International Journal of Advanced Research in ISSN: 2278-6236

Management and Social Sciences Impact Factor: 6.943

DETERMINANTS OF SMALLHOLDER FARMERS IN TEFF MARKET SUPPLY IN

AMBO DISTRICT, WEST SHOA ZONE OF OROMIA, ETHIOPIA
Azeb Bekele Habtewold, Ethiopian Institute of Agricultural Research, Ambo, Ethiopia
Tadele Melaku Challa, Research Scholar, Department of Economics, Andhra University,
India
Dr. D. Asha Latha, Department of Economics, Andhra University, Visakhapatnam, India

Abstract: The study was conducted to identify factors affecting smallholder farmers teff
supply to the market in Ambo district West Shoa Zone of Oromia. Two main teff producer
Kebeles, namely Amaro and Gossu Kora were selected by using simple random sampling
technique from 11high potential teff producing Kebeles in Ambo district. A total of 142 teff
growing households were selected using random sampling and then interviewed. Both
descriptive and econometrics analysis were employed to meet the objective of the study. By
applying multiple regressions models frist identify the factors affecting teff market supply.
Results of the study shown that four factors were found to have significantly affect the
decision of smallholder farmers on the quantity of teff sold on the market; namely, teff
production (yield) at 1%, labour at 5%, income from nonfarm at 5%, and price of teff which is
significant at 10% probability level. The study recommends that farmers use modern
technologies such as improved production methods, improved seeds, and farming tools;
access to credit and labour reducing technologies to increase quantity supply of teff into the
market.The district agricultual office must create an enabling environment, especially by
given support to increase production of teff. Moreover, reducing non-farm activities by
making teff production more profitable and farmers must devote more time to farming
activities. Further research needed on teff market chain analysis starting from producer to
final consumers, and critical analysis on the value chain of teff.
Keywords: Teff, determinants of market supply, smallholder farmers, Ambo, Ethiopia
INTRODUCTION
The majority of Ethiopia’s population earns its livelihood primarily from agriculture. The
agricultural sector, which is stunned by subsistence smallholder farmers, is the primary
source of livelihood for the majority of the population and the basis of the national
economy. Agriculture accounts for 42.9% of GDP (MoFED, 2014), it contributes to nearly

Vol. 6 | No. 2 | February 2017 www.garph.co.uk IJARMSS | 133

 International Journal of Advanced Research in ISSN: 2278-6236
Management and Social Sciences Impact Factor: 6.943

80% of export earnings, provides employment to 73% of the population (EATA, 2014).
In Ethiopia, smallholder agriculture is the main source of food. This sector was sharing about
96% of total crop production in 2012/13 (MoFED, 2014). According to CSA (2014),
smallholder farmers produced 215,835,225.61, 28,588,805.90, and 7,112,592.38 quintals of
cereals, pulses, and oil crops, respectively. Thus, smallholder agriculture is the base for
family livelihood and food security of the county (Adenew, 2006). However, the productivity
of this sector is very low in quantity and poor in quality. On the other hand smallholder,
agriculture is the main and only supplier of staple food crops like teff in this country.
Botanical, Teff is named as Eragrostis tef and it is believed to be the smallest grain in the
world. The plant is grown over a wide range of environmental conditions in Ethiopia and has
been utilized as the primary food and food supplements in Ethiopia (Gebremariam et al.,
2014).Teff is grown mainly as a cash crop by most farmers in Ethiopia (Demeke and
Marcantonio, 2013).
Teff (Erogrostis teff) is the leading crop which is unique to Ethiopia of the World. Teff
cultivation requires several plowings for fine seedbed preparation, which can contribute to
soil erosion, a factor which favors crop rotation and multi-cropping to maintain soil
productivity (Desta et. al. 2000).
It is observed that teff production is increased in rapid rate recently. It is estimated that
annual teff production has been increasing by 11%, which has resulted in a 100% increase
every seven years. Increased productivity is believed to contribute about 6% of that 11%
growth while about 5% was attributed to expansion in area cultivated for teff (EATA, 2013).
Since there is a little information about the determinant of teff market supply that means
information on factors affecting a farmer’s decision to teff markets. This study tried to fill
the research gap by investigating the major determinants of smallholders which affect teff
supply on the market.
RESEARCH METHODOLOGY
Both qualitative and quantitative data were used to answer the research questions. A
qualitative method was used to collect the qualitative data. A quantitative method was used
to collect information that has been transformed into numbers. The sample size was
determined by using Slovin’s formula (Slovin, 2003 as by cited Tadele et al., 2015).
Two main teff producers peasant association (Kebeles), namely Amaro and Gossu Kora were
purposely selected for this study in consultation with relevant agricultural officials from

