Market Chain Analysis of Moringa Stenopetela. A Case of Konso Zone, SNNPRS, Ethiopia

TABLE OF CONTENTS

ACKNOWLEDGEMENT

LIST OF ABBREVIATIONS

LIST OF TABLES

LIST OF FIGURES

ABSTRACT

CHAPTER ONE
INTRODUCTION
1.1. Background of the Study
1.2 Statement of the Problem
1.3 Research Questions
1.4 Objectives of the Study
1.4.1 General objective of the study
1.4.2 Specific objectives of the study
1.5 Scope and Limitations of the Study
1.7 Organization of the Thesis

CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.1. Theoretical Literature review
2.1.1 Basic concepts and definition
2.2 Empirical literature Review
2.2.1 Determinant of market participation and surplus
2.2.2 Challenges of Marketing Farm Products

CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Description of the Study Area
3.2 Research design
3.3 Types, Sources, and Methods of Data Collection
3.3.1 Sources of data
3.3.2 Types of data
3.4 Sampling technique and sample size determination
3.4.1 Sampling technique
3.5 Methods of Data Analysis
3.5.1 Descriptive statistics
3.5.2 Model specification

CHAPTER FOUR
RESULT AND DISCUSSION
4.1. Descriptive Analysis
4.1.1 Socio-Economic characteristics of sample respondents on market participation
4.2 Characterization of Moringa Production in the Study Area
4.2.1 Average number of Moringa trees owned by household
4.2.2 Production and productivity of Moringa in relation to market participation
4.2.3 Input utilization
4.2.4 Purpose of Moringa Production
4.3 Market Characteristics of Moringa in the Study Area
4.4 Characteristics of Traders
4.4.1 Demographic characteristics of traders
4.4.2 Type of Moringa traders along the chain
4.4.3 Socio-economic characteristics of sampled trader
4.5 Structure, Conduct, and Performance of Moringa Marketing
4.5.1 Market participants role and linkages
4.5.2 Moringa marketing channels
4.5.3. Structure of Moringa Market
4.5.4 Conduct of Moringa Traders
4.5.5 Market performance
4.6 Determinants of Moringa Market Participation
4.6.1 Factors influencing market participation and the extent of participation
4.6.2 Outcome Estimation of Heckman Second Stage
4.7 Challenges along the Market Chains
4.7.1 Constraints of Moringa marketing and production

CHAPTER FIVE
SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS
5.1 Summary and Conclusion
5.2 Implications of study
5.2.1 Implications for the public policy
5.2.2 Possible areas for the future research

REFERENCES

APPENDIX'S

Annex 1: Producers' Interview Questionnaires

Annex 2: Traders ‘Questionnaire

Annex 3: Questions Focus Group Discussion

Annex 4: Questions for Key Informant

Annex 5: Output of Marginal Effect

Annex 6: Multicollinearity Tests Variance Inflation Factor VIF Person Correlation Matrix

Annex 7 Heteroskedasticity test

Annex 8: Normality Test on OLS Model for second stage of the hekman model

Annex 9: Output for Heckman Selection Model

DEDICATION

This work is dedicated to my parents, my brother and sisters.

BIOGRAPHICAL SKETCH

The author was born in May 1995 in Southern Nation, Nationalities and Peoples Region (SNNP), Konso zone. He attended his primary education (1-6 grade) in Fasha Elementary School and (7-9 grade) in Laska Elementary and secondary School and (10 grade) in Fasha Secondary School. The author attended preparatory education (11-12 grades) in Karat Preparatory School.

The author joined Arba Minch University, College of Agriculture Sciences, in 2015 and graduated in July 2017 with a BSc degree in Agribusiness and value chain management. Soon after his graduation, he worked as Graduate Assistant for one year in Arba Minch University and he started to pursue his MSc in Agricultural Economics program again in Arba Minch University in October 2019.

ACKNOWLEDGEMENT

I would like to acknowledge the following for their support and help regarding this thesis.

First and foremost, I am thankful to the one who created everything, the one who gives wisdom and strength, the one who picks you up when you feel so broken, to our Almighty Father.

My special and sincere gratitude goes to my major Advisor Dr. Mebratu Alemu, for his earnest and constructive comments throughout the analysis and preparation of the manuscript. My thanks also go to my co advisor to Mr. Alemayehu Acha for his comments.

To my ever-loving parents who are always there to give me the courage to pursue my goals and provide financial and emotional support. I wish to acknowledge the entire staff of the Department of Economics, Arbaminch University for their sincere and honest support since I enrolled in my studies.

I thank to all my colleagues of agricultural Science College for their encouragement during my thesis work. My appreciation also goes to all sample respondents in this study. Finally, at last but not least, I am also grateful to my friends for the affections, care, and support made to me during my study.

LIST OF ABBREVIATIONS

Abbildung in dieser Leseprobe nicht enthalten

LIST OF TABLES

Table 3.1: Moringa producers of the Woreda and their sample size of selected Kebeles

Table 2.2: Definition and Prior Assumptions of the Variables Used in Empirical Analysis

Table 4.1: Descriptive results for continuous socio-economic variables

Table 4.2: Gender status distribution among farmers in Konso

Table 4.3: Access to institutional factors among Moringa producers in Konso

Table 4.4: Access to market information by Moringa market participation

Table 4.5: Sources of market information for respondents

Table 4.6: Area under Moringa in a different sampled production area

Table 4.7: Market Characteristics

Table 4.8: Demographic Characteristics of Traders

Table 4.9: Details of the type of traders available for procuring Moringa produce

Table 4.10: Concentration ratio of top four traders

Table 4.11: Method of price setting

Table 4.12: Actor's methods to approach their respective buyer and seller

Table 4.13: Analysis of the distribution of margin along the Moringa market chain

Table 4.14 Marketing margins of actors in different channels

Table 4.15: First-stage probit estimation of Moringa market participation

Table 4.16: Heckman's second stage (OLS) estimates for the volume supplied to market

Table 4.17: Constraints of Moringa for producers in the study area

Table 4.18: Traders' Marketing Constraints

LIST OF FIGURES

Figure 1: Market chain and its business support services

Figure 2: Conceptual frameworks

Figure 3: Location of the research area

Source: Haile and Tegegne, (2018)

Figure 4: Sampling Procedure

Figure 5: Extension frequency

Figure 6: Market distance of market participants and non-participants of Moringa marketing

