ANALYSIS OF AGRICULTURAL INPUT SUPPLY SYSTEM: THE

CASE OF DALE WOREDA, SOUTHERN NATIONS,

NATIONALITIES AND PEOPLES’ REGION

M.Sc. Thesis

KASSU KUBAYO SEKO

August 2009
Haramaya University
ANALYSIS OF AGRICULTURAL INPUT SUPPLY SYSTEM: THE
CASE OF DALE WOREDA, SOUTHERN NATIONS,
NATIONALITIES AND PEOPLES’ REGION

A Thesis Submitted to the Department of Rural Development and

Agricultural Extension, School of Graduate Studies
HARAMAYA UNIVERSITY

In Partial Fulfillment of the Requirements for the Degree of

MASTER OF SCIENCE IN AGRICULTURAL COMMUNICATION
AND INNOVATION

By

Kassu Kubayo Seko

August 2009
Haramaya University
 SCHOOL OF GRADUATE STUDIES

HARAMAYA UNIVERSITY

As Thesis Research advisor, I here by certify that I have read and evaluated this thesis

prepared, under my guidance, by Kassu Kubayo Seko, entitled Analysis of Agricultural

Inputs Supply System: The case of Dale Woreda, Southern Nations, Nationalities &

Peoples’ Region. I recommend that it be submitted as fulfilling the Thesis requirement.

Professor Ranjan S. Karippai (Ph. D.) _______________________ ______________

Major Advisor Signature Date

As members of the Board of Examiners of the Final M. Sc. Thesis Open Defense

Examination, we certify that we have read, evaluated the Thesis prepared by Kassu

Kubayo Seko and examined the candidate. We recommended that the Thesis be accepted

as fulfilling the Thesis requirement for the Degree of Master of Science in Agricultural

Communication and Innovation.

______________________ _________________ _______________

Chairperson Signature Date

______________________ _________________ _______________

Internal Examiner Signature Date

______________________ _________________ _______________

External Examiner Signature Date

ii
 DEDICATION

I dedicate this thesis manuscript to my Mother Bizunesh Tessema, who suffered a

lot to reach me at this level.

iii
 STATEMENT OF AUTHOR

First, I declare that this thesis is my bonafide work and that all sources of materials used
for this thesis have been duly acknowledged. This thesis has been submitted in partial
fulfillment of the requirements of M. Sc. degree at the Haramaya University and is
deposited at the University Library to be made available to borrowers under rules of the
Library. I solemnly declare that this thesis is not submitted to any other institution
anywhere for the award of any academic degree, diploma, or certificate.

Brief quotations from this thesis are allowable without special permission provided that
accurate acknowledgement of source is made. Requests for permission for extended
quotation from or reproduction of this manuscript in whole or in part may be granted by
the head of the major department or the Dean of the School of Graduate Studies when in
his or her judgment the proposed use of the material is in the interests of scholarship. In
all other instances, however, permission must be obtained from the author.

Name: Kassu Kubayo Seko Signature: …………………

Place: Haramaya University, Haramaya
Date of Submission: …………………

iv
 BIOGRAPHICAL SKETCH

Kassu, the author was born on February 14, 1962 in Southern Nations Nationalities and
Peoples’ Region (SNNPR), Gedeo Zone, Dilla town to his mother Bizunesh Tesemma
and his father Kubayo Seko. He attended his elementary education at Dawit elementary
school. He also attended his Junior and High-school education at Dilla Comprehensive
Secondary school. Then joined the then Awassa Junior College of Agriculture and
graduated with Diploma in Plant Sciences and Technology (PST) in November 1985.

Soon after his graduation, he was employed by the Ministry of Agriculture of the then
Sidamo Administrative Region and served for about 13 years. Then he joined the then
Alemaya University in 2000 academic year and graduated with B.Sc. degree in
Agricultural Extension in July, 2002. After that he assigned and has been working in
SNNPR Sidama Zone Agriculture and Rural Development Department. Then after, he re-
joined Haramaya University in 2007 to pursue graduate studies for the M.Sc. in
Agricultural Communication and Innovation. The author is married and has four children.

v
 ACKNOWLEDGMENTS
First and foremost, I want to give my thanks to Almighty God. Then I am really happy to
thank my major advisor, Dr. Ranjan S. Karippai, as without his encouragement and
guidance, the completion of this work may not have been possible. Thus, I am very much
indebted to him for all his support and willingness to advise me on my all efforts to
successfully finalize the thesis.

I am deeply beholden to IPMS/ILRI for giving me the scholarship and covering full
tuition fee and funding my M.Sc. research work. In this connection, my thanks are due to
the SNNPR/ Sidama Zone Rural Development Department for its provision of the
necessary support to let me join postgraduate studies at Haramaya University.

The generous assistance of Dale WARDO and IPMS office staff members allowed me to
conduct data collection smoothly both in the field and in the office.

My special thanks are given to my mother, Bizunesh Tesemma, my wife, Tadelech

Direse, and my children Frezer Kassu, Yared Kassu, Betelihem Kassu and Yididiya
Kassu for their invaluable encouragement throughout the study period. I also appreciate
the assistance of key informants of input/service providers and others for providing me
valuable information during data collection.

My great gratitude goes to my friends, Tirfu Hedeto and Asefa Abraham for their heartly
advice and material support.

My special gratitude goes to enumerators, the members of the sample farm respondents,
and members of focus group discussions for their valuable cooperation during data
collection.

vi
 LIST OF ABBREVIATIONS

ADLI Agricultural Development Led Industrialization

AESE Agricultural Economics Society of Ethiopia
AISCO Agricultural Inputs Supply Corporation
AISE Agricultural Inputs Supply Enterprise
ACRSC Awada Coffee Research Sub Center
BoARD Bureau of Agriculture and Rural Development
CADU Chilalo Agricultural Development Unit
CBD Coffee Berry Disease
CBE Commercial Bank of Ethiopia
CTDA Coffee and Tea Development Authority
CIAT International Center for Tropical Agriculture
CIMMYT International Maize and Wheat Improvement Center
CSA Central Statistics Authority
EARO Ethiopian Agricultural Research Organization
EIAR Ethiopian Institute of Agricultural Research
EMTPs Extension Management Training Plots
ESE Ethiopian Seed Enterprise
ESE-HSSMC Ethiopian Seed Enterprise Hawassa Shallo Seed Multiplication
Company
FDRE Federal Democratic Republic of Ethiopia
FREG Farmers Research Extension Group
GDP Gross Domestic Product
GO Government Organization
HARC Hawassa Agricultural Research Center
HH Household
IBCR Institute of Biodiversity conservation and Research
ICARDA International Center for Agricultural Research in the
Dry Areas
ICRISAT International Crops Research Institute for the Semi- Arid Tropics
ICU Input Coordination Unit
vii
 LIST OF ABBREVIATIONS (Continued)

IPMS Improving Productivity and Market Success of Ethiopian farmers

IITA International Institute of Tropical Agriculture
MFIs Micro Finance Institutions
MoA Ministry of Agriculture
MoARD Ministry of Agriculture and Rural Development
NEIP National Extension Intervention Program
NFIA National Fertilizer Industry Agency
NGO Non Governmental Organization
NSIA National Seed Industry Agency
NSIC National Seed Industry Council
NSIP National Seed Industry policy
NVRC National Variety Release Committee
NYTs National Yield Trials
PADETES Participatory Demonstration and Training Extension System
PAs Peasant Associations
RCBP Rural Capacity Building Project
REFLAC Research Extension Farmers Linkage Advisory Council
RFF Rural Finance Fund
SG-2000 Sasakawa Global 2000
SECCU Sidama Elto Cooperative Crop Union
SZARDD Sidama Zone Agriculture and Rural Development Department
SMSs Subject Matter Specialists
SSA Sub Saharan Africa
TGE Transitional Government of Ethiopia
TOT Training OF Trainers
WARDO Woreda Agriculture and Rural Development Office

viii
 TABLE OF CONTENTS

STATEMENT OF AUTHOR iv 

BIOGRAPHICAL SKETCH v 

ACKNOWLEDGMENTS vi 

LIST OF ABBREVIATIONS vii 

TABLE OF CONTENTS ix 

LIST OF TABLES xii 

LIST OF FIGURES xiii 

LIST OF TABLES IN THE APPENDIX xiv 

LIST OF FIGURES IN THE APPENDIX xv 

ABSTRACT xvi 

1. INTRODUCTION 1 

1.1. Background 1 
1.2. Statement of the problem 5 
1.3. Objectives of the study 6 
1.4. Research questions 7 
1.5 Significance of the Study 7 
1.6 Scope and limitation of the study 7 

2. REVIEW OF LITERATURE 9 
2.1 Innovation 9 
2.1.1 Concept and definition 9 
2.1.2 Types of innovation 10 
2.2 Actors Mapping, Linkage and Knowledge Flow 10

ix
 TABLE OF CONTENTS (Continued)

2.3 Agricultural Services and Service Systems 13 

2.4 Seeds as Agricultural Resource Base 16 
2.5 The Ethiopian Government Agricultural Policy 17 
2.5.1Input sector reform and emerging market structure 18 
2.5.1.2 The seed sub –sector 18 
2.5.1.1 The fertilizer sub- sector 20 
2.5.1.3 Agricultural input credit 21 
2.6 Conceptual Frame Work of the Study 22 

3. METHODOLOGY 25 
3.1. Description of the Study Area 25 
3.2 Sampling Techniques 29 
3.3 Method of Data Collection 31 
3.4 Method of Data Dnalysis 32 
3.5 Definition of Variables and Working Hypotheses 34 
3.5.1 Dependent variable 34 
3.5.2 Independent variables 35 

4. RESULT AND DISCUSSION 38 

4.1 Actors Mapping, Linkage and Knowledge Flow within the System 38 
4.1.1 Actors mapping 38 
4.1.2 Linkage 43 
4.1.2.1 Linkage of actors with farmers in the project area 44 
4.1.2.2 Linkage among actors in the input demand-supply system 45 
4.1.3 Knowledge flow 48 
4.1.4 Constraints of input demand-supply system 51 
4.2 Major factors that influence the smooth functioning of the system 55 
4.2.1 From Input/ service providers perspective 56 
4.2.2 From farmers/users point of view 56 

x
 TABLE OF CONTENTS (Continued)

4.2.3 Descriptions of personal, socio-economic, situational, and organizational

and institutional characteristics of sample respondents 60 
4.2.3.1. Descriptions of personal characteristics of the sample respondents 60 
4.2.3.2. Descriptions of socio-economic characteristics of the sample
respondents 62 
4.2.3.3 Descriptions of situational characteristics of the sample respondents 65 
4.2.3.4 Distribution of sample respondents based on organizational and
institutional factors 66 
4.2.4 Relationship between dependent and independent variables 68 
4.2.5 Multiple Linear Regression Analysis 69 
4.3 Policy and Institutional Environment for Agricultural Input Demand-Supply
System 72 
4.3.1 Institutional arrangements 73 
4.3.2 Seed systems and policy 73 
4.3.3 Fertilizer and credit policy 77 

5. SUMMARY, CONCLUSION AND RECOMMENDATIONS 81 

5.1 Summary 81 
5.2 Conclusion and Recommendations 83 

6. REFERENCES 85 

7. APPENDICES 91 

xi
 LIST OF TABLES

Table Page

1. Types of major crops grown and coverage in ha ......................................................... 27 

2. Distribution of sampled respondents by PAs in the study area, Dale woreda, ............ 29 
3. Actor’s linkage matrix in Input demand-supply system .............................................. 47 
4. Matrix of sources of knowledge/information delivered to each actor ......................... 49 
5. Frequency of knowledge flow within the system ........................................................ 50 
6. Constraints of farmers in agricultural input/ service delivery ..................................... 53 
7. Influential factors of input demand- supply index from farmers perspectives ............ 57 
8. Distribution of sample respondents based on their personal characteristics................ 61 
9. Distribution of sample respondents based on their socio-economic characteristics .... 63 
10.Distribution of sample respondents based on their situational characteristics ............ 65 
11.Distribution of sample respondents based on their organizational and institutional
factors ......................................................................................................................... 67 
12.Relationship between dependent and discrete/ categorical independent variables ...... 68 
13.Relationship between dependent and continuous independent variables .................... 69 
14.Relationship between dependent and dummy independent variables.......................... 69 
15.Coefficients of regression function .............................................................................. 71 

xii
 LIST OF FIGURES

Figure Page

1. Conceptual framework of the input demand-supply index .......................................... 24

2. Location of the study area ............................................................................................ 28
3. Sampling procedure of the study ................................................................................. 30
4. Actors’ linkage map developed by FGD and key informants...................................... 45
5. Position of actors drown to show their closeness to farmers in knowledge flow ........ 51

xiii
 LIST OF TABLES IN THE APPENDIX

Appendix Table Page

1.Input demand –supply data of the study area............................................................... 104 

2.Prioritization of the crops in terms of high level of constraints in input supply
system………………………………………………………………………………105 
3.Demand and Supply for seed during the 2005 agricultural season .............................. 105 
4.Hybrid maize seed production by company................................................................. 105 
5.Respondents alternative measures for high cost of inputs ........................................... 105 
6.Identified actors and their role in input demand- supply system of the study area ..... 106 
7.Descriptions of independent variables ......................................................................... 107 
8.Variance inflation factor (VIF) for continuous independent variables ........................ 107 
9.Conversion factor used to compute man equivalent .................................................... 108 
10.Contingency coefficient test for discrete/categorical/dummy variables ................... 108 
11.Coefficient of regression function ............................................................................. 109 
12.ANOVA of the regression function ........................................................................... 109 

xiv
 LIST OF FIGURES IN THE APPENDIX

Appendix Figure Page

1. Map of agricultural input – supply system ................................................................ 110 

xv
ANALYSIS OF AGRICULTURAL INPUT SUPPLY SYSTEM: THE CASE OF DALE
WOREDA, SOUTHERN NATIONS, NATIONALITIES AND PEOPLES’ REGION

ABSTRACT

The farming sub-sector of Ethiopia is characterized by traditional rainfed and low techniques
of production and thus, is prone to the recurrent natural calamity of drought, which leaves
famine and death in its wake. Today, farmers in Ethiopia have difficulties in feeding their
households on their increasingly fragmenting land, using traditional and backward
techniques of production. Hence the drastic need to improve agricultural productivity and
production through the adoption and adaptation of improved agricultural technologies and
techniques is apparent. For modernize agriculture, a strong support system involving input
supplies and other services like marketing, transport, storage, processing etc. are inevitable.
This study is intended to analyze the agricultural input demand –supply system of the study
area; to map the actors and their linkages, knowledge and information flows, to identify
influential factors for the smooth functioning of the system and to explore the influence of
policy in providing an enabling environment in relation to the input demand-supply system in
Dale Woreda, Sidama Zone, SNNPR. Three stages sampling were used in which both non-
random sampling and random sampling procedures were followed to select four Peasant
Associations and 200 respondents. Structured interview schedule and questionnaires were
used for collecting the essential quantitative and qualitative data from the sampled
respondents and input suppliers respectively. To generate qualitative data, field
observations; informal interview with key informants; and discussions with separate focus
groups were conducted. The quantitative data were analyzed using descriptive statistical
tools chi-square test, Cramer’s V, Pearson and Spearman’s rho Correlation coefficient, and
Multiple Linear Regressions from inferential statistics. The major output of the study
indicates that the system is highly characterized by relatively poor linkage and inefficient
knowledge flow between actors and farmers in the study area. Moreover, input demand-
supply index was significantly influenced by household head age, active labor force of the
family, access to market, extension contact and type of road used. In addition to this, from
the supply sector factors like organizational mandatory clarity, sufficient and irrigable seed
farm, skilled man power, delay of temporary loan settlement by users, policy environment,
storage facilities at grass root level, efficient marketing system, timely demand claims from
users, clearly defined role and responsibilities of each partner, availability of improved seeds
in terms of their germination, viability and adaptability, research centers cooperation and
willingness to share resources including knowledge, farmers willingness to take risks and
demand for improved crop varieties were some of mentioned factors that influence the system
positively and/or negatively. As to the enabling policy environment, pitfalls identified were;
inflexibility of rules and regulations, lack of strong quarantine measures on imported seeds
and prolonged time given for variety release and registration were amongst all. Therefore, it
is recommended that, the existing extension service should be strengthened in a way that
working in harmony with relevant actors to bring about change for efficient and effective
delivery of agricultural inputs/services. Likewise, policy should account the flexibility of
rules on credit provision and organization of small farmers groups in addressing resource
poor farmers to ensure food self sufficiency of rural community in particular and the nation
at large.

xvi
 1. INTRODUCTION

1.1. Background

In Ethiopia, 84% of the estimated 78 million people live in rural areas and depend on
agriculture for their livelihoods. The sector contributes 41.4% of the GDP of the country.
The average cereal yields are low at 1244kg/ha (World Bank, 2006).

Despite the importance of agriculture in its economy, Ethiopia has been a food deficit
country since the early 1970s. A close look at the performance of the Ethiopian
agriculture reveals that over the last three decades it has been unable to produce sufficient
quantity to feed the country’s rapidly growing human population. Even worse, the
country has experienced recurrent droughts that claimed the lives of several thousands of
people. It is note worthy that food aid has been accounting for a significant proportion of
the total food supply in the country. For instance, Ethiopia received 726,640 metric tons
of food aid yearly over the 1985-2000 periods (FDRE, 2002). This is equal to about 10%
of the national food grain production.

The farming sub-sector of Ethiopia is characterized by traditional rainfed and low

productive techniques of production and thus, is prone to the recurrent natural calamity of
drought, which leaves famine and death in its wake. Today farmers in Ethiopia have
difficulties in feeding their households on their increasingly fragmenting land, using
traditional and backward techniques of production. Hence, the drastic need to improve
agricultural productivity and production through the adoption and adaptation of improved
agricultural technologies and techniques is apparent. This places a lot of responsibilities
on agricultural support services like agricultural research and extension (AESE, 2005).

The national strategy chimes with a widely held view that poverty reduction in Ethiopia
is impossible without significant growth in crop yields for major staples, and this requires
improving farmers’ access to fertiliser, improved seeds, agricultural credit and other
inputs. However, this view is not new. Indeed, it has dominated development thinking for
the past four decades, and some developing countries have implemented it with some
success, as part of a ‘green revolution’. Previous Ethiopian governments have also toyed
with the idea and have selectively implemented this strategy in the 1960s and 70s as part
of major package programmes, although there was very little to show for it. But, no
government in the country’s history has given much emphasis on this strategy as the
current one. Not only has it accorded priority to the agriculture sector, it has made
agricultural development the centrepiece of its overall development strategy.

The Agriculture Development Led Industrialization strategy (ADLI) was officially

formulated and inaugurated during the 1995 elections and continues to be the country’s
development strategy for the next five years. In fact, even before the strategy was
officially launched, a massive extension program to diffuse agricultural technology
(particularly fertilizers and improved seeds) was started as early as 1993/94 under the
transitional government (EEA, 2002).

In 1993, Sasakawa Global 2000 (SG-2000), a nongovernmental organization introduced a

new system of extension intervention aimed at increasing productivity and production of
small holder farmers through an aggressive technology (mainly improved seeds and
fertilizer) transfer program, and strengthening the linkage between the research and
extension in order to streamline the process of technology generation and dissemination
(SG-2000, 2002).

In order to implement the program, SG- 2000 used Participatory Demonstration and
Training Extension System (PADETES), which involves the establishment of Extension
Management Training Plots (EMTPs) usually half hectare on-farm and farmer managed
demonstration plots established to train farmers as well extension workers on proper farm
management practices. The EMTPs used improved seed varieties with their proper
agronomic practices, utilized the credit made available for the purchase of agricultural
inputs (mostly fertilizer), trained grass-root level development agents and farmers. The
program provided facilities and incentives for outstanding farmers who used the package
(Ibid).

