COLLEGE OF AGRICULTIRE AND ENVIRONMENTAL SCINCE

DEPARTMENT OF AGRICULTURAL ECONOMICS

A Research Proposal Oon Determinant Oof Market Supply Oof Maize Iin Debark Woreda

BY; ID;

ZENEBECH GETANEH 1200352

ADVISOR: ADUGNAW.W

DEBARK, ETHIOPIA

JAN, 2023

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 Table of contents
ACKNOWLEDGEMENT...........................................................................................................II

ABRIVATION.............................................................................................................................III

1. INTRODUCTION.....................................................................................................................1

1.1. BACKGROUND OF THE STUDY.............................................................................................1

1.2. STATEMENTS OF THE PROBLEM..........................................................................................2
1.3. RESEARCH QUESTIONS.........................................................................................................3
1.4. OBJECTIVES OF THE STUDY.................................................................................................3
1.4.1 General objective...........................................................................................................3
1.4.2 Specific Objectives.........................................................................................................3
1.5. SIGNIFICANCE OF THE STUDY..............................................................................................3
1.6. SCOPE AND LIMITATION OF THE STUDY.............................................................................4
1.6.1. Scope of the study.........................................................................................................4
1.6.2. Limitation of the study.................................................................................................4

2. LITERATURE REVIEW.........................................................................................................5

2.1. THEORETICAL LITERATURE.....................................................................................5

2.1.1. Basic Concepts..............................................................................................................5
2.1.2. Maize Production in Ethiopia.....................................................................................7
2.1.3. Maze Marketing in Ethiopia.......................................................................................7
2.2 APPROACHES TO THE STUDY OF AGRICULTURAL MARKETING........................................8
2.2.1. Functional Approach...................................................................................................8
2.2.2. Institutional Approach.................................................................................................9
2.2.3. Commodity....................................................................................................................9
2.3. EMPIRICAL LITERATURE REVIEW.....................................................................................10
2.4. CONCEPTUAL FRAMEWORK OF MARKET PARTICIPATION AND MARKETED................11

3. METHODOLOGY..................................................................................................................12

3.1 DESCRIPTION OF THE STUDY AREA ............................................................................12

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 3.2 SAMPLING TECHNIQUE AND SAMPLE SIZE.......................................................................13
3.3 TYPE, SOURCE AND METHOD OF DATA COLLECTION.......................................................14
3.3.1. Sampling unit..............................................................................................................14
3.4 METHOD OF DATA ANALYSIS.............................................................................................14
3.4. VARIABLES DEFINITIONS AND HYPOTHESIS FOR MARKET SUPPLY OF MAIZE............15
DEPENDENT VARIABLE.............................................................................................................15

4 WORK PLAN...........................................................................................................................18

4.1 BUDGETING PLAN............................................................................................................18

5. REFERENCES........................................................................................................................20

ABRIVATION

BLUE Best Linear Unbiased Estimator

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CC Contingency Coefficient
CLR Classical Linear Regression
FAO Food and Agricultural Organization
GDP Gross Domestic Product
IMR Inverse Mill s Ratio
NBE National Bank of Ethiopia
OLS Ordinary Least Square
SPSS Statistical Package for Social Science
USAID United States of Agency International Development
VIF Variance Inflation Factors

