Introduction to agricultural value chains and supply chain managementILRI
Presented by Karl M. Rich at the Training program for “Methods for livestock value chain analysis: Qualitative and quantitative methods”, ILRI, Nairobi, 1 July 2013
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Inability of flowering plants to produce functional pollen.
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Onion crop provides one of the rare examples of very early recognition of male sterility cultivar Italian Red (Jones and Emsweller 1936)
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Since then male sterility is reported in a fairly large number of crops including vegetables.
Introduction to agricultural value chains and supply chain managementILRI
Presented by Karl M. Rich at the Training program for “Methods for livestock value chain analysis: Qualitative and quantitative methods”, ILRI, Nairobi, 1 July 2013
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Inability of flowering plants to produce functional pollen.
Male sterility is agronomically important for the hybrid seed production.
Onion crop provides one of the rare examples of very early recognition of male sterility cultivar Italian Red (Jones and Emsweller 1936)
Its inheritance and use in hybrid seed production (Jones
and Clarke 1943).
Since then male sterility is reported in a fairly large number of crops including vegetables.
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Determinants of Coffee Market Outlet Choices in Gewata District, Kaffa Zone, ...Premier Publishers
Ethiopia has a broad genetic diversity among its coffee varieties. Coffee is one of the cash crop which is highly marketed through world next to petroleum. It has a great contribution in earning foreign currency and it is an income source for around 20 % Ethiopian population either directly or indirectly. Linking small producers to markets are widely recognized as a valuable development route and market outlets choice is one of the most important farm household decisions to sell their produce and has a great impact on household income. Even if the study area has great potential of coffee production, the farmers faced the marketing problem particularly in choice of appropriate coffee market outlets. This study was therefore carried out to analyze determinants of coffee producers’ market outlet choice decisions in Gewata district. Purposive and two stage random sampling technique was used and data was collected from 121 coffee producers. Multivariate probit model (MVP) was used to analyze factors influencing the choice of coffee market outlets choice by coffee producers. The multivariate probit model results indicated that quantity of coffee sold, education level, frequency of extension contacts, household size, years of farming experience, distance to nearest market, off/non-farm income, land under coffee and transport access significantly influenced coffee producers’ choice of market outlet. Therefore, strengthening farmers coffee cooperative and enhancing the financial capacity of cooperative with functional collection center, improving accessibility of transport services and developing infrastructure, improving farmers’ knowledge through adult education as well as their experience sharing with other coffee producing farmers, improving productivity through strengthening supportive institutions (extension service provider).
Value Chain Analysis of Banana in Mizan Aman Town of Benchi Maji Zone, Southw...AI Publications
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Determinants of Teff Market Channel Choice in Abay Chomen District, Western E...Premier Publishers
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Legume SELECT-Ethiopia: Highlights of desk review on legumes intensification ...ILRI
Presented by Birhan Abdulkadir, Kindu Mekonnen, Peter Thorne, Alemayehu Dabessa, Tamiru Meleta and Assefa Ta’a at the Legume SELECT Finalization Workshop, ICRAF Campus, Nairobi, Kenya, 26 April 2022
This study was analyzed value chain analysis of sesame in Bench Maji Zone of Southwestern, Ethiopia. It was specifically aimed to address the research gaps by, identifying the major value chain actors and mapping the value chain, and identifying major factors affecting market outlet choices of sesame producers in Meinit Goldya and Guraferda Districts. For addressing these objectives the study used both primary and secondary data obtained from field survey and desk review. Multistage random sampling technique was used to draw 270 sesame producers. Descriptive statistics and econometric method of data analysis were used to analyze the data. The major value chain actors for sesame marketing in the districts were producers, wholesalers, rural collector, cooperatives, broker/commission agents, retailers, local consumers, ECX, exporters and non-governmental organizations. The multivariate probit model results indicated that Years of experiences, Coop membership, household size, Education level, Land under sesame, Quantity supply, participating in training and distance to nearest market significantly influenced sesame producer’s choice of market outlet. Depending on results of this study recommend that strengthening farmers sesame cooperative and enhancing the financial capacity of cooperative, improving accessibility of Transport services and developing infrastructure, improving farmers’ knowledge through adult education as well as their experience sharing with other sesame producing farmers, improving productivity through strengthening supportive institutions(extension service provider) motivating sesame producing farm household to participate different training. Therefore, those important socioeconomic and institutional factors which are mentioned above must take into account to improve the productivity of sesame in the study area.