2
In 1995, the then Transitional Government of Ethiopia (TGE), pleased with SG-2000’s
performance, launched a similar extension intervention program called the National
Extension Intervention Program (NEIP) and adopted PADETES/EMPTs as its
implementation instrument. NEIP took over and expanded SG-2000’s operations. NEIP is
considered as an instrument of the Agricultural Development Led Industrialization
Strategy (ADLI). Though ADLI is a strategy for Ethiopia’s overall economic
development, with regard to agriculture, it has aimed at improving agriculture production
and productivity and thus living standards of the rural population by demonstrating to and
training participating farmers and development agents on improved cultivation practices
and enhancing increased use of improved technologies (MEDaC, 1999).

The Ministry of Agriculture was not only responsible for conducting adaptive research
and transfer of technology, but also played a key role in provision of inputs, particularly
fertilizers and pesticides. The agricultural input supply enterprise (former AISCO, now
AISE has the primary responsibility of input supply (fertilizers, pesticides, seeds and
credit) for the peasant sector. AISE operates under the MOA and collates demands,
arranges the importation and distribution of inputs with strong emphasis on fertilizers and
pesticides. AISCO managed over 600 distribution centers throughout the country
although little has been achieved in certified seed marketing and distribution (Zewde,
2004).

A necessary and integral part of the technology introduction services is the provision of
improved inputs/services such as seeds, seedlings, agro chemicals, drugs, veterinary
services, heifers, artificial insemination, credit, production and processing tools. Most of
these inputs were supplied through the agricultural offices linked to the package. While
this has contributed to the development of agriculture, several sources indicate that
improved inputs/services are usually in short supply and delivery is often untimely.
Government policy is now stimulating diversification of input/service provision,
involving private sector (Gebremedhin et al., 2006).

3
Extension service focused in Ethiopia until about 2002 was focused on increasing
production and productivity in view of achieving food security (Mathewos and
Chandaragi, 2003). However, it had become apparent around 1996 that without
integrating farmers in to the market, sustained growth in the agriculture sector would not
be realized. Perhaps as a result, the government policy on agricultural development has
recently started to emphasize the transformation of subsistence agriculture into market
orientation as a basis for long term development of the agricultural sector (Berhanu et al.,
2006).

Imbalance between the population growth rate and the agricultural production growth
rate is one of the pronounced national problems in Ethiopia. Low-level productivity, due
to low level of improved technologies utilization and high risk due to adverse
environment are among the most frequently mentioned major causes of the country’s
chronic food security problem. In order to meet the food requirements of the growing
population, food grains and other agricultural products have to be increased. The
immediate available means to attain the national goal of food self-sufficiency is
improving productivity through improved technologies. Improved seeds, fertilizer,
farming tools, pesticides etc. are some of the major productivity enhancing inputs (Ibid).

In the study area (Dale woreda), most farmers are growing coffee as the main source of
income. Maize and haricot bean are cultivated mainly for alternative food source and
market sale.

Moreover, farmers are experienced in using agricultural inputs through Woreda

Agriculture and Rural Development Office (WARDO). Actors involved in delivering
agricultural inputs are Sidama Elto Union, ESE Shallo branch; private farmers who
engaged on haricot bean seed and improved coffee seedling multiplication are amongst
all. There are also actors who are involved on facilitation of inputs by providing credit to
the farmers like Rural Development Finance Fund and Commercial Bank of Ethiopia.
One way or the other, WARDO, Awada coffee research sub center and IPMS are also

4
playing important role in providing agricultural knowledge related to the above
mentioned crop technologies.

The WARDO, in its strategic plan, has indicated to increase the productivity of these
crops by reasonable figure. But the average productivity of coffee, haricot bean and
maize do not exceeded from 5, 4, 20 quintals/ha, respectively, due to poor supply of the
inputs. This shows how the production is low and needs attention for further investigation
regarding their use of inputs and related services, such as seeds, fertilizer, credit, etc.

Therefore, this study is made to provide information on actors involved in the system,
their linkage and knowledge flow in input delivery, the influential factors for the smooth
functioning of the system and the influence of enabling policy environment towards input
demand-supply system by giving special emphasis on coffee, haricot bean and maize
crops in the study area. The study also provides research, extension, development
institutions and policy makers with valuable information that assists in improving the
efficiency of communication among them.

1.2. Statement of the problem

Majority of Ethiopian farmers have been using traditional way of agricultural practices.
This has contributed for low productivity of the agricultural sector. To solve these
problems, governmental and non-governmental organizations have made efforts to bring
about change in agricultural production system of peasant farmers. They have introduced
improved agricultural technologies like fertilizers, high yielding varieties of seeds,
pesticides, farm tools, etc. As a result, farmers who participated in the extension package
program showed relative change in the style of their production process.

To increase production and productivity, the collective interaction of actors in the sector
is a must. Agricultural input suppliers are one of the actors that are responsible to deliver
according to the demand of the farmers.

5
However, due to the growing demands of the farmers in the study area, for improved
agricultural inputs, the supply sector could not satisfy the needs of the farmers. This
indicates that there are different factors directly or indirectly influencing the input supply
system that believed to boost up production and productivity of the smallholder farmers.
But the reasons why input-supplying system failed to satisfy the needs of the farmers is
not analyzed so far in the study area. Therefore, this study focused on identification of
actors, their linkage and knowledge flow among actors in enhancing crop production and
productivity, influential factors of the system and the enabling policy environment of
agricultural inputs demand-supply system by giving special emphasis on coffee, haricot
bean and maize technologies. Hence it attempts to fill the existing gap of knowledge
regarding the input supply system.

1.3. Objectives of the study

The general objective of the study is to identify the constraints and strengths of input-
demand supply system of the selected crops in the study area.

™ The specific objectives of the study are:

• to map the actors and their linkages, knowledge and information flows in the
input demand-supply system;

• to identify influential factors for the smooth functioning of input demand-supply

system; and

• to explore the influence of policy in providing an enabling environment in relation

to the input demand-supply system

6
1.4. Research questions

• Who are the actors, the status of linkage and how knowledge flow works within
the system?

• What are the influential factors for the smooth functioning of input demand-
supply system?

• What is the influence of policy in providing an enabling environment to the

system?

1.5 Significance of the Study

To enhance production and productivity of small scale farmers, efficient and effective
input/service delivery system should be on practice. To ensure this goal, relevant actors
within the system should play role for effective linkage and policy implementation as to
bring about change on peasant sector.

The result of this study will help to identify actors involved in input/service delivery,
their role, linkage and knowledge flow within the system and influential factors that
hamper the smooth functioning. More over it will also help to identify policy issues that
influence the system and make some corrective measures to benefit end users. The
findings of this study can also be used in guiding policy makers and development
planners who are concerned about input/service provision in the region and elsewhere in
the country.

1.6 Scope and limitation of the study

This study was undertaken in one woreda, namely Dale which is in the SNNPR. Since the
study was limited by time, finance and human resources, there could have been some bias
in the information obtained about the supply system of improved agricultural inputs
related to coffee, haricot bean and maize crops.

7
Given the diversity of the Ethiopian population in terms of religion, ethnicity, agro-
ecological climate, the communities selected are not representative of all the people in
Ethiopia. As such, the research does not claim to provide conclusive findings on
agricultural input demand-supply system. However, the research findings could be used
to raise awareness among different stakeholders and also serve as background
information for others who seek to do further related researches and would help serve in
formulating and revising the system towards benefiting the farmers in the study area in
particular and the region in general.

8
 2. REVIEW OF LITERATURE

2.1 Innovation

2.1.1 Concept and definition

According to Gardner et al., (2007), innovation encompasses the entire process, from
idea to implementation, of the development of new products, services, methods,
management practices and policies. The word “innovation” is often used as synonymous
with the outcome of the process, but should not confuse with “invention”.

Spielman (2005) succinctly defines an innovation system as “a network of agents, along

with the institutions, organizations, and policies that condition their behavior and
performance with respect to generating, exchanging, and utilizing knowledge.”

Moreover, an innovation system can be defined as a network of organizations,

enterprises, and individuals focused on bringing new products, new processes, and new
forms of organization into economic use, together with the institutions and policies that
affect their behavior and performance. The innovation systems concept embraces not
only the science suppliers but the totality and interaction of actors involved in innovation
(World Bank, 2004).

Then innovation as a process is linked to learning processes and to the information and
knowledge management capability that the agents and actors have different motivations
and confront different challenges (Barbier, 2003).

According to Spielman et al. (2008), innovation agent is someone who introduces or uses
such knowledge a process that entails seeking information from various sources and
integrating elements of the information into social or economic practices that somehow
change the behaviors and practices of individuals, organizations, or society.

9
Thus, innovation occurs when someone uses an invention- or uses existing tools in a new
way- to change how the world works, how people organize themselves, and how they
conduct their lives (Fagerberg, 2004).

2.1.2 Types of innovation

Fagerberg (2004) identified a variety of innovation classifications and some of them are:
i/ Organizational innovation – involves the creation or alteration of business structures,
practices, and models, and may therefore include process, marketing and business model
innovation.

ii/ Process innovation- involves the implementation of a new or significantly improved

production or delivery method.

iii/ Product innovation – involves the introduction of a new good or service that is new or
substantially improved. This might include improvements in functional characteristics,
technical abilities, ease of use, or any other dimension.

vi/ Service innovation – refers to service product innovation which might be, compared to
goods product innovation or process innovation, relatively less involving technological
advance but more interactive and information-intensive.

2.2 Actors Mapping, Linkage and Knowledge Flow

Actors mapping

The purpose of this subsection is to provide information on how actors are functioning
within the system- main actors and organizations in the sector with the specific roles they
play; extent of linkage between actors and organizations and the nature of these linkages
for supporting interaction; level of coordination, and identification any missing actor or
role in input demand- supply system.

10
Linkage

Generation of technology is not an end by itself. It must be utilized by end users. This can
be realized through the presence of effective linkage among the major stakeholders in the
agriculture, agricultural knowledge and information system. Linkages between major
institutional actors in agricultural knowledge and information system are widely
recognized as essential for an effective flow of technology and information between
research, extension and farmers. The types and nature of linkage between actors within
the agricultural knowledge and information system directly influence the production and
productivity of small holder farmers. It is commonly recognized by agricultural
knowledge and information system stakeholders that poor performance of the system is
often related to linkage problems (Akalu and Enyew, 2006).

According to Hagmann et al., (2002), linkages between service providers in to service

delivery system are critical to ‘make the system work as a system’. The different roles
and mandates of service providers need to be clarified and even more important; they
need to ‘learn to play the roles’ and work together in synergistic way towards making a
difference.

Hence, to map the interactions thereby learning among the actors in the service delivery
system, tools for diagnosis and institutional change in agricultural innovation systems are
adopted (Hall et al., 2007).

Knowledge

Knowledge can be understood as both information and skills that are acquired through
individual experience and trial and error, within an organization or a learning community,
or from outsiders adapting it to local contexts. Knowledge that rural and farming
communities are typically interested in includes cultural management practices; new
agricultural technologies; diagnostic information about plant and animal disease and soil
related problems; market information on inputs and sales(prices, seller, buyers, retailers);
market demand and quality of products required for these markets; and land records and
government policies. The concerted efforts and practices used by organizations and

11
individuals to identify, create, accumulate, re-use, apply and distribute knowledge are
commonly labeled knowledge management (Hartwich, et al., 2007).

According to Paul and Engel(1997), knowledge is not simply that is possessed and
accumulated, it emerges out of process of social interaction and should be looked at in
terms of social relationships. What people know and how they go about learning is
intrinsically woven in to their life as social beings. Knowledge emerges as a result of
social efforts to come to grips with the demands, the social and physical environments in
which individuals and groups are immersed and said about knowledge that to know is to
act effectively. Knowledge includes the ideas, concepts routines and skills people acquire
over time to support their livelihood.

Since knowledge is dynamic, it is constantly produced and reproduced, shaped and

reshaped and yields many types of knowledge, differentiated within and between
localities (Mango, 2002).

According to Joshi et al., (2004) knowledge continuously evolves as farmers learn both
by evaluating the outcome of previous actions and by observing the environment. This
means that knowledge that enters a locality is not simply internalized, but becomes
transformed by various actors to suit their circumstances.

The important questions need to be answered in the knowledge/information network

analysis are what types of knowledge/information are important for the successful
performance of the system? Who are the source user of these types of knowledge and
information? Who or what are the intermediaries- the actors, printed materials or other
media that move knowledge and information among actors? How effective are the
existing communication networks in linking relevant sources, intermediaries and users of
knowledge and information (Salomon and Engel, 1997).

12
2.3 Agricultural Services and Service Systems

Services to the agricultural sector are extra ordinarily heterogeneous, ranging from
agricultural extension to legal counseling on land tenure issue. According to Helmut
(2000), as cited by Anteneh, (2008), typical services to the agricultural sector include:
agricultural research, agricultural extension and information services; education and
training; rural financing (e.g. saving, credit) and insurance marketing of agricultural
products and market promotion; input delivery services for plant production (e.g. seed,
fertilizer, pesticides, irrigation water, machines/tools) and animal production (e.g. genetic
material, forage, veterinary products, drinking water, machines/tools); regulatory services
often provided by governments (e.g. certification of seeds and bio-products, quality
control of agricultural products, regulations of water rights etc.) and technical support
services i.e. all activities related to the provision of the technical and social infrastructure
for agriculture (e.g. transport, supply of fuel and spare parts, planning of resettlement
schemes etc.).

Systems theory or systems science argues that however complex or diverse the world is
that we experience, we will always find different types of organization in it, and that such
types of organization can be described by concepts and principles which are independent
from the specific domain under consideration. Hence, if we could uncover the general
laws, we would be able to analyze and solve problems in any domain, and pertaining to
any type of system. The systems approach is distinguished from the more traditional
analytic approach in its emphasis on the interactions and relationships between the
different components of a system. Although the systems approach in principle considers
all types of systems, in practice it focuses on the more complex, adaptive, self-regulating
systems which can be termed “cybernetics”(Görlitz, 1989).

In systems theory, reality is seen as a complex pattern of various relationships between

different elements. A system which can be defined as a simplified reproduction of a part
of reality is composed of elements with attributes, i.e. their perceived characteristics,
and describes the specific relationships between them and their boundaries. What is

13
regarded as a system (i.e., which elements and relationships are selected to form a
system) depends on the perspective and the specific objectives (e.g. small-scale farmer
obtaining access to agricultural inputs, private research institutions advising commercial
farmers, government institutions privatizing extension services, development
organization designed to improve the agricultural services in a specific region). The
systems, or holistic, approach is useful when seeking to analyze and understand better the
complexity of service systems (Doppler and Calatrava, 2000). In the context of services
to the agricultural sector, five important aspects can be identified:

• Type of service: this comprises the key features (technical

aspects, economic characteristics, quality aspects, effects) of an individual
service such as agricultural extension, research, etc.
• Actors of the service system: this aspect includes the provider sub-system
(service supply) and the client sub-system (use of service).
• Functional relationships of the service system: this includes the
components of service provision ( financing, delivery, assurance), the
interaction of and between actors and services, and the governance of services
(mode and mechanisms).
• Level and scope of the service system: this includes the micro-level
(farm- household), meso-level (region or district) and macro-level (national) as
well as the regional range of the service system.
• Frame conditions of the service system: this includes the
technological (service infrastructure) and ecological conditions in the region
in which the service system is operating, as well as the political, economic and
socio-cultural conditions influencing or being influenced by the system.

Each of the above mentioned aspects can be further differentiated and analyzed in the
context of sub-systems. Numerous possibilities of classifying agricultural services in a
system context exist, with the emphasis shifting away from a simple technical
interpretation to the processes and functional relationships of the service system itself.

14
Adopting a systems perspective, agricultural services can be categorized as follows
(Ibid):

• Services for the application and management of agricultural inputs, such

as water (irrigation), veterinary products (veterinary services), machines
and tools (mechanization), pesticides (plant protection), etc.
• Services for the acquisition and management of agricultural production
factors, such as land (e.g. Provision of land) and labor (e.g. hired labor).
• Services for post-production systems: these include all services related to
operations, from the harvesting of agricultural products to consumption (e.g.
processing, transport, storage, etc.), including the respective actors and all
influencing factors and framework conditions (often referred to as “post-harvest
systems”).
• Supply-chain services: these include all services related to the
production and postproduction of a specific commodity (e.g. cotton, tomatoes,
cocoa, etc.).
• Information and knowledge services: these include services related to the
creation and dissemination of agricultural information and knowledge.
• Services for innovation systems: these include all services related to the
development and dissemination and utilization of a particular innovation (e.g.
research, extension, input supply, etc.).
• Regional services: these include all services related to the production
and postproduction of crops and livestock in a specific region.
• Public sector services: these include all services provided by the public sector as
well as their political and social influence on frame conditions (e.g.
legal aspects, institutional arrangements, etc.).
• Services of interest representation: these include services such as
co-ordination, representation, negotiation, advocacy and lobbyism. These
services are strongly related to the governance of a service system.

15
2.4 Seeds as Agricultural Resource Base

Seeds played a critical role in agricultural development since pre historic man
domesticated the first crops 10000 years ago. The domestication of wild species into crop
plants probably started with the collection, storage and utilization of seeds not only for
food, but also for planting a major step in the evaluation of settled agriculture. The
domestication of plants was a gradual transformation from hunting and gathering to
sedentary agriculture rather than a sudden revolution. During this process conscious and
unconscious selection occurred, leading to significant modification of many our crop
plants from their wild ancestors into highly adapted and diverse population of local land
races (Zewde, 2004).

According to (Buddenhagen and Richard, 1988; as cited by Zewde, 2004), domestication

of wild species into cultivated crops has probably altered natural adaptation very little in
the centre of origin. The migration of human populations and/or diffusion of crops from
the centers of crop domestication exposed crops to new biophysical environments. The
landraces, by disseminating into different agro-ecosystems, have acquired new genes or
gene combinations and frequencies to fit into their new environments. Thus, farmers’
selection coupled with natural selection conditioned the adaptation of landraces to their
agro-ecosystems.

The history of seed trade is as old as agriculture itself. Farmers exchanged seed in various
traditional forms such as gifts, barter, labor exchange or social obligations. However,
information on when, where and how organized seed production and trade started, is
limited. It is believed that the introduction of new crops and knowledge- based
agriculture including scientific plant breeding, mechanization, intensification and
commercialization at various stages of agricultural development might have played a key
role (Zewde, 2004).

The informal seed system deals with small quantities of seed is semi-structured, operates
at the individual farmer or community level and may depend on indigenous knowledge of

16
plant and seed selection, sourcing, retaining and management, as well as local diffusion
mechanisms. The informal sector is more flexible and adaptable to changing local
conditions and less dependent on or less influenced by other external factors (Cromwell
et al; 1992).

The distribution of improved seeds to farmers started with the launching of the Chilalo
Agricultural Development Unit (CADU) in 1967. In 1978 the Ethiopian Seed Enterprise
(ESE) (formerly known as Ethiopian Seed Corporation) was established as a government
parastatal under the now defunct Ministry of State Farms, Coffee and Tea Development.
The primary objective of the enterprise was to produce and supply improved seeds to
state farms and small farmers (Techane and Mulat, 1999).

2.5 The Ethiopian Government Agricultural Policy

Agriculture is the foundation of the national economy and plays a major role in the socio-
economic development of the country. In 1991, the government launched the agricultural
development- led industrialization strategy where emphasis is put on linking research
with development through well-focused and targeted transfer of appropriate technology
to farmers. The agricultural development strategy is aimed at promoting growth, reducing
poverty and attaining food self-sufficiency while protecting the environment through safe
use of improved technologies. The agricultural package program is spearheaded through
demonstration and provision of improved varieties and required inputs such as improved
seeds, fertilizers, and pesticides as well as better access to credit facilities (ICARDA et
al, 1999).