Figure 7: Number of Moringa trees owned by households

Figure 8: Quantity of Moringa produced

Figure 9: Annual production of main crops and vegetables

Figure 10: Purpose of Moringa produced in the study area

Figure 11: Education level of traders

Figure 12: Financial capital of sampled traders

Figure 13: Source of working capitals and source of a loan of sampled traders

Figure 14: Moringa marketing channels

ABSTRACT

In the last few years, the international and domestic demand for Moringa has increased. Despite Moringa market value and its increased production volume, its market potential has not been fully studied and quantified, results in poor prices among small-scale farmers and producers still experience marketing challenges. This research attempted to analyze the Moringa market chain in the Konso zone. A multistage sampling procedure was employed to contact 257 farmer respondents and a rapid market appraisal was made to select 31 traders. Semi-structured questionnaires and focus group discussions were used to collect data from small-scale Moringa farmers through face to face interviews. The data were analyzed using the descriptive statistics and econometrics model. The results of the first Heckman two-stage model was showed that education level of household head, land size, off-farm income, a quantity of Moringa produced, access to credit service, access to market information and level of lagged price of Moringa leaf positively and significantly influenced the decision to participate in the Moringa marketing. The second stage (OLS) result indicated that family size, gender, access to market information, and quantity of Moringa yield affect the volume of Moringa supplied to the market positively and significantly. While family size negatively and significantly affects the volume of Moringa supplied to the market. Therefore one of the most important variables influencing the market participation and supply of Moringa is market information and quantity produced due to this, extension work should focus on encouraging farmers to participate in Moringa production and market-oriented training. The findings suggest that an effective market information service has to be established to provide accurate and timely market information to farmers and traders on the current supply of Moringa output, demand, and prices at woreda and regional levels. Infrastructural development is also a key to support the sub-sector. In this arena, the emphasis has better be given to improve storage and transportation system, pesticides, and insecticides provision, offering credit and other services to improve the effective production and marketing of Moringa. Improving the condition of roads linking woreda markets to producers could potentially reduce transportation costs of accessing such area markets. This could go on to encourage the use of woreda markets among farmers, who stand to gain better income and gradually fish themselves out of poverty traps.

Keywords: Market Chain, rapid market appraisal, Market participation, Moringa, Heckman two stages model

CHAPTER ONE

INTRODUCTION

This chapter opens with the background of the study and further describes Moringa economic importance in the world and particularly in Konso. This is followed by the research questions, research objectives, scope and limitations of the study, and significance of the study. The chapter concludes with the organization of the thesis.

1.1. Background of the Study

Agriculture is the backbone of every country's economy because it has a vital role in reducing poverty, environmental management, employment opportunities, export earnings, responses to, climate change and high contribution to the nation's Gross Domestic Product (Oparinde & Daramora, 2014). Above 60 percent of the world's population depends on agriculture to sustain their livelihood (FAO, 2017). From this, Latin America and sub-Saharan Africa cover the highest percentage (90%) so that the economy of most African countries is depending on agriculture. In Ethiopia, it contributes about 43% of GDP, generates 90% of export value, and supplies 70% of the industrial raw materials for domestic industries (MoA, 2011; Abdul et al., 2016). Therefore, the agricultural sector is crucial for the overall performance of the many countries' economy, especially for developing countries like Ethiopia.

Despite having all this importance, agriculture continues to face several problems and challenges like; adverse climatic conditions, limited use of improved agricultural technologies, lack of appropriate land use system resulting in soil and other natural resources degradation, the predominance of subsistence agriculture and lack of and/or absence of business oriented agricultural production system, limited or no access to market facilities resulting in low participation of the smallholder farmers in value chain or value addition of their produces (FAO, 2017).

Moringa, one of the most valuable agricultural products belongs to the family Moringaceae. Its genus includes 14 species and as a commercial crop, it is cultivated extensively in India and parts of Africa but, traditionally several southern American, Asian, and Oceanic countries also grow and use Moringa. India is the prime producer of Moringa. M. oleifera and M. stenopetala are the two most common species among the species of the Moringa family. Moringa oleifera is native only to restricted areas of the Southern foothills of the Himalayas, but, now a time it present in all the countries in the tropics. While, Moringa stenopetala is endemic to East Africa mainly present in northern Kenya and southern Ethiopia, and is also reported to be found in Djibouti, Uganda, and Sudan (V.Ponnuswami. 2014, UNIDO. 2015). However, the plant is not well known by many people and most institutions.

Ethiopia has greatest potential for Moringa tree and the main distribution of M. Stenopetala is the SNNPRS, and it is an important tree for millions of people living in the region. Konso is among the main areas where Moringa stenopetela predominantly produced. Konso peoples use the tree for food, as a medicine, a source of income, as an industrial crop, for shade and they cultivate it in around their home garden and farmlands. Moringa also has the potential to be integrated with tourism in Konso and other production areas. The tree is resistant to both insects and pests character and is known to be a fast-growing plant where one Moringa tree can support a large family for many years (UNIDO. 2015, Reta.A. 2016, Mathewos.M. 2018).

Marketing of agricultural products performs a central role in assembling agricultural commodities from scattered and vast production areas and distributes these commodities further to consumers and other stakeholders in rural, urban, and, pre-urban areas. In doing so, several value-adding activities and processes such as production planning, harvesting, cleaning, sorting, grading, processing, packaging, transportation, storage, and advertising are performed. The value of agricultural products increases while moving from the farm gate through marketing channels to final consumers (Abdul. G, et al, 2016).

Most small farmers do not access marketing to sell their produce, and this is the main impediment to increased production for a given product. Many of the farmers feel that they run too high a risk of not being able to sell their produce at a fair price. It is important to secure a reliable market, a suitable price, and a system by way of which the farmer can market his/her produce, and at the same market, a suitable price, and a system by way of which the farmer can market his/her produce, and at the same time receive the highest possible share of the price paid by the consumer for that produce (IFAP, 2012).

Despite the ample literature about the Moringa tree in the world, it seems hard to get research findings on the Moringa tree in terms of marketing. Being one of the world's most useful plants in its economic, medicinal, social, and cultural values, very little scientific research has been done. In Konso Moringa have a market potential but, due to knowledge gap smallholder producers use the produce for food purpose mostly and during peak periods due to high production, a significant part of the produce deteriorates and inefficiently utilized. Moringa was highly produced in all sites of the zone and grown for a long time; however, the achievements from Moringa production so far remained minimal due to its low proportion to access market. Moringa has great potential to support the economy of poor farmers in the future if due attention is given to solve emerging issues. Therefore, to ensure that Moringa production achieves its objectives and perform satisfactorily, what is produced in one area need to be consumed in another area where a product moves from the producer to the consumer in different ways by creating form, place, time, and possession utilities in the marketing process. An understanding of the marketing chain and system, their role in the coordination of commercial transactions between farmers and buyers is essential to assess their advantages and evaluate their performance.