Comparative Study of Economic Potentials of Cooperative and Non Cooperative M...ijtsrd
Cassava processing greatly influences the price value of cassava produce but processing and marketing through group approach will increase the value addition. Consequently, farmers' income will definitely increase, there will also be increase in savings habit. The study broad objective was to compare the economic potentials of cooperative and non cooperative members in cassava processing and marketing in agricultural zones of Anambra State. The farmers are poor and cannot access the needed agricultural facilities and technologies to enhance their productivity individually, that is why the rationale to compare their economic potentials through group approach becomes vital. Multistage sampling technique was used to determine the sample size of 287 for cassava farmers that were cooperative members and 294 sample size was equally determined for cassava farmers that were not cooperative members. Data obtained were analyzed with both descriptive statistics and inferential statistics. Evidence from the study revealed that majority of the both respondents were females. The findings also revealed that the cooperative farmers earned more income from cassava processing and marketing more than those cassava farmers that were not cooperative members. In order to enhance the cooperative approach of cassava processing and marketing among the farmers, the farmers should be encouraged to expand their cassava production capacity. As a matter of necessity, the farmers should be provided with micro production loan and credit. The cooperative society should adopt more innovative processing technologies. Also, the cooperative society should be more informed with current market information and seek for alternative access from other markets to dispose processed cassava. Okafor I. P. | Umebali E. E "Comparative Study of Economic Potentials of Cooperative and Non Cooperative Members in Cassava Processing and Marketing in Agricultural Zones of Anambra State" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-5 , August 2019, URL: https://www.ijtsrd.com/papers/ijtsrd25247.pdfPaper URL: https://www.ijtsrd.com/management/marketing/25247/comparative-study-of-economic-potentials-of-cooperative-and-non-cooperative-members-in-cassava-processing-and-marketing-in-agricultural-zones-of-anambra-state/okafor-i-p
Determinants of Smallholder Farmers’ Vegetable Crop Commercialization in East...ijtsrd
Transforming the subsistence oriented production system into a market oriented production system as a way to increase the smallholder farmer’s income and reduce rural poverty has been in the policy spotlight of many developing countries, including Ethiopia, particularly in the East Hararghe Zone. The objective of this study was to identify determinants of household level output side commercialization of vegetable crops in the East Hararghe Zone. A multi stage sampling procedure was used to select 230 sample vegetable producers by using probability proportional to population size. Descriptive statistics and econometric models were used to analyze data. The findings further revealed that the mean household vegetable commercialization index HCI was 89.21 . The results from the Tobit regression model revealed that commercialization of vegetable crops was determined by the distances to the nearest market center, access to market information, livestock ownership, cooperative membership, and the area allocated under vegetable production. This study recommended that improving market access, organizing farmers into groups to have better access to agricultural inputs, providing market information through networking and institutions, and clustering and intensification of vegetable crop production are therefore crucial in enhancing the commercialization and level of vegetable commercialization in the study area. Solomon Ayele | Kibret Ketema | Hussein Abro "Determinants of Smallholder Farmers’ Vegetable Crop Commercialization in East Hararghe Zone, Oromia Regional State, Ethiopia" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-7 | Issue-6 , December 2023, URL: https://www.ijtsrd.com/papers/ijtsrd59881.pdf Paper Url: https://www.ijtsrd.com/other-scientific-research-area/other/59881/determinants-of-smallholder-farmers’-vegetable-crop-commercialization-in-east-hararghe-zone-oromia-regional-state-ethiopia/solomon-ayele
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2. Introduction
Ethiopia focus on agriculture production as a poverty
reduction strategy.
massive efforts and resources are being spent on
improving agricultural production, productivity and
promoting market access by smallholder producers.
Various types of vegetable crops are grown in Ethiopia
under rain-fed and/or irrigation systems (ALEMAYEHU
et al., 2010).
