Horticulture value chains in Ethiopia : Opportunities for better nutrition and new market access ? Tropentag 2016 , Vienna , Austria September 18-21 , 2016, (November).

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