Structure conduct and performance of dairy market in Ada’a Berga district, Ethiopia

Abstract

The aim of this article was to investigate SCP of milk and butter market in Ada’a Berga District using SCP model. Primary data collected from randomly selected 123 smallholder farmers, 48 traders and 30 consumers were used to calculate the gross margin, concentration ratio(CR), regulation of market entry and exit and market conduct. The CR results showed that top four milk traders controlled 78.8% and 89.54% of the total volume of milk sold in Ada’a Berga and Holeta, respectively, and 61.29% and 63.46% butter sold in Ada’a Berga and Holeta, respectively. The CR of milk and butter markets were strongly oligopolistic. Education, market transparency and capital, political equality, corruption were barrier to entry milk and butter trade. The conduct analysis results showed that farmers use different markets outlets and price setting strategies to sell dairy products. The result of pricing setting was not competitive as 51.67% dairy price decisions were decided by buyers. In milk marketing, the maximum total gross marketing margin of producers share was 63.15% in channel III (producer, district retailer to consumers). The maximum producer’s share in butter market was in channel V (producer, district retailer to consumers). Therefore, strengthening institutions that convey reliable and timely market information; support dairy market, improving collective action of farmers, address the challenges of financial access to smallholder farmers and traders to decrease oligopolistic nature of the market. Moreover, give attention to market infrastructural, training and yield increasing technologies in the study area to improvement production and marketing of dairy products.

Keywords

• milk and butter market
• structure conduct performance
• concentration ratio
• marketing margin