5/19/2016
3. Introduction…
5/19/2016
The major economically important vegetables
include:
• hot and sweet peppers (Capsicum spp.),
• Ethiopian mustard/kale (Brassica carinata),
• onion (Allium cepa),
• tomato (Solanum lycopersicum),
• chili (C. chinense),
• carrot (Daucus carota),
• garlic (A. sativum) and
• cabbage (B. oleracea var. capitata).
4. • vegetables exports have increased from 25,300 tons
in 2002/03 budget year and it’s doubled in 2009/10
(EHDA, 2011).
• Onion (Allium cepa) is a recently introduced and one
of the few widely-grown vegetable crops in Ethiopia.
According to CSA (2008) 453,608.8 hectare (ha) was
covered by vegetable.
Onion covered 15,628.44 of total (ha)
5/19/2016
5. The estimated annual production of vegetable
was 18,124,613.5 quintal (Qt).
Among these, onion constituted
1,488,548.9Qt
it is significant to identify, prioritize and
analyze onion value chain constraints that
affect actors in each segments of the chain
system.
5/19/2016
6. Onion is one of the most important vegetable crops
produced on small scale in Ethiopia(Nigussie2015).
It occupies an economically important place among
vegetables in the country.
The area under onion is increasing from time to time
mainly due to its high profitability per unit area and
ease of production, and the increases in small scale
irrigation areas.
produced both under rain fed in the “Meher” season
and under irrigation in the off season.
under irrigation constitutes much of the area under
onion production.
5/19/2016
7. the productivity of onion is much lower than other African
countries.
The low productivity could be attributed to the limited
availability of quality seeds and associated production
technologies used, among the others (Nigussie et al, 2015).
For supply of onion seeds, the informal sector is playing
significant role in outreaching large number of farmers.
Most of the demand for onion seed is either meets by local
supplies unorganized market system and imported seeds
informal trend.
The formal sector, Ethiopian Seed Enterprise (ESE) is not
generally supplying onion seed.
Most amount is catered by public sector organizations like
Ethiopian Institute of Agricultural Research (EIAR).
5/19/2016
8. PURPOSE THE REVIEW
5/19/2016
The purpose of the review is:
to investigate and understand the current value
chain for Onion in Ethiopia in order to be aware of
its production, productivity, its bottlenecks and
opportunities.
9. Rationale for the Demand Driven Value Chain
Approach
5/19/2016
In order for a small farmer to acquire income from agricultural
produce, (s) he has to produce what the market demand and
according to the market requirements.
If not, productivity increase will not lead to additional income or can
even lead to higher price fluctuations, due to the high price elasticity
of many in particular "commodity" type of products.
Market-driven chains where there are no long-term relations
between the actors and where the market price is the central
governance mechanism.
All actors, including the poor, compete in these markets without
specific support aimed at facilitating market access and/or guidance
from the buyers on quality, quantity or commitment.
Relational chains where transactions occur in the framework of
established relations and where the central governance mechanism is
the lead actor.
10. 5/19/2016
Three different types of relational chains have
been identified:
buyer-driven chains, where a dominant buyer
determines what is produced and sold;
producer-driven chains, where farmers, usually
through their organizations, constitute the lead
actors; and
intermediary-driven chains, where the key linkages
are fostered by third parties, usually service
providers or social entrepreneurs.
12. Onion Production in Ethiopia
Vegetables are major source of vitamins and microelements
necessary for the human health
The total production of vegetables in Ethiopia during the
long rain season, Meher, in 2010-2011 was about 1.75mln
tons (CSA, 2011).
The average productivity of onion in the year 2010-2011 was
about 10.8 tons/ Ha (CSA, 2011).
The production of onions in Ethiopia in 2011 was estimated
to 236,922 tons, which was about 0.27% of all world onion
production (FAOSTAT, 2013)
Production of vegetables is low and insufficient to satisfy
the growing demand for vegetables (caused by population
growth.
5/19/2016
13. It is estimated that an average Ethiopian consumes
less than a 100 g of vegetables and fruits (combined)
a day.
This is not enough to maintain a healthy lifestyle and
much below the levels of per capita daily
consumption of vegetables/fruits suggested by the
WHO.
Such low levels of vegetables production and
consumption result in a society being significantly
vitamins-deprived (SNV, 2012).