Vol. 6 | No. 2 | February 2017 www.garph.co.uk IJARMSS | 134

 International Journal of Advanced Research in ISSN: 2278-6236
Management and Social Sciences Impact Factor: 6.943

Ambo District Agricultural Office. These selected Kebeles are a relative better production
potential of teff among other Kebeles in Ambo district. The two selected Kebeles have a
total of 1553 households (HH). The numbers of sampled respondents are presented below.
Table1. Number of sample respondents taken from each Farmer Associations
Grain type Name of selected No of Teff % No of Sample
FAs Producing HH HHs taken
Teff Amaro 619 39.85 57
Gossu Kora 934 60.14 85
Total 1553 142

A total of 142 respondents were randomly selected to collect primary data and information
at producers, for the present study. Among total respondents teff growing farmers 57
households from AmaroKebeles and 85 households from Gossu Kora were selected and
interviewed.
Pre-tested and semi-structured interview questionnaires were used for collecting data and
information from respondents. The interview questioners were formulated after a pilot
survey was conducted in the study area by asking teff producers, development workers and
agricultural officers in the district. Primary data was collected by using personal interview
technique from the producer. The validity of collected data and information were
Triangulated through focus group discussion with key informant using checklists.
ECONOMETRIC MODEL SPECIFICATION
Multiple regression models were used to examine the demographic, socioeconomic, and
institutional factors that are associated with market participation by producers. This model
is chosen because it helps to identify factors that determine the quantity of teff supply to
the market and extent of participation by producers.
To identify factors affecting teff market supply and extent of production and marketing,
multiple regression models were used. It is indicated that in a situation where the one
dependent variable and two or more independent variables relationship is estimated by
multiple linear regression model. The relationship can thus be expressed as:

𝑌 = 𝛽1 + 𝛽2 𝑋2 + 𝛽3 𝑋3 + 𝛽4 𝑋4 + ⋯ + 𝛽𝑘 𝑋𝑘𝑖 + 𝜀𝑖
Where: Yi = Teff quantity supplied to the market
β = a vector of estimated coefficient of the explanatory variables
X = a vector of explanatory variables

Vol. 6 | No. 2 | February 2017 www.garph.co.uk IJARMSS | 135

 International Journal of Advanced Research in ISSN: 2278-6236
Management and Social Sciences Impact Factor: 6.943

Ɛ = error terms
Moreover, multicolliniarity, endogeniety and heteroscedasticity detection test were
performed using appropriate test statistics.
RESULTS AND DISCUSSION
Determinants of Quantity of teff Supplied
This section, multiple regressions analysis is performed to identify the decisive factors
affecting the amount of total teff crop that sampled respondent supply to the market. It is
worth mentioning at this stage that almost all farm households who participated in the
market as sellers are considered in this analysis since the objective is to identify what factors
determine for a household to sell more or less of its crop production in the market.
Table 2. Indicates that the decision of how much quantity was sold by households. Each
decision has been studied by using a selection model which calculated by multiple
regressions estimation of the decision to sell into the supply equations. There are 13
potential explanatory variables (7 continuous and 6 dummy). Out of these four variables,
non-farming income, the price of teff, yield and labour had a significant effect on the
quantity of teff sold.
Table 2. Determinant of teff quantity sold to the market
Variable Coefficient. Std. Err t P>|t
Gender 0.825 0.732 1.13 0.262
Total production of teff in quintal 0.367*** 0.043 8.42 0.000
Labour 1.201** 0.507 2.37 0.019
Farm size 0.118 0.118 1.00 0.319
Access to extension service 0.703 0.671 1.05 0.297
Nature of land -0.275 0.415 -0.66 0.510
Total fertilizer use in quintal -0.000 0.000 -0.99 0.323
Income from nonfarm 0.000** 0.000 2.00 0.048
Price of teff 1.105* 0.567 1.95 0.053
Access to credit services 0.703 0.640 -0.46 0.649
Nonworking age 0.342 0.220 1.55 0.123
Family size (AE) -0.025 0.022 -1.12 0.264
Time of selling teff 0.119 0.225 0.53 0.599
_cons -1.526 2.026 -0.75 0.453
Note: Dependent variable- is Teff quantity supply to the market
***,**,*indicate statistically significant at1%, 5%, and 10% probability level, respectively
Number of obs = 142 Prob > F = 0.0000
R-squared = 0.5242, Adj R-squared = 0.4758

Vol. 6 | No. 2 | February 2017 www.garph.co.uk IJARMSS | 136

 International Journal of Advanced Research in ISSN: 2278-6236
Management and Social Sciences Impact Factor: 6.943