Moreover, Agricultural Development Led Industrialization (ADLI) sets out agriculture as

a primary stimulus to generate increased output, employment and income for the people,
and as the springboard for the development of the other sectors of the economy. A ‘green
revolution’-like intensification of smallholder agriculture was seen as central by the
government in implementing the strategy (Keeley and Scoones, 2000).

17
Policy makers assumed that significant productivity growth could be easily achieved by
improving farmers’ access to technologies which would narrow the gap between farmers’
yield and what agronomists called ‘exploitable yield potential’. Researchers also reported
the existence of technologies that can make a huge difference and shift upwards farmers’
yield frontier in grain production. Based on 6 years average data, researchers indicated
that maize yield, for instance, can be increased from current farmers’ yield level of 1.6
ton/ha to 4.7 ton/ha, and wheat from 1.1 ton/ha to 2.8 ton/ha and teff from 0.7 ton/ha to
1.5 ton/ha, if peasants use the right type and amount of improved seed varieties,
fertilizers and other recommended practices (Berhane et al., 2004).

2.5.1Input sector reform and emerging market structure

2.5.1.2 The seed sub –sector

In 1992, the Transitional Government of Ethiopia (TGE) announced the National Seed
Industry Policy (NSIP) with the aim of strengthening the supply of adequate and high
quality seed. The policy envisaged the participation of both public and private enterprises
in the production and marketing of improved seeds. The National Seed Industry Agency
(NSIA) was also established in 1993 with the following objectives:
- To oversee and ensure that the seed industry develops and operates
efficiently,

- To ensure that producers and the farming community, industries using

agricultural raw materials and organizations which export agricultural
products benefit from the seed industry,

- To create an enabling environment for capacity building in research

development and training in the fields of genetic resources, conservation, crop
improvement and seed technology.

In spite of the reform measures, the seed industry is still dominated by the ESE. Over
93% of the total seed supply came from the enterprise in 1996/97(Afri-Tech
Consult,1998, as cited by Techane and Mulat,1999). The enterprise owns three basic seed
farms (Iteya/Gonde,Arssi,262 ha),Shallo, the former East Shewa, currently West Arssi

18
zone 1870ha- 46.5% of which is currently under use and Kunzia, West Gojam, 500 ha).
The Iteya basic seed farm represents the high lands for the production of mainly basic
seeds of wheat, barley, tef, maize, faba bean , field pea, chick pea, lentil, rape seed,
mustard, linseed and sunflower. Shallo and Kunzia are situated in mid –altitude and are
used for the production of maize, sorghum, haricot bean, sunflower and tef. The ESE has
also has five seed processing plants located at Asela, Kofele, Awassa, Nekemt and Bahir
Dar (NSIA, 1999 as cited by Techane and Mulat, 1999).

According to NSIA (1999), the Ethiopian seed industry is characterized by the following
deficiencies.
• Shortage of improved varieties and inadequate supply of high quality breeder and
basic seeds which serve as the foundation for certified seed production;

• Inadequate specialized seed farms for different agro-ecological zones;

• Inadequate coverage of economically important crops and production regions;

• Absence of an organized system of using local cultivars;

• Inadequate provision for national seed data base and lack of provisions for reserve
seed stock;

• Shortage of trained workforce in seed production, processing and marketing;

• Insufficient availability and supply of agricultural inputs mainly seeds and

pesticides;

• No internal quarantine regulation to curtail the movement of seeds from

contaminated area to another area;

• Inadequate follow up of imported materials by the quarantine unit of the ministry

of agriculture.

19
 2.5.1.1 The fertilizer sub- sector

The supply of yield enhancing inputs in Sub Saharan Africa (SSA) is restricted and
highly priced in relation to international market prices. Within SSA, fertilizer use is
mainly confined to export cash crops. Gregory and Bumb (2006) identified five pillars
that are required to develop input markets and achieve market efficiency. Increasing
supplies and market efficiency can reduce input prices. These five pillars are the policy
environment; human capital development; access to finance; market information; and
regulatory frame works. These generic components need to be adopted in the context of
country-specific situations. Holistic improvements in all areas will reduce transaction
costs and improve accessibility to fertilizers in rural areas.

Recognizing the need to increase the use of fertilizer, the federal Government of Ethiopia
has taken several measures, including issuance of national fertilizer policy, liberalization
of the market to allow private sector participation, deregulation of prices and expansion
of extension services. The national fertilizer policy was issued in 1993 with the main aim
of ensuring competitive fertilizer market and supporting the national fertilizer and
extension systems. The Government completely deregulated fertilizer prices in 1998 and
eliminated subsidy in 1997 in an attempt to create a fully competitive market (Techane
and Mulat, 1999).

Despite the growth in the total fertilizer consumption, the average nutrient used per
hectare of cultivated area in Ethiopia is one of lowest in the world. For instance, fertilizer
nutrient use per hectare of cultivated land is about 48kg in Kenya, 97kg for the world
(estimated average) and more than 200kg in Europe, compared to 17-20kg in Ethiopia.
The picture of organic fertilizer is not any more encouraging. Because of fuel wood
scarcity, rural households have been forced to divert animal dung from its traditional role
as a source of soil nutrient to direct burning as a source of fuel (Ibid).

20
 • Fertilizer distribution channels

Immediately after the liberalization, many wholesalers and retailers were registered as
agents of different importers. For instance, in 1996 there were 2309 wholesalers and
retailers registered by importers. But their number reduced to 430 in 1998 (quarterly
reports of NFIA, 1996-1999). Field observations and regional reports have shown that the
number of wholesalers and retailers further declined in 1999 (Ibid). This is because:

- Before the deregulation of fertilizer price, there was a retail margin built in the
selling price of fertilizer fixed by the government. This margin has attracted many
wholesalers and retailers to participate in fertilizer business. But, after complete
deregulation, they have to compete in the market to earn profit. Many private
wholesalers and retailers withdrew from the business doubting the profitability of
this seasonal activity.

- Retailing by importers has also limited the number of private wholesalers and
retailers, leaving no room for small wholesalers and retailers.

- Private wholesalers and retailers have also been discouraged by lack of working
capital since most of them are not in a position to provide collateral to banks to
get credit.

2.5.1.3 Agricultural input credit

Credit administration and channeling system varies from region to region. In Amhara,
SNNP and Tigray, the regional governments actually assess loan requirement, screen
eligible beneficiaries, process the loan applications and issue purchase order to the input
supplies using the relevant administrative machinery. In such cases, the task of the bank
is to distribute payments to the designated suppliers. Cooperative promotion bureau, Omo
micro Financing Institute and ICU at different level are responsible for input credit
administration. In Tigray, while the cooperative promotion bureau is responsible for
administering input credit obtained from CBE, Dedebit Credit and Saving Institute
deliver and administer input credit from its own fund. In Oromya region, the credit

21
required for the extension program is administered by the Agricultural Bureau at different
levels. The agricultural bureaus assess loan requirement, process loan applications and
issue purchase order to the suppliers. With regard to credit required for the regular
program, the beneficiaries deal directly with the bank through their groups or service
cooperative backed by the technical assistance from the cooperative promotion bureaus at
different level (Ibid).

The regional governments use their administrative machinery at all level and apply
administrative measures to enforce repayment. Although strenuous efforts are made by
the regional governments to enforce repayments, loan recovery is still facing problems.
Some of the factors constraining loan recovery are:
- Crop damage due to bad weather conditions
- Lack of integrated efforts among all concerned to collect overdue loans
according to the time table

- Strategic default-decision by some farmers not to repay loans even they have
the capacity to do so

- Some farmers are taking inputs and sell it in cash at a cheaper price to solve
their immediate financial problems (Ibid).

2.6 Conceptual Frame Work of the Study

Agricultural input supply system has an immense contribution in enhancing the

productivity of agricultural commodities through collective action of relevant actors
within the system. The system also plays important roles in bridging modern agricultural
technologies to the peasant sector.

Moreover, it has potential to influence goals, strategies and resources and thus bring
about changes in policies, programs and other related agricultural projects. To insure food
self sufficiency, identifying of influential factors in the smooth functioning of the system

22
is essential to design purposeful intervention planning for betterment of the farming
community in particular and the society at large.

According to different sources and the real world situations, the input demand-supply
system is influenced by personal, situational, economic, institutional and organizational
factors. Therefore, in this study the researcher tries to analyze these relationships, identify
the influence of independent variables on the dependent variable and also tries to identify
the influential factors of the input demand-supply index of the area under study. The
conceptual framework diagram of this study is presented in figure-1.

23
 Personal factors

• Age

• Education

Institutional and Situational factors

organizational
• Distance from
factors nearest input
market
• Storage facility
Input demand-
• Type of road used
• Extension supply index
contact • Access to market
• Access to credit

Socio economic
factors

• Farm size

• Annual income

• Family labor

• Input price

Figure 1: Conceptual framework of the input demand-supply index

Source: Own computation

24
 3. METHODOLOGY

3.1. Description of the Study Area

Dale woreda is one of 19 Woredas in Sidama Zone and covers a total area of 28440 ha, at
about 320 km south of Addis Ababa. The woreda is subdivided into 36 PAs. According
to CSA (2008), the population of the woreda is estimated as 244692 of which women
account for 49.7% and men account 50.3%of the population. The altitude of the woreda
ranges from 1650-2800 masl. The altitude at Yirgalem, which is the woreda headquarter,
is 1765 masl.

The mean annual rainfall recorded at Awada Research sub-centre in Yirgalem is 1314
mm. Rainfall declines as one move from the highlands in the east to lowlands in the west.

There are two cropping seasons in the area, Belg (short rainy season) from March to April
and Meher (main rainy season) from June to September. Belg rains are mainly used for
land preparation and planting long cycle crops such as maize and seedbed preparation for
Meher crops. The Meher rains are used for planting of cereal crops like barley, teff, wheat
and vegetable crops. Meher rains are also responsible for the growth and development of
perennial crops such as enset, coffee and chat. Livestock also play a major role in crop
production in areas of the mid highlands and lowlands for cereal production (draught
power) in addition to meat and milk; it also denotes prestige and asset to the households.

Farming systems

According to IPMS (2005), two main farming systems can be found in Dale woreda.
They are the garden coffee, enset, and livestock (here after referred to as coffee/livestock
system) system is found east of the main road transecting Dale from north to south. The
terrain is hilly and soils are red (Nitosols).

Rainfall is higher and more reliable than in the dry midlands haricot bean/livestock
system. The farming system is composed of garden coffee, enset, and cattle, which are
tethered and kept for manure and production of dairy products. Other crops in the system

25
are haricot beans (as an intercrop), yam, cereals, fruits, mainly avocado and bananas.
Because of the perennial nature of the crop and the small holding size (between 0.25-0.5
ha per family), hand hoeing is the predominant method of cultivation.

The Cereals, enset, haricot beans, garden coffee, and livestock (here after referred to as
haricot bean/livestock system) system is the other main farming system in Dale woreda.
This system is found west of the road transecting Dale from North to South. The terrain
varies from relatively flat to hilly. Black soils (Pellic Vertisols) are commonly found on
the flat areas and red soils on the slopes. Rainfall is lower and more erratic than in the
coffee system. This system is dominated by cereals (maize, teff) rotated with haricot
beans. Enset is cultivated near the homesteads.

Garden coffee is grown in small patches, on the red soils. Extensive grazing areas are
found, which are used for herding the oxen, cattle and goats. Average farm size is
estimated at 1.5 ha. The farmers use oxen for their cultivation.

Besides these two major systems, one smaller system can be found in the extreme east at
the high altitude where farmers grow horticultural crops like shallots (IPMS, 2005).

Crop Production

According to the available statistics, the area under coffee is 13,215 ha and average of 9
million kg of red cherry was sold annually to central market. Garden coffee improvement
is being promoted predominantly in the coffee/livestock system. A total of 24 PAs have
been targeted for this specialization, while, all the 36 PAs grown coffee. The
commercialization of the haricot beans is targeted for the haricot bean/livestock farming
system. The area under beans at the moment is still small i.e., 2,510 ha and the estimated
production is 670 tons. A total of 12 PAs are targeted for specialization. The government
intends to commercialize the haricot bean for export purposes, using the Awash 1and
Awash melka varieties (small white seeds). This is a new introduction to the area which
can either be added to and/or replace the area already sown with the local red Wolayta

26
variety (IPMS, 2005). According to WARDO, the total coverage of maize crop is
3007ha.

Table 1: Types of major crops grown and coverage in ha

S.No Type of crops Coverage in ha

1 Coffee 13215
2 Enset 9021
3 Maize 3007
4 Haricot bean 2510
5 Mango, Avocado &Banana 496
Source: WARDO, 2009

Livestock

The main livestock species in the woreda are cattle, goats and sheep. The livestock
resources are cattle 126459; sheep 19319; Goats 13352; Poultry 109,452; Horses 136;
Mules 68; Donkeys 3991; and Beehives 6777. Production systems range from extensive
system in the lowlands (haricot bean/livestock system) to intensive tethered system in the
major coffee/livestock system. Sheep production is important in the Dega (highlands)
areas. Cattle, sheep and goat production is major in the mid-altitudes and goat, cattle, and
sheep production are important in the lowland areas. Land preparation is mainly done by
oxen power in the haricot bean/livestock system or human power using hoe in the
coffee/livestock, depending on land size and availability of oxen. Oxen ownership is very
low and farmers share their oxen for ploughing. In the woreda, only 16% of the farmers
have a pair of oxen, 26% have one ox and 58% have no oxen. There is a large resource of
production of skins and hides in the woreda. Production of fattened cattle, goat and sheep
has great potential and there is a plan to enhance meat production in the woreda. The
poultry production system is traditional using local birds. The market-led priority
livestock commodities incorporated in the woreda development plan are: 1. Dairy
Production 2. Meat production from fattened ruminants (mainly cattle and goats). 3.

27
Skins and Hides 4. Poultry production. Apiculture is identified as a potential commodity
for development (IPMS, 2005).

Figure 2: Location of the study area

28
 3.2 Sampling Techniques

To develop sampling frame for the study, both probability and non-probability sampling
methods were used. Multi-stage random sampling from probability sampling techniques
and convenience sampling technique from non- probability sampling were used.

Firstly, the woreda was divided into two groups according to the existing farming system
(coffee-livestock and haricot bean-livestock). From two farming systems, PAs were
stratified depending on closeness and farness from the center (town). Then a total of four
PAs were selected purposively (two from far and two from closer to town). Finally
respondents were randomly selected using probability proportional to size (PPS) in terms
of the population density of the selected PAs.

Sample size is determined based on research time and resource available and accordingly
the total size of the respondents was 200 farmers. Female-headed HHs in the selected
PAs were included in the sample with proportion of 20% for their engagement in crop
production processes.

Table 2: Distribution of sampled respondents by PAs in the study area, Dale woreda,
2009.
S.No. Name of PA Total Number of respondents in the sample
number of No. Male No. Female Total Farming system
HHs HHs HHs
1 Shoye 1240 46 9 55 Coffee-livestock
2 Manche 990 33 10 43 » »
3 Debub mesinkella 852 29 10 39 H.bean- livestock
4 Danshe sire 1411 52 11 63 » »
Total 4493 160 40 200

Source: own survey, 2009.

29
 DALE WEREDA (36 PAs)

Coffee- livestock farming Haricot bean- livestock

system (24 PAs) farming system (12 PAs)

Stratification

11Near by 13 Far 6 Near by 6 Far

PAs PAs PAs PAs

Convenient sampling

1 PA 1 PA 1 PA 1 PA

PPS

MHH FHH MHH FHH MHH FHH MHH FHH

(46) (9) (33) (10) (29) (10) (52) (11)

200 Target

Respondents

Figure 3: Sampling procedure of the study

30
3.3 Method of Data Collection

The primary data necessary for the study were collected from sample respondents by
using pre-tested and structured interview schedule.

For the purpose of data collection, 10 enumerators, who have acquaintance with socio
economic concepts and knowledge of the culture of the society as well as local language
proficiency were selected, oriented and employed.

The interview schedule was consisted different types of questions or items, related to the
topic of the research and relevant variables to gather the needed information. Thus
structured interview schedule was developed and used in order to allow the respondents
to freely express their opinion on issues related to the research topic. After formulating
the interview schedules, necessary editing was done for its observed consistency and
logical sequence with frame of reference of the respondents. Then it was subjected to a
pilot study on non-sample respondents with a minimum and adequate sample size. Based
on the nature and extent of responses obtained, necessary modifications and further
editing was done in the interview schedules to ensure its clarity and completeness for
generating the needed information from the respondents. As to input/service providers,
data were collected through questionnaires distributed to relevant actors related to the
research topic.

To supplement the quantitative data, qualitative data was collected through focused group
discussions, informal interview with key informants, discussions with woreda level and
village level extension staff and related actors.

To collect data on information/knowledge flow, Rapid Appraisal of Agricultural

knowledge systems (RAAKS); information source-use exercise (Tool B3/a) and linkage
matrix (Tool B4/a) were used. These tools help to identify the important types of
information and knowledge, the source and users of knowledge and information, the

31
intermediaries that move knowledge and information and the status of linkage among
actors (Salomon and Engle, 1997).

3.4 Method of Data Analysis

Different types of analytical methods can be used to evaluate different research results
and make a sound conclusion for a given survey information. Literature reveals that each
and every analytical method has their advantages and limitations; it is always advisable to
select the one that can better suit to answer the specific purpose (Hopkins et al., 1996;
Pallant, 2001).

The role of statistics in research is to function as a tool in analyzing its data and drawing
conclusions there from. Only after this, we can adopt the process of generalization from
small groups (i.e., sample) to population.

In this study, data were analyzed using different quantitative and qualitative procedures
and methods. Descriptive statistical tools were used to analyze the quantitative data. The
important statistical measures that were used to summarize and categorize the research
data were means, percentages and frequencies. Qualitative assessment was carried out
using key informants and focused group discussion; input suppliers’ survey and
government policy document content analysis.

To see the association of explanatory variables with response variable chi square test for
discrete/categorical variables, Pearson correlation analysis for continuous variables and
Spearman’s rho correlation analysis for dummy variables were used.

Multiple Linear Regression (MLR) analysis was another statistical technique used to
analyze the influence among variables (i.e. single dependent variable and several
independent variables) with the object of using the independent variables whose values
are known to predict the single dependent value (Hair et al., 1998).

32
According to Browen and Starr (1983), the regression equation takes the form:

y = a +b1x1+b2x2 +b3x3+………………………… +bp xp+ei

Where:
y = Dependent variable
x = Independent variable (of there are p)
a = y intercept
b = the slope of the line
ei = error term

Estimation procedure

Following the completion of the data collection, the responses were coded and entered
into SPSS version 12.0 for analysis.

Before estimating the models, it was necessary to check if multicollinearity exists among
the explanatory variables. If multicollinearity turns out to be significant, the simultaneous
presence of the two variables will reinforce the individual effects of these variables.

According to Gujarati (1995) there are various indicators of multicollinearity and no

single diagnostic will give us a complete handle over the collinearity problem. For this
particular study, Variance Inflation Factor (VIF) was used for continuous variables.

The larger the value of VIF, the more it is troublesome. As a rule of thumb, if the VIF of
2
a variable exceeds 10 (this will happen if R exceeds 0.95), that variable is said to be
i
highly collinear (Gujarati, 1995). Following Gujarati (1995), the VIF is given as:

2
Where, R is the coefficient of determination when the variable Xj is regressed on the
j
other explanatory variables.

33
Similarly, there may be also interaction between qualitative variables, which can lead to
the problem of multicollinearity. To detect this problem, coefficients of contingency were
compounded. The contingency coefficient was compounded as follows:

Where, C is coefficient of contingency, χ 2 is chi-square test and n = total sample size.