The aim of this paper, therefore, intends to analyze the current Moringa marketing chain and its contribution to household income in the Konso zone because increasing market participation among smallholder producers has the potential to lift them to better income levels through increased productivity and surplus production. And also increased market participation by the poor rural people is important as a means of breaking from the traditional semi-subsistence farming. It has been argued that market-oriented production can achieve welfare gains through specialization and comparative advantage, economies of scale, and regular interaction and exchange of ideas. Unfortunately, poor farmers who need this kind of welfare boost constrained by several factors in their quest to participate in the market for their goods and services in the study area (FAO, 2017).

1.2 Statement of the Problem

Agricultural products are perishable products and bulky and of relatively small individual values, and requires rapid, cost-efficient transportation to buyers and consumers. Their quality also deteriorates very rapidly and the ability to consistently provide high-quality products depends on the commitment of all players in the sector. This perishability nature of the fresh product requires producers to sell quickly their products (FAO, 2016, Anna. H. et al, 2020). The ability of smallholders in developing countries to address these issues is important as they face an increasing imperative to incorporate themselves into the market economy to generate cash income that will allow them to meet their basic needs, and thereby improve their livelihoods.

Agricultural production is scattered and is a small-scale production, which creates problems of marketing. Also, the infrastructure facilities like roads, means of transport, storage facilities, etc. are scarce in our rural areas. Thus, improved information and well-organized marketing is necessary to enable farmers to plan their production more in line with market demand, to schedule their harvests at the most profitable times, to decide which markets to send their produce to, and negotiate on a more even footing with traders and also it enables traders to move to produce profitably from a surplus to a deficit market and to make decisions about the economics of storage (Gebresenbet, G., & Bosona, T. 2012, Jayadatta, S. 2017)

There are many simple ways in which farmers can add value to their products, such as the use of the improved uniform seed, bulking and grading products, and in many cases by working in marketing groups. Farmers can diversify their production and use part of their land for higher- value crops and in some cases; farmers can sell their products into higher value marketplaces. All of these methods aim to take advantage of the rapidly changing market environment being led by urban consumers, who have more sophisticated market needs such as organic and fair-trade markets. To take advantage of these potential options, farmers, however, must be able to understand market opportunities and being able to respond to changing market needs. Farmers must also provide products and services at a price that is competitive with rival suppliers and there is increasing social pressure to ensure that production systems are environmentally sustainable. (Lundy, M 2007)

According to Saavedra, G et al (2015), the production and even transformation of Moringa into higher-value products appear to be feasible. However, identifying the opportunities that the market provides and meeting the demands of final consumers seem to be a recurring problem when setting up a Moringa sector. Several studies have been conducted on Moringa in Ethiopia. To our knowledge, almost all of these studies focus on production, nutritional values, and its economic importance (Nibret, E., and Wink, M. 2010, Ashfaq M, et al 2012, Kifle.Y, 2014, Seifu, E. 2014, Toma, A, et al 2014). Liyew.B and Daniel. F (2015) tried to assess the Socioeconomic, cultural, food, and Medicinal Significance of Moringa Stenopetala in Konso. Kumssa D. et al. (2017) posit that the Moringa sector in southern Ethiopia and Kenya faces several challenges, including a lack of reliable information on nutritional and medicinal values, inadequate access to markets for their products, and pest and disease stresses to their plants and suggested research and development to address these challenges and to promote the use of these species in the fight against hidden hunger are necessary.

The current study by Tezera.W. et al, (2020) in Konso showed that the welfare of the households has increased with the level of Moringa market participation. They recommended the policies aimed at different stakeholders, encouraging market linkages among diverse market players, and providing farmers with the chance of attending basic education as critical points to the improvement of household welfare. Therefore, Moringa has the potential to significantly add to household income and improve the livelihood of smallholder farmers in Konso, if its production were utilized efficiently. This can be done by creating a balance between marketing and production of Moringa produces which requires continuous involvement and commitment of different stakeholders along the chain and creation of Moringa actor's chain involving in production, processing, marketing, and investment.

Furthermore, (Kumssa. et al, (2017)) showed that despite the long-lasted cultivation, lack of reliable information on nutritional and medicinal values, inadequate access to markets for their products, and pest and disease stresses to their plants were major challenges that producers facing and production also concentrated in and around Konso town in the Woreda. These researches did not provide information on the Market chain, their gap, and their contribution to the Moringa production rather than studying challenges and opportunities for Moringa growers and concluded marketing as a major problem. They also fail in identifying the deep marketing channel with their actors and their operation toward the Moringa production.

Despite the well-known potential benefits of engaging in Moringa markets, very low levels of market participation are observed among smallholder farmers throughout the study area, it has not been given due attention. It is only recently that few studies have been done on Moringa. However, most of these studies have focused on the production and were limited to a specific area and marketing aspects. It is known that the farmers and traders over there are subject to certain problems because, systematic and adequate information on the process of market competition, on market structure, conduct, performance; not well identified. To this end, critical issues that are relevant to the exploitation of Moringa for marketing and efficient utilization must be identified and addressed.

Therefore, this study was conducted with the main purpose of analyzing Moringa marketing chain in the Konso zone because, identification, characterization, and evaluation of the market chain help to remove barriers affecting performance and to strengthen production sides and will contribute to a better understanding of improved strategies for reorienting marketing system for the benefit of small farmers and traders. It also assures producers an orderly and non-exploitative marketing system and fair business practices and tries to equalize the bargaining power of the farmers and the traders.

1.3 Research Questions

This study attempted to answer the following research questions:

- What are the constraints of Moringa marketing and production in the study area?
- Who are the major actors and what are their respective roles along the Moringa marketing chain in the study area?
- What does the structure, conduct, and performance of the Moringa market look like in the study area?
- What are the key factors affecting the smallholders' market participation of Moringa in the Konso zone?

1.4 Objectives of the Study

1.4.1 General objective of the study

The overall objective of the study is to analyze the Moringa market chain in the Konso zone.

