Trader-supplier Coordination in the Agrifood Supply Chains in Northern Ethiopia

Abebe Ejigu Alemu, Erik Mathijs, Miet Maertens, Jozef A. Deckers, Kidanemariam Gebregziabher, Hans Baur and Kindeya Gebrehiwot

No 114218, 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland from European Association of Agricultural Economists

Abstract: There exists a huge agrifood potential in Ethiopia. However, the country's agrifood supply chains are underdeveloped to deliver quality supply to traders and supplement household livelihoods from the sector. The key factors that determine the proper functioning of supplier-trader chains were not rigorously investigated, at least in the case study area. This paper aims at examining the key determinants in choosing vertical coordination for agrifood products in Tigray, Northern Ethiopia. Structured questionnaires were administered to 247 traders in 10 towns in Tigray. Probit model was employed to identify the key determinants of vertical coordination. Model results show that market information, product characteristics, firm characteristics, and product quality were found significant factors in determining the adoption of vertical coordination. An interesting finding is that traders tend to vertically coordinate so as to get credit from suppliers. Based on our findings we suggest that strengthening quality assurance and contract enforcement institutions appears to be an important intervention area to improve the agrifood chain in the study area. Moreover, providing financial support to encourage the private sector to operate in agro-processing is among the efforts that need to be focused so that it facilitates the rural development process in the region.

Keywords: Agribusiness (search for similar items in EconPapers)
Pages: 13
Date: 2011
New Economics Papers: this item is included in nep-afr
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae11:114218

DOI: 10.22004/ag.econ.114218

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