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1. INTRODUCTION

1.1. Background of the Study

Agriculture is the main stay of the Ethiopian economy employing the greatest proportion of the
country population mainly of rural areas, which accounts for about 46% of the GDP of the nation
and 90% of its export earnings and hold about 85% of the country’s labor force. Agriculture and
allied activities are the main source of much of the raw materials, investment capital, and foreign
exchange, and labor needed for the economic growth. However, it is still in its primitive stage
although there are some improvements in inputs in recent times. In this regard, improving the
performance of agricultural sector is of critical importance for fast development of countries‟
economy (Tesfaye, 2009).
Cereals are the most important food crop of the world and it provides the world with a majority
of its food calories and about half its protein. Cereals occupy more than half of the world's
harvested area and are the most important food source for human consumption. Of the 2.3 billion
tons of cereals produced each year, 1 billion are destined for human consumption; 750 million
tones are used as animal feed and 500 million tones are processed by industry, used as seed, or
wasted. World total cereal production is increase by about 13.4 percent or nearly 68 million tons
in 2014 compared to 2013 year (FAO, 2014). It is now increasingly used both separately as well
as in mixed flour with other more expensive cereals in traditional Ethiopian diets Ebrahim
(2013).
Maize is the most important staple in terms of calorie intake in rural Ethiopia. The 2004/5
national survey of consumption expenditure indicated that maize accounted for 16.7 % of the
national calorie intake followed by sorghum (14.1 %) and wheat (12.6 %) among the major
cereals (Berhane et al. 2011). Compared to the 1960s the share of maize consumption among
cereals more than doubled to nearly 30% in the 2000s, whereas the share of teff, a cereal that
occupies the largest area of all crops in Ethiopia, declined from more than 30% to about 18%
during the same period (Demeke, 2012).The production of cereal crops, such as teff, maize and
sorghum is economically and

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socially important regionally. Cereals are the major food crops in this region and 82% of the total
land area covered by grain crops and contributes 87% of the total grain production. Cereal
production and marketing are the means of livelihood for smallholder households and it
represents the single largest sub-sector in the economy, which accounts for roughly 60% of rural
employment (Adugna, 2009) and account for over 90% of input consumption in regionally
(Ebrahim,2013).
Maize supply to the market enhances the economic groth of many smallholder farmers in
Ethiopia . Despite this farmers still produce mainly for cnsumption ,and small amounts of maize
are supplied to the market due to different factors .Therefore this,study examined the
determinants of maize supply to the market in northern Ethiopia .Descriptive statistcs and linear
regression analysis were employed to analyz edeterminants of maize supply .market supply of
maize in Debark district ,the studyarea, is also quite low .However ,inthe district ,maizeis
produced in alarge amounts compared to other cultivation crops even if the district produces
cereas based on rainfall only(OAWARD,2017).
The contribution of cereals to national income is also large. According to available estimate,
cereal production represents about 30% of gross domestic product (GDP). This calculation
follows from the fact that agriculture is 48% of the nation’s GDP (World Bank, 2007), and that
cereals‟ contribute to agricultural GDP is 65% (Diano et al, 2007).

1.2. Statements of the problem

Ethiopian agriculture is characterized by small holdings, low capitalization and low yield per unit
of land. Cereal production and marketing are the means of livelihood for millions of households
in Ethiopia. It is the single largest sub-sector within Ethiopia’s agriculture, far exceeding all
others in terms of its share in rural employment, agricultural land use, calorie intake, and
contribution to national income. Cereal crops are the major dietary energy supplier all over the
world and particularly in Ethiopia. The roles of agriculture remain significant in the Ethiopia
economy despite the strategic importance of the industrial sector (Shahidur, 2010).
Understanding cereal markets is especially relevant in Ethiopia, given the disastrous implications
that poorly functioning cereal markets had on food security in the past, when cereal stocks were
available in some parts of the country while widespread famine occurred in other parts

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(Gebremedhin, 2012). Major reasons for historically poorly functioning of cereal markets have
included a lack of market information, poor road infrastructure and high transaction costs, and
distress sales and lack of storage by small farmers (Seneshaw et al, 2013).
According to Wolday and Eleni (2003) in Ethiopia the performance of agricultural marketing
system is constrained by many factors such as: poor quality of agricultural produce, lack of
market facilities, weak extension services which ignored marketing development, poor linkage of
research and extension, absence of marketing information and intelligent services, excessive
price and supply fluctuations, limited access to credit, inefficient handling including, storage,
packaging and transportation problems. Farmers in Ethiopia in general and in Amhara region in
particular are affected by low producer’s price, on one hand, and high consumer’s price, on the
other hand. One of the reasons for this is lack of proper transport facilities and other
infrastructure service.
This type of problems discourages market participation and market supply agricultural
commodity. Major reasons for historically poorly functioning of cereal markets have included a
lack of market information, poor road infrastructure and high transaction costs, and distress sales
and lack of storage by small farmers (Seneshaw et al, 2013). Therefore, this study proposed to
assess all challenges related to household market participation decision and supply of maize
Farmers produce maize but market participation and market supply of maize to the market is
limited. Because of the nature of the product on the one hand and lack of properly functioning
marketing system on the other, often resulted in volatile producers ‘price of maize grown in the
study area mainly for market. Hence, this study attempts to look the whole determinants of maize
market supply in the kebele. This study will be designed to address the prevailing information
gap on market participation, market supply and contribute to proper understanding of the
challenges and assist in developing improved market development strategies to benefit
smallholder farmers.