5/19/2016
14. Onions are treated as an annual crop even though it is
biennial.
The seed production requires two seasons since it
takes one season for the onion to produce dry bulbs
and another season for the production of the flower
stalk, from which the seeds are harvested.
The optimal temperature condition for onions is mild
climate around 21°C without any extreme heat or
excessive rain. (Desalenge, 2003; Hanna, 2015).
It takes almost 2 months for the onion seeds to
develop seedlings, roughly 2 months for the seedlings
to develop visible bulbs and then an additional 2.5
months from the stage of visible bulbs to maturity of
the onions.
5/19/2016
15. Farmers can cultivate seeds to seedlings at small
farmlands
It takes up to 12 months to produce new seeds since it
takes 5-6 months for flower stalk development from
onion bulbs.
Areas with good soil and weather conditions for the
cultivation of onions are the Awash valley, Lake region
and areas close to the Sudan border (Desalenge and
Aklilu, 2003,).
In Ethiopia, the planted area for onions was 22,036
hectare (ha) in 2011, which corresponded to about 0.5 %
of all onion-cultivated areas in the world.
5/19/2016
16. Onions can be produced throughout the year in
Ethiopia due to the mild climate and the rainy season
that provide water for irrigation (Hanna, 2015).
The red onions are culturally most accepted in
Ethiopia.
Two big families of the red onion species are Adama
Red and Bombay Red.
Adama Red has the longest storage ability of the two.
(Desalenge and Aklilu, 2003)
5/19/2016
17. VALUE CHAIN ANALYSIS OF ONION
5/19/2016
value chain concept
The value chain describes the full range of activities which are required to
bring a product or service from conception, through the different phases of
production (involving a combination of physical transformation and the
input of various producer services), delivery to final consumers, and final
disposal/recycling after use.
Generally value chain is the system of linked steps
necessary to transform raw materials into a finished
product or service for an end consumer, where each
step along the way adds to a product’s value.
18. Why a Value Chain Analysis?
To address African farmer’s disconnection from the input
and product markets
Responding to domestic regional demand fueled by
population growth, income growth and urbanization
Responding better to opportunities of global markets - esp.
niche markets
Responding to farmers’ need and demand for modern farm
inputs and support services - esp. extension, financing
To maximize the contribution of agriculture to economic
growth and poverty reduction – Beyond the narrow
perspective “agriculture = farming”
Tapping inter-sectoral growth linkages to realize the full
potential of on-farm and non-farm employment and
income generation of the food and agriculture systems
5/19/2016
19. What is value chain?
5/19/2016
is the process of breaking a chain into its constituent parts in
order to better understand its structure and functioning.
The analysis consists of:
identifying chain actors at each stage and discerning their
functions and relationships;
determining the chain governance, or leadership, to facilitate
chain formation and strengthening; and
identifying value adding activities in the chain and assigning costs
and added value to each of those activities.
The flows of goods, information and finance through the
various stages of the chain are evaluated in order to detect
problems or identify opportunities to improve the contribution
of specific actors and the overall performance of the chain
(UNIDO, 2009).
20. • Vc allows businesses to respond to the marketplace by linking
production, processing and marketing activities to market
demands.
• It is much like a supply chain, except it focuses on how value is
added rather than how raw materials get from one point to
the other.
• onion, for example, the value chain begins with the
preparation of land (clearing it, financing it) and then
progresses along to planting, harvesting, cleaning, domestic
marketing and selling.
• To understand a company’s competitive advantages it is
necessary to look into all activities executed within the
company, for example design, production, sales and service.
5/19/2016
21. • If the events are analyzed, instead of the
company as a whole, advantages can be gained in
both cost efficiency and differentiation.
• To do this analysis Michael Porter introduced the
value chain in 1985.
• His idea was to divide a business into its strategic
activities to make them better than the rivals, or
to a lower cost.
5/19/2016
22. The challenge for the companies within a system is to
see what the other parties’ demand is and what they
can supply, and from that make the best fit into the
whole system. (Porter, 1985, p.33)
In all companies, nine general activities can be
identified, which interact to achieve the goal together.
These nine activities should all add value that exceeds
the related cost.
