Governance structures in wheat supply chains and their impacts on productivity and profitability of wheat producers in Ethiopia

Abstract

This study aims to supplement the literature on the factors affecting wheat producer productivity and profitability by focusing on the role of governance structures and asymmetric information – an issue that is rarely discussed in developing countries. The study thoroughly explores the effect of governance structures and asymmetric information to model a hypothesis for Ethiopia. The study area enables an exemplary case study as it is one of the top wheat-producing areas in both Ethiopia and all of Africa. The study area has also been registered as a wheat belt region in Sub-Saharan Africa. This study used personal interviews to collect primary data from actors. Mixed sampling techniques (i.e., random, census, and purposive) were used to select sampling units. Multiple linear regression models were used to analyse the data. The results show that governance structures, Farm-gate transactions, and asymmetric information have a significant effect on wheat productivity and profitability. Asymmetric information significantly reduces the profit and yield of wheat producers. The study implies that the government should apply a policy related to institutional arrangements to enhance productivity and profitability in wheat supply chains.

Keywords

• governance structures
• Farm-gate transactions
• asymmetric information
• wheat supply chain
• wheat productivity
• profitability