1.3. Research questions

 What are the factors that influence producers’ market participation decision?
 What factors determine market supply of maize in Debark Woreda?

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1.4. Objectives of the study

1.4.1 General objective

The general objective of the study is to identify determinants of market supply of maize in
Debark Woreda

1.4.2 Specific Objectives

1. To identify factors that affect market participation decision of households.

2. To determine factors affecting the quantity of market supply of maize in Debark Woreda.

1.5. Significance of the study

The study will be generating valuable information on determinants of market supply maize that
will be assist policy makers at various levels to make relevant decisions to intervene in the
development of maize production, and marketing to improve the livelihood of smallholder
farmers through market participation and designing of appropriate policies and strategies. The
findings of the study may also be useful to farmers, government and non-governmental
organization to make their respective decisions. It may also serve as a reference material for
further research on similar topics and other related subjects.

1.6. Scope and limitation of the study

1.6.1. Scope of the study

The study will be conducted in, north Gonder zone Amhara Rigion inDebarkworeda and
important information will be collected from sample households in the study area. The study
emphasizes on market supply of maize that is factors affecting market participation and intensity
of market supply.

1.6.2. Limitation of the study

The study will be restricted to the market supply of maize production in Debarkworeda due to
some constraints while conducting this research. The study has its own limitations; This study
will be conducted only in one district of Debark Woreda because of lack of budget, time and
costs.

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2. LITERATURE REVIEW

2.1. THEORETICAL LITERATURE

2.1.1. Basic Concepts

This section attempts to provide basic concepts of a market, marketing, market participation, and
marketable surplus identifying factors influencing market participation and identifying the
factors affecting the marketable surplus.
Market: The word “market” has many connotations. Bain and Howells (1988; cited in
Muhammed, 2011), define “markets” as a single arrangement in which one thing is exchanged
for another. A market consists of buyers and sellers which facilities to communicate with each
other. It needs not to be specific place (Crammer and Jensen, 1997; cited in Muhammed, 2011)
or spot market. According to Abbot and Makeham (1981; cited in Muhammed, 2011), a market
can be defined as an area in which exchange can take place. Kohl’s and Uhl (1985; cited in
Bosena, 2008) define 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.
Marketing: The term marketing has a variety of meanings. To some shoppers it means
purchasing groceries and all other household needs. From the point of view of farmer or rancher,
it means selling their commodities. From the perspective of handler of the commodity, it means
storing the commodity, transporting the product in to a form that consumers want, shipping it to
retail outlet and promoting its sale (Crammer and Jensen, 1997; cited in Muhammed, 2011).
According to Mendoza (1995; cited in Bosena, 2008), marketing is a system, which comprises
several and usually stable and interrelated structures that along with production, distribution and
consumption, strengthen the economic process. According to Kotler and Armstrong (2004)
defined marketing as a social and managerial process by which individuals and groups obtain
what they want and need through creating and exchanging products and value with others.
Purcell (1979; cited in Muhammed, 2011), forwarded a broader definition i.e. marketing is the
set of economic and behavioral activities that are involved in coordination the various stages of
economic activities from production to consumption.

