| Abstract: | Ethiopian agriculture has a long history manifested in the considerable number of crop species, genetic diversity and also the second largest barley producer in Africa, next to Morocco, accounting for about 25 percent of the total barley production in the continent (FAO, 2014). Barley is one of the most important cereal crops that are largely grown in highland areas of Ethiopia with annual production of about 1.9 million tons cultivated on an area about 1 million hectares of land (CSA, 2014).Barley is one of the most important cereal crops that are largely grown in highland areas of Ethiopia with annual production of about 1.9 million tons cultivated on an area about. The Ethiopia malt barley market is fast-growing at 15-20% per year, market potential for malt barley is expected to grow from 58,000 MT in 2011 to 133,000 MT in 2016 but competition was limited and unable to offer a high quality product.
The monopoly price setting system that neglects the participation of value chain actors discourages smallholder farmers to remain in the sector and push them in to adulteration. Hence, undertaking an in-depth study on the current situation of malt barley production in Ethiopia, malting capacities, challenges, opportunities and the role/contribution of smallholders to import substitution agenda of Ethiopia is very essential. This study took the case of smallholder malt barley producers in Arsi and Bale areas of Ethiopia.
The study entirely focus to the existing theories related to research problems on how to identify and explore the existing market practices referring kotler’s (The 4Ps) and value chain models (Vertical and horizontal integration / forward and backward economic linkages) One type of inclusive business model which currently gains much renewed attention is contract farming.
In general delivered products should be able to generate sufficient revenues to buyers to cover not only their inputs costs and provide a profit, but also to cover the costs of developing and maintaining an effective and healthy relationship with the growers.
This study found out that 42% of the total respondents received embedded services form NGO’s 25% of it from Breweries .17% embedded was given by Assela Malt factory and only 15% of the respondents reported that the service given by cooperatives / Unions |
