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Analysis of Factors Affecting Potato Farmers' Gross Margin in Central Ethiopia: The Case of Holeta District

Mersha, Mesfin and Demeke, Leykun (2017): Analysis of Factors Affecting Potato Farmers' Gross Margin in Central Ethiopia: The Case of Holeta District.

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Abstract

Markets are important for economic growth and sustainable development of a given country, but, emphases in development policies in agrarian countries have usually been placed on increasing agricultural production to serve as a base for rural development. In the absence of well-functioning markets, agricultural production can experience several drawbacks. The title of the study is Analysis of Factors Affecting Potato Farmers’ Marketing Gross Margin in Central Ethiopia: the case of Holeta District. Therefore, the general objective of this study was to examine factors affecting potato farmers' gross margin in the Holeta district and specifically to examine the effects of farmers demographic characteristics, factors of production, institutional factors, production cost and livestock ownership on the potato producing farmers’ gross margin. The research was bound to the production area which is 35 hectares of potato in Welmera, Goro and Arebot Kebeles of Holeta district. The statistical result showed that age, land size (owned and contracted), potato farm land size (owned and contracted), input costs (land preparation, chemicals and harvesting) and livestock ownership, access to irrigation, credit, extension services, potato output and sales revenue had significant outcome on farmers’ gross margin. Moreover, the result from the OLS (Ordinary Least square) regression showed that education level of household head, household size, potato cultivated land size, quantity of potato produced, input cost, livestock ownership and access to market information had expected sign and significantly affect sampled potato farm household gross margin. The study 2

imply the introduction of modern technologies for the efficient use of the irrigation water, controlling disease and pest practices should be promoted to increase production; strengthening efficient and area specific extension systems by giving continuous capacity building trainings and separating extension work from other administrative activities increases potato farmers’ gross margin.

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