1.4.2 Specific objectives of the study

The specific objectives of the study include:

- To assess major constraints in Moringa production and marketing in the study area.
- To characterize the major market channels of Moringa in the study area.
- To analyze the market structure, conduct, and performance of Moringa in the study area.
- To identify the major determinants that affect producers' market participation (level of participation) in the study area.

1.5 Scope and Limitations of the Study

Conceptually, describing important Moringa marketing channels, identifying determinants of marketable supply of Moringa and constraints and opportunities will be the center of the study. Geographic area coverage of the study was Konso zone, SNNPR, with a specific focus on Moringa Market chain analysis. The study was focused only on two Woreda (Gena and Karat Zuria) due to budgetary and time, limitations. Lack of record keeping by chain actors was challenging to collect relevant information on the channel

1.6 Significance of the Study

This study has generated important information useful to formulate Moringa marketing development programs and guidelines for interventions that would improve the efficiency of the Moringa marketing system. The potential users of the results of this study would be farmers, traders, and policymakers, governmental and non-governmental organizations, who want to introduce interventions in the Moringa marketing system. Furthermore, this study may be used as source material for further study.

1.7 Organization of the Thesis

This thesis was organized into five chapters. The first part includes the introduction of the study, the second chapter reviews detailed literature on relevant topics on the study of the performance of agricultural product marketing and empirical studies focused on determinants of market participation and supply. Subsequently, methodologies and description of the study area were presented in Chapter 3. Both descriptive statistics and econometric results were presented and discussed in detail in Chapter 4. Chapter 5 summarizes the main findings of the study and draws a conclusion and appropriate recommendations.

CHAPTER TWO

REVIEW OF RELATED LITERATURE

In this chapter, the basic concepts of market, marketing, market participation marketing channel, agricultural marketing, approaches to the study of agricultural marketing, empirical studies of agricultural products marketing and its marketing, structure-conduct- performance, market integration, measures of market concentration and integration and analysis of factors affecting market supply are discussed.

2.1. Theoretical Literature review

2.1.1 Basic concepts and definition

2.1.1.1 Market

The word “market” has many connotations. Bain, K., & Howells, P. G. (1988), define “markets” as a single arrangement in which one thing is exchanged for another. A market consists of buyers and sellers with facilities to communicate with each other. It needs not to be a specific place or spot market (Crammer.G et al, 2001). According to Abbot, M., & Mahekam, J. P (1981), a market can be defined as an area in which exchange can take place. A market is an arena for organizing and facilitating business activities and for answering the basic economic questions: what to produce, how much to produce, how to produce, and how to distribute production (Kohls, R. L., & Uhl, J. N. 2002).

From these definitions, it is possible to conclude that the market is a social institution that performs activities (marketing) and provides facilities for exchanging commodities between buyers and sellers or it is commodities and buyers and sellers who are in free intercourse with one another to make an exchange.

2.1.1.2 Marketing:

Marketing is the performance of all business activities involved in the flow of food products and services from the point of initial agricultural production until they are in the hands of consumers. The definition of marketing as a process by which individuals and groups obtain what they need and want by creating and exchange products and values with others involves work (Kohls, R. L., and JN Uhl, 1985).

Etzel, et al, 2005 have defined marketing as a total system of interacting business activities designed to plan, price promotes, and distribute want satisfying goods and services to target markets to achieve organizational objectives.

Kotler (1994) defines marketing as: the analyzing, organizing, planning, and controlling of the firm's customer impinging resources, policies, and activities to satisfy the needs and want of customer chosen groups at a profit. This definition suggests that marketing is oriented towards the activities of firms that is satisfying the needs of consumers is a necessary condition for the firm to achieve maximum profits. The firm tries to satisfy the needs of chosen groups in terms of product, price, promotion, and place. American Marketing Association also defined marketing as the performance of business activities that directs the flow of goods and services from producers to users.

Therefore, marketing is the series of services involved in moving a product from the point of production to the point of consumption matching production to customer needs and satisfaction

2.1.1.3 Agricultural marketing

According to Thomson (2003, in Subba et al. 2004), agricultural marketing comprises all the operations and the agencies conducting them, involved in the movement of farm-produced food, raw materials and their derivatives, such as textiles, from the farms to the final consumer and effects of such operations on farmers, middlemen, and consumers. While Acharya and Agawal (2003) in Subba et al. (2004) sees agricultural marketing as the study of all activities, agencies, and policies involved in the procurement of farm inputs by the farmers and the movement of agricultural products from the farmers to consumers. Thus, marketing provides a link between the farm and non-farm sectors. Thomson's definition mainly focuses on the product side of agricultural marketing and does not consider the farm supplies whereas Acharya and Agarwal's definition also does not adequately cover the scope of agricultural marketing.

Agricultural marketing, therefore, can be comprehensively defined as comprising of all activities involved in the supply of farm inputs to the farmers and the movement of agricultural products from the farms to the consumers or agricultural marketing embraces all business activities involved in production planning, transformation, grading, storing, transportation and distribution of goods and services related to agriculture as desired by agricultural producers (farmers) and ultimate consumers. Agricultural marketing system includes the assessment of demand for farm­inputs and their supply, post-harvest handling of farm products, the performance of various activities required in transferring farm products from farm gate to processing industries and/or to ultimate consumers, assessment of demand for farm products, and public policies and programs relating to the pricing, handling, and purchase and sale of farm inputs and agricultural products. Of late trade in the domestic and international markets also become part of it.

2.1.1.4 Market channel

The analysis of market channels is intended to provide systematic knowledge of the flow of goods and services from their origin (producer) to their final destination (consumer). The analysis of marketing channels is intended to provide systematic knowledge of the flow of goods and services from their origin (producer) to their final destination (Scott, 1995). According to Moore “The chain of intermediaries through whom the various food grains pass from producers to consumers constitutes their marketing channels”. Kohls and Uhl have defined marketing channels as alternative routes of product flow from producers to consumers.

It is a business structure of interdependent organizations from the point of product origin to the consumer to move products to their final consumption destination (Kotler and Armstrong, 2003).

In short, market channel is the way or a sequence of intermediaries involved in which products and services get to the final user, the consumer; and are also known as a distribution channel

2.1.1.5 Market chain

A marketing chain is used to describe the numerous links that connect all actors and transaction process involved in the movement of agricultural products from the farm to the consumer (Arinloye, 2012). It refers to the economic actors who make and transact a particular product as it moves from primary producer to final consumer i.e. including farmers, producers, input suppliers, processors, traders, wholesalers and retailers. (Figure 1) It is the path in which goods fellow from their source of original production (production area) to ultimate destination for final use (consumption).

