Analysis of Supply Chain and Demand for Fertilizer in Ethiopia: Empirical Evidence from Kersaand Malima Woreda of Oromia Region, Ethiopia

Abstract

The role of the agricultural sector in terms 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 agricultural inputs particularly use of chemical fertilizers for crop production plays a significant role in yield increase. This study, therefore, assessed the factors affecting demand and supply for fertilizer in Ethiopia as a case study in Kersa and Malima woreda in Oromiya National Regional State of Ethiopia. Descriptive statistics were used to analyses supply chain for fertilizer. Descriptive statistics and Econometric model were used to analyze of factors affecting demand for fertilizer in Ethiopia in the case study area. Under the analyses supply chain for fertilizer the result of descriptive statistics of Pearson correlation it is concluded that there is relationship between the seven variables (Estimation of demand for fertilizer purchase, Storage Facility, Custom process and Documentation, Transportation, Collaboration of Stakeholders, Distance from the village to market, Process of Order Issuance) with supply chain performance. Under analyze of factors affecting demand for fertilizer econometric estimation results depicted that 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. Hence, an additional store building, computerized system of estimation of demand for fertilizer, subsidy programs on the price of fertilizer, delivering credit, efficient extension system, due attention for timely distribution of fertilizer to the farmers are likely to improve demand and supply for fertilizer in Ethiopia.