Authored by Zinabu Ambisa
The review was mainly focused on to review
the production and marketing of banana in Ethiopia. Specifically aims to
review the overall status
of banana production, banana marketing and its constraints in the
Ethiopia. Dessert banana and plantain (Musa sp.) are the fourth most
important
staple food crops in the world after rice, wheat and maize. Currently
banana in Ethiopia covers about 59.64% (53,956.13 hectares) of the total
fruit
area, about 68% (478,251.04 ton) of the total fruit produced, and about
38.3% (2,574.035) of the total fruit producing farmers. On the other
hand,
about 68.72% (37,076.83 hectares) of land covered by banana, about
77.52% (370,784.17 ton) of the banana production, and 22.38% (1,504,207)
of
the banana producers in Ethiopia are found in the Southern Nations
Nationalities and Peoples Regional State (SNNPRS). Hence as we have
reviewed
several researches conducted by several authors are concentrated in the
southwestern part of the country in the Southern Nations, Nationalities
and
Peoples Regional State (SNNP) and Oromia Regional States this is due to
the authors select this area purposively depending on productions
potential.
So that it’s better if researches are conducted on other part of the
country. And also, several researches are conducted on banana marketing
but not
on production, again its better if researcher include its production in
their thesis.
Keywords: Banana; Constraint; Marketing; Production
Background and justification
Dessert banana and plantain (Musa sp.) are the fourth most
important staple food crops in the world after rice, wheat and maize
[1]. Dessert banana in particular is a commercially important crop
in the global trade, both by volume and value, as a leading fruit [1].
In 2010, world commerce in banana was valued at US 8.05 billion
and the total world production of banana is about 106,541,709.00
tons [FAOSTAT, 2012]. For many African, Asian and Latin American
countries, banana is as well one of the most important fruit for
foreign exchange earnings [FAOSTAT, 2012].
Dessert banana is also the major fruit crop that is most widely
grown and consumed in Ethiopia. It is cultivated in several parts
where the growing conditions are favorable. Especially in the south
and southwestern parts of the country, it is of great socioeconomic
importance contributing significantly to the overall wellbeing of the
rural communities including food security, income generation and
job creation [2].
Currently banana in Ethiopia covers about 59.64% (53,956.13
hectares) of the total fruit area, about 68% (478,251.04 ton) of the
total fruit produced, and about 38.3% (2,574.035) of the total fruit
producing farmers. On the other hand, about 68.72% (37,076.83
hectares) of land covered by banana, about 77.52% (370,784.17
ton) of the banana production, and 22.38% (1,504,207) of the
banana producers in Ethiopia are found in the Southern Nations
Nationalities and Peoples Regional State (SNNPRS) [25].
Gamo Gofa, Bench Maji, and Sheka zones are among the major
banana producing zones of the SNNPRS [3].
Objectives of the review
General objective:
• To review the production and marketing of banana in
Ethiopia.
Specific objectives:
• To review the overall status of banana production in the
Ethiopia.
• To review banana marketing and its constraints in the
Ethiopia.
Banana production in ethiopia
In Ethiopia, the modern banana production was started at the
beginning of this century with the establishment of the state farms
and different plantations such as large scale sugarcane plantations.
The production system of the crop is mainly composed of 1) small
plantations in home gardens owned by small farmers-especially
in the South-Western and Western provinces; 2) medium-sized
plantations of not more than 10 ha supplying local consumers; and
3) relatively large plantations above 20 ha developed to supply
export markets [4].
The export business of banana in Ethiopia dates back to
1961 where the country started at about 5000 tones. This figure,
however, increased to 60,000 tones by the year 1972 when the
country exported to different countries of Europe, Asia and Africa.
In 1975 the total production of banana in the country has reached
about 100,000 tones [5].
Banana in Ethiopia is produced by both small-scale farmers
and state farms. The production system is slightly different between
small-scale farmers and state farms.
Commonly farmers spacing between rows and plants ranges
from 3m to 3.5m and they do not practice the management of
suckers, even though recent trends show that some farmers have
started to manage number of suckers per hill due to yield reduction.
Use of commercial fertilizer on banana field is not practiced;
however, some farmers use animal dung and compost as organic
fertilizers. They practice weeding as deemed necessary. In most
of the major banana producing areas of the country, farmers use
supplementary furrow irrigation during the dry months. Banana
fields are maintained up until the time when yield starts declining
and then they shift to another land and establish new plantation. As
per the response of the farmers and experts, the sources of banana
suckers to establish plantation used to be nurseries of the Ministry
of Agriculture and state farms in places where there were state
farms. To date farmers use suckers from their own banana fields,
even though they can get suckers from the nurseries of the regional
Bureaus of Agriculture and Rural Development. On average, farmers
replant their banana plantations every 5 year.