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Agricultural marketing: Consumers spend a large amount of income on basic foods hence with
the growth of urbanization; the agricultural marketing system is expected to play a great role in
linking the rural and the urban population. Agricultural marketing covers all the activities
associated with the agricultural production and food, feed, and fiber assembly, processing, and
distribution to final consumers, including analysis of consumers’ needs, motivations, and
purchasing and consumption behavior (Branson and Norvell, 1983).
Marketable surplus: is the quantity of the total produce which the producer actually sells in the
market, irrespective of his total personal requirement (Usha, 2013). It is more practical in nature
and refers to that part of the marketable surplus which is actually marketed by the producer, i.e.,
not only the part which is available for disposal but the part which is actually made available to
the market or to the disposal of the non-farm rural and urban population. The term is objective in
nature, because it refers to the marketed amount, i.e., to the actual quantity which enters the
market (Kumar 2007; cited in Parmodet al, 2013). It may be more, less or equal to the
marketable surplus.
Market Participation: Various definitions of market participation have been suggested by
different authors. Some authors consider market participation as any market related activity
which promotes the sale of produce (Key et al., 2000; Holloway &Equip, 2002; Laparet al.,
2002; cited in Geoffrey, 2014). According to Jubilee (2014) market participation is defined as the
exchange of goods and services for money. Market participation can be referred to as
commercialization (Latt&Nieuwoudt, 1988; cited in Muhammed, 2011).
It can also be described as an individual’s or household’s economic transactions with others, in
cash or kind (Von Braun et al., 1991; cited in Muhammed, 2011). Staalet al. (1997, cited in
Geoffrey, 2014) mentioned that a low proportion of products exchanged in the market reflect
limited market participation. With the three possible states of buying, selling or not trading,
(Goetz 1992, cited in Geoffrey, 2014) defines market participation using household purchases
and sales.Volumes of produce traded are used to determine market participation. In an
agricultural market economy, market participation or commercialization occurs mainly when
farmers stop being mostly subsistence farmers and become profit-oriented. Market participation
is in that case defined as earnings from market activities (Makhuraet al., 1997; Makhura, 2001).

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2.1.2. Maize Production in Ethiopia

Maize is one of Ethiopia’s most important cereals in terms of production, with four million tons
produced in 2011 by eight million farmers across two million hectares making it a significant
contributor to Ethiopia’s economic and social development. There is significant market potential
for maize in Ethiopia and eastern Africa. However, once harvested, maize production is
extremely vulnerable to significant post-harvest losses due to mold, vermin and theft. Moreover,
only a small fraction of the eight million farmers use hybrid maize seed.
As farms become more productive, the wages earned by those who work in agriculture increases.
At the same time, food prices decrease and food supplies become more stable. Laborers therefore
have more money to spend on food as well as other products… However, it is not only the
people employed in agriculture who benefit from increases in agricultural productivity. Those
employed in other sectors also enjoy lower food prices and a more stable food supply. Their
wages may also increase. Agricultural productivity is becoming increasingly important as the
world population continues to grow a productive farm is one that provides most of the resources
necessary for the farmer's family to live, such as food, etc. It is a farm which ensures food
security as well as a way to sustain the well-being of a community (Tsha, 2015).

2.1.3. Maze Marketing in Ethiopia

Agricultural markets continue to be seen as the means for ensuring that smallholder farmers are
effectively integrated into the mainstream of national economies, especially in Ethiopia, Obi et
al., (2011). Markets provide the opportunity for farm production to contribute to poverty
reduction through the cash income realized from sales of farm produce (Minot and Hill, 2007).
According to Siziba et al. (2011), reported on cereal market participation by Sub Saharan Africa
smallholder farmer that household size, experience, cultivated land, animal manure, price
information, road net and ICT significantly influenced market participation whereas membership
in cooperative, radio, livestock owned, off farm income, extension training, research
participation, price information, average market distance, credit amount and ICT significantly
determined level of participation.