Abbildung in dieser Leseprobe nicht enthalten

2.1.1.6 Market Supply and marketable surplus

According to Wolday (1994) Market supply refers to the amount taken to the markets irrespective of the need for home consumption and other requirements whereas the market surplus is the residual with the producer after meeting the requirement of seed, payment in kind and consumption by a peasant at the source.

A marketable surplus is the quantity of produce left out after meeting the farmer's consumption, payment of wages in-kind, feed and seed have been met and utilization requirements for kind payments and other obligations such as gifts, donations, charity, etc. This marketable surplus shows the quantity available for sale in the market. The marketed surplus shows the quantity sold after accounting for losses and retention by the farmers if any and adding the previous stock left out for sale (Thakur et al., 1997).

2.1.1.7 Market participation and level of participation

A number of definitions of market participation have been suggested by different authors. Some studies consider market participation as any market-related activity that actors perform which promotes the sale of commodity (Key et al., 2000; Holloway and Ehui, 2002; Lapar et al., 2003). William et al. (2008), defined market participation in terms of sales as a fraction of total output, for the sum of all agricultural crop production in the household which includes annuals and perennials, locally-processed and industrial crops, fruits, and agro-forestry. This sales index would be zero for a household that not participate and not sell and could be greater than unity for households that add value to their crop production via further processing and/or storage. Improvements in market participation are necessary to link smallholder farmers to markets to expand agriculture sector as well as set opportunities for income generation (Pingali, 1997) Goetz (1992) defined market participation using household purchases and sales, whereby the volume of produce traded is used to determine market participation. Increased market participation is implication for the transition from subsistence farming to a market engagement mode, whereby frequent use of markets is made to exchange products and services. The quantity of a product sold is an indicator of the level of households market participation (Goetz, 1992) states that, in principle, variables affecting the amount to buy or sell are the same as those affecting the decision of whether to participate in the market as a buyer or seller. Proportion of agricultural produce that is not used for subsistence is sold therefore the higher proportion of sales leads to greater market participation.

Market participation can therefore defined as participation in any market related activity which encourages the sale of produce, as the individual farming household's economic transactions with others in cash or kind or commercialization with the aim of boosting their income level resulting in poverty reduction.

2.1.1.8 Approaches to the Study of Agricultural Product Marketing System

Marketing is a subject, which bristles with wide and varied problems. It includes the services and functions of different specialized institutions and middlemen. Different commodities have special marketing problems therefore the results of the study of one commodity may not apply to other commodities. Also, the same commodity will have different problems in different regions. Various approaches have been suggested and used to study marketing problems. These are functional, institutional, commodity, and behavioral approaches.

2.1.1.8.1 Functional approach

Studying a marketing system using a functional approach is just to break up the whole marketing process into specialized activities performed in accomplishing the marketing process (Kohls and Uhl, 1985). This approach helps to evaluate marketing costs for similar marketing middlemen and/or different commodities and costs and benefits of marketing functions (Kohls Uhl, 1985; and Andargachew, 1990). The widely accepted functions are exchange (buying and selling), physical (processing, storage, packing, labeling, and transportation), and facilitating (standardizing, financing, risk-bearing, promoting, and market information). The exchange function involves pricing, buying, and selling which is a transfer of title between exchanging parties.

Marketing of agricultural products consists primarily of moving products from production sites to points of final consumption. In this regard, the market performs exchange functions as well as physical and facilitating functions. The exchange function involves buying, selling and pricing. Transportation, product transformation and storage are physical functions, while financing, risk­bearing and marketing information facilitate marketing

2.1.1.8.2 Institutional approach

The institutional approach of marketing problems implies a study of different agencies (producers, wholesalers, agents, retailers, etc) and institutions, which perform various functions in the marketing process. The nature and character of various middlemen and other related agencies involved in the movement of the product must be studied (Kohls, R. L., and Uhl, J. N. 2002). The agencies vary widely in size and ownership. They get their reward in the form of marketing margins. This approach helps us to find answers to the problems of 'who does what' in the marketing process, whether the marketing and markets margin of the agency is corresponding with the services rendered, which government regulations are necessary so that their unlawful activities may be minimized or stopped. The institutional analysis is based on the identification of the major marketing channels and it considers the analysis of marketing costs and margins (Mendoza, 1995).

Thus, institutional approach involves various institutions, business firms and organizations that perform the marketing activities, such as operations necessary to transfer goods from one agent to another to meet consumer demand. It covers all market actors involved in handling products directly indirectly (producer, assembler, transporter, wholesaler, retailer and consumer).

2.1.1.8.3 Commodity approach

In this approach, a specific commodity or group of commodities is taken and the functions and institutions involved in the marketing process are analyzed from farm to consumers (Kohls and Uhl, 1985). This approach is said to be the most practical as it helps to locate specific marketing problems of each commodity and improvement measures. This approach follows the commodity along the path between the producer and consumer and is concerned with describing what is done and how the commodity could be handled more efficiently (Purcell, 1979). The problems of marketing of agricultural products differ from commodity to commodity mainly because of the seasonality of production, the variations in its handling, storage, processing and the number of middlemen involved in them. By this approach, similar commodities are sometimes grouped together and described as grain marketing, fruit marketing, livestock marketing, vegetable marketing, etc., or even sometimes each grain crop can be described independently as; wheat marketing, maize marketing, barely marketing, etc., each fruit as; banana, orange, etc. each vegetable as; potato, tomato, etc. marketing.

2.1.1.8.4 Behavioral System Approach

This approach refers to the study of behavior of firms, institutions and organizations, which exist in the marketing system for different commodities. The marketing process is continually changing in its organization and functional combinations. There are many possible ways to satisfy the needs of target customers. A product can have many different features and quality levels where service levels can be adjusted. The package can be of various sizes, colors, or materials. The brand name and warranty can be changed. Different advertising media newspapers, radio, television, and billboards may be used. A sales force or other sales specialists can be used. Different prices can be charged. Price discounts may be given, and so on. : Thus, emphasizes the interdependence and coordination of all participants and all the functions of the entire system - combines institutional and functional approaches (Juma, M, et al., 2017)

The Behavioral systems approach consists of four sub-components: Input- output system, power system, communication system, and adaptive behavior system in the operation of the marketing system at any one time. Keeping these in mind may help explain actions which, when viewed only in the context of one of the systems, seem irrational or unintelligent. A firm may forego the ultimate in an input - output solution because its communication system has broken down or because of considerations of its power situation. The analytical view of multiple behavior systems adds the important dimension of decision makers and their differing goals to the rather impersonal functional and institutional analysis.