Types of banana grown
Cultivated bananas are derived from two species of the genus
Musa, namely from Musa acuminate and Musa balbisiana. Musa
acuminate originates from Malaysia, while Musa balbisiana
originates from India. African banana is grouped into three
categories, including East African (mainly dessert) bananas, the
African plantain banana grown mainly in Central and West Africa,
and the East African Highland banana, used for cooking and beer
preparation [6].
In Ethiopia, even though both dessert and cooking types/
varieties of banana are released by the research system, the types of
varieties that are under production are dessert type that has been
under production since the early 1970s. In major banana producing
areas, farmers produce formerly recommended varieties such as
Dwarf Cavendish, Giant Cavendish, and Poyo. Most of them produce
Dwarf and Giant.
They produce these varieties for market. Dwarf has short plant
height, which is easy to manage, while Giant and Poyo have good
fruit size and quality for market. Some farmers also grow Ducasse
Hybrid variety, East African Highland Cooking banana, which
is used as windbreak and tolerant to stresses such as drought.
Ducasse hybrid is starchy type and is not preferred as dessert, but
other African countries use it for brewing.
In general Table 1 summarizes the banana varieties that have
been released by the Ethiopian Institute of Agricultural Research
(EIAR). There are also different local varieties that are produced
in almost all part of the country by small-scale farmers as garden
crop mainly for home consumption and in some cases for sale in
local markets.
Table 1: Type of banana varieties released.
Production zones
Overall, banana is mainly produced in the southwestern part
of the country in the Southern Nations, Nationalities and Peoples
Regional State (SNNP) and Oromiya Regional States. The specific
major banana production area in the country is Arba Minch area
with about 2500 hectares of banana plantation and the second major
production area are in the southwestern part of the country around
Jimma, Sheka, Kaffa, and Bench Maji zones in Southern and Oromiya
regional states. Banana production in Amhara, Tigray, Benishangul-
Gumuz, and Gambella is mainly for domestic production under very
traditional system as a garden crop. However, due to the promotion
of different irrigation systems, which is linked with the production
of fruits and vegetable all over the country, banana production in
the stated regions including in Afar and Somali Regional States is
coming into picture. The Afar and Somali Regional State do have
huge potential for the production of banana due to the availability
of rivers for irrigation like Awash River in Afar and Wabishebele in
Somali Region.
Gamo Gofa Zone in SNNP and West Wollega zone in Oromiya are
the major producing zones (Figure 1). When comparing the wereda
level with zonal distribution, there is considerable variability in the
allocation of land among weredas in a given zone. This is mainly
due to the fact that banana in the country is mainly produced using
supplementary irrigation. Even though, a given wereda is suitable
for banana production, it may not produce due lack of access to
irrigation.
Kathirvel N [7] analyzed the economic factors limiting to
banana production with the help of Garrett Ranking technique. He
pointed out that credit inadequacy was the major problem (rank
1) in the production of banana. High fertilizer cost was the next
important problem (rank 2). The small size of farm holdings, the
lack of technical guidance was the least important problems.
Joel Mpawenimana [8] in his study analyzed the socio-economic
factors influencing the production of bananas in Kanama district in
Rwanda. After estimating the relationship between the output of
bananas and various socio-economic factors, the findings showed
that various socio-economic factors have to be reviewed in order
to improve the production of bananas in the country. The results
described that land, physical capital, fertilizer and price, have
positive relationship with the banana output.
Several studies have identified the determinants of yield
for banana production. Apart from inputs of production, other
factors have influenced yield levels. Yamano, T: 2015 examined the
integration of dairy and banana farms in Uganda and the effects of
selected determinants on banana yield. Results of the study revealed
that the amount of organic matter, plot size, tenancy, number of male household members, farm assets, land altitude, population
density, and rainfall were statistically significant predictors of
banana productions.
Banana Production trends
Based on the production estimates for 2002 production season
about 24 thousand hectares of farmland was allocated for banana
nationally with considerable variation among regions. Based on
the level of banana production, SNNP Region ranks first followed
by Oromiya, Amhara, and Benishangul-Gumuz. However, based on
the proportion of farmers involved in banana production, Gambella
region ranks first where about 31% of the farm households
are involved in banana production, followed by SNNP (28%),
Benishangul-Gumuz (19%), Oromiya (16%), and Afar 11%) with
about 14% of farmers growing banana at national level (Table 2 &
3).
