FACTORS AFFECTING DEMAND AND SUPPLY CHAIN OF FERTILIZER IN ETHIOPIA: EMPIRICAL EVIDENCE FROM KERSA AND MALIMA WOREDA OF OROMIA REGION, ETHIOPIA

Abstract

The role of the agricultural sector interms of its contribution to the economy of Ethiopia is large. To accelerate the sector’s growth and increase its contribution to the overall economic growth modern inputs particularly chemical fertilizers in the sector plays a great role. This study is designed to identify factors affecting demand and supply chain of fertilizer in Ethiopia as a case study in Kersa and Malima woreda in Oromiya National Regional State of Ethiopia. The researcher used both secondary and primary data. Descriptive statistics and econometric techniques were employed to analyze the data. Multiple linear regression were employed to analysis factors affecting demand and supply chain for fertilizer. Econometric estimation results depicted that estimation of demand for fertilizer purchase, storage facility and collaboration of stakeholders were negatively influenced the supply chain of fertilizer whereas distance from the village to market positively influenced supply chain of fertilizer at standard significant levels. On the other hand, price of fertilizer, farm size, access to credit, access to extension services, off-farm income, number of oxen and on time-delivery of fertilizer negatively affected the demand of fertilizer. Therefore, additional store building, computerized system of estimation of demand of fertilizer, subsidy programs on the price of fertilizer, delivering credit, assign efficient extension system and attention given for the timely distribution of fertilizer to the farmers are the most important thing to be considered in the study area.