Advanced Research Journal of Banking, Economics and Finance ISSN 1273-2109: Vol. 3(1), pp.039-048, March, 2020.  © Advanced Scholars Journals

Full length Research paper

Market Participation And Financial Viablity Analysis of Small Holder Pineapple Producers   in Aleta Chucko Woreda Southern Ethiopia: Multinomial Log it and Net Present Value Analysis

Eyasu Kifle¹* and Oliyad Sori²

²Hawassa University, Department of Agricultural Economics

*¹Wollega University, Department of Agricultural Economics

Corresponding author Email: [email protected]

Accepted 5 March, 2020.

Abstract 

In support of stimulating growth, economic development, food security and alleviating poverty, the analysis of the Factors affecting small holder pineapple producer’s market participation plays an important role in an ongoing or future pineapple market development plan. So as to contribute an appropriate policy design to improve pineapple marketing in the study area in particular and in Ethiopia in general, Thus this specific study was aimed to: analyze socio economic characteristics of pineapple producers; investigate financial viability of pineapple for producers; identify factors influencing the choice of pineapple marketing outlet in the study area; and analyze constraints of pineapple production and marketing. Multistage sampling procedure was employed to draw183 sample respondents. Semi-structured questionnaires were used to collect data from small-scale pineapple farmers. The data were analyzed using the descriptive statistics, net present value and internal rate of return approach and Multinomial Logit model. SPSS version20 and STATA version13 computer programs were used to process the data. The survey result showed that the Net Present Values (NPV) were positive indicating that the production of pineapple in Aleta Chucko Woreda was financially viable. This was further confirmed by the estimated Internal Rate of Return (IRR).  The estimated IRR indicated that pineapple enterprise was by far higher than the cost of capital and hence financially viable. The sensitivity analysis performed on the Net Present Values for Aleta chucko Woreda revealed revenue to be the most sensitive and cost of chemical is least sensitive variable. The multinomial logit model analysis further showed that age, sex, education, access to contract market, market experience and pineapple yield volume were significantly influenced the choice of pineapple marketing outlets. Since the production of pineapple fruit was financially viable, there is