2.2 Empirical literature Review

2.2.1 Determinant of market participation and surplus.

There are much research had been conducted in the field of determinant of market participation and surplus of different agricultural commodities and their summary is as follows;

Christopher.S (2014) found that the failure of farmers to access information on the markets through long distances and lack of access to village market arrangements seemed to lock out many of them from making decisions to enter the potato market to sell. Results also revealed that once a smallholder farmer decides to enter the market to sell, household characteristics and farmer endowments are the key factors that influence how much will be sold into the market. Factors like gender, membership to a farmers' group or cooperative came out to significantly influence the level of market participation in form of how much is sold.

Adeoti et al. (2014) studied the determinants of market participation among maize producers in Oyo state, Nigeria. The study revealed that the coefficient of educational status showed a positive relationship with market participants and it was significant at 5%. This shows that farmers with formal education are more market-oriented, knowledgeable about prevailing market situations, and therefore produce to take advantage of the market environment. Sebatta et al. (2014) in a study in Uganda using the Heckman two-stage model observed that proximity to a village market positively and significantly influenced the decision to participate in potato markets Results from the second stage of the model indicated that non-farm income earned negatively and significantly affected the potato farmers level of market participation.

In a study by Osmani and Hossain (2015) on market participation decision of smallholder farmers and its determinants in Bangladesh, revealed that the explanatory variable farm size was significant at 1% and has a positive influence on the decision for market participation meaning that as farm size increases, the probability of decision for commercialization increases.

Goitom Gebremedhin (2015) used the Heckman two-stage econometric model and identifies factors determining market participation decision and value of poultry sales. Results obtained from the first stage of the model indicated that sex of the household head, number of chickens owned, and extension contact were the variables that influenced the decision to participate in the poultry and egg market positively while the distance to the wereda market influenced the decision to participate in poultry and egg market negatively. Results from the second stage of the model show that the number of chickens owned and access to extension contact influenced the value of poultry sales by the market participants positively while the distance to the wereda market and exotic poultry breed influenced the volume of poultry sold by the participants negatively. Results from the second stage of the model also show that the number of poultry owned, access to credit, exotic poultry breed, education status, and years of experience in farming influenced the value of egg sales positively while the age of the household head was found to influence egg supply to the market negatively.

Venance.M and Deus.N (2015) researched determinants and extent of market participation of tomato in Tanzania using Hackman's two-stage model. In their study, it was found that market participation is determined by age, education, quantity produced, and sex of the tomato farmer. Likewise, the extent of market participation of tomato farmers was determined by age, quantity produced, sex, and marketing experience. These factors are directly associated with the behavior of farmers to increase their tomato marketable quantities and volume of sales.

Efa. G. (2016) applied the Double hurdle model to identify factors affecting market participation and intensity of marketed surplus of teff and found that market participation of smallholder farmers was significantly affected by access to credit, perception of farmers on the lagged market price of teff, family size, agroecology, farm size and ownership of transport equipment. Similarly, the intensity of marketed supply was significantly influenced by family size, agroecology, distance to the nearest market, farm size, perception of the current price, income from other farming and off-farm activity, and livestock holding. The findings generally suggest the need to create reliable market information, provide good transport facilities for farmers through the development of infrastructure, strong extension intervention, and giving training to farmers on marketing.

Similarly a study on Potato by Yassin. E, et al (2016) also indicates that level of education, livestock owned, a quantity of potato harvested, potato market price, and access to market information positively affect farmers participation decision whereas participation in off/non-farm activities were negatively affected farmers decision to participate in the potato output market. This study suggested that a policy that improves the determinants of market participation is recommended to enhance farmers' market participation in the potato output market.

The result of the multiple linear regression model from Ephrem.T, (2018), indicated that land allocated for haricot bean, utilization of NPS fertilizer and livestock ownership have positive and significant influence on supply of haricot bean to the market while distance from nearest market and lagged market price have negative influence.

Tariku A et al (2018) used heckmans two stage model on analysis of market decisions and intensity of market participation of smallholder wheat farmers and showed that Perception on lagged wheat price, quantity of wheat produced, size of land allocated for wheat and literacy status of household head had significant positive effect on market participation decision, while age of household head had significant negative effect. Level of market participation affected positively and significantly by perception on lagged wheat price, size of land allocated for wheat, quantity of wheat produced, and literacy status of household head.

A study by, Wondim.A and Desselgn.M (2019) on market chain analysis of potato and factors affecting market supply in West Gojam Zone of Ethiopia revealed that distance to nearest market center, owned ox number, experience, access to credit, total amount of potato produced and market information influences market supply of potato significantly.

Furthermore, the research findings of Atinkugn Assefa (2020) indicated that farm size, output, extension contact and membership of farmer group was found to affect both households' decisions to participate and intensity of participation in sorghum sales at 1% level of significance. And results of the probit model analysis showed that output, farm size, extension contact and ownership of transport have positive and significant role in households' decision to participate in sorghum output sales at 1% level of significance; whereas, household income, off- farm income, access to credit and lack of information negatively at 1% and 10% level of significance.

In summary, many empirical studies are conducted in Ethiopian and in other countries to identify major determinants that affect producers' market participation and level of participation. However, most of the past studies on market participation were focused on other agricultural commodities and no study was made on Moringa. But, the results obtained for other commodities cannot be generalized to Moringa because different nature of the product as well as most of the products are produced for commercial purpose only whereas Moringa production is for both commercial and household subsistence. That is, the production drivers are not the same. On other hand studies conducted in other areas may not be conclusive and apply to study area (Konso) context. Thus, the reviewed studies were used in specifying the models and identifying factors affecting market participation decision and intensity.

The Studies that have been conducted so far on Moringa has focused on production, opportunity and constraint, nutritional aspect, economic value..etc. and some concluded marketing as major problem (Kumssa , etal, 2017, UNIDO. 2015). As per researchers knowledge no past study has been undertaken on the factors influencing Moringa farmers' market participation in Ethiopia and other part of the world. In most of the past market participation and intensity studies, a Heckman two-step model was applied mainly to correct for self-selection bias. Generally, there is scanty information on the factors influencing farmers' participation and intensity in the marketing of Moringa of Ethiopia and hence this study.