For dummy variables if the value of contingency coefficient is greater than 0.75, the
variable is said to be collinear (Healy, 1984 as cited by Mesfin, 2005).

3.5 Definition of Variables and Working Hypotheses

3.5.1 Dependent variable

Dependent variable of the study is agricultural inputs demand-supply index. The variable
would operationalzed as farmers’ response in terms of the quantity of required and
obtained inputs on the selected crops. It was measured using demand-supply index of the
respondents with structured list of items selected.

IDSI = Sx A/Dx A + Sx B/DxB + Sx C/DxC + SyA/DyA + SyB/DyB + SyC/DyC…………..

N
Where:
IDSI = Input demand supply index
S= quantity of inputs supplied
D= quantity of inputs demanded
A, B, C = Crops (Coffee, Haricot bean and Maize)
x,y ……..= are types of inputs
N = number of inputs applicable

34
3.5.2 Independent variables

For this study, 12 independent variables were hypothesized to influence the dependent
variable. Out of these variables; five, three and four were continuous, discrete/categorical
and dummy respectively. Independent variables include the personal/demographic, socio-
economic, situational, and organizational and institutional factors that may influence the
dependent variable. The selection of independent variables is based on the past research
and published literature related to the study. 

1. Age- the age of the farmer has negative effect on using agricultural inputs by
contributing for risk aversion ( Abadi and Pannel, 1999). It is hypothesized that as the age
of the farmer increases the demand for agricultural inputs will be decrease. Thus it was
expected to have negative effect on the dependent variable. It was measured in year’s
equivalent.

2. Educational level- the level of formal education of the farmer is important variable
affecting the probability of using improved agricultural inputs (Nkonya et al., 1997). The
better the education level the farmer has the better will be his understanding concerning
the knowledge of improved agricultural technologies. Thus educational level was
assumed to have positive association with dependent variable. It was measured using
categorical scale.

3. Family labor- a farmer with larger number of family size engaged on agricultural
activities is more likely to be in a position to try to continue using a potentially profitable
production enhancing inputs (Abadi and Pannel, 1999). Thus a farmer with high family
labor will have a capacity to use labor intensive agricultural inputs. The variable was
expected to have positive effect on the demand-supply of inputs. It was measured by man
equivalent.

4. Access to credit - the existence of credit institution at a disposal of farmers will

enhance the use of improved agricultural inputs. A study conducted by Getahun et al.,
(2000) revealed that access to credit, has a significant and positive influence on the

35
adoption of improved technology. Therefore, the variable was expected to have positive
effect on the dependent variable. It was dummy variable with value of 1 for yes and 0
other wise.

5. Storage facility- the presence of storage for agricultural inputs at farmers’ disposal
may encourage farmers to demand it timely. Thus it was assumed to have positive
relation to the dependent variable. It was dummy variable with value of 1 for yes and 0
other wise.

6. Extension contact - the more contact the farmer has with extension service, the more
will be the information/knowledge s/he has and the better will be the use of agricultural
inputs (Haji, 2003). Packages developed by Board are more or less composed of
improved agricultural inputs. DAs are responsible to transfer knowledge about the
recommended packages prior implementation through their regular contact program.
Therefore, it is assumed that farmers who have frequent contact with DAs are more likely
to demand agricultural inputs due to the increased awareness, and it was expected to
affect the dependent variable positively. It was measured using different levels of
frequency scales.

7. Type of road used- limited infrastructure development influences the production and
distribution of agricultural inputs, because of high transportation and marketing cost
(Tesfaye and Shiferaw, 2001). The type of road used for agricultural inputs delivery may
influence the availability of inputs at farmers’ disposal. There fore the variable expected
to influence the dependent variable negatively. It was discrete variable measured 0 for
absence, 1for all weathered and 2 for winter season road.

8. Distance from nearest input market- Distance to market is negatively associated

with the use of production enhancing inputs. Those who are far from the market may not
have a chance to get agricultural inputs comparing to the nearby farmers (Legesse, 2001).
Therefore, the variable was expected to have negative association with the dependent
variable. It was measured in kms.

36
9. Farm size- the size of land holding to a limit of course provides sufficient income and
there by funds for investment on modern farm inputs (Roy et al., 1999). Thus size of land
holding assumed to have positive relation to dependent variable. It was measured in
‘timad’ base and hactar equivalent ( 4 timad= 1 ha).

10. Annual income - the status of the farmers in terms of their annual income will matter
in deciding to purchase improved agricultural inputs. Wealthy farmers decide to take risk
for using agricultural inputs (Getahun, 2004). Therefore, annual income has assumed to
have positive relation to dependent variable. It was measured in Ethiopian birr.

11. Access to market- Market access is one of the variables that affect input out put
marketing in rural areas. Presence of input/output marketing at farmers disposal would
increase the uptake of improved agricultural inputs by farmers. Hence the variable was
expected to have positive influence on the dependent variable. It was dummy variable
with value of 1 for yes and 0 other wise.

12. Input price- the price of agricultural inputs may encourage/discourage farmers in
order to use production enhancing inputs. Wolday (1999) indicated that price of inputs is
significantly related to use of improved seeds. If the pricing regulation of inputs does not
invite farmers, it will have negative effect on improved agricultural inputs use. Therefore,
this variable was expected to have negative association with the dependent variable. It
was dummy variable with value of 1 for yes and 0 other wise.

37
 4. RESULT AND DISCUSSION

This part of the thesis presents the major findings of the study under three sub sections.
The first sub section presents map of actors, linkage and knowledge flow within the input
demand-supply system in the study area. The second describes influential factors for the
smooth functioning of the system. The implication of current input/service delivery
system is analyzed from the perspective of Government policies and institutional
arrangements in the third subsection.

4.1 Actors Mapping, Linkage and Knowledge Flow within the System

4.1.1 Actors mapping

To map the actors, discussions were made with WARDO staff and farmers in the study
area. According to the survey result, actors involved in the woreda are mainly concerned
with technology generation, promotion, input supply and knowledge transfer to farmers.
From the result of the discussion; WARDO, Woreda Cabinet, Sidama Zone Agriculture
and Rural Development Department (SZARDD) Hawassa Agricultural Research Center
(HARC), Awada Coffee Research Sub Center (ACRSC), Sidama Elto Cooperatives Crop
Union (SECCU), Ethiopian Seed Enterprise- Hawassa Shallo Basic Seed Multiplication
Company(ESE-HSSMC), Coffee seed multiplier farmers and Improving productivity and
market success of Ethiopian Farmers (IPMS) are identified as main actors currently
involved in different intervention areas of the woreda in relation to agricultural input
supply system . Actors who are assumed to have indirect involvement in the system are
identified as missed actors viz. Bureau of agriculture and Rural Development (BoARD),
Pioneer Hi- Bred Seeds Ethiopia P.L.C and Agricultural Input Supply Enterprise (AISE).
Identified actors and their role in the system are illustrated in Appendix Table 6.

38
Role of actors in the study area

• Woreda Agriculture and Rural Development Office (WARDO)

WARDO is mainly concerned with provision of extension service to farmers through

woreda SMSs, and DAs assigned in each PA who are responsible to transfer knowledge
about plant production, animal production and natural resource conservation and
development using individual and group contact. It is also engaged in facilitation and
joint action of activities carried out by partners such as input suppliers, GO and NGOs for
the successful accomplishment of their goals and objectives towards improving the
livelihood status of farmers in the project area. Moreover, with regard to agricultural
input provision, farmers demand would be finalized through DAs and line work process
for the timely delivery of inputs.

• Woreda cabinet

In input demand-supply system, the woreda cabinet has played significant role in
mobilizing farmers for rural development activities. It facilitates joint actions such as
input supply, input credit provision and monitoring and evaluation of productive safety
net activities.

• Sidama Zone Agriculture and Rural Development (SZARD)

The Sidama Zone Agriculture and Rural development Department is concerned with all
activities undertaken in the study woreda by line sector office. The department played
role in facilitating input credit, input distribution, technical assistance, and monitoring
and evaluation of the extension program. It is also involved on capacity building to SMSs
and farmers through workshops and refreshment trainings.

• Hawassa Agricultural Research Center (HARC)

As it is well known that agricultural inputs specially seed technologies are the result of
research organizations’, efforts have been made to maximize the production and
productivity of seed technologies per unit area. In the context of this approach, HARC

39
played significant role in execution of enormous types of seed technologies which are
best fitted to different agro- ecological zones.

In the study area, the research organization has provided different types of haricot bean
varieties to be selected by farmers. It also works with IPMS to strengthen farmers to
farmers seed exchange system. As a member of Research Extension and Farmers Linkage
Advisory Council (REFLAC), the organization started to strengthen the linkage with
WARDO and farmers in transferring knowledge through Farmers Research and
Extension Groups (FREG).

• Awada Research Sub Center (AWRSC)

The research sub center is working under close supervision of Jimma Coffee Research
Center. The main occupation of the research station is to conduct research on coffee and
diversification with associated crops. The research station provides coffee berry disease
(CBD) resistant improved coffee technologies to farmers and in return works for the
improvement of the technologies on feedback gained from users. Currently,
dissemination of “Angefa” improved coffee variety is on duty in collaboration with IPMS
and WARDO staff for coffee multipliers and growers.

• Sidama Elto Cooperatives Crop Union (SECCU)

The Sidama Elto Crop Cooperative Union is one of the three unions existing in Sidama
Zone. The main occupation of the union is supplying inputs to farmers through member
cooperatives/WARDO to farmers and facilitation of market link for grain produce to its
primary member cooperatives. As to input supply, the union is mainly concerned with
provision of commercial fertilizer from Federations at regional level to farmers grass root
level on credit and cash bases.

According to a key informant of the organization, the input delivery system is not
efficient as expected. This is because, the organization lacks warehouses, trucks and
vehicles to damp inputs at farmers disposal, transport inputs for distant areas and to

40
facilitate input delivery system with concerned parties respectively. However, to reverse
the situation, the organization tried to deliver inputs through cooperation with public line
sectors.

• Ethiopian Seed Enterprise- Hawassa Shallo Basic Seed Multiplication

Company(ESE-HS)

The main occupation of the organization is seed multiplication, processing and

distribution. Maize hybrid varieties (BH-540, BH-660 & BH-140) and haricot bean
varieties (Red wolita, Awash melka, Awash-1, Ebado, etc.) are supplied from this
enterprise to farmers in the study area. Besides these, variety adaptation trial is carried
out in conjunction with WARDO to provide inputs that best suited to the agro ecology of
the woreda. However, the organization could not satisfy the need/ demand for improved
hybrid maize varieties due to lack of irrigable seed multiplication farm and related
constraints (see appendix table 3). As the organization is a member of the regional
REFLAC, the advisory council arranges quarter and yearly meetings, forums and
workshops in collaboration with Rural Capacity Building Project (RCBP) to share
knowledge among member partners. ESE/HS being as improved seed supplier shares its
experience and get feedbacks from line sector representatives to improve the seed
multiplication process.

• Coffee seed multiplier farmers

Farmers, who are living in one of the woreda PAs (Dagiya), are engaged in coffee
seedling multiplication in addition to crop production and livestock rearing. These
farmers started coffee seedling multiplication eight years ago in small patches near river
side. They were supported by WARDO in provision of coffee berry disease (CBD)
resistant improved coffee seedlings/seeds. Now-a-days, multipliers have started to
provide coffee seedlings and seeds to surrounding farmers and coffee growing zones of
the region respectively.

Though they are working with close technical assistance of WARDO and IPMS,
according to the key informants, due attention is not given by responsible bodies to

41
empower them. They need to be organized in group or association to broaden their
activities and enhance bargaining power in competitive markets.

• Improving productivity and market success of Ethiopian Farmers (IPMS)

The role of IPMS in the study area is not limited with research and development. It also
involved in capacity building activities through conducting trainings in collaboration with
WARDO and research organizations to SMSs, DAs and farmers groups to bring about
sustainable agricultural development in the sector. Besides this the project facilitates
market links and input supply for high value agricultural commodities like; coffee,
haricot bean, mango and avocado through joint action with concerned parties. It also
accessed knowledge centers as a source of indigenous and scientific knowledge to users
in woreda and PA level. Currently provision of selected varieties of haricot bean and
coffee to targeted farmers group is underway with the collaborative actors of IPMS.

Missed actors

In the process of actor identification through FGD, key informants and relevant staff of
WARDO, some missed actors were identified. These actors have their own contribution
for the system either by playing facilitation role or indirect involvement. The identified
missed actors were Regional Bureau of Agriculture and Rural Development, Pioneer
hybrid P.L.C and AISE. The roles of these actors in the system are discussed below.

• Bureau of Agriculture and Rural Development (BoARD)

The regional BoARD has direct involvement in input credit facilitation. The loan
agreement modality document is signed in collaboration of this organization with loan
lender banks and responsible line sectors. In addition to this, capacity building activities
are conducted to woreda SMSs and DAs through TOT and refreshment trainings. The
SMSs of BoARD are also provided technical support to woreda SMSs to bring about
change within the sector.

42
 • Pioneer Hi-Bred Seeds Ethiopia P.L.C

Pioneer hybrid is the first private company that provides hybrid maize seed in the
country. Few years ago farmers in the study area were using hybrid corn varieties namely
Phb- 3435 and Phb- 3253. But now due to shortage of improved hybrid maize seeds,
farmers could not get the seed. According to the company key informant, timely claim is
very important to get hybrid corn seeds. They also need to re-strengthen their linkage
with the WARDO to serve as alternative seed source.

• Agricultural Input Supply Enterprise (AISE)

The former AISCO and the now AISE is the government enterprise known for a long
period of time in delivering commercial fertilizer to farmers throughout the country.
Farmers in the study area were also using DAP and UREA fertilizers from the
distribution centers. According to the key informants of the enterprise, though due to the
illegal interference of some actors in the bid process, the enterprise was not able to reach
the farmers, still they are willing to work with the community as alternative source of
commercial fertilizers.

4.1.2 Linkage

According to Hagmann et al., (2002), linkages between service providers in to service

delivery system are critical to ‘make the system work as a system’. The different roles
and mandates of service providers need to be clarified and even more important; they
need to ‘learn to play the roles’ and work together in synergistic way towards making a
difference.

To bring sustainable agricultural development, partners within the sector must develop
joint collaborative action to ensure efficient and effective input/service delivery system.
To support actors in the sector, the Regional Research Extension Farmers Linkage
Advisory Council (REFLAC) started to strengthen the linkage among multiple actors.
Potential actors like BoARD, Research stations and FREG are participated in joint
planning for action. The main aim of the council is to promote farmers participatory

43
research through strong collaborative action by potential actors and to develop area
specific technologies through adaptation trials and farmers- to- farmers seed exchange
specifically on cereal and pulse crops. The Regional Rural Capacity Building Project
(RCBP) is in charge of facilitating joint activities carried out by partners through budget
and material support i.e. capacity building , workshops, joint monitoring and evaluations,
for members of advisory council and FREG. In the study area, linkage of actors is
worked out on the basis of their proximity to the farmers and link for support among
themselves.

4.1.2.1 Linkage of actors with farmers in the project area

Actor interaction is mapped using both character based map and linkage matrix. By using
character based map; here we can look at individual actors and see that they link up with.
Following Anandajayasekeram et al.(2008) the actor linkage maps were produced by
placing farmers in the center and linking the other actors based on their contribution to
the demand sector (farmers). A participatory actor’s linkage map was produced by
farmers and other key informants according to the proximities to them and farmers and
key informants were asked to identify key actors they have linkage and draw the map
(Figure 4).

As indicated in the linkage map, farmers and key informants put the linkage between
them and actors as strong with WARDO, Wereda Cabinet and coffee seed/seedling
supply farmers. On the other hand, they put medium for the linkage with, SZARDD,
IPMS and Awada Research Sub Center (ARSC). Lastly, they put weak linkage with
Hawassa agricultural research center, Sidama Elto Crop Union and Ethiopia Seed
Enterprise/ Hawassa Shallo. The probable reason for this is actors who are involved in
input/ service provision prefer to communicate facilitators rather than farmers even if
there is room to communicate.

44
 WARDO 1 HARC 2
AWCRSC 3

Sidama Elto SZARDD 4

Crop Union Farmers in the
9 project area
Coffee seedling
multipliers 5
IPMS 8 ESE/SHC 7 Woreda
cabinet 6

Figure 4: Actors’ linkage map developed by FGD and key informants

Key:
Linkage strength
Strong linkage
Medium linkage
Weak Linkage
Linkage description
1. Extension service, farmer’s mobilization, input distribution
2. Adaptation trial, demonstration of improved technology
3. Provision of improved coffee technology
4. Technical support and facilitation of input supply
5. Improved coffee seedling/seed supply
6. Mobilization and administrative support
7. Maize and haricot bean seed supply
8. Technical support, training, haricot bean seed and coffee seed support, and market link
9. DAP and UREA fertilizer supply

4.1.2.2 Linkage among actors in the input demand-supply system

The advantage of linkage matrix over linkage map is it helps to show the linkage and
interaction among the different actors (Anandajayasekaram et al., 2008). Thus, actor

45
interaction was presented using linkage matrix where major actors in the input demand-
supply system are listed both the row and column of the matrix and their relation and
interaction is described in the intersection cells (Table 3). Each box/cell in the matrix
then represents the linkage between the two actors and the type of linkage. Bolded cells
represent strong linkage among the respective actors.

Accordingly strong linkage was observed between actors involved in technology

generation and knowledge provision viz. HARC, AWCRSC, SZARD, WARDO and
IPMS. The probable reason for this might be the presence of these actors in different plat
forms such as REFLAC may contribute to act collectively for joint actions. In contrary,
the linkage between others seems to be weak. These weak interactions call for strong
efforts to strengthen the capacities of relevant actors for interacting and learning.

46
 Table 3: Actor’s linkage matrix in Input demand-supply system
ACTORS WARDO SZARDD Woreda cabinet HARC AWRSC SECU Farmers in the ESE/HASH Coffee seed IPMS
project area multiplier Frs.
WARDO Technical Facilitation and Technical and Technical support - Distribution - provision of - input supply Technical support - joint planning
support and administrative administrative and feedback on of inputs extension service - variety and coffee seedling - group formation
facilitation of support support for introduction and - information - input Demonstration distribution and training
improved improved seed promotion of sharing on Distribution
agricultural technology improved coffee feedbacks and - Farmers
inputs delivery introduction and techno. demand claims mobilization
promotion
SZARDD Technical and Technical and Technical and Technical and - technical and input - technical and Technical and Technical and
administrative improved techno improved techno facilitation facilitation support facilitation facilitation support facilitation support
support support support support support

Woreda Nil Nil Facilitation & Facilitation, Nil Facilitation & Technical and
cabinet administrative mobilization & administrative support administrative support
support administrative supp
HARC Collaborative Technical and Demonstration of Provision of Collaborative work
work on coffee material support improved technology parental materials on transfer of knowledge
technology - feed backs for seed Nil
multiplication
AWRSC Provision of - Joint planning
Nil improved coffee Nil Product testing on - improved coffee
technology farm variety trial technology support
SECU Inputs supply Improved seed
through WARDO support Nil Nil
Farmers in the Variety Coffee seedling - training
project area demonstration provision - market linkage
- technical support
ESE/HSH Nill Nil
Coffee seed Input and technical
multiplier support
farmers
IPMS

Source: Own survey result, 2009.