Consumption
Unlike other East African countries, banana is consumed only
in the form of fresh in Ethiopia. This is mainly because the type
of banana produced in the country is dessert type and there is no
tradition to use it in different form. Rather, false banana, which is
mainly produced in the SNNP regional state, is the major source of
energy food. The traditional dishes produced from false banana are
Bulla and Kocho. The expansion of the food industry in the urban
areas and the increased demand for processed foods especially for
children is expected to create demand for banana processing.
Analyses of the supply chain of banana
The overall supply chain of banana in Ethiopia can be broadly
divided into two chains, the first being the chain from the major
production area to the terminal market (Atkilt Tera) and the second
the chain that starts from the banana producers as garden crop to
the local rural or wereda markets.
The entire supply of banana to the terminal market comes from
Gamo Gofa Zone. The supply of banana from the Zone is from three
sources: the state farm, farmers’ fruit and vegetable marketing
union and individual farmers. The land allocated by the state farm
is about 285 ha, by members of marketing cooperatives is about
500 ha and more than 2000 ha of land by individual farmers. This
shows that individual farmers still dominate in the production of
banana.
Small-scale producers: Small-scale banana producers are
found almost in all parts of the country where banana can be
produced. In general, small-scale farmers can be categorized into
two groups. The first category of farmers is those who produce
banana as one of their major production activities and the second
category are those who produce banana as garden crop mainly for
home consumption. They usually produce in small amount mainly
for domestic consumption and if surplus for sale in local markets.
Purchasers usually are local consumers and local retailers. Such
producers transport banana using locally made bamboo baskets
either at the back of women or at using pack animal. Due to the recent
government intervention in promoting group marketing through
marketing cooperatives, there are farmers who are members of
such cooperatives in the major banana production areas. However,
dominant part of the marketed surplus (62%) comes from farmers
who are not members of marketing cooperatives.
State farms: The role of state farms in the country has been
diminishing since 1990s following the privatization process. There were
two state farms producing banana, however, due to disease
one of the farms had abandoned banana production.
Upper awash agro-industry enterprise: This is a state owned
enterprise with three major farms and Awara Melka state farm is
the one with banana plantation. However, recently the plantation is
abandoned due to the deterioration of fruit size and quality because
of a severe nematode infestation and the banana plantation is
replaced by sugar cane plantation.
North omo agricultural development enterprise: This is
also a state owned enterprise with two farms i.e. Arba Minch state
farm and Sille State Farm, which are the major supplier of banana
to ETFRUIT. Overall land size allocated to banana in both farms at
present is 285 ha. There is a plan to increase this to 400 ha. The
supply of banana is more or less stable over a year with some
fluctuation (Figure 2 & 3).
Market structure of banana
Market structure analysis covers other market actors outside
of farming households such as importers/ exporters, wholesalers,
retailers, assembler/ collectors, transporters and laborers [9].
Market concentration: According to Tomek, et al. [10],
concentration ratio refers to the number, and relative size of buyers
in the market. The structure performance hypothesis states that the
degree of market concentration is inversely related to the degree of
competition [11]. The concentration ratio is given as:
Where, C = concentration ratio,
Si = the percentage market share of the ith firm,
r = the number of relatively larger firms for which the ratio is
going to be calculated.
Concentration ratio of 50% or more is an indication of a strongly
oligopolistic industry, 33-50% a weak oligopoly and less than that a
competitive industry [12].
Market concentration measure: According to Getahun Kassa,
et al. [13], the concentration ratio of the biggest four firms were
considered to determine the structure of the market. 40 traders
in each specific fruit type were interviewed to understand the
structure in the market (Table 4).
Table 4: Type of banana varieties released.
The table is the results of the research done by [13], so the
CR4 for banana was 86.76 percent which indicated that the market
structure for banana was strong oligopoly.
According to Severova, et al. [14], oligopoly can be defined as
a market model of the imperfect competition type, assuming the
existence of only a few companies in a sector or industry, from
which at least some have a significant market share and can
therefore affect the production prices in the market. Therefore,
a strong oligopoly market structure for banana implies that the
concentration of market power on few big wholesalers.