2.2.2 Challenges of Marketing Farm Products

One of the main factors that cause agricultural development goals and increasing production and income of farmers in developing countries is the inefficiency of marketing system for agricultural products. Marketing of farm products is a complex process and thus faces multiple challenges.

Traditional rural areas are distinguished by a subsistence economy (an economy directed to basic subsistence (the provision of food, clothing, and shelter) rather than to the market). In such villages, the production unit is the family, which produces the food for its consumption, and the surplus is offered for sale only after a particularly plentiful cultivation season. The family unit considered as a production unit is very small and such unit functions separately. This situation makes it difficult to focus the produce for well-organized marketing. In certain areas, the vast majority of the population is not at all used to thinking in terms of market and barter trading. Another characteristic of these areas lies in the fact that many of the traditional farmers would be prepared to shift over to the cultivation of market crops, provided a price system is set up which gives them an motivation (Beine et al, 2008).

The traditional peasant in developing countries sells his produce at the time and for the price, which is the least advantageous for him. He sells to pay his debts, but the cycle is repeated, and he becomes involved in new debts. In developing countries, the farmers sell a "forced" surplus. The farmers were forced to sell a large part of their produce, sometimes much more than they would have sold if they had the choice. (FAO, 2010).

A study by Abbas.S & Christopher.M (2016) in Tanzania showed that prominent constraints of marketing tomatoes among the small-scale farmers were: lack of access to credit, lack of access to storage facilities, lack of market information, lack of finance for farming, poorly developed village markets, poor producer prices, high perishability of produce, low patronage, inadequate access roads, small size of transport and high transportation costs. Razeul.I et al (2019) also concluded insufficient space for storage of produce, effect of middle man, in adequate market information, low transport facilities, lack of knowledge and training were the major problems of Vegetables Marketing in Bangladesh.

In agricultural marketing transportation cost, inadequate market infrastructure, lack of market information and linkage, lack of processing units, road access, large number of middlemen, storage facility, price fluctuation transaction cost on marketing and training and development are the major problems (Tesfaye H. et al 2016 and Nidhi, N. et al 2017).

Agricultural marketing plays an important role in stimulating production and consumption, as well as accelerating the pace of economic development thus; if the government and farmers work together the problems of marketing agriculture products can be solved. Eliminating middlemen, enough storage facility, freedom from moneylenders, adequate transportation facilities, availability of loan and training facilities etc. are required for satisfactory agricultural marketing. Based on different literature adequately monitoring and stimulating agricultural production and produce marketing has become also a necessity.

2.3 Conceptual Frameworks

A Conceptual framework is typically derived from theory and empirical literature. It identifies the concepts included in a complex phenomenon, the variable and shows their relationships. The relationships are often presented visually in a flow chart, web diagram, or other types of the schematic (Glatthorn & Joyner, 2005). The conceptual framework for this study was originated from the review of related literature. The producers first decide whether to participate in marketing of Moringa or not participate; then decide, provided they participate, how much to sell or supply to the market.

The researcher identifies various factors that might affect the marketable supply of Moringa. These are considered to be the independent variables because they affect the amount of Moringa supplied to the market. On the other hand, the dependent variables were considered to be the market participation of households and quantity supplied to the market. Socioeconomic characteristics are the background factors such as age, education level, household size, and quantity of Moringa produced. Institutional factors include access to extension service, distance to market and access to credit. Market information, lagged price and all these factors influenced market participation. These factors could have negative and positive effects, which could either improve or cause a decline in the welfare of the actors.

Abbildung in dieser Leseprobe nicht enthalten

CHAPTER THREE

RESEARCH METHODOLOGY

This chapter starts by describing the area of study including the map of the study area, Konso. It also covers sampling techniques, data types, and data collection techniques. Data validation and reliability are also briefly discussed. The section ends with specific frameworks of data analysis based on the objectives of the study.

3.1 Description of the Study Area

This research was conducted in Konso zone of the Southern Nations, Nationalities, and Peoples Regional State (SNNPRS), Konso Zone. The Konso people are resided in Konso zone, which speaks Konsigna language that belongs to the Eastern Cushitic language family. The Segen River in the south, Woyto River in the west, and Derashe wereda in the North and Burji in the South East bounds Konso. Konso is located according to the Konso development office at 37.1-37 longitudes and 5-5.36 latitudes. Konso is known for its hard-working people who endowed with extraordinary skills and knowledge, particularly in indigenous water and soil conservation and land management practices. They managed to survive in a marginal environment using the indigenous skills and knowledge that enabled them to make optimal use of unfavorable terrain and climatic conditions innovatively. This creative indigenous and noble work culture has qualified the Konso people in 1995 for a UN prize and recognition and registration of the Konso landscape as a cultural heritage site by UNESCO in 2010. The average annual rainfall of the area is 570mm. The climate is known for its long dry spells punctuated by unreliable and poor rains. 57% of the annual rainfall of Konso is concentrated in three months (March, April and May) and 62% of this is received in April. There are two cropping seasons in Konso: Belg (February-May) accounting for 65-75% of the annual crop production and Meher (Hagaya). Belg crops include maize, sorghum, teff, haricot bean, barley and wheat. In Konso, sorghum is harvested twice: the main harvest comes from the Belg production while a secondary Meher/hagaya harvest in October/November is obtained from rationing (allowing new growth from the rootstock left in the ground) (WOFED, 2018).

Abbildung in dieser Leseprobe nicht enthalten

Figure 3: Location of the research area Source: Haile and Tegegne, (2018).

3.2 Research design

The research design used was a cross-section study done at a single point in time. The study used both qualitative and quantitative data to describe the nature and performance of the Moringa market. This design was useful for descriptive purposes and in obtaining qualitative information as well as for determination of relationship between variables.

3.3 Types, Sources, and Methods of Data Collection

3.3.1 Sources of data

The study was used both primary and secondary sources of data. The primary data was collected by using a questionnaire, visiting sites, and interviews with key informants from the actors, starting from Moringa producers up to the processors. Due to a lack of previous studies and knowledge about activities within the Market chain of Moringa in Konso zone preliminary data gathering was necessary. Thus, the research was started by on-site visits to farmers, wholesale markets, processors, and retail markets. The secondary data was reviewed from published and unpublished reports of different levels of the agricultural bureau (country, regional and zonal, woreda, and kebeles), report of CSA (central statistical agency), and different published articles.