The difference between the value and the production
cost is the company’s margin.
The value adding activities need human resources,
material inputs and technology.
5/19/2016
23. • According to Porter (1985, p.39-43) there are five primary activities
and four support activities as shown in Figure 1a, these value
activities are defined as followed:
Inbound logistics:
• All events connected to the inflow of materials before it is used in
the production, for example transportation, warehousing and
control of goods.
• The supply chain and value chain of onion study done around meki
indicated that the products needed for growing onions are mainly
seeds, disease protection inputs and fertilizers.
• All products are purchased in agricultural stores in small villages
nearby.
• Seeds can also be bought from neighbor farmers that have their
own seed production
5/19/2016
25. Operations:
5/19/2016
The activities where the inflow of materials are turned
into a new product, which can be machining, assembling
and testing.
The operations are the farming activities from plowing
to harvesting of the onion
Except the small cost for the inbound logistics, all
identified costs are found in this category.
The costs have been put into the different farming
activities with separated labor and material costs.
The activities are: plowing, sowing, fertilization,
irrigation, disease protection, weed picking and
harvest.
26. Outbound logistics:
• include storage of the products before they leave for the
customers, taking care of orders and distribution of the
products.
• The onions are bought and transported away from the farm
directly at harvest.
• The wholesaler or the broker is the one responsible to find
a truck and a driver for the transportation.
• When the onions are harvested they are picked in wooden
boxes and weighted before they are put on the truck.
• The work done to prepare the onions for transport from
the farm counts as the harvest step and the cost is found in
the Operations stage.
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27. sales and marketing
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It is necessary to find and have contact with
customers to sell the products.
Activities in this category are for example
advertising, pricing and sales.
The study conducted in meki and zuway by Hana et al,
2015, indicated that there are many brokers and all of the
interviewed farmers used one to get buyers for their onions.
The broker comes to the farm to do a quality check and
give a price to the farmer.
Some of the farmers contact people in Addis Ababa to get
an idea of the price level so that they can negotiate with the
broker.
28. Service
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Training and reparation are examples of activities in
this category.
Firm infrastructure:
This is where activities that build up a firm are done.
Accounting, finance and planning are some of the
important events within the firm infrastructure.
Human recourses management:
Human resources are needed in all value activities.
Recruiting, training and pay salary to the workers are
examples within this support activity
29. Technology development:
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Technology of some kind is involved in all value activities.
It might be more simple technology and know-how or advanced
machinery used in the production.
This is an activity that aims to improve all kinds of technologies to
make the process or product better.
Procurement:
This means purchasing of inputs needed in the company
The most obvious is raw material to the operations stage in the
company, but all activities need purchased inputs, accounting tools
required within the firm infrastructure stage is one example.
This is an important activity since the cost for purchased inputs is a
large post of a company’s total cost.
30. Mapping a value chain
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The first step in a value chain study is to identify the actors and
the connections between them to get the chain mapped out.
When the value chain is mapped out it is time to investigate
the chain in numbers; costs and the outgoing values in each
step, from which the net output value can be calculated.
To get a good picture of the value adding throughout the chain
it is important to collect the data over time to see changes and
trends in the chain.
According to Kaplinsky & Morris, a five year period is
recommended. (Kaplinsky & Morris, 2000, p.53)
31. • Relations between actors in a chain can be affected by the
governance within each step.
• The conditions might be set up by the most powerful actor
in the value chain and the others have to adapt to the rules.
• The largest firm usually has the largest influence on the
other actors in the chain.
• By doing a value chain analysis different indicators can be
calculated to get a hint about which actor is the most
powerful.
• One indicator is how big share each actor has from the
total value added in the chain.
• Another indicator is how big share of the total profit in the
chain each actor gets. (Kaplinsky & Morris, 2000, p.66)
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32. the complete six step value chain, from farmer to consumer, for onions in Ethiopia
Source: Hanna et al, 2015
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33. Constraints and Opportunities of onion
value chain in Ethiopia
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Constraints
Analysis of different scholars’ findings revealed
constraints in the different segments of the oion
value chain.
problems perceived by the onion producers were
high transportation cost to procure the supply
requirements for onion production, i.e., seeds,
fertilizers, insecticides, fungicides, and herbicides,
poor road condition and unavailability of supply.