47
Case study 1
Limassa Rikiwa is a member of coffee seed/seedling multiplier farmers’ group of Dagiya PA. He
told us about market link problem he faced. He said, “I have started coffee seedling
multiplication eight years ago near river side in small scale and now I broaden the activity and
started to earn 10000 birr per year. Thanks for WARDO experts, due to their serious supervision
and technical support, now some forty farmers have adopted it and started to provide seedlings to
surrounding farmers. Moreover, last year we have started preparing different coffee seed
varieties (1377, 74110, and 74112) by the order of BoARD via WARDO for zones like Kembata
and Tembaro, Wolita and Dawro. I am working with my relatives and we are ten in the group
and promise to produce coffee seed. As per the agreement, we produced 991 kg of seed on time.
But the problem came, when these mentioned zones of the region ignore to take as per schedule.
As we have incurred costs to prepare the seed, they must settle the necessary requirements timely
and receive the seed. But after suffering a lot, WARDO and Sidama Zone Agriculture and Rural
Development Department (SZARDD) helped us in finding market for the seeds produced.
Though we are in a position to produce seed for multiplication purpose, the link between market
and our group is very poor. Therefore, attention has to be given to organize us in cooperative
association to enhance our bargaining power as well as to create effective linkage with partners”.

4.1.3 Knowledge flow

Knowledge /information flow of the system is studied on the basis of the type of
knowledge/information delivered by each actor. From the survey result, actors who involved in
delivering technical, strategic, operational, policy and market information are identified using
operational definitions for each type of knowledge/information delivered. Table-4 shows that
matrix of sources of knowledge/information delivered to each actor in the study area.

48
Table 4: Matrix of sources of knowledge/information delivered to each actor
S.No. Name of actors Sources of knowledge/ information delivered
Technical Strategic Operational Policy Market
1 Hawassa RC 4,7 - - - -
2 Awada RC 1 - - - -
3 Sidama ECU - - - - 4,7
4 WARDO 1,2,5,7 1,2,5,6,7 1,2,5,7 6,7 1,5,6&7
5 IPMS 1,2,7 - 1,2 - -
6 Woreda cabinet 4,7 - 4,7,9,10 - 4,5,7
7 SZARDD 1,2,8 1,2,4 1,2,8 - 4,5
8 ESE/SHC 1,4 1 1 - 4,7
9 Coffee seedling 4,5 - 4,5 - 7
supplier farmers
10 Famers in the 4,5 4,6 4 4,6 4,5,6
project area
Source: Own survey 2009

Operational definitions for the above matrix

Technical: Knowledge/information related to technology to be utilized (e.g. merit of improved

varieties, how to control pests.etc)

Strategic: Knowledge/information related to future perspectives (e.g. keeping up of quality

standards of coffee for export, improving productivity for better income, cost benefit analysis
etc.

Operational: Knowledge/information related to activities to be under taken (e.g. adjusting

planting time, use of short duration varieties to escape from drought, plant population per unit
area and such managerial aspects.

Policy: Knowledge/information related to policy issues like organizing farmers for better market
negotiations, channelizing incentives.

49
Market: Knowledge/information related to in the context of input-output marketing to benefit
the farmers.

From the above matrix, actors like WARDO, Woreda cabinet and SZARDD are found to be
relatively with different sources of knowledge/information that would help in achieving their
plan of actions. The probable reason for this is knowledge/information related to technical,
operational and market would provide by multiple actors to strengthen the overall agricultural
extension program to the study woreda in particular and Sidama zone in general.

Linkage between actors could be seen through how they frequently communicate and draw
active knowledge/information flow mechanisms to end users. In the study area, frequency of
knowledge flow among actors is also identified according to how frequent knowledge transferred
to end users. Table-5 shows frequency of knowledge flow within the system.

Table 5: Frequency of knowledge flow within the system

S.No. Name of actors Frequency of knowledge flow
Frequently Sometimes Rarely
1 Hawassa RC X
2 Awada RC X
3 Sidama ECU X
4 WARDO X
5 SZARDD X
6 Woreda cabinet X
7 IPMS X
8 ASE X
9 Coffee seedling X
supplier farmers
10 Farmers X
Source: Own survey 2009

50
From the survey result, frequency of knowledge flow within the system is not as such
satisfactory due to absence of strong linkage among all actors. The probable reason for this is
actors who involved in the system are not transferring knowledge to farmers directly rather they
transfer to WARDO independently. Therefore, WARDO might shoulder all responsibilities to
transfer knowledge delivered by partners to farming community and feedbacks from the farmers
to partners. The study revealed that knowledge flow between partners and WARDO is relatively
frequent.

SZARDD ESE/HS
CSMF
WCABT
Farmers
IPMS WARDO
SECCUN
AWCRSC
HARC

Figure 5: Position of actors drown to show their closeness to farmers in knowledge flow

4.1.4 Constraints of input demand-supply system

Constraints of the system were identified from the perspective of input/service providers and
users independently. Questionnaires and interview schedules were used to collect the data from
input/service providers and users respectively. The results of the survey are discussed below.

Constraints of input/service providers

According to key informants and input/service suppliers survey result, the following are
constraints of the supply sector.

• Unavailability of agricultural inputs at farmers disposal due to lack of transport, storage,

etc. facilities

51
 • Lack of flexibility of policy, for example, three years time for seed release and register
impedes the efficiency of supply sector instead using many location for test can minimize
the time to a year
• Organizing market follows a very complicated and tedious process that took time and
energy of farmers and staff, cooperative law is not flexible to take other forms of
organization (groups).
• Absence of strong quarantine for imported and shopped crop varieties’ seeds.
• Low attention with regard to seed biodiversity; particularly for those of our
endemic/indigenous crop varieties

Constraints of users (farmers)

From FGD and user survey conducted, farmers pointed out the constraints they had. The
identified constraints by demand sector are discussed below.

Among three crops selected for the study (coffee, haricot bean and maize), prioritization of crops
in terms of the level of constraints faced by farmers towards each commodity during the process
of input delivery was identified by respondents. According to the survey result, the rank given by
the farmers i.e. maize 109(54.5%), coffee 30(15%) and haricot bean 19(9.5%) was first, second
and third respectively. Therefore, maize found to be a crop that is highly constrained in input
supply system (see Appendix table 2).

The constraints of farmers in agricultural input/ service delivery were identified during user
survey. From the result obtained, exorbitant input price, mismatch in kind, inability to deliver
timely, insufficient delivery, source from far distance, poor quality of inputs and less extension
support were identified and ranked according to their importance. Table 6 illustrates
respondents’ perception in terms of frequencies, percentage and rank.

52
Table 6: Constraints of farmers in agricultural input/ service delivery (N=200)

S.No Types of constraints Frequency % Rank

1 Exorbitant input price 45 22.5 1
2 Mismatch in kind 29 14.5 2
3 Not timely 27 13.5 3
4 Insufficient delivery 23 11.5 4
5 Source from far distance 14 7 5
6 Poor quality 11 5.5 6
7 Less extension support 9 4.5 7
No response 42 21
Source: computed from own survey result, 2009.

From the result obtained, exorbitant input price was ranked as the first constraint of agricultural
input demand by the farmers. The focus group discussion revealed that currently agricultural
input price was escalated beyond the affordability of many farmers. The discussant mentioned
that the price of fertilizer and seed increased by more than double fold comparing to past 2-3
years. This in return discouraged farmers to demand for production enhancing inputs.
The second constraint described by the sample respondents was mismatch with demand in terms
of kind of inputs. During the focus group and key informants discussion, participants pointed
out that there was difference between the demands in kind and inputs delivered in the study area.
For example, improved maize variety like BH-540 has got high demand by the farmers for its
high adaptability and yield potential. However, the delivered maize varieties were BH- 140 and
BH-660, which were out of their demand.

The third constraint of farmers demand for agricultural input supply is timeliness of input
delivery. As crop production is associated with planting time, inputs should be delivered ahead
of time. According to focus group discussants, they suffered with problems regarding to the
delay of inputs supply which in turn contributed pest attack and yield loss for lately planted
crops.

53
The fourth constraint of input supply is insufficient delivery of inputs. The focus group
discussion revealed that currently farmers suffered with shortage of agricultural inputs.
According to discussants, the amount of input delivered is by far lesser than the required. The
collected down payment from farmers for input purchase is returned back to farmers due to
shortage of inputs. This, in response, seriously exposed farmers to purchase unknown source of
inputs from local markets in the name of improved technologies but weak in their yield potential
and quality.

The fifth constraint of input supply was source from far distance. As the survey result showed,
there are no input stores at farmers’ disposal. Therefore, farmers tend to move long distance (10-
25kms) to bring agricultural inputs. This may discourage them to search for improved
agricultural inputs. According to key informants and discussants, unavailability of inputs at their
disposal forced them to remain on traditional practices.

54
Case study 2
Tilahun Gabisso is living in Manche PA of the study area. He is a farmer who engaged mainly
on coffee, maize and haricot bean farming in conjunction with livestock rearing. He shared his
experience in using agricultural inputs/services. He said, “I don’t have serious problem in the
process of coffee cultivation, because I can get coffee seedlings nearby from public nursery or
private farmers’ nursery. In addition to this, as I prepare organic coffee for the central market, I
am using organic fertilizer such as compost for my coffee orchard. The only problem I had is
fluctuation of market price and yield loss due to recurrent moisture shortage. A big problem I
had is lack of services like credit, improved maize and haricot bean seed supply and commercial
fertilizer provision. Let me share my experience in this regard,” said Tilahun, “last year, I have
been asked by DAs to pay down payment for the inputs I need with the hope to receive, and I
paid 412 birr for maize seed and fertilizer. I assumed that they would provide me on time prior to
planting time (mid-march). I waited, but I couldn’t get and DAs have advised me to wait
patiently. Even if I waited as per DAs’ advice, the planting time is passed and finally
theyreturned 412 birr to me. When I asked the reason, they said that the woreda has finished its
quota. Mind you, this condition exposed me to two problems. First, I couldn’t even plant the
local one timely and second, due to late planting I couldn’t get harvest from the seed and
fertilizer that I bought from local market. This, in return, exposed my family for serious food
shortage. Therefore, what I suggest is that, here we have service cooperative and let us
strengthen together the organization to provide us input and credit, because many years ago we
have a trend in paying our debts on the basis of delivering ripened coffee cherries to the
cooperative”.

4.2 Major factors that influence the smooth functioning of the system

Factors that influence the smooth functioning of the system is seen using questionnaire for
input/service providers and focus group discussions and interview schedule for users. Therefore,
in this section, findings are discussed from input/service providers and users point of view
independently.

55
4.2.1 From Input/ service providers perspective

For the successful provision of agricultural inputs/services the input supply sector should work in
harmony to satisfy the need of the clients. During the study, factors that influence the smooth
functioning of the supply sector were identified by each partner involved in the system in terms
of input supply and knowledge provision. From the result obtained, the sector is
positively/negatively influenced by the following major factors:

Input suppliers

• Sufficient and irrigable seed farm (-)

• Skilled man power (+)
• Delay of temporary loan settlement by users (-)
• Policy, in creating conducive environment (+/-)
• Storage facilities at grass root level (-)
• Efficient marketing system (-)
• Timely demand claims from users (-)
• Demand for improved crop varieties (+)

Knowledge providers
• Organizational mandatory clarity (+/-)
• Clearly defined role and responsibilities of each partner (-)
• Availability of improved seeds in terms of their germination, viability and adaptability (+)
• Research centers cooperation and willingness to share resources including knowledge (+)
• Farmers willingness to take risks (+)

4.2.2 From farmers/users point of view

In this section, the result would be presented on the basis of methods used to collect data. In the
first sub section, the result of FGD would be presented, and users’ survey data results presented
in the second sub section. To find out influential factors of the demand sector, focus group
discussions were made in the selected four sample PAs. From FGDs conducted, prioritization of

56
influential factors is carried out by using pair wise ranking. Table-7 shows identified factors by
the farmers in priority order.

Table 7: Influential factors of input demand- supply index from farmers perspectives

S.No Influential Scores Sum of Rank

factors Shoye Manche Debub Danshe scores
PA PA mesinkela sire PA
PA
1 Credit 3 4 4 4 15 1
2 quantity 2 2 3 3 10 2
3 Price 1 3 3 2 9 3
4 Timeliness 1 1 4 1 7 4
5 Pest 0 0 2 0 2 5
6 Quality 0 0 1 0 1 6
Source: Own survey 2009

From the result obtained, lack of insufficient credit service, low quantity of input delivery, high
cost of input price, timeliness, pest attack and quality are crucial factors that singled out by the
farmers according to their priority order respectively. Based on FGD findings, some of the
identified factors are discussed in this section.

Input credit
The most important roles that credit is expected to play in agriculture may include- facilitating
adoption of improved agricultural technologies, transformation of traditional agricultural
practices, mitigating adverse conditions (drought, crop failure, disease and price uncertainties),
improving physical and human capital, increasing farm efficiency, increasing flexibility of
farmers decisions, attaining economies of scale in production, consumption, smoothing, and so
on (Edlengaw, 2006).

From the result obtained, insufficient credit service was the most serious problem remained
unsolved in the study area. The probable reason for this is lack of commitment of facilitators at

57
woreda level. According to the Sidama Zone Agriculture and Rural Development Department
(SZARDD), the agricultural credit system is of two types (extension package and household
package) - for extension package especially for inorganic fertilizer (DAP and UREA), BoARD
of the region is responsible to finish loan agreement with the branches of Commercial Bank of
Ethiopia. Head of zonal and woreda administration, finance and economy branch offices and
WARDO are also responsible to sign on the modalities and they have to confirm that their
running cost budget accounted for collateral.

For house hold packages, Rural Finance Fund (RFF) is responsible to deliver loan to farmer
cooperatives through their unions. In most cases improved seed would not be provided in credit
basis, therefore farmers are forced to pay 100% of the price.

According to WARDO, fertilizer credit is given to the farmers with 25-50% down payment using
quota system. During focus group discussion, farmers seriously underlined that the input credit
for each PA distributed was very limited which does not exceed from few farmers. Therefore, the
majority of the farmers remained without getting fertilizer credit. However, fertilizer suppliers
confirmed that there is no input shortage in their stock rather the problem emerged due to lack of
using allocated loan fully by the woreda. From the survey result, the reason why they underuse
yearly allocated loan for fertilizer is due to collateral in the loan agreement. Inability for timely
settlement of the debt causes the transfer of the woreda running cost budget to commercial bank
accounts. Therefore, to minimize the risk what they did is limiting the amount of loan to
manageable size for recollection of the remaining debt.

Lack of input credit is not associated only with access and utilization it also associated with debt
settlement. If a given PA did not settle previously utilized debt, it will not get input credit for
coming crop seasons. This, in return, disfavored the majority of the farmers by exposing to three
main problems;

• farmers who settled their debt timely could not get input credits due to farmers who
did not settle their debts in a given period of time.
• farmers would be exposed to serious food shortage due to low productivity.

58
 • consequently most farmers are migrating to nearby towns and PAs to be hired as daily
laborer to search alternative sources of income.

On the other hand, inputs delivered to the farmers are not in sufficient quantity, not timely and
are costly. This also exposed farmers to four main problems;

• inability to deliver inputs as per farmers demand ( in type and quantity) made farmers
unable to increase their productivity per unit area by influencing on the growth of
the total production in the woreda.

• even inputs which delivered in small quantity, does not reach at farmers’ disposal timely.
This has caused for low productivity due to incidence of crop pests and shortage of
moisture due to late planting.

• the cost of inputs is increasing from time to time by causing smallholder farmers out
of the game. This resulted the majority of poor farmers not to adopt production
enhancing inputs and consequently the overall productivity of the woreda would be
affected to meet the proposed goal.

• Insufficient delivery of inputs may force farmers to search alternative market source
(local market) where the quality of inputs is in question. As it was clearly observed, the
quality of seeds and fertilizer sold from local market was very poor for productivity and
increasing soil fertility respectively.

The current seed and fertilizer supply channel in the woreda would take the following forms:
Fertilizer
Federations Cooperative Unions Primary cooperatives Farmers
(WARDO)
Seed
Seed suppliers WARDO Farmers

Zonal ARDD plays facilitation role

59
Case study 3

Workenesh Toramo is a woman farmer living in the study area, Danshesire PA. She is working
as a leader of women’s credit and saving group. She shared us her experience in agricultural
inputs/service provision in her PA. She said, “due to lack of access of women farmers to
agricultural inputs, credits and extension service, we did not get chance to benefit from services
to improve our livelihood status, rather we are searching for food aids. Though the PA has
potential for crop production (maize and haricot bean), credit and input provision is very poor.
Hence, most farmers are forced to continue with traditional practices resulting in low yield and
income”. As she added, “due to shortage of income I could not afford to give enough food for
my children who attend school in Yirgalem town (capital of the woreda). As our soil is very poor
in nutrient content, planting food crops without commercial fertilizer is unthinkable. Though
starting from last year, we have started to be organized in credit and saving groups to save 2 birr
on monthly basis, still we are in short of the above mentioned services. Therefore, attention has
to given by responsible bodies to women farmers to make us more productive and self
sustained”.

4.2.3 Descriptions of personal, socio-economic, situational, and organizational and

institutional characteristics of sample respondents

In this section, descriptions of personal, socio-economic, situational, and organizational and

institutional characteristics are presented and discussed in detail. These are the hypothesized
variables that might influence the dependent variable, input demand-supply index.

4.2.3.1. Descriptions of personal characteristics of the sample respondents

Personal Characteristics include the variables related to personal characteristics such as age and
level of education. The distribution of sample respondents based on their personal characteristics
is presented in Table 8.

60
Table 8: Distribution of sample respondents based on their personal characteristics
(N=200)

Variables Attributes Frequency Per cent

Age of respondent 15-29 (younger) 26 13

30-49(middle) 139 69.5
50- 65 (older) 28 14
>65 (oldest) 7 3.5
Total 200 100
Education level Illiterate 30 15
Can read and write 43 21.5
Primary school 92 46
Secondary school 35 17.5
Total 200 100

Source: computed from own survey data, 2009.

Age of the respondents

Age of farmers was one of the demographic characteristics hypothesized to influence agricultural
inputs demand negatively; towards this end data on the age of farmers with respect to input
demand-supply index seems important.

The age of farmers who participated in the study ranged from 20 to 110. Farmers aged 30-49
were the majority (69.5%) followed by age group 50-65(14%), 15-29(13%) and age group
>65(3.5%).

Level of education

Education is one of the important variables, which increases farmer’s ability to use production
enhancing agricultural inputs. Low level of education and high illiteracy rate is typical in
developing countries like Ethiopia. In fact, education level of farmers is assumed to increase the

61
ability to use improved agricultural inputs in a better way. Therefore, in this study, education
level is a variable helping to demand production enhancing inputs by the respondents.

As indicated in Table 7, 15% of the sample respondents were illiterates, 21.5% were able to read
and write, 46% had elementary school education, and 17.5% had attended secondary school
education. From the data presented, number of educated farmers (> 63%) is by far greater than
that of illiterates (21.5%).

4.2.3.2. Descriptions of socio-economic characteristics of the sample respondents

Socio-economic factors relate to the purchasing power of farmers to agricultural inputs, which is
determined by various social and economic variables such as size of land holding, annual
income, family labor and input price. The findings are presented in Table 9.

62
Table 9 : Distribution of sample respondents based on their socio-economic characteristics
(N=200)
Variables Attributes Frequency Per cent
Land holding 0.125-0.5 85 42.5
0.51-1 93 46.5
1.01-2.5 22 11
Total 200 100
Annual income 500-1500 33 16.5
1501-2500 41 20.5
2501-4000 57 28.5
4001-5500 38 19
5501-7000 18 9
7001—8500 5 2.5
8501-10000 3 1.5
>10000 5 2.5
Total 200 100
Family labor 0.5-3.9 160 80
4-6 38 19
6.1-9 2 1
Total 200 100
Input price Yes 1 0.5
No 199 99.5
Total 200 100

Source: computed from own survey data, 2009

Size of land holding

Land is a primary source of livelihood for all rural households. It was assumed that larger the
farm size, higher is the possibility to use a combination of improved agricultural inputs. In the
study area, the size of the land owned differed from household to household.