3.3.2 Types of data

For the study, the researcher has used both quantitative and qualitative types of data. Quantitative data are related to market performance while qualitative data is related to the Market chain activities, the role, and the challenges and opportunities of Moringa marketing.

3.4 Sampling technique and sample size determination

3.4.1 Sampling technique

Simple random sampling, stratification (for Gena) and simple random sampling (for karat zuria), and systematic random sampling with proportionate to household head techniques were applied to select the woreda, the sample kebeles, and to draw household respondents, respectively. Moringa stenopetela was native to Konso and it is cultivated almost in all of the three woredas and thus Gena and Karat zuria woreda were randomly selected.

The populations of the districts (Gena woreda (10kebeles)) are homogeneous in, socio-economic conditions and share common culture but, they are different in agro-ecology (kola' and ‘woinadega') and production potential from Keble to Keble. Thus, based on production potential, the 10 kebeles are stratified into two subgroups, (high and medium production) called strata each with many elements in it. From 10 kebeles in Gena woreda, 6 kebeles are the most Moringa producing 4 are the medium ones. The population of the district share a common culture in each stratum and hence simple random sampling technique was used to select sample kebele administrations from each stratum. Consequently, 2 kebeles namely Kaho and Gera were drawn as sample kebeles. Using the household list of the sampled kebeles sample farmers were selected randomly based on proportional to the population size of the selected kebeles.

On the other hand, Karat Zuria woredas(14 kebeles) population are homogeneous in, socio­economic conditions, share a common culture, the same in agro-ecology (‘kola') and production potential from Keble to Keble. Thus accordingly, 3 kebele among 14 kebeles were selected randomly to represent the woreda. Using the household list of the sampled kebeles (from kebele administration), sample farmers were selected randomly based on proportional to the population size of the selected kebeles.

In summary, from the three available woreda, two woreda randomly selected (Gena and Karat Zuria woreda) and Table 3.1 and Figure 4 illustrate more about the sample determination and procedure.

3.4.2. Household sample Size determination

The sample size for the study was determined by using an appropriate sample size determination technique using the total population of the sampled kebeles. According to Ranjit.k (2019), in qualitative research, the question of sample size is less important, as your aim is to explore, not quantify, the extent of variation for which you are guided by reaching saturation point in terms of new findings. In practice, budget determines the size of sample. The skills in selecting a sample, within the constraints of budget, lie in the way elements are selected so, that they effectively and adequately represent sampling population. The greater the variation in the study population with respect to the characteristics under study, for a given sample size, the greater the uncertainty. In technical terms, the greater the standard deviation, the higher the standard error for a given sample size in estimates and if a population is homogeneous (uniform or similar) with respect to the characteristics under study, a small sample can provide a reasonably good estimate, but if it is heterogeneous (dissimilar or diversified), you need to select a larger sample to obtain the same level of accuracy. With this regard to calculate the sample size for this study 94% desired confidence level was used using Yamane (1967), simplified formula for determination of sample size.

According to W.G Cochran (1977), the precision desired may be made by giving the number of errors that are willing to tolerate in the sample estimates. The difference between the sample statistic and the related population parameter is called the sampling error. It depends on the amount of risk a researcher is willing to accept while using the data to make decisions. Usually, 95% and 99% of probability are taken as the two known degrees of confidence for specifying the interval within which one may ascertain the existence of the population parameter.

Abbildung in dieser Leseprobe nicht enthalten

Where n: is the number of respondent farmers,

N: is the total number of Moringa farmers in sample kebeles, e: is the precision level. A 94% confidence level was taken and e= 0.06, then

Abbildung in dieser Leseprobe nicht enthalten

The sample households were drawn using systematic random sampling proportionate to household head techniques. The household head list in each Keble was be used as a sampling frame to select sample households.

A total of 257 producer respondents were included in the study. The sample kebeles have different household sizes. Thus it was based on population proportionate to size to select the sample from each kebeles.

Abbildung in dieser Leseprobe nicht enthalten

Gera, Kamole, Mechelo, and Lehayte kebeles respectively as shown in the table below.

Table 3.1: Moringa producers of the Woreda and their sample size of selected Kebeles

Abbildung in dieser Leseprobe nicht enthalten

Source: Woreda Agricultural Office, 2019 and author's computation

3.4.3 Traders sampling

Here sampling is a very difficult task due to the opportunistic behavior of the traders but, to have the possible level of a representative before the formal traders' survey, a rapid market appraisal (RMA) was conducted to get the overall picture of the Moringa marketing chain in the district and 31 traders were selected. At first, to have the possible level of representative traders, secondary information from and discussion was made with the Woreda Trade and Industry Office, Woreda agricultural office experts (Since there was a new structural change of rural kebeles and urban kebeles). And traders were selected from the main city, Woreda and at local points during marketing days. There was no recorded data for traders of Moringa in the study area with the expectation of two big processors. Consulting other traders, information was gathered (counting) and the size of traders was determined by developing a sample frame. Hence, 11 rural assemblers, 9 retailers, 4 wholesales, and 7 processors a total of 31 traders were selected out of 69 and interviewed by administering a structured questionnaire randomly.

Abbildung in dieser Leseprobe nicht enthalten

Figure 4: Sampling Procedure Source: authors sketch from sampling techniques

3.5 Methods of Data Analysis

Descriptive statistics and econometric analysis were used to analyze the data collected from Moringa producers, traders, and consumers.

3.5.1 Descriptive statistics

To describe the characteristics of market players and to identify key constraints in Moringa production and marketing descriptive statistics was used. This method of data analysis refers to the use of ratios, percentages, means, variances, and standard deviations in the process of examining and describing marketing functions, facilities, services, and the role of intermediaries, market, and traders' characteristics. To identify major Moringa marketing channels, the roles and linkages of marketing actors, the commodity approach was applied.

3.5.1.1 Analysis of the Structure conduct and performance (S-C-P) model

SCP model is also one of the most common and pragmatic methods for analyzing the marketing system in different industries. It analyzes the relationship between functionally similar firms and their market behavior as a group and, it is mainly based on the nature of various sets of market attributes and relations between them and their performance in the market (Scarborough and Kydd, 1992). This analytical framework distinguishes between three related levels; the structure of the market, the conduct of the market, and the performance of the market. In short, it is an analytical approach that is used to study how the structure of the market and the behaviour of sellers of different commodities and services affect the performance of markets, and consequently the welfare of the society as a whole.

[...]