Market conduct: Meijer [15] said that, “conduct is pattern of
behavior which enterprises follow in adopting or adjusting to the
market in which they sell or buy”, in other words the strategies of
the actors operating in the market.
Market conduct investigates the behaviors and rules that
regulate the relationships between actors or how they engage with
one another [9].
According to Getahun Kassa, et al. [13] Market conduct indicated
components like level of competition, the accepted standards in the
market, transparency of transactions and terms of payment.
a. Price Setting mechanisms: Fruit products (banana) are
easily perishable by their very nature. Once the status of
the fruit products reached maturity level, the producer’s
power to influence price is insignificant. In the study
area, due to the existence of too many producers and few
numbers of traders, producers were price takers.
Ayelech [16] reported that farmers do not negotiate on price
to sell their produce; indicating this large number of producers are
price takers.
b. Standard setting in the market: The existence of few
numbers of traders in the market also gave a significant
power for traders to set the standards of the fruit products.
Most of the time, a good quality banana fruit product is
determined by visual observations. After harvesting, the
trader can reject the offer by the producer if the trader
believed that it is a poor quality product; or low price will
be offered to the producer for poor product quality. The
lack of additional premium for good quality fruit products
discouraged farmers from performing activities which
can enhance product quality. Furthermore, constant price
offered for fruit products irrespective of quality made
farmers subservient to the needs of traders and agents
[13].
c. Sources and transparency of information: Clear market
information is highly crucial to create transparency
and efficiency in the banana fruit markets. Imperfect
information is one of the causes for imperfect market.
There is no formal source of information for producers
regarding pricing and overall market situation in the
country. Most producers relied on informal sources of
information obtained from neighbors, brokers and
traders. Regarding information transparency, there is
no perfect exchange of information between producers
and traders about product price in terminal markets.
Therefore, in the absence of timely and reliable market
information, market fails to bring economic efficiency
[13].
Nega, et al. [17] reported that the majority of fruit producers
lack adequate, timely and reliable market information in the study
area.
d. Terms of trade: There was no formalized or regulated
system in which effective exchange could take place
between producers and traders. Regarding terms of
payment, there was irregularity. Most of the time an
exchange was being made on cash basis, but there were
some room for post payment. More than 90 percent
of producers practiced cash in hand system. On the
contrary, all local traders stated that they received post payment. This implies that a deferral payment method
was practiced between local traders and big city traders.
The lack of formal and regulated trading system between
actors in the chain typifies traditional marketing system
where exchange took place based on trust and good social
relationship. Since there is no legally binding agreement
between actors in the chain, experiencing defraud is very
common while entering into a new market [13].
Adugna [18] & Nega, et al. [17] found that large proportion
of the fruit producers practiced cash in hand system and take the
price as soon as they sell the fruits.
e. Market performance (Marketing margin) of banana:
Market performance is concerned with the benefits an
industry generates for its different stakeholders [19].
Measures of market performance reveal whether there
is market power in an industry [20]. To evaluate market
performance marketing margins analysis and sales
volumes were analyzed. The total marketing margin is
given by the formula shown below:
Where TGMM – Total gross marketing margin
Computing the total gross marketing margin (TGMM) is always
related to the final price paid by the end buyer and is expressed as
a percentage [21]. Wider marketing margin indicates high price to
consumers and low price to producers and it is an indicator of the
existence of imperfect markets [22]. The producers’ margin (which
is the portion of the price paid by the consumer that goes to the
producer) is calculated as:
GMMp = 1 - TGMM
Where: GMMp is producers’ share in consumer price.
The above equation tells us that a higher marketing margin
diminishes producers’ share and vice versa. It also provides an
indication of welfare distribution among production and marketing
agents.
Market performance refers to the impact of structure and
conduct as measured in terms variables such as prices, marketing
margins, and volume of output.
f. Performance of banana market chain: The performance
of banana market chain was calculated by taking common
market catchment for all traders. This happened because
of its accessibility to all local traders as compared to other
market catchment.
According to Getahun Kassa, et al. [13] in bench Maji Zone south
west Ethiopia, in terms of TGMM, total gross marketing margin in
channel II and channel IV were 83.33 percent for each respective
channel. TGMM in channel III was 85.33 percent. Channel I
accounted for 60 percent of TGMM. According to Cramer, et al. [22],
wider marketing margins in all channels were good indicators of
the existence of imperfect markets for banana.