63
Of the total 200 respondents, 85 (42.5%) own between 0-0.5 hectare, 93 (46.5%) own between
0.51-1 hectare, while only 11 (1.3%) own 1.01-1.5 hectares of land. Average land holding of
total respondents was about 0.723 hectare with maximum and minimum of 2.50 and 0.125
hectares respectively.

Annual income of the respondents

Total annual cash income is an important variable explaining the characteristics of households, in
that those who have earning relatively high income could probably increase the purchasing
power of agricultural inputs and this in return would expose them to demand inputs. Results of
different empirical studies show the effect of annual income on house holds’ decision in using
and adopt improved agricultural technologies. For example Kidane(2001) , Dejene et al., (2001)
and Getahun (2004) reported positive influence of households’ farm income on adoption of
improved agricultural inputs. As indicated in Table 9, the minimum and maximum annual
income was Birr 500 and Birr 25000 respectively.

Family labor
Higher number of family active labor force leads to decisions to take risk for participation in
technology packages. Therefore, family labor force contributes to the variation in agricultural
input demand. In this study, family labor force was assumed to have positive relation with the
dependent variable. Similarly the result of the study conducted by Bezabih (2000) on the role of
new varieties and chemical fertilizer revealed that the rate of adoption of chemical fertilizer is
positively influenced by the number of man equivalent.

Family labor force in the study area ranges from one person to nine persons with an average of
2.82 adult equivalents per household. The respondents were placed under three family labor
force categories. Based on this, 80%, 19% and 1% had in the range of (0.5 – 3.9, 4 – 6 and 6.1-
9) adult equivalents respectively.

Input price
The price of inputs may be seen in terms of affordability by small scale farmers. Affordable
prices of inputs may enhance farmers’ interest to purchase inputs from the distribution centers,

64
whereas exorbitant input price lead poor farmers to not demand improved agricultural inputs.
Therefore, the variable is expected to have negative effect on the demand of agricultural inputs.
From the data, almost all 199(99.5%) of the respondent noted that the price of input is not
affordable. From the result of qualitative analysis, though the price is unaffordable, farmers were
subjected to use below recommended rate and partly use of package inputs due to lack of
alternative input sources (see Appendix table 5). The variable was not computed for statistical
analysis due to relatively very low variability among respondents.

4.2.3.3 Descriptions of situational characteristics of the sample respondents

Situational characteristics include the variables that might influence farmers demand for
improved agricultural inputs such as type of road used, access to market and distance from
nearest input market. The findings are presented in Table 10.

Table 10: Distribution of sample respondents based on their situational characteristics (N=200)

Variables Attributes Frequency Per cent

Type of road used No access 24 12
Winter season 35 17.5
All weathered 141 70.5

Total 200 100

Access to market Yes 73 36.5
No 123 63.5
Total 200 100

Distance from nearest .3-5 13 6.5

input market 6-10 52 26
>10 135 67.5
Total 200 100

Source: computed from own survey data 2009

65
Type of the road

Type of the road may have an influence on input demand- supply index. All weathered roads
would fever the inlet/outlet of farm inputs and produce at/from farmers’ disposal. From the data
obtained, 24(12%), 35(17.5%) and 141(70.5%) of the respondents have no access, winter season
road and all weathered road respectively. According to respondent farmers, even if they have
roads meant for transportation, due to lack of allocation of transport vehicles by responsible
bodies still the problem remain unsolved.

Access to market

Access to input /output marketing may have positive association with farmers’ demand for
agricultural inputs and to sell their produce with reasonable price. From the data obtained, 73
(36%) of the respondents have no access to market and 127 (63%) have access to market.

Distance from nearest input market

The availability of inputs on nearby markets would have positive influence for farmers to
demand inputs. Whereas for farmers who located far from input markets may have relatively
negative influence to demand agricultural inputs. From the finding, farmers who live in different
range of distance (0.3-5, 6-10 and >10) are 13(6.5%), 52(26%) and 135(67.5%) respectively
from nearest input market. Though for the purpose of the survey, 2 PAs are selected from nearby
PAs and 2 are from far, their settlement within the PA varies even in the nearby PAs from the
center.

4.2.3.4 Distribution of sample respondents based on organizational and institutional

factors

Organizational and institutional factors include the variables that might influence farmers
demand for improved agricultural inputs such as access to credit institutions, storage facilities,
existence of service cooperatives and extension service. The finding is presented in Table 11.

66
Table 11: Distribution of sample respondents based on their organizational and
institutional factors (N=200)
Variables Attributes Frequency Per cent
Access to credit Yes 117 58.5
No 83 41.5
Total 200 100
Storage facility Yes 0 -
No 200 100
Total 200 100
Extension contact 0 22 11
Rarely 39 19.5
Once in a month 33 16.5
Once in 3 weeks 41 20.5
Once in 2 weeks 40 20
Once in a week 25 12.5
Total 200 20

Source: computed from own survey data 2009

Access to credit
Access to credit can address the financial constraints of farmers. The finding shows that, 58.5%
of the respondents had no access to credit institutions, whereas, 41.5% had access to and
utilization of credit from institutions. Among those who have access to credit institutions, only
21.5% of them have got credit in 2008 production year in the study area. The constraints for
access to credit in the study area might be lack of efficient credit system at farmers’ disposal.

Storage facility

Existence of storage facilities at farmers’ disposal would have an advantage for input suppliers to
damp and timely deliver agricultural inputs. As a matter of chance no warehouses were seen that
meant for input storage in the study area. From the data collected, the response of all respondents
was the same (200%) and showing the absence of storages. This entails farmers are subjected to
high transport cost and lack of timely delivery of inputs. Therefore, this variable could not show

67
variation among respondents in relation to their input demand, and not included in statistical
analysis.

Extension contact

Farmers’ proximity to agricultural extension services would have positive influence on demand
for agricultural inputs due to increased adoption rate of farmers on improved agricultural inputs.
The variable is computed in terms of farmers’ proximity/contact with DAs. From the survey, 178
(89%) of the respondents have contact with DAs at different level of frequency ( rarely 39, once
in a month 33, once in three weeks 41, once in two weeks 40 and once in a week 25) and the rest
22(11%) had no contact.

4.2.4 Relationship between dependent and independent variables

This section covers the findings on relationship between input demand-supply index (dependent
variable) and independent variables (personal factors, socio-economic factors, situational factors,
and institutional and organizational factors) through, Pearson correlation analysis for continuous
variables, Chi-square test and Cramer’s V for discrete/categorical variables and Spearman’s rho
Non Parametric Correlation analysis for dummy variables.

Table 12: Relationship between dependent and discrete/ categorical independent variables

Discrete /categorical independent Input demand supply index

variables X2 df p Cramer’s V
Education level 124.730 3 .661 .456
Type of road used 137.427*** 2 .001 .586
Extension contact 240.224* 5 .068 .542
*** , * Significant at 0.01 and 0.1 level

The output of chi-square test in Table 12 is generally revealed that, among the three
discrete/categorical independent variables, type of road used and extension contact show positive
and significant association with the dependent variable at 1%and 10% level of significance
respectively.

68
Table 13: Relationship between dependent and continuous independent variables
Continuous independent variables Pearson correlation analysis
r p
Age of the respondent -.073 .303
Active labor force of the family .081 .251
Total farm land owned .048 .501
Annual income of the family .053 .638
Distance from the nearest input market .206** .013
** Significant at 0.05 level (2- tailed)

The output of Pearson correlation analysis in Table 13 indicates that, out of five continuous
independent variables, distance from the nearest input market is positively and significantly
associated with the dependent variable at 5% level of significance. The probable reason for
positive significance of distance from the nearest input market is majority of respondents are
located in distant villages even within the nearby PAs (see Table 10).

Table 14 : Relationship between dependent and dummy independent variables

Dummy independent variables Spearman’s rho correlation analysis

r p
Access to credit .187** .008
Access to market .096 .177
** Significant at 0.01 level (2-tailed)

The output of Spearman’s rho correlation analysis in Table 14 indicates that, out of two dummy
independent variables, access to credit is positively and significantly associated with the
dependent variable at 1% level of significance.

4.2.5 Multiple Linear Regression Analysis

In the preceding parts of this thesis the descriptive analysis and bivariate analysis of important
independent variables, which are expected to have influence on input demand- supply were
presented. In this section, the selected independent variables were put to Multiple Linear
Regression (MLR) model to identify the factors influencing agricultural input demand-supply

69
index of farmers. A MLR model was fitted to estimate the influence of the hypothesized
independent variables.

Prior to the estimation of the model parameters, it is crucial to look into the problem of
multicollinearity or association among the potential candidate variables. To this end, the variance
inflation factor (VIF) was used to test the degree of multicollinearity among the continuous
variables and contingency coefficient test for categorical/dummy variables.

The value of VIF for continuous variables was found to be less than 10 (see appendix table 8).
To avoid serious problem of multicollinearity, it is quite essential to omit the variables with VIF
value greater than or equal to 10 from the MLR analysis. As a result all 5 continuous
independent variables were retained and entered into MLR analysis. For categorical/dummy
variables contingency coefficient test was worked out to test the existence of multicollinearity
effect. As a result the values of contingency coefficients were less than 0.75 and no serious
multicollinearity problem was occurred among the independent variables (see appendix table
12).

The variable input demand-supply index was used as a continuous dependent variable.
Eventually, a set of five (5) continuous independent variables, three (3) discrete/categorical and
two (2) dummy variables were included in the model and used in the MLR analysis (see
appendix table 13).

These variables are selected on the basis of theoretical explanations and the result of various
empirical studies. To determine the best subset of independent variables that are good predictors
of the dependent variable, the MLR were estimated using SPSS 12 version. In this method all the
above mentioned variables were entered in a single step.

70
Table 15 : Coefficients of regression function
Variables Coefficients
β Std.Error t Sig.
Constant .821 .155 5.290 .000
AGE - .004* .002 -1.786 .076
ACLF .036* .021 1.726 .086
TYPRD -.110*** .037 -2.942 .004
ACTMKT .034* .018 1.698 .085
EXTCON .028** .014 1.982 .049
,
*** **, * Significant at 0.01, 0.05 and 0.1 level

Table 17 shows that, out of 10explanatory variables considered in the model, only five variables
were found to be significantly influencing on input demand-supply index at 0.01, 0.05 and 0.1
levels of significance. These variables include age of the HH, active labor force of the family,
type of road used, access to market and frequency of contact with DAs. 5 of the 10 explanatory
variables (see Appendix table 13) were found to have no significant influence on input demand-
supply index in the study area. The variables derived as output of the model, are described
below.

Age of the household (AGE): from the result obtained, as number of HH head age increases by
a unit, input demand-supply index of the HH would decrease by .004 unit. This entails when the
age of the HH increases the probability of taking risk to use improved agricultural inputs would
decrease. This result concurs with the findings of Mahdi (2005).

Active labor force of the family (ACLFOF): The result showed that as number of active labor
force of the family increases by 1 unit, input demand-supply index of the family would be
increase by .036 units. This implies when the number of active labor force of the family
increases taking the risk of using production enhancing inputs would increase. This result
coincides with the findings of Abadi and Pannel (1999) and Bezabih (2000).

71
Type of road used: the analysis revealed that having road which is inconvenient to transport
inputs would deceases the input demand supply index by .110 units. This intailes the type of road
is negatively influence the dependent variable and hence, having difficulties in transporting
agricultural inputs would decrease the probability of purchasing production enhancing inputs.
The result concurs with the findings of Tesfaye and Shiferaw (2001).

Access to market (CACTMKT): as we can see from the analysis that having access to market
would increase input demand-supply index of the farmer by .034 units. This implies farmers
who have access to market regardless of input/output marketing, would have the probabilty of
demanding production enhancing inputs as compared to farmers who do not have market access.

Extension contact (EXTCON): It was hypothesized that this variable has positive influence on
the dependent variable. From the result obtained as frequency of contact with development agent
increases by a unit, input demand-supply index of the farmer would be increase by 0.028 units.
This implies when farmers have regular contact with extension agent, probability of using
production enhancing inputs would increase through increased awareness from the extension
organization. This result will coincide with Kidane (2001) and Techane (2002) who have
reported significant and positive relationship of extension contact and use of agricultural
technologies.

4.3 Policy and Institutional Environment for Agricultural Input Demand-Supply System

In analyzing the existing input demand-supply system of the country in general and the study
area in particular, policy and institutional environment for channeling the services is crucial.
According to Hagmann et al. (2002) as cited by Anteneh (2007), service delivery framework this
level is called ‘Supporting the Response’. At this level, analysis on the policies and legislation
for the institutional arrangements of service provision, monitoring and evaluation and quality
assurance of the service for regulating service provision modes and arrangements was
undertaken. The analysis was made based on narrative analysis of government policy and
strategy documents. It was backed up from public sector input suppliers, MoARD offices
existing at different levels and past studies conducted by some scholars.

72
4.3.1 Institutional arrangements

There exists a multiple actors in the service delivery and regulatory institutions in the public,
private, farmer based organization, civil society and NGOs with verified responsibility and yet
complimentary. Currently, the agricultural marketing and input sector in the MOARD with its
decentralized structure has developed implementation strategy to coordinate and support in
capacity building for the production, supply, distribution and marketing of agricultural inputs
system in the country (MoARD, 2005).

However, the public system is not functioning in an efficient or coordinated manner for the
financing and delivering inputs/services there by support responsive input/service delivery
system due to poor institutional linkage between different public organizations at different levels,
and between public organizations and other players in the system (i.e. private, cooperative
unions, NGOs and civil society organizations). These weak linkages are exacerbated by the
public sector’s persistent emphasis on yields and technologies rather than more comprehensive
focus on improving the service delivery ( Spielman et al.2006).

With regard to financing and delivery of the research system, agricultural research is also the
services that demonstrate existence of multiple actors in the financing and provision of the
research services especially for maize and participatory research in the country. The limited
research under taken by the private sector like Synegnta and pioneer hybrid in maize research
can be referred.

4.3.2 Seed systems and policy

From an economic point of view, determining the appropriate role of the state and the private
sector in the market for seed is a complex issue. Seed systems are, by their nature, subject to a
variety of unique market and institutional constraints (Tripp and Louwaars, 1997, Gisselquist and
Van Der Meer, 2001). First, problematic property rights questions arise from fact that improved
seeds can, in many cases, be reproduced by the farmer, thus reducing the ability of breeders to
appreciate the gains from their innovative activities and investments. Second, information
asymmetries result from the inability of farmers to make ex ante assessments of seed quality,

73
since the seller retains such knowledge in the absence of certain types of regulation. Third,
coordination problems result from difficulties in monitoring and enforcing contracts for seed use.
Finally, inelastic supply responses result from the inability of breeders to respond effectively to
the changes in seed demand that result from expectations of market prices, household incomes,
rainfall, and other determinants of farmers’ planting decisions. Nonetheless, over time, many of
these failures can be resolved through enactment of plant variety rights and truth in labeling
laws, eventually allowing developed seed systems to be largely driven by the private sector.

Until 1992, there was no coherent national policy for the development of seed industry. In 1993,
a national seed industry policy and strategy was formulated to guide seed sector development.
The National Seed Industry Council (NSIC) was established under Proclamation No 56/1993 and
become responsible for advising the Government on policy and regulatory issues that would help
improve and build a sustainable national seed supply system. Proclamation No122/98 amended
the members of the Council (Getnet et al., 2001). The main objectives of national seed industry
policy are to:

• Streamline evaluation, release, registration and maintenance of varieties developed by

national programs.
• Develop an effective seed production and supply system through participation of public
and private sectors.
• Encourage the participation of farmers in germplasm conservation and seed production.
• Create functional and efficient institutional linkages among seed industry participants.
• Regulate seed quality, seed import export trade, quarantine and other seed related issues.

In the national seed industry policy, emphasis have been given to agricultural research
institutions, the Ethiopian Seed Enterprise (ESE), state farms, private farms and farmers as major
producers and suppliers of seed. The private sector is expected to play an important role in seed
sector development.

A Ministerial Regulation No. 16/1997 which was enacted to cover registration of varieties, seed
producers, processors, distributors, quality control, seed trade (import-export), etc. has been

74
replaced by Seed Proclamation No. 206/2000. The latest Proclamation is more comprehensive
and creates stronger legal framework for the protection and control of the interests of all players
in the seed industry. Moreover, field and seed standards prepared for 74 crops are officially
issued for implementation.

Shortcomings in seed quality and timeliness of delivery have been an issue in Ethiopia for
several reasons. First, the ESE supplies seed with only a limited number of traits capable of
addressing the many biotic and abiotic stresses found across these farming systems and agro
ecologies. Second, concerns have been raised regarding the quality of seed provided by the ESE.
Poor cleaning, broken seeds, low germination rates, and the presence of mixed seeds has been
commonly reported in ESE supplied seed (DSA 2006). Third, the official process of procuring,
stocking, and distributing seed often fails to meet the time-sensitive needs of farmers. Numerous
surveys have found that seed procurement and distribution through official channels is often not
conducted in a timely or coordinated manner. Seed is either distributed after the optimal planting
time, or the varieties distributed are not appropriate to changes in farmers’ expectations of
weather (e.g. Sahlu and Kahsay 2002; DSA 2006; EEA/EEPRI 2006).

As it was discussed in literature review part, timely delivery of agricultural inputs with sufficient
quantity as per the demand of users would enhance the consistent use of agricultural technologies
to boost productivity of individual farmers in particular and the farming community in general.
From the discussion with WARDO and key informants, improved maize seed delivered to the
woreda was not timely and not according to the demand. Moreover, according to SZARDD, the
quality of BH-660 (maize variety) seeds delivered this year (2009) by private investors and
Hawassa state farm found to be worse (full of broken, shriveled and poor in germination).
Though seed policy and legislations are issued regarding quality, due to weak controlling system
and inability to implement rules and regulations the demand sector faces this problem repeatedly.

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Variety Release and Registration

Agricultural research in Ethiopia has a relatively long history and is carried out by a number of
institutions. In the past EARO has a national mandate to conduct and coordinate research, but
institutions of higher education (universities and colleges) are also engaged in agricultural
research. Moreover, specialized units in the MoARD and other public sector organizations
conduct adaptive and applied research for their own needs (Getnet et al. 2001).

Agricultural research has been reorganized recently as part of the Government effort to promote
the agricultural sector of the economy. From 1998, the former Ethiopian Agricultural Research
Organization (EARO) and the now Ethiopian Institute of Agricultural Research (EIAR) became
operational and a focal point for implementing national agricultural research in Ethiopia. Some
main agricultural research centers have been transferred to the Regional States and are
accountable administratively to Regional Agricultural Bureaus but technically to EARO. EARO
has 14 main research centers and 29 sub-centers located in various agro ecological zones of the
country. The organization has a strong collaborative research with international agricultural
research centers such as CIAT, CIMMYT, ICARDA, ICRISAT and IITA (Ibid).

Ethiopia is the primary center and diversity of most important agricultural crops. The country is
endowed with rich genetic resources. The Institute of Biodiversity Conservation and Research
(IBCR) was established in 1975. IBCR is responsible for collection, conservation,
characterization and utilization of Ethiopia’s germplasm. It is a major source for germplasm for
crop breeding for NARS in the country (Ibid).

The variety release and registration system has evolved over a number of years. Since 1984
variety release and registration has become the responsibility of the NVRC. The Committee is
composed of breeders (4), agronomists (1), crop protection specialists (2), research/extension (1)
and socio-economists (1) representing different research institution and user organizations. The
membership includes the EARO, Institute of Biodiversity Conservation and Research (IBCR),
Awassa College of Agriculture, NSIA, Coffee and Tea Development Authority (CTDA), and the
Ministry of Agriculture (MoA). The NVRC proposed a reform of its current structure and
functions and elaborated procedures for variety release and registration of horticulture, fruit and

76
tree crops. The Seed Quality Control and Certification Department of NSIA serves as the
secretariat of NVRC. Varieties are in extensive trials before they are proposed for release at
regional or national level. Breeders carry out a minimum of two to three years national or
regional trials (NYTs) in at least three to five locations or different agro-ecological zones before
submitting an application to NVRC. The variety should be tested for yield, tolerance to pests and
other important agronomic characters compared with standard varieties or local check.
Superiority in yield, grain quality and acceptable level of distinctness, uniformity and stability
are required to grant a release (Ibid).

