Analyzing the Influential Factors Affecting Groundnut Market Supply: A Case Study Of Babile District, East Hararghe Zone, Oromia National Regional State, Ethiopia

Abstract

This research tried to analyze the factors influencing the groundnut market supply in the case of Babile district, east Hararghe zone of Oromia national regional state, Ethiopia. Groundnut (Arachis hypogea L.) is a source of income generation for many smallholder producers in the district. However many
factors affect the supply of groundnut to the market. Hence, improving groundnut producers to arrive at the market is a key concern desired in the study area. Therefore this study aims to analyse the determinants of marketed surplus of groundnut in the district. Multi-stage random sampling technique was used to select 138 smallholder farmers from three kebeles of the district. Descriptive statistics was used for socio-economic characteristics of groundnut
producers and econometric analysis was employed to assess factors that determine the supply of groundnut to the markets. Results of the multiple linear regression model revealed that access to credit, lagged price, and quantity of groundnut produced significantly affected the market supply of groundnut.
The study suggests there should be appropriate interventions by the government to enhance farmers’ bargaining power by establishing an agriculture price information center, increasing farmers’ productivity through introducing modern technology and improved varieties, and providing training on financial
management.