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In Ethiopia, participation of smallholder farmers to the maize market has long been considered
an important part of the agrarian transformation of low income economies and a means of
ensuring food security, enhanced nutrition, and enhanced incomes, Eleni, (2009). This is because
the majority of her populations live in rural areas where agriculture typically constitutes 50–90%
of the total household income contributed mostly by maize production.
Despite the importance of maize market in agrarian transformation, smallholder’s farmers,
especially in Ethiopia, have encountered several challenges in participating to markets (Minot
and Hill, 2007; URT, 2008; Tilburg and Schalkwyk, 2011). However, this was less of a problem
in the era of the marketing boards, when a parastatal organization the marketing board–tended to
provide essential output market services such as collection of the harvest, quality assessment,
buying and storage (Jayne et al., 2006; Barrett, 2007).
Generally, market facilities are important aspects for the development of the agricultural sector
and poverty reduction in rural areas. Availability of markets for agricultural products is
important in stimulating agricultural production. Availability of improved markets facilities in
the market also ensure better producer prices for farmers. URT (2010) argue that improvement
and construction of rural roads and market infrastructure are important for efficient inputs and
output marketing. Investment in facilities is also important for attracting private investment in
agricultural

2.2 Approaches to the Study of Agricultural Marketing

Different circumstances involved in the demand and supply of agricultural products, and the
unique product characteristics, require a different approach for analyzing agricultural marketing
problems (Johan, 1988; cited in Ayelech, 2011). The major and most commonly used approaches
are functional, institutional and commodity approaches.

2.2.1. Functional Approach

One approach to study marketing is to break up the whole marketing process into functions -
specialized activities performed in accomplishing the marketing process (Kohl’s and Uhl, 1985;
cited in Ashenafi, 2010). Regardless of how the marketing system is organized, the economic
functions necessary for the production of form, time, and place utilities must be performed. The

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efficiency with which the various economic functions are performed is important (Andargachew,
1990). The approach helps to evaluate marketing costs for similar marketing middlemen and/or
different commodities and costs and benefits of marketing functions (Kohl’s and Uhl, 1985; cited
in Ashenafi, 2010).
The approach promotes careful identification of corrective measures as it pays special attention
to particular functions. At the same time, it has drawbacks as the improvement measures
formulated in isolation may not necessarily fit very well into the rest of the marketing system
(Kohl’s and Uhl, 1985; Purcell, 1979; cited in Ashenafi, 2010). Since the focus on the functions
performed usually leads to consideration of institutions and a particular commodity, the
functional approach provides the skeletal framework for a more encompassing approach to the
study of marketing problems. Most contemporary marketing texts follow to varying degrees’
functional approach.

2.2.2. Institutional Approach

The institutional approach to the studies on agricultural marketing problems pays attention to the
nature and characteristics of the various middlemen and related agencies and organization of
marketing machinery (Kohl’s and Uhl, 1985; cited in Ashenafi, 2010). 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, cited in Bosena, 2008). The human element
receives primary emphasis in this approach.
There can be no change and no adjustment without action by the institutions. But emphasis on
mere institutions is not sufficient. In the final analysis, it will be the interactions along the
marketing continuum from producer to consumer that determines the degree of co-ordination and
total system efficiency achieved. Neither detailed descriptions of the institutions involved, nor in
depth analysis of the actions of the institutions will contribute in any significant way toward
increased efficiency in marketing unless the focus of attention is extended to include the inter-
stage actions and interactions.

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2.2.3. Commodity

In a commodity approach, a specific commodity or groups of commodities are taken and the
functions and institutions involved in the marketing process are analyzed (Kohl’s and Uhl, 1985;
cited in Ashenafi; 2010). This approach is said to be the most practical as it helps to pin point the
specific marketing problems of each commodity as well as improvement measures. The
approach follows the commodity along the path between producer and consumer and is
concerned with describing what is done and how the commodity could be handled more
efficiently.