According to the key informants of improved maize variety suppliers, the time given for variety
release has to shorten and improved through increasing number of locations in different agro
ecological zones to test for various characters. This in return would have advantage for both
sectors to update the existing varieties and deliver high yield potential varieties within a short
period of time as to satisfy the current high demand for improved maize technologies and
increase production and productivity of farming community to ensure food self sufficiency.

4.3.3 Fertilizer and credit policy

Unlike seed, fertilizer is a private good that should be well suited to private market
development in Ethiopia. However, a number of features of fertilizer have complicated market
development in the early stages of adoption. On the demand side, fertilizer is a highly specialized
input, the efficient use of which generally requires complementary inputs (e.g. improved
varieties), as well as higher levels of management. Most final consumers of fertilizer—
smallholders—are widely dispersed geographically, and most of them are poor, so creating a
market can be costly. Furthermore, in rainfed areas, fertilizer consumption is highly seasonal (a
2-3 month market window), and year-to-year fluctuations in rainfall patterns contribute to high
inter-year variability in demand for fertilizer, with corresponding risks of high carryover stocks
from year to year. On the supply side, fertilizer is a bulky input, with relatively low value to
volume. This means that transportation costs can make up a large share of final selling prices,
even despite considerable economies of size in international procurement and shipping. In
countries that import fertilizer (such as Ethiopia), the supply chain from fertilizer production to
the final user, the farmer, is long in terms of both distance and time, often requiring over six

77
months from initial orders to final purchase. Hence, liquidity along the supply chain is often a
constraint. Due to these constraints on both demand and supply, public interventions in fertilizer
markets are common in the early stage of market development (Getnet et al, 2001).

However, since 1999 the private sector that had initially responded to the reforms has largely
exited the fertilizer market. In the case of imports, the share of private firms operating in the
market went from 33 percent in 1995 to zero in 1999. Since then, the AISE has taken the
majority share, followed by “private” companies closely affiliated with or owned by the
governing party and, more recently, cooperative unions. In 2004/05, the share of party affiliated
companies declined, and cooperative unions entered the import market with considerable
technical assistance from the Ministry of Agriculture. The market share trends are similar in the
case of wholesalers. While AISE had a market share of less than 50 percent during the mid- and
late 1990s, it had regained the majority share by 2001, when private sector wholesalers, except
for the party-affiliated companies, had disappeared from the scene. The decline of the private
sector in the retail market was more dramatic. While private sector retailers held a majority share
of the market in the early 1990s, the public sector and cooperatives have become almost the sole
distributors of fertilizer since early 2000 (DSA 2006). As of 2004, the public sector accounted
for over 70 percent of distribution, with private dealers accounting for only 7 percent of sales
nationwide (EEA/EEPRI 2006). The public sector supply channels have also changed; whereas
extension agents initially managed distribution, the responsibility was shifted to local input
supply offices in more recent years.

Difficulties are also evident in the estimation of demand and distribution of fertilizer. Estimates
of demand are compiled through official channels and aggregated to the national level as in the
case of seed. Importers respond to official demand estimates and organize distribution through
the regional bureau of agriculture or cooperatives, depending on the region (DSA, 2006).

The current government policy is to target at least 80 percent of fertilizer sales through
cooperatives, which are eventually intended to replace the public sector involvement in retail
distribution of fertilizers. This process, as with the importation process, tends to favor those

78
firms or organizations with access to capital markets and experience in navigating the regulatory
and administrative systems at both the federal and regional levels.

To ensure the uptake of the seed-fertilizer technological packages, regional governments in

Ethiopia initiated a 100 percent credit guarantee scheme beginning in 1994. Under this system,
about 90 percent of fertilizer is delivered on credit at below-market interest rates as part of
packages (incorporated with extension programs), displacing what had previously been retail
sales from the private sector (including a substantial share on cash basis). In order to finance the
seed-fertilizer technology packages, credit is extended to farmers by the Commercial Bank of
Ethiopia (a state-owned bank), through cooperatives, local government offices, and more
recently, microfinance institutions (MFIs) and one cooperative bank. Since 1994, the number of
active cooperatives, cooperative unions and MFIs has expanded. These organizations have
gradually assumed part of the guaranteed credit program, which had reached some four million
farmers with guaranteed credit of nearly $70 million in recent years.

Credit recovery, using extension agents and a degree of coercion by local administrative
officials, was generally successful until the collapse of maize prices in 2001 and the subsequent
drought. In Oromiya, for example, recoveries had averaged above 80 percent up to 2001, but this
figure dropped to 60 percent in 2002, forcing major rescheduling of loans. As a result of the
credit guarantee, the total amount of the defaults is now deducted from the Federal government
block grants to each of the regions (Ibid).

Moreover, the regional government of SNNPR currently put credit norms in the basis of
production seasons i.e. for belg, 75% of inputs would be delivered in cash and only 25% was
meant for credit with 25% and 50% down payment and for that of meher, input credit is
delivered with ranging from 25% - 50% down payment for inorganic fertilizer. No credit is
provided for improved seeds.

According to WARDO seed- fertilizer channel is complex and bureaucratic due to inefficient
facilitation by concerned partners. The credit system is also taking many steps to reach at

79
farmers’ disposal. Moreover, credit modalities (norms) are disfavor of small scale poor farmers
due to absence of money at times of down payment collection.

The current fertilizer supplier in the project area (Sidama Elto Crop Cooperatives Union) is not
efficient due to weak organizational and institutional arrangements. Similarly, fertilizer credit
provided by commercial bank of Ethiopia (CBE) is also full of obstructions like untimely release
due to prolonged loan agreement process and inefficient uptake of credits by users due to link
between government offices running cost budget and collateral. This, in turn, affected the
commitment of grass root level policy implementers to help resource poor farmers through
channeling efficient credit systems in a wider scope.

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 5. SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary

The study area Dale woreda is one of the potential for coffee producing woredas in the region
having two farming systems viz. coffee-livestock and haricot bean-livestock. To determine the
input demand-supply index of the respondents, input required and obtained last year in relation
to coffee, haricot bean and maize crops are taken into considerations.

The study was conducted in order to analyze the input demand- supply system of the area. It also
tried to investigate, the status of linkage and knowledge flow among actors involved in the
system, influential factors for the smooth functioning of the system and the enabling policy
environment toward the system. To see the status of linkage and knowledge flow among
partners, linkage matrix and knowledge network analysis of RAAKS tools were used. For
identifying the influential factors both qualitative and quantitative method of data collection were
used i.e. for input suppliers, qualitative analysis was used through questionnaires distributed, and
for demand sector (farmers) FGD and interview schedule were conducted to collect data and
analyzed using descriptive statistics and multiple linear regression from econometrics model. As
to the enabling policy environment, Government policy content analysis on seed and fertilizer
policy was made using different documents of policy and regulations of the country versus
implementations.

According to the result of the study, linkage between farmers and relevant actors was found to
be relatively weak, and whereas linkage among actors like WARDO, SZARDD, HARC,AWRC
and IPMS found to be relatively strong. As far as knowledge/information flow from relevant
actors to farmers is concerned, it was also found to be ‘sometimes’ and ‘rarely’. But
information/knowledge flow between WARDO and relevant actors seemed to be somewhat
frequent.

As to influential factors for the smooth functioning of the system, from input/service providers
side; organizational mandatory clarity, sufficient and irrigable seed farm, skilled man power,
setback of temporary loan settlement by users, policy environment, storage facilities at grass root

81
level, efficient marketing system, timely demand claims from users, clearly defined role and
responsibilities of each partner, availability of improved seeds in terms of their germination,
viability and adaptability, research centers cooperation and willingness to share resources
including knowledge, farmers willingness to take risks and demand for improved crop varieties
were some of mentioned factors that influence the system positively and/or negatively.

Moreover, from users’ survey, the results of econometric model indicated the relative influence
of different explanatory variables on the response variable. A total of ten (10) explanatory
variables were included into the model, of which five (5) of them had shown significant
influence on the dependent variable (input demand-supply index). Number of active labor force
of the family, access to market and extension contact found to have positive and significant
influence on input demand-supply index; and contrary to this, age of the household head and
type of road used were shown negative and significant relationship with the dependent variable.

Regarding to the enabling policy environment, rules and regulations to implement policies and
strategies found to be mainly constrained with lack of flexibility and commitment. Though the
policy invited actors to involve in the system, especially in seed industry and fertilizer markets,
due to lack of efficient management system and facilitation role by the bureaucracy, it is found to
be not as expected. Accordingly, issues like durations for seed release and registration,
cooperative law, quarantine measures for imported/shopped seeds and attention to seed bio-
diversity (endemic/indigenous crop varieties) were some points raised from supply sector and
pricing, quantity and credit system were some of issues raised from users to be revisited in the
policy to strengthen the system and hence to create efficient and effective input/service delivery
to farmers as to increase production and productivity of the study area in particular and the
nation at large.

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5.2 Conclusion and Recommendations

To bring sustainable agricultural development and ensure food self sufficiency of the nation,
actors involved in the sector should act synergistically. Services like extension, input supply,
credit provision, research and development were amongst all delivered in the project area for the
realization of bringing about change at the peasant sector.

Agricultural inputs like seed, fertilizer, pesticides, improved farm tools, etc supply in line with
efficient extension service would lead to ensure enhanced production and productivity. However,
the supply of these production enhancing inputs/services were constrained with various factors.
These factors together with several personal, situational, socioeconomic, and institutional and
organizational factors greatly affected the input demand supply index of the sector in the area
under study. Based on the research findings of this study, the following points are recommended
to improve the input demand supply system of the study area.

For the strength of the system, the existence of strong linkage among actors within the system
has a vital importance in a way that to transfer knowledge and provision of agricultural
inputs/services in efficient and effective manner. Therefore, creating strong relationship among
relevant actors through platforms, workshops and symposia has to consider with the aim of
bringing strong partnership to reverse the existing livelihood status of the peasant sector.

Inaccessibility of credit is found to be serious problem to increase farmers’ productivity in the

sector. This, in response, disfavored the majority of small scale farmers in lowering their
livelihood status and resulting for food shortage. Therefore, by improving the efficiency of credit
system, timely and sufficient amount of delivering credit to farmers who engaged on crop
production has to be considered as a central and core component of any development
intervention in the sector. In line with this, due attention has to given to women farmers group to
empower them and participate in productive activities through delivering agricultural input
credits as to minimize vulnerability and improve their livelihood status.

Provision of inputs timely and according as to the demand of beneficiaries is crucial to boost up
production and productivity of smallholder farmers. Accordingly organizing farmers groups

83
through primary cooperatives has significant importance to deliver inputs via cooperatives at the
beneficiary disposal. Therefore, attention has to given for the strengthening of farmers
organizations to involve in input distribution and credit provision for farmers and enhance
bargaining power in competitive markets with support of GOs and NGOs involved in the sector.

To resolve problems related to the use of production enhancing inputs by farmers, establishing
efficient extension service in the study area is mandatory. In this regard, the extension
organization should work in harmony with research centers and NGOs in updating knowledge to
be transferred to farmers’ research extension groups (FREG) supported with relevant extension
methods and approaches. Likewise, the extension service should give attention in accessing
information/knowledge to women farmers through including women groups in its program as to
participate in income generating activities and for accumulation of capital at household level.
Moreover, attention has to be given by local administration to rural development and agricultural
extension activities in facilitating infrastructures related to road and transportations for market
in/outlets to change the life of resource poor farmers in particular and the rural society at large.

With regard to the enabling policy environment, flexibility of laws and changing paper to action
is very important for the smooth functioning of the system. Flexible laws that could
accommodate and recognize other informal types of organization like ‘groups’ may enhance the
supply of inputs/services by service providers as to assist according to farmers need and
willingness to involve in interventions to be conducted. Therefore, to fill the gap, polices related
to farmers organization (groups), channeling efficient and effective credit service, time given for
release and registration of new seed varieties, appropriate quarantine services to shopped and
imported crop varieties, attention to seed biodiversity particularly those of our
endemic/indigenous crop varieties, expansion of public and private seed multiplication farms
supported with irrigation facilities and promotion of farmers to farmers seed multiplication and
exchange has to be given due emphasis to reverse the impediments encountered due to
inflexibility and inability to put in action of intended policies for the sector.

84
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Sahlu, Y. and M. Kahsay. 2002. Maize seed production and distribution in Ethiopia. In:
Proceedings of the Second National Maize Workshop, Addis Ababa, Ethiopia, November 12 -
16, 2001, pp. 160 - 165.

Salomon Monique L. and Paul G.H. Engel, 1997. Networking for Innovation: A participatory
actor-oriented methodology. Royal Tropical Institute KIT Press, Amsterdam, The Netherlands.
P.172

Sasakawa Global 2000,SG-2000/Ethiopia Project: Activities and outputs:- An assessment- 1993-

2001, SG-2000,2002, Addis Ababa.

Spielman, D. J., 2005. Systems of innovation: Models, methods, and future directions.
Innovation Strategy Today 2(1):55-56.

Spielman D., Martha Negash, K., Davis, and Gezahegn Ayele, 2006. The Smallholder Farmer in
a Changing World: The Role of Research, Extension and Education in Ethiopian Agriculture
Paper submitted for ESSP Policy Conference 2006 “Bridging, Balancing, and Scaling up:
Advancing the Rural Growth Agenda in Ethiopia” 6-8 June 2006, Addis Ababa, Ethiopia

Spielman, D. J., Davis, K. E., Negash, M. and Ayele, G., 2008. Rural Innovation Systems and
Networks Findings from a Study of Ethiopian Smallholders, IFPRI Discussion Paper,
international food policy research institute, Washington, DC.

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Storck H., Bezabih Emana, Berhanu Adnew, Borowiccki A. and Shimelis W/ Hawariat, 1991.
Farming Systems and Resource Economics in the Tropics: Farming System and Farm
management practices of small holders in the Hararghe Highland. Vol. II,Wissenschaftsverlag
Vauk, Kiel, Germany.

Techane Adugna and Mulat Demeke, 1999. “Institutional reforms and sustainable input supply
and distribution in ethiopia”. Institutions For Rural Development Proceedings of the 4th Annual
Conference of the Agricultural Economics Society of Ethiopia (AESE) Addis Ababa, Ethiopia,
pp 125 - 157

Techane Adugna, 2002. Determinants of Fertilizer Adoption in Erhiopia. The Case of Major
Cereal Producing Areas. M.Sc. Thesis (Unpublished) Presented to School of Graduate Studies of
Haramaya University, Ethiopia.

Tesfaye Zegeye and Shiferaw Tesfaye, 2001. Determinants of adoption of improved maize
technologies and inorganic fertilizer in Southern Ethiopia. Research Report No. 39. Ethiopia
Agricultural Research Organization(EARO).54p.

Tripp, R., and N. Louwaars. 1997. Seed regulation: Choices on the road to reform. Food Policy
22 (5): 433–446.

Wolday Amha, 1999. “Improved seed marketing and adoption in Ethiopia”. Ethiopian journal of
Agricultural Economics, AESE, Addis Ababa, Ethiopia vol. 3 No 1 – pp 41-88.

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Research Systems, Washington, DC. [On line accessed June 15, 2008] http://www.worldbank.org/rural

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Zewde Bishaw, 2004. Wheat and Barley seed system in Ethiopia and Syria. PhD thesis
Wageningen University.

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7. APPENDICES

91
 Appendix 1 Users survey interview schedule

General Instructions to Enumerators

Make brief introduction to each farmer before starting the interview, get introduced to the
farmers, (greet them in the local way) get his/her name; tell them yours, the institution
you are working for, and make clear the purpose and objective of the study.

Please ask each question clearly and patiently until the farmer understands (gets
your point).
Please fill up the questionnaire according to the farmers reply (do not put your
own opinion).
Please do not try to use technical terms while discussing with farmer and do not
forget to record the local unit.
During the process put the answer of each respondent both on the space provided
and encircle in the choose

Identification Number (code) ------------------

Peasant Association name ----------------------
Name of enumerator-----------------------------
Date of interview---------------------------------

I- PERSONAL FACTORS

1. Name of the respondent _________________________ Sex_____________

2. Age of respondent ______________
3. Marital status 1. Single 2. Married 3. Divorced 4.Widowed
4. Education level
1. illiterate 2.can read & write 3. primary school (grade 1-6)
4. secondary school (grade 7-12)
5. Total number of household members (active labor force) -----------
S Name of family members Relationship to Age Gender
N the respondent (15-64) 1: M
(a)
2: F
1
2
3
4
5
6
7
8
9
(a)
Relationship: 1: Husband 2: Son 3: Daughter 4: Relative 5: Raised 6: Other

92
II- SOCIO-ECONOMIC FACTORS

6. Do you own land? 1. Yes 0. No

7. If yes, mention the source and size of farmland? 1. Own farm size_________ 2. From share
cropping______3. Rented from other source___________
7.1 Total land size covered by all crops (in timad) ____________
1- Coverage of coffee farm _______________
2- Coverage of haricot bean farm _______________
3- Coverage of maize farm _______________
4- others (specify)_______________
8. What are the sources of family income?
1- From farming activities 2- non farming activities 3- others specify
9. What amount of money you earn annually from your income sources?
_______________________________________________________________________________
10. For what purpose you are using the money you get?
1. To purchase inputs 2. To purchase cattle 3. Clothing 4. Home consumption materials
5. Others specify
11. Is the price of inputs affordable? 1. Yes 0.No
12. If your answer is no, what was its impact on you in the use of improved crop inputs?
1- using below recommended level 2- partly use of package inputs 3- decision for not using
4-Others specify_________________

III- SITUATIONAL FACTORS

13- Is there road facility which helps you for input purchase and market out late?
1-Yes 0- No
14- If your answer is yes, what type of road you are using?
1- all weather road 2- winter season road 3- others specify
15- If your answer for question 12 is no, how do you cope up?
1- bare foot roads 2- others specify
16- What do you use to bring agricultural inputs from the source?
1. Transport car 2. Own cart 3. Equines 4- others
17- How much hour will you spent to reach to the nearest input market from your home?
----------------------------------------
18- How do you evaluate the facilities related to road and transportation means in relation to
input use?
_____________________________________________________________________________
______________________________________________________________________________
_____________________________________________________________________________
______________________________________________________________________________
19- Do you have access to market for your produce?
1. Yes 0. No
20. If no, what is/are the main constraint (s) regarding access to market?
1. Unable to get market information 2. Far distant of market place
3. Unable to get alternative market 4. Lack of means of transportation 5. High market tax
6. If other, specify_____________________

93
IV- ORGANIZATIONAL AND INSTITUTIONAL FACTORS

21- Are there credit institutions at your disposal? 1. Yes 0. No

22- If your answer is yes, what is the name of credit institution?__________________________
23- Are you ever used credit from the organization? 1. Yes 0. No
23.1- If your answer is yes, how frequent you are using credit from the institution?
1- once per a year 2- twice per a year 3- others specify___________
23.2- what is the type of credit you obtained? 1- in cash 2. in kind
23.3 If it is cash, for what purpose you borrowed the money?
1- to purchase inputs 2. For home consumption 3. Others specify_______________
23.4 If your answer for 22.3 is to purchase inputs, what type of inputs you purchased?
1- Seed 2. Fertilizer 3. Farm tools 4. Pesticides 5. Others specify_____________
23.5 If it is in kind, what are the inputs you borrowed?
1- seed 2. Fertilizer 3. Farm tools 4. Pesticides 5. Others specify_____________
24- If your answer for question 20 is no, what is the source of your money to purchase inputs?
1. From own farm income 2.Borrowed from neighbors 3.Gift from relatives
4. Others specify_________________
22.1 what type of inputs you purchased last year?
1- seed 2. seedling 3. Fertilizer 4. Farm tools 5. Pesticides 6. Others specify_____________
25- If your answer for question 22 is no, what is your reason to not borrow?
1- High interest rate 2.Presence of own money 3.Lack of collateral
4. Others specify_________________

26- What problem you are encountered related to input credit?