The quantity of Teff produced

As hypothesized, the multiple linear regression results show that marketed surplus was
significantly affected teff quantity sold at 1% level. The positive coefficient indicates that a
unit increase in the quantity of teff produced will increase the marketable supply of farmers.
The result also implied that a unit increase in the quantity of Teff produced has caused an
increase of 0.367quntal of marketable teff. This result is similar with Muhammed, (2011)
who studied about market chain analysis of teff and wheat production in Halaba Special
District, Southern Ethiopia multiple linear regression output variable was significant at 1%
significant level, a positive coefficient implies that an increase in quantity of teff produced
increases volume of marketable supply of teff by farmers. It indicates that households who
produce more quantity of teff had also supplied more to the market. The other result with
Ashenafi (2010) who studied about Analysis of Grain Marketing in Southern Zone of Tigray
Region, Ethiopia. Yield positively affected quantity supplied and is statistically significant at
1% probability level. As hypothesized when the quantity of grain produced increases, the
market supplies also increase too. Other result with Berhanu and Hoekstra (2007) who
studied about cereal marketing and household market participation in Ethiopia in the case
of teff and wheat and rice. The study on the determinant of teff market participation
indicated that about 60% of teff produce is sold, although there were significant variations
among the districts. The proportion of teff produce sold ranged from 42–80%. Results also
indicated that in areas, where the proportion of cultivated area covered with teff was
lower,significantly higher proportion of teff produce was sold, indicating the relative role of
staple food crops in market participation for a particular crop.
Labour: The coefficient of labour which shows a positive relation to the quantity of teff sold
or supplied to the market. Producers checked the labour for their best benefit and this
directs to the determinant to be significance at 5% level. The positive and significant
relationship between the variables indicates that as the labour rises, the quantity of teff sold
at the market also rises, which in turn increases the quantity of teff sold per household per
year. The coefficient of the variable also confirms that a unit labour increase in the teff
market directs to the household to increase yearly teff sales by 1.20 quintal. This result is
similar with Kefyalew (2013) who studied about determinants of smallholder farmers’
participation in sesame production this result revealed that family labour is one of the
critical variables in influencing decisions of households to produce sesame in the study area.

Vol. 6 | No. 2 | February 2017 www.garph.co.uk IJARMSS | 137

 International Journal of Advanced Research in ISSN: 2278-6236
Management and Social Sciences Impact Factor: 6.943

Thus, farmers who have more access to family labour are more likely to participate in such
activity by 5% probability level.
Income of non-farming: The coefficient of income of non-farming which shows a positive
relation to the quantity of teff sold or supplied to the market. Producers checked the
income of non-farming for their best benefit and this directs to the determinant to be
significance at 5% level. The positive and significant relationship between the variables
indicates that as the income from non-farming rises, the quantity of teff sold at the market
also rises, which in turn increases the quantity of teff sold per household per year. The
coefficient of the variable also confirms that a unit income from the non-farming increase in
the teff market directs to the household to increase yearly teff sales by 0.0001261quintal.
This result is similar with Ashenafi (2010) who studied about Analysis of Grain Marketing in
Southern Zone of Tigray Region, Ethiopia. The result indicated that Nonfarm income
positively affects the supply of grain at 10% significance level. It was expected that as non-
farm income of farmers increase, the sale of grains to decrease, but the analysis showed a
positive relationship between supply and nonfarm income. On average if a farmer gets 1 birr
of additional income causes a 0.2 kg addition in the quantity of grain supply. This could be
due to the fact that farmers who have additional income would have the chance to buy food
for consumption at any time and increase their marketable crops
The price of Teff: The coefficient of the price of teff which shows a positive relation to the
quantity of teff sold or supplied to the market. Producers checked the price of teff for their
best benefit and this directs to the determinant to be significance at 10% level. The positive
and significant relationship between the variables indicates that as the price of teff at
market rises, the quantity of teff sold at the market also rises, which in turn increases the
quantity of teff sold per household per year. The coefficient of the variable also confirms
that a unit price increase in the teff market directs to the household to increase yearly teff
sales by 1.105 quintals. This result is similar with Aid (2008) report on agricultural marketing
in Ethiopia in the case of Arrero, Goro, and Dehana Districts. The presented study reveals
that most of the producers in the surplus producing areas positively benefited from the
increased market prices while it was only 3 to 4% of the farmers in the grain deficit areas
that could benefit from the price increase.
SUMMARY AND CONCLUSIONS
This thesis analysed determinant of teff market supply by smallholder farmers in the case of

Vol. 6 | No. 2 | February 2017 www.garph.co.uk IJARMSS | 138

 International Journal of Advanced Research in ISSN: 2278-6236
Management and Social Sciences Impact Factor: 6.943