In the final price for the different channels of the banana
marketing system, producers captured 16.67 percent of the final
price in channel II linking producers and wholesalers through
brokers; followed by 16.67 percent in channel IV linking producers
directly to wholesalers.14.67 percent of the final price was captured
in channel III where producers and wholesalers linked through
collectors. The highest producers’ share was 40 percent in channel
I where banana flowed from producers to local consumers through
farmer traders. High TGMM diminished the share of producer’s in
final price.
In terms of carrying large volumes of banana, 89.48 percent of
sales volumes accounted for channel III, followed by 8.21 percent for
channel IV, 2.31 percent for channel II, and the remaining 0.001%
of sales volumes accounted for farmer traders. This implies that
channel III is more efficient in terms of distributing large volumes
of sales. The result revealed that wholesalers preferred to be linked
with producers through Collectors’ cooperatives (channel III).
Collectors’ cooperatives’ knowledge of the locality made this
channel highly preferable for wholesalers in providing information
about marketable products which in turn saved wholesalers’ time
(Table 5).
Challenges of fruits (banana) marketing
a. Seasonality: Seasonality is another factor affecting
banana marketing. As seasonal price fluctuation is the
major problem in banana’s marketing [13]. During
peak supply period, price declined. In peak seasons, the
perishability of the products does not give enough time
for producers to look for alternative market opportunities.
Thus, producers accept low price offered in peak seasons
to avoid massive loss of profits.
Getahun Kassa, et al. [13] demonstrated that price declined
by more than 15 percent in peak seasons. This implies that when
there is excess supply of fruits, price declines. Therefore, seasonal
price fluctuation is common implying that supply and price moves
in opposite direction.
b. Few numbers of big traders: The existence of many
producers but very few big traders which in turn lead
to large volumes of outputs produce must be absorbed
by high demand in big cities. Research indicates that
limited access to market is among the challenges of
banana marketing in the country. The participation of
big traders in the fruits industries is highly important in
bringing better opportunity for producers. However, the
existence of few big traders in the fruits industries limited
producers’ access to more efficient market channel [13].
c. Lack of organized market center: Getahun Kassa, et
al. [13] revealed that lack of organized market center is
one of the basic problems for the existence of imperfect
competition. Getting better incentives in terminal
markets depend on the quality of the produce to be
offered in those markets. However, due to absence of
market center in which good product quality is inspected
and standardized, producers and traders failed to receive
their fair share from the market in big cities.
d. Brokers’ interference: The main role of brokers/ agents
in the fruits (banana) markets is providing information
about price and output both for producers and traders. As
a result, they are considered as the most reliable partners
for traders in making deals with producers. Brokers
created collusion in the fruit’s markets in terms of
geographic dispersion to avoid unnecessary competition.
This collusion helped them to monopolize a certain
geographic area. So, without brokers, it is hardly possible
to create direct link between producers and traders.
We have tried to conclude our review: Dessert banana is
the major fruit crop that is most widely grown and consumed
in Ethiopia [23-25]. It is cultivated in several parts where the
growing conditions are favorable. Especially in the south and
southwestern parts of the country, it is of great socioeconomic
importance contributing significantly to the overall wellbeing of
the rural communities including food security, income generation
and job creation. Banana market channel linked producers to local
consumers through farmer traders. The structure of banana market
at each market level depends on the level of competition existing
in the banana market, the market concentration ratio was used as
evaluation criteria. Banana market performance is evaluated based
on the level of marketing margins by taking into consideration
associated marketing costs for key marketing channels.
The high the market concentration ratio indicates oligopoly
market structure. The existence of few big-traders in the market
gave market power for traders in deciding output price and setting
product quality standard [26,27]. The TGMM indicates that the
markets for banana were imperfect markets. However, the most
efficient banana market channel in the area was the one that
links producers to wholesalers through Collectors’ cooperatives.
Collectors’ cooperatives good knowledge of the locality made this
channel a preferable channel to distribute large volumes of banana
products to terminal markets in big cities. However, seasonal
price fluctuation, the existence of few big traders, limited access
to information, lack of organized market center, and brokers’
interference mainly affected the performance of banana fruit
market in the country.
Hence as we have reviewed several researches conducted by
several authors are concentrated in the southwestern part of the
country in the Southern Nations, Nationalities and Peoples Regional
State (SNNP) and Oromia Regional States this is due to the authors
select this area purposively depending on productions potential.
So that it’s better if researches are conducted on other part of the
country. And also, several researches are conducted on banana marketing but not on production, again its better if researcher
include its production in their thesis.
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