34. Production constraints
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Despite the immense merits of vegetables to farmers, their
production has been constrained by a myriad of:
biotic (i. e., diseases, insect pests and weeds) and
abiotic factors (i.e., soil acidity and low soil fertility) as
well as
institutional (e.g. policy, market, and infrastructure).
The constraints could thus be categorized under 3 factors
viz: (i) natural factors, (ii) institutional and policy factors,
(iii) market factors.
35. Production constraints…
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The natural production constraints identified include the
perishable nature of onion, pests and diseases
infestation, and extreme moisture levels (i.e., high during
rainy season, and shortage during the dry season).
Cabbage and onion come after tomato in terms of
vulnerability to low moisture stress (55%) and
postharvest loss (44%), Bezabih et al (2013).
Regarding inputs, seeds, fertilizer, and pesticides are
usually supplied to farmers by farmers’
cooperatives/unions, traders and other individual
farmers.
36. Production constraints..
• Institutional factors that are related to the provision of
improved vegetables production technologies including
supply of relevant varieties, agronomic practices and
improved product management techniques.
• The farmers have not been supported enough by research
based practical recommendations of agronomic practices and
pre- and post harvest management practices.
• Policies and strategies governing agricultural inputs have
been set or changed without strong analytical background
(Bezabih, 2008).
• Adequate market information is lacking to guide production
planning.
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37. Natural factors such as rainfall, water supply, flood and pests
are often beyond the control of farmers and institutions.
Infrastructure such as rural roads and means of
communication for efficient flow of goods and market
information is a limiting factor.
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38. Low price of onion.
Moreover, lack of standards and norms governing sorting of
onion and its weight
Ethiopian Quality Standard and Control Agency has
established a clearly defined policy framework to ensure
quality standard of inputs and outputs.
The agency has been given the mandate to establish quality
standards and ensure the implementation.
However, at the lower level of the administrative structure,
there is a serious limitation on the strategies and practices in
terms of enforcement, regulation and control of qualities
and procedures related to distribution, marketing and
handling of inputs and outputs.
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39. E.g. there is no standard and norms
governing the sorting and weighing of the
various vegetables and fruit products
exported to Somali.
Farmers cannot complain since they are
concerned with the risk of boycotting by
traders to purchase the vegetables as a result
of which the products may perish.
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40. Opportunities
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Presence of organic materials and technology for
organic fertilizer
Water sources availability potential for irrigation
development
Favorable land and Climatic condition for potato
farming Enabling policy environment and Support
from GOs and NGOs High productivity potential
onion can be grown by large number of resource
poor producers.
Highly consumed so has high demand in the local
and international market
41. RECOMMENDATIONS
The government can adopt a number of strategies to help
mitigate its prevailing challenges.These include:
Establishment of farm-to-market roads in onion-growing
communities to ensure smooth operations of both the farmers
and the traders in those communities.
Construction of post-harvest facilities, such as cold storage and
onion hangers to ensure the shelf life of onions,
Installation of small scale water irrigation systems, such as
Shallow Tube Wells, to ensure adequate supply of water needed
during production.
Construction of Organic Fertilizer Plant to mitigate the cost of
fertilizers
Improve the input supply system so that farmers receive the
right type of production inputs, the quantity needed at the
right time.
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42. Access to commercial mechanisms to transfer and adopt
the needed skills, know-how, and information to improve
onion productivity.
Increased access to government social interventions of free
mass spraying exercise and subsidized fertilizers and other
inputs
Institutionalization or creation of farmers’ association or
clustering smallholders.
Smallholders can bring large volumes of onions for direct
sale to other markets through or by farmers’ association.
.Provision of credit to enhance the use of agricultural inputs
is an immediate option.
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43. • In summary, the pressing issues in the onion value chain
calls the need at improving access to market by linking
producers directly with the institutional markets; ii)
providing access to new product technology to enhance
product quality; iii) complying with standards, and
improve productivity and efficiency; iv) providing access
to financing for expansion of production; v) creating an
enabling environment through policy reforms; vi)
establishing strategic alliances among stakeholders; and
(vii) strengthen partnership with government and
industry
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