____________________________________________________________________
____________________________________________________________________
____________________________________________________________________

27- What is your suggestion for efficient input credit service in the future?
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________

28. Is there storage facility nearby to store agricultural inputs? 1. Yes 0. No

29. If your answer is yes, what is its contribution to your farming activity?
1. to get inputs timely 2. To minimize transport cost 3. Others specify_________________
30. If your answer is no, how much time do you spent to reach to the nearest input distribution
center?_________________________
30.1 does the distance has negative effect on you in using agricultural inputs? 1.Yes 0. No
30.2 If your answer is yes, what do you suggest to improve the service?
_______________________________________________________________________
________________________________________________________________________
_________________________________________________________________________

31. Is there service cooperative in your area? 1. Yes 0. No

31.1 If your answer is yes, are you a member of service cooperative? 1. Yes 2. No

94
 31.2 If your answer is yes, what service do you get from service cooperative?
1. input credit 2. Crop marketing 3. Credit and saving 4. Others specify_____________
32. If the service cooperative works on input distribution, being as a member what are the
problems encountered during distribution and what is your suggestion to improve service
delivery.

32.1 problems encountered

_________________________________________________________________
__________________________________________________________________
___________________________________________________________________

32.2 suggested solutions

__________________________________________________________________
___________________________________________________________________
____________________________________________________________________
33. If your answer for question 31 is no, what possibilities you have, to get services from a
service cooperative ?
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

34. Did you have any contact with Development agent in your area? 1. Yes 0. No
35. If yes, frequency of contact?
5. Once in a week 4. Once in two weeks 3. Once in three weeks 2. Once in a month 1. rarely
0.never
36. If no, why? 1. No DA nearby 2 . No need for service 3 .Others (specify)
37. What types of service most of the time you are getting from DAs?
1. Technical support 2. Theoretical information 3. Input Supply 4. Experience sharing
5. Others specify_____________________________.
38. Are you ever participated in extension training? 1. Yes 0. No
39. If yes, in what area of extension training you have participated?
___________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
________________________________________________________________________

40. Was the training contributed for the use of improved agricultural inputs? 1. Yes 0. No
41. If yes what are the significant contribution of the training in using agricultural inputs?
1. increased the demand for fertilizer use 2. increased the demand for seed use
3. Increased the demand for farm tools use 4. increased the demand for pesticide use
5. others specify________________
42. If your answer for question 36 is no, why?
1. Not invited to participate 2. No interest in the program 3. Others specify
___________________
43. Have you ever attended any farmers’ field day last year? 1. Yes 0.No
44. If no, why?

95
 1. Not invited to participate 2. No interest in the program 3. Others
specify___________________
45. Have you ever hosted, extension demonstration, or on farm experiments on your field last
year?
1. Yes 0. No
46. If not, why?
1. Not invited to do 2. Not interest in the program 3. Others
specify________________________

VII- INPUT DEMAND – SUPPLY INDEX

47. What type of inputs are required and obtained last year?
No Type of agricultural inputs Unit Required(1) Obtained(2) Sources of inputs
1 Maize
1.1 improved seed
1.1.1 BH-540
1.1.2 BH-660
1.1.3 BH-140
1.1.4 Others specify
2 Haricot bean
2.1 improved seed
2.1.1 Awash-1
2.1.2 Awash melka
2.1.3 Others specify
3 Coffee
3.1 improved seed
3.1.1 74110
3.1.2 74112
3.1.3 others specify
3.2 improved seedlings
3.2.1 74110
3.2.2 74112
3.2.3 others specify
4 Fertilizer
4.1 DAP
4.2 UREA
5 Pesticides
5.1 symbush
5.2 Others specify
6 Farm tools
6.1 sickle
6.2 spade
6.3 zabia
6.4 saw
6.5 pruning sheave
1.4.4 Others specify
48. Have you ever faced constraints on using the above-mentioned inputs? 1. Yes 2. No

96
 49. If your answer is yes from the above mentioned crops on which crop you faced more
constraints?
1. Coffee 2. Haricot bean 3. Maize
50. What is/are the main constraint(s) you faced?
1. Mismatch with the demand (in kind)2. Insufficient delivery 3.Poor quality of input 4. not
timely 5. Source from far distance 6. Less Extension support 7. Exorbitant input price 8.If
other specify______

VIII- ACTORS MAPPING, LINKAGE AND KNOWLEDGE FLOW

51. Who are the actors in relation to input demand-supply? Indicate their function and strengths
of linkages with you?( to indicate use “√ “)
No Name of the actors Function Status of linkage
V/strong Strong Weak None
(3) (2) (1) (0)
1 OARD - Knowledge transfer and
input delivery
2 NGOs existing in the area - Knowledge transfer and
input delivery
3 Woreda input desk - input delivery
4 Farmers’ service cooperatives - input delivery and purchase
of crop produce
5 Woreda rural finance - credit service
fund(RFF)
6 Awada Research Center - Knowledge transfer
7 Awassa Research Center - Knowledge transfer
8 Sidama Elto union - input delivery and credit
service
9 Private seed multiplier farmers - input delivery
10 Sidama micro finance - credit service
11 Omo microfinance - credit service
Others (specify)

52. How do you evaluate the frequency of participation of actors in delivering improved
agricultural knowledge? ( to indicate use “√ “)

No Name of the actors Frequency

Frequently (2) Sometimes (1) Rarely (0)
1 OARD
2 NGOs existing in the area
3 Awada Research Center
4 Awassa Research Center
5 Others specify

97
 Appendix 2 Questionnaire for actors involved in agricultural inputs/services
provision

™ Name of the organization__________________________

™ Address________________________________________________________
________________________________________________________
™ Major occupation _______________________________________________
_____________________________________________________
______________________________________________________
______________________________________________________
1.Types of agricultural inputs delivered to the farmers for last 3-5 years according to
farmers demand (only applicable for material input providers)
SN Types of inputs delivered Unit 1996E.C 1997 E.C 1998 E.C 1999 E.C 2000 E.C Total
D S D S D S D S D S D S
1 Improved seed
- Maize
- Haricot bean
- Coffee seed/seedling
- Others (specify)
2 Fertilizer
- DAP
- UREA
3 Plant protection chemicals
4 Credit
5 Others (specify)
Note: - D= demand S= supply
2. What are the opportunities for the organization to achieve the proposed goals?
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
________________________________________________
3. What are the major factors that influence the smooth functioning of the organization?
Justify how each factor affects.
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
__________________________________________________
4. Does your organization has any integration /linkage with related organizations.
1/ yes 2/ no

98
5. If your answer for question 4 is yes, fill the following table? Use (√ ) to indicate
SN Name of the organization The status of linkage
V. Strong Strong Weak None
1 Hawassa research center
2 Awada research center
3 Sidama elto crop union
4 Wereda OARD
5 Pioneer hi-breed seeds Ethiopia
6 P.L.C
7 IPMS
8 Farmers in the project area
9 Awassa seed enterprise (ASE)
10 AISCO
Others specify

6. What support you get from each of mentioned actors?

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

7. Knowledge flow within the system

Operational definitions

Technical = Knowledge/information related to technology to be utilized (e.g. merit of

improved varieties, how to control pests.etc)

Strategic = Knowledge/information related to future perspectives ( e.g. keeping up of

quality standards of coffee for export, improving productivity for better income,
cost benefit analysis etc.
Operational = Knowledge/information related to activities to be under taken (e.g. adjusting
planting time, use of short duration varieties to escape from drought, plant
population per unit area and such managerial aspects.
Policy = Knowledge/information related to policy issues like organizing farmers for better
market negotiations, channelizing incentives.
Market = Knowledge/information related to in the context of input-output marketing to
benefit the farmers.

99
 7.1 Types of knowledge/ information delivered by each actor
SN Name of actors Types of knowledge/information delivered
Technica Strategic Operational Policy Market Other
l (specify)
1 Hawassa research center
2 Awada research center
3 Sidama elto crop union
4 Wereda OARD
5 Pioneer hi-breed seeds Ethiopia P.L.C
6 IPMS
7 Farmers in the project area
8 Awassa seed enterprise (ASE)
9 AISCO
10 Others specify
♣Put (X) mark on types of knowledge delivered by each organization/ partner
7.2 Frequency of knowledge flow with in the system
SN Name of actors Frequency of knowledge flow
Frequently Sometimes Rarely
1 Hawassa research center
2 Awada research center
3 Sidama elto crop union
4 Wereda OARD
5 Pioneer hi-breed seeds Ethiopia P.L.C
6 IPMS
7 Farmers in the project area
8 Awassa seed enterprise (ASE)
9 AISCO
10 Others specify

♣Put (X) mark in the appropriate column ( only in one of the three columns)

8. Is/are there constraint/s in relation to policy environment? 1/ yes 2/ no

9. If your answer is yes what is/are the constraint/s?
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
__________________________________________________
10. What do you suggest for improvement of your organization service in relation to
agricultural input/service delivery?
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
__________________________________________________
11/ Do you have a trend in collecting feedbacks from users? 1/ yes 2/ no

100
12/ If your answer is yes, what are the feedbacks for your services?

SN Types of service delivered Feedbacks from users

1 Input supply
2 Credit provision
3 Knowledge transfer
4 Others (specify)

13/ Does your organization incorporate users feedbacks in its plan, for better
service?1/yes 2/ no
14/ If your answer is yes, what changes are made as the result of perceived feedbacks?
SN Perceived Feedbacks Changes made
1 Improving the quality of inputs
2 Improving the quantity of inputs
3 Improving input delivery network
4 Improving input delivery timeliness
5 Improving input credit delivery network
6 Improving the type of knowledge delivered
7 Improving the frequency of knowledge delivered
8 Others specify

15/ Does your organization has compensation plan for farmers who faced crop failure due
to low quality of your inputs? 1/ yes 2/ no
16/ If your answer is yes, explain?____________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________
17/ Does your organization encourage users by giving incentives for better adoption of
your inputs? 1/ yes 2/ no
18/ If your answer is yes, what criteria are used to select users and what type of
incentives are given so far?
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
________________________________________________

101
 19/ How do you evaluate your users satisfaction? Put (X) mark in the most appropriate
column.

SN Types of service delivered Level of user satisfaction

Very good Good Fair Bad
1 Input supply
2 Credit provision
3 Knowledge transfer
4 Others specify

20/ what is your suggestion for the smooth functioning of input demand supply system?
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
________________________________________________

Appendix 3 Check list for focus group discussions (FGD) for MHH
Name of PA________________________
Name of farmers participated in FGD Occupation in PA
1._______________________________ ____________________
2._______________________________ ____________________
3________________________________ ____________________
4._______________________________ ____________________
5._______________________________ ____________________
6._______________________________ _____________________
1. What are the possible agricultural inputs you use in your area and how do you explain
agricultural input /service delivery related to coffee, haricot bean and maize?

2. Who are the actors involved in agricultural input/service provision? How is the status
of linkage and knowledge sharing with you?
Status of linkage with farmers
SN Name of the actors Function Frequency of K flow
V. strong Strong Weak Freq. Sometimes Rarely

102
3. What are the influential factors related to input/ service provision and what constraints
do you have in using inputs/services?
4. How do you rank the influential factors regarding input/service provision?
SN Influential factors Score Sum Rank

5. What are your suggestions to improve the situations?

6. What are the opportunities, which can be capitalized?

Appendix 4 Check list for focus group discussions (FGD) for FHH
Name of PA________________________
Name of farmers participated in FGD Occupation in PA
1._______________________________ ____________________
2._______________________________ ____________________
3________________________________ ____________________
4._______________________________ ____________________
5._______________________________ ____________________
6._______________________________ _____________________
1. Do you have access and utilization to agricultural inputs/services? 1/ yes 2/no
2. If your answer is yes, What are the possible agricultural inputs you use in your area
and how do you explain agricultural input/service delivery related to coffee, haricot
bean and maize?
3. If your answer is no, what are the reasons?
4. From whom do you share information/knowledge?

SN Name of actors Frequency of knowledge flow

Frequently Sometimes Rarely

5. What are the influential factors related to input/ service provision and what constraints
do you have in using inputs/services?
6. What are your suggestions to improve the situations?

103
 Appendix 5 Supportive and Detail result Tables

Appendix: 1 Input demand –supply data of the study area (2004-2008)

S. Type of Unit 2004 2005 2006 2007 2008 Total
No inputs D S D S D S D S D S D S
1Maize Qt 240 172 617 248.5 532 330 535 330 600 215 2524 1295.5
2H.bean Qt - - 250 182 229.5 219.25 47.5 37.2 23 23 550 461.5
3Coffee Ps 0.6 0.88 1.26 1.73 2.0 2.72 2.5 2.6 3.12 3.13 9.48 11.06
1
Seedlings M M M M M M M M M M M M
4 Fertilizer
- DAP Qt 2016 1662 6230 3200 5750 2820 2500 1800 2000 525 13320 10007
- UREA Qt - - - - 200 100 120 60 - - 320 160
5 Credit 2 Birr 607600 223800 297000 165400 - - - - - - 904600 389200
Source: WARDO, 2009

1
Coffee seedlings distribution was run mainly (90%) by coffee multiplier farmers
and the rest 10% was supplied by public nursery sites as per need.
M = in millions
2
The credit demand was requested by WARDO without considering farmers’ need

104
 Appendix table 2: Prioritization of the crops in terms of high level of constraints in input supply system
S.No. Type of the crop Frequency % Rank
1 Maize 109 54.5 1
2 Coffee 30 15 2
3 Haricot bean 19 9.5 3
No response 42 21
Total 200 100
Source: computed from own survey, 2009

Appendix table 3: Demand and Supply for seed during the 2005 agricultural season
Crop Quantity demanded Quantity supplied Supply as a percent of
demand
Wheat 518,487 106,279 20
Maize ** 155,215 82,458 53
Barley 70,839 11,628 16
Teff 78,389 4,197 5
Faba bean 77,728 4,761 6
Chick pea 48,187 26,405 55
Haricot bean ** 33,742 7,027 21
Sesame 21,769 6,046 28
Total ( incl.others crops) 1,117,597 304,042 27
Source: MOARD 2005 ** Selected crops for the research project

Appendix table 4: Hybrid maize seed production by company, 2004.

Company Percent of total maize supply
Ethiopian Seed Enterprise 70.0
Pioneer 16.1
Hawas Agro business 0.2
Awassa Farm Development Enterprise 1.3
Awassa Green Wood 4.7
Hadiya Trading Enterprise 1.5
Bako Agricultural Research Center 4.3
Ano agro industry 0.8
Anger farm 1.1
Total 100
Source: MoARD 2005

Appendix table 5: Respondents alternative measures for high cost of inputs (N=200)
S.No Measures taken Frequency % Rank
1 Using below recommended rates 127 63.5 1
2 Partly use of package inputs 43 21.5 2
3 Decision for not using 23 11.5 3
No response 7 3.5
Total 200 100
Source: computed from own survey, 2009

105
 Appendix table 6: Identified actors and their role in input demand- supply system of the study area

Sector type Name of the actor Role Remark

WARDO - technology introduction and promotion

- extension service and input provision
ESE / Hawassa- - introduction of seed varieties through
Shalo demonstration
- seed supply / maize and haricot beans/
Sidama Elto crop - Input supply for primary cooperatives/
union WARDO
AISE - fertilizer supply Missed actor
Hawassa Ag,Res. - technology generation
Public center - knowledge transfer
- improved seed supply( Haricot beans)
Awada coffee - technology generation
research sub center - improved coffee varieties introduction
Farmers - mobilization for improved technology use
- provision of feed back through two way
communication
Private seed - multiplication of coffee seedlings
multiplier farmers - provision of seedlings to growers
Wereda cabinets - facilitation of over all systems activity
- mobilization of people for development
activities
Zonal ARDD - technical support
- facilitation of input credit
- facilitation of improved seed supply
Regional BoARD - facilitation of input credit and seed supply Missed actor
- technical support
- capacity building/training/
- technology introduction
NGO IPMS - training for farmers and DAs
- knowledge transfer
- facilitation of market link
Private Pioneer hi-bred - improved maize seed supply Missed actor
investors or private limited A.C - technical support
companies

106
Appendix Table 7: Descriptions of independent variables

Variables Variable Expected Value

type sign

Age Continuous - Measured in years equivalent

Education level categorical + Measured in categorical scale
Family active labor force Continuous + Measured in adult equivalent
Total farm land Continuous + Measured in hectares
Annual income Continuous + Measured in birr
Distance from nearest input Continuous - Measured in kms
market
Type of road used discrete - scale

Access to market Dummy + Takes a value of 1 for yes 0

otherwise
Access to credit Dummy + Takes a value of 1 for yes 0
otherwise
Input price Dummy - Takes a value of 1 for yes 0
otherwise
Extension contact Continuous + Measured in number of contact

Storage facility Dummy + Takes a value of 1 for yes 0

otherwise

Appendix Table 8: Variance inflation factor (VIF) for continuous independent variables
Variables VIF
AGE 1.313
ACTLF 1.309
AMTLOW 1.704
ANINC 1.540
DFNIM 1.076

107
 Appendix Table 9: Conversion factor used to compute man equivalent
Age group Male Female
< 10 years 0 0
10-14 years 0.35 0.35
15-50 years 1 0.80
>50 years 0.55 0.50
Source: Storck et al. (1991)

Appendix Table 10: Contingency coefficient test for discrete/categorical/dummy variables (N= 200)
EDULVL TYPR TYTOPO FRCODA ACTMKT ACTCRDT

EDULVL 1 .413 .253 .334 .073 .128

TYPRDUS 1 .377 .480 .211 .398
TYTOPO 1 .338 .290 .132
EXTCON 1 .167 .247
ACTMKT 1 .132
ACTCRDT 1

108
Appendix table11: Coefficient of regression function
Variables Coefficients
β Std.Error t Sig.
Constant .821 .155 5.290 .000
AGE - .004* .002 -1.786 .076
EDUL .086 .040 2.037 .203
NACLF .036* .021 1.726 .086
FARMS .099 .070 2.131 .196
ANINC .032 .019 1.374 .785
TYPRD -.110*** .037 -2.942 .004
DFNINM .007 .004 1.646 .101
ACCRDT .096 .045 2.246 .245
ACTMKT .034* .018 1.698 .085
EXTCON .028** .014 1.982 .049
,
*** **, * Significant at 0.01, 0.05 and 0.1 level

R= .387 R2 = 0.150 Adj R2 = 0.105 F= 3.330 p = .001

Appendix Table 12: ANOVA of the regression function

Sum of squares df Mean square F Sig.
Regression 2.527 10 .253 3.330 .001
Residual 14.345 189 .076
Total 16.872 199
ANOVA results in table 12 shows that the regression is significant at 1% level

109
 Appendix 5 Supportive Figures

Appendix Figure 1: Map of agricultural input – supply system

Technology
Technology generation promotion
- Research centers & dissemination
- Universities
- External agencies -Extension
Organizations
- NGOS

On – farm trial

FARMERS
(USERS) Facilitators

Public and private seed - Service cooperatives

- Unions
multipliers & suppliers - Rural finance fund
- ESE - OARD
- NGOS
- Private investors - CBE
- Farmers

Source: SZARDD, 2009.

Key:
Two way communication

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