2.3. Empirical literature review

A number of studies pointed out factors that centrally affect marketable supply of agricultural
commodities. For example, Musahet al. (2014), reported on market participation of smallholder
maize farmers in upper west region of Ghana indicated that age of household head, education
status of household head, household size, farm size, off farm income, output produced, access to
credit and market information were the significant factors which affect market participation
decision.
The recent study that was conducted by Habtamu (2015) identified the major factors that
influence the level of market participation of potato in Hadiya zone of Ethiopia. In this study the
researcher employed Heckman Two-Stage model and came up with the finding that sex,
education, total annual potato harvest, district, oxen owned by farmers and livestock owned by
farmers influenced the level of potato market participation positively but access to extension
service influence the level of potato market participation negatively.
Agete (2014) study factors influencing participation of smallholder farmers in red bean
marketing in Halaba special district. The results showed that out of the fifteen variables
hypothesized to influence red bean farmers‟ market participation decision, nine were statistically
significant. The factors that significantly and positively influenced the likelihood of farmers
participating in the red bean market were price, ownership of means of transport, number of
extension visits per year, quantity of red bean produced, awareness about quality standards,
market information, access to credit and family size. The result indicated that increase in the
values of the variables also increased market participation decision of red bean farmers.

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 Solomon et al. (2015) the study conducted on barley value chain in Ethiopia among different
variables hypothesized to determine supply of barley; the econometric result showed that three
variables such as distance to road and region, tropical livestock unitand age of house hold head
significantly affected volume of barley to the market. Tadelemelaku et a l(2016)

2.4. Conceptual Framework of Market Participation and Marketed

Market participation of smallholder farmers is affected by numerous factors such as,

demographic factors, service and information access factors, socio-economic factor and the
natural disasters and calamities also affect market participation. These factors will be positive or
negative effects, which could either improve or cause a decline in the welfare of the farmers as
illustrated in (figure 1). The main approach is that greater market participation of farmers results
in more commodities being traded and this may lead to more return being obtained by the
farmers. This becomes an incentive to increase production and hence a positive supply response
is achieved.

Source; my formulation Figure 1: Diagrammatic representation of the conceptual framework

Demographic characteristics

 Sex
Socio-economic factor  Family Size
Service and information
 Education
 Quantity of output, access factors
 Age
 non-farm income
 Landholding and  Access to
 Number of livestock extension service,
 Access to credit,
Market participation  Current prices of
output,
 Lagged price,
 Marketing
information, and
 Distance to the
Market supply market

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Improved household income
3. METHODOLOGY

3.1 Description of the Study Area

Debark is a townin northern Ethiopia ,90 kilometer north of gonnder on the highway between
gonder and axsum and in the semen gonder zone of Amhara region .it has alatitude and longitude
of 13 degree 08'N 37'54E and an elevation of 2850meters above sea level.Debark is the coldest
town to semen mountain national park and include 33 kebele. the location of the park
headquarters .rhe 2020 national census reported atotal population for debark town is 32,556 of
whom women 16,356 were men and 16,200 were women(CSA,2010).the climate condion also
Dega and the livelihood of this woreda people are depending on trade,livestock and
manufacture(DTM,2020),techneqese size. The localandmarks in this woreda includes Mikara, an
archeological site showing an uninterrupted chronological range from the Pre-Gonderian through
the Late Gonderianperiods (2005-2010) - an indication of the site's importance both as a long-
lived habitation in the area, and as the westernmost known example of this chronological range.

Demographics

Based on the population progression of 2010 by woreda level obtained from Debark finance
office in debark town, this woreda has a total population of 32,556,of whom 16,356are men and
16,200are women.The majority of the inhabitants practice Ethiopian Orthodox Christianity, with
95% reporting that as their religion, while5% of the population follow Muslim. Agro climatically
the woreda has 24- 26 range of temperature and 1000-1200mm range of annual rain fall most of
the people practiced mixed farming system (CSA, 2014/2015).

Agriculture
A sample record performed by the CSA in 2001 interviewed 1000 farmers in this woreda, who
held an average of 0.85 hectares of land. Of the 9000 hectares of private land surveyed in debark
woreda, 91.76% was under cultivation, 0.68% pasture,5.3% fallow, 0.01% woodland, and 2.25%
was devoted to other uses. For the land under cultivation in this woreda, 82.94% is planted in
cereals, 7.01% in pulses, 0.97% in oilseeds, and 0.42% in vegetables. Eight hectares were

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planted in fruit trees. 80.27% of the farmers both raise crops and livestock, while 17.99% only
grow crops and 1.74% only raise livestock. Land tenure in this woreda is distributed amongst
79.65% owning their land, 18.84% renting, and those holding their land under other forms of
tenure 1.5%.

