ASSESSMENT ON PRIMARY SESAME TRANSACTION CENTERS IN MAINTAINING ETHIOPIA COMMODITY EXCHANGE PURPOSES: THE CASE OF METEMA WOREDA

Abstract

Agricultural markets of the country are characterized by different inefficiencies that significantly affect the production and productivity of smallholder farmers. Primary Transaction Centers are established to overcome these agricultural marketing problems by serving as a main supplier to the Ethiopia Commodity Exchange. The new marketing benefits introduced by Ethiopia Commodity exchange are designed to reach to smallholder farmers through Primary Transaction Centers. This research, a descriptive study using the survey method, makes an assessment on the agricultural commodity transaction practices at the selected three Primary Transaction Centers in order to identify which benefits of ECX are availed for smallholder farmers to modernize agricultural markets and which are not yet implemented. From the research it has been found that, Primary Transaction Centers are not serving well to realize modern agricultural market i.e. transactions do not consider product quality as price determination factor and because of this farmers are not rewarded for their quality products. Secondly, ECX market information are not used as an input or Primary Transaction Centers do not have their own price discovery mechanism to disseminate market information to the market actors. Thirdly warehouses are not constructed to keep unsold farmers’ products. In addition to these, price variability do not managed well and the market is so undetermined. All the above situations hinder the improvement of bargaining power of smallholder farmers to the required level. In the study, it is recommended that quality to be considered as pricing factor to enhance better quality production. Secondly, PTCs to disseminate market data for market actors on a daily basis to make the transaction based on information. Thirdly, to construct warehouse facilities at the Primary Transaction Centers to keep unsold farmers’ products. Finally, to fix price variability range based on daily average prices.