Ambo area. Findings of the study are shown that majority of the households covered in
Amaro and Gossu Kora are mainly dependent on agriculture for their livelihoods. Teff is not
only the major food crops for the majority of the population but also as a source of income
at household level. It was obtained that about 82.27 % farmers are reported that teff is used
as the source of income in addition to home consumption. The study has focused on
identified the factors affecting the volume of teff production sold by households The study
was based on primary data collected from farmers and secondary data were generated from
Ambo District Agriculture and Rural Development Office, Ambo District Trade and Market
Development Office, and Central Statistical Agency.
In general, a number of actions need to be undertaken in order to promote the
development of Teff production and market supply. This particularly includes capacity
building, technological applications: like improve seed, improve production tool and
improving harvesting methods and the device it helps to reduce post harvesting loss of teff
product and reduce the time of production and labour. Agricultural extension agents and
cooperative have integrated the provision of market information. Infrastructural
development is also a key to support the sub-sector. In this area, emphasis should be given
to transportation system and offer credit and other services to improve effective teff
production and marketing
RECOMMENDATIONS
The study recommends that farmers use modern technologies such as improved production
methods, improved seeds, and farming tools; access to credit and labour reducing
technologies to increase quantity supply of teff into the market. The distirctagricultual office
must create an enabling environment, especially by given support to increase production of
teff. Moreover, reducing non-farm activities by making teff production more profitable and
farmers must devote more time to farming activities. Further research needed on teff
market chain analysis starting from producer to final consumers, and critical analysis on the
value chain of teff.
ABBREVIATIONS
MoFED Ministry of Finance and Economic Development
HHH Household Head
EATA Ethiopia Agricultural Transformation Agency
CSA Central Statistical Agency

Vol. 6 | No. 2 | February 2017 www.garph.co.uk IJARMSS | 139

 International Journal of Advanced Research in ISSN: 2278-6236
Management and Social Sciences Impact Factor: 6.943

REFERENCES
1. Agricultural Transformation Agency (2013) Working Strategy for Strengthening
Ethiopian’s Teff Value Chain: Vision, Systemic Challenges, and Prioritized
Interventions, ATA, Addis Ababa.
2. Ashenafi Amare. (2010)Analysis of Grain Marketing in Southern Zone of Tigray
Region, Ethiopia, MA. Thesis, Mekelle University.
3. Berhanu, G. And Hoekstra, D. (2007)‘Cereal Marketing and Household Market
Participation in Ethiopia: The Case of Teff, Wheat and Rice`, In: AAAE Conference
Proceedings Cereal Marketing in Ethiopia, Pp. 243-252.
4. Central Statistical Agency (2015) Agricultural Sample Survey, Addis Ababa, Volume I
(Private Peasant holdings, meher season)
5. Dan Church Aid (2008) Agricultural Marketing in Ethiopia The case of Arrero, Goro
and Dehana Districts Final Report By SID Consult Addis Ababa.
6. Demeke M., Di Marcantonio F. (2013) Analysis of incentives and disincentives for teff
in Ethiopia. Technical notes series, MAFAP, FAO, Rome.
7. Ethiopia Agricultural Transformation agency (2014) Annual Report TRANSFORMING
AGRICULTURE IN ETHIOPIA (EATA) Addis Ababa
8. Gebremariam, M. M., Zarnkow, M., & Becker, T. (2014).Teff (Eragrostis tef) as a raw
material for malting, brewing and manufacturing of gluten-free foods and beverages:
a review. Journal of Food Science and Technology, 51 (11), pp. 2881-2895.
9. Kefyalew, G. (2013) Determinants of smallholder farmers’ participation in sesame
production: Evidence from Diga, Ethiopia. In: Wolde Mekuria. (ed), Rainwater
management for resilient livelihoods in Ethiopia: Proceeding of Nile Basin
Development Challenge Sciences meeting, Addis Ababa, 9-10 July 2013. NBDC
Technical Report 5 Nairobi, Kenya, International Livestock Research Institute.
10. Ministry of Finance and Economic Development (2014)Growth and Transformation
Plan Annual Progress Report for F.Y. 2012/13, Addis Ababa
11. Muhammed, U. (2011)Market Chain Analysis of Teff and Wheat Production in Halaba
Special District, Southern Ethiopia, M.Sc. Thesis, Haramaya University.
12. Tadele,M., Mulu,D. and J. Poul,M. (2015) Determinants of teff and wheat market
supply in Dendi District, West Shoa Zone, Ethiopia Prime Journal of Social
Science,.4(10),PP.11224 – 1130.

Vol. 6 | No. 2 | February 2017 www.garph.co.uk IJARMSS | 140