3.2 Sampling Technique and Sample Size

A multistage sampling technique will be used for the study; where in the first step; Debark
Woreda will be selected purposively to address market supply of maize in the study area, and
due to shortage of time and budget. Then at the second step, one Kebele namely: Mikara kebele
selected by using simple random sampling among the 20Kebeles.
Then Solving sampling formula with 90 percent confidence level will be used to determine
sample respondents.
Solving Formula: n= N__
1+N (E) ²
Where: n = sample size
N = total number of household from mikara kebele
E = margin of error
Numbers of households in Mikara kebele = 837
N = 837 HHs
n= 837_ = 89.3
1+837 (0.1) ²
So, the total sample size of the respondents from the kebele is, 89. But for different reasons such
as limitation of time, finance, and energy I took a sample size of 40 households.
Therefore, the total sample size of the kebele will be 40.
The reasons why we will try to use this sample selection

a) It is simple to calculate
b) Usually this formula used to select small sample size and we also need to select small
samp

3.3 Type, Source and method of data collection

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Both qualitative and quantitative data will be used to collect data from primary and secondary
sources to identify important variable that affect the supply of maize in the study area. To
generate quantitative and qualitative information at household level, household interview survey
will be used by developing open and close ended questionnaires. Thus, primary data will be
obtained from sample respondents using household interview survey method to get firsthand
information about factors that affect market participation decision of households and factors
affecting the quantity of market supply of maize in the study area.
Qualitative data will be gathered through focused group discussion. Secondary data will be
collected from published and unpublished materials related to the subject. It is the main source of
information because it indicates the past and the present market supply of maize information.
The survey will include data on production, market participation, problem, opportunities and
characteristics of maize market.

3.4 Method of Data Analysis

For this study methods of data analysis will be used. The data that will be obtained from primary
source is analyzed by SPSS version 16.0. SPSS will be used to analyze different variables
through descriptive statistics such as frequencies and cross tabulation to generate tabulated
reports, charts; and to analyze factors influencing for house hold food security in the study area.
T-test; and Chi square tests are also used to indicate the significance of continuous and discrete
variables on household food security respectively. Qualitative data will be analyzed by
describing, summarizing and interpreting for further clarity. Descriptive statistic such as
percentage, mean, minimum, maximum, standard deviation, bar charts, table and pie charts will
be used.

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3.4. Variables Definitions and Hypothesis for Market Supply of Maize

Dependent Variable
Market participation decision (MKT PART): it is a dummy participation decision dependent
variable that will be used the logit model (the logistic model or logit model is a statistical model
that is usually taken to apply to a binary dependent variable) estimation procedures because of
logistic distribution nature of data. For the respondents who participate in maize market = 1, and
= 0 for otherwise
Quantity supplied to the market (QUASUP): it is a continuous variable which represents
dependent variable the actual supply of maize by farm household to the market measured in
quintals this determinants of maize by household to market will be used the Tobit model (The
Tobit model is a "Statistical model" proposed by "James Tobin" to describe the relationship
between a non-negative dependent variable) because of censured data. Put households don’t
supply maize take the value zero (0) and put for participants take the actual quantity supply of
maize.
Independent variables
1 Quantity of maize produced (QMP): it is measured in quintals as a continuous variable. High
maize production will be hypothesized to have a positive effect on market participation and
extent of participation as measured by the quantity of maize supply in the market. Wolday (1994)
observed that output of food grains (wheat, teff, and maize) had a positive effect on the quantity
supplied to the market in Ethiopia. In Ghana, Marteyet al. (2012) found that an increase in
production of cassava increased farmers‟ market participation.
2. Farm allocated to maize (FARM): the total land used for maize production is measured in
terms of number of hectares the household owns and it is expected to affect the household level
of maize marketable supply positively EbrahimEsa. (2013) because, a producer who owns a
large area of land for maize production than a producer who own less area of land and under the
same input utilization condition can produce more.
3. Current market price (CMP): current year price is expected to affect the market supply of
maize positively because prices stimulate marketable supply. If the current market prices are low

15
producers store the produce until the price rises after meeting their immediate needs Wolday
Amha (1994). It is measured in birr per quintal
4. Distance to market (MKT DIS): distance to the market is a continuous variable measured in
kilometers from the household residence to the market centers. The closer the residence of the
household to the rural market center, the more is the quantity of marketable supply. The
assumption here is that the closer a household is to the market, the more the household is
motivated to produce maize and supply it to the market Usha.T (2013). Therefore, this variable is
expected to have an inverse relationship with market supply.
5. Market information (MKT INFO): this variable is measured as a dummy variable taking a
value of 1 if the farmer had access to market information and 0 otherwise. It has been
hypothesized to affect market supply of maize positively. Producers that have access to market
information are likely to supply more maize to the market than informed producers. The finding
is consistent with the findings of Astewel (2010) access to market information positively and
significantly affects market participation and quantity supply of rice to the market.
6. Education of household head (EDU HH): it is a dummy variable and refers to the formal
schooling of a respondent during the survey period. Those household heads who had formal
education determines the readiness to accept new ideas and innovations, and easy to get supply,
demand and price information and this enhances farmers’ willingness to produce more and
increase volume of sales Obi Mohammed U (20110). Therefore, formal education willhave
hypothesized to positively influence market participation and market surplus.
7. Family size (FAM SIZE): it is a continuous variable, measured in man equivalent i.e. The
availability of active labor force in the household, which affects farmer's decisions to participate
in market. Since production is the function of labor, availability of labor is assumed to have
positive relation with volume of supply. However, family size is expected to have positive
impact on market participation and volume of sales, but larger family size requires larger
amounts for consumption, reducing marketable surplus. A study by Tobin, J. 1958 found
marketed surplus of buffalo milk to be negatively affected by family size. However, a study
conducted by wolday (1994) showed that household size had significant positive effect on
quantity of teff marketed and negative effect on quantity of maize marketed.

16
8. Age (AGE): it is a continuous variable measured in years. A farmer with longer period of
experience in production was assumed to have a better knowledge than who has a lower
experience in agriculture because through time producers acquire skill about marketing and
supply better than those who are less experienced. It is also assumed that as age increases the
production capacity will decrease and amount produced and marketed supply decrease. Hence,
both inverse and direct relation is assumed to the amount supplied. Eleni Z. (2009).
9. Income from off-farming activity (OFFF INC): it is a dummy variable that show obtained
from non-farming activities by the household head. This income may strength farming activity or
reluctant to produce maize to generate money from barley rather than getting income from non-
farming activities. However, getting income from non- farming activity is assumed to have direct
or inverse relation with market participation and marketable surplus Gebre-medhin B. (2012).
10. Number of livestock owned (TLU): a continuous variable and measured by tropical
livestock unit (tlu). It could be that ownership of livestock is negatively associated with crop
output market participation by offering alternative cash income sources. According to Rehima
(2006) this variable influenced the quantity of supply negatively. This is mainly due to the fact
that farmers with more tlu tend to specialize in livestock production.
11. Sex of household head (SEX): it is a dummy variable; both men and women participate in
production of maize. Male households to have a better tendency than female household to enter
into maize market and volume supply. Literature indicate that female-headed households have
less access to improved technologies, land, and extension services as compared to male headed
households Tufa et al. (2013). Male households have been observed to have a better tendency
than female household to participate in the market and volume of supply.

17
4 Work Plan
Activity November Desember January February March
Problem 
identification
Proposal 
defense
Data 
collection

Data 
analyzing
Interpretatio 
n

Report 
writing

Research
submission
and
presentation 
the out come

5.BUDGETING plan

No Item Unit Amount Unit Total

price

18
1 Pen No 5 20 100

Paper Packet 1 100 100

Stationery Note book No 1 25 25

Ruler No 1 6 6

Binding No 1 25 25

Total 256

2 Communication Telephone three months 250

3 Internet 200

CD No 3 20 60
Others
Copy Paper 60 0.40 24

Total 284

4 Transportation Students(we) N 200 200

5 Contingency 100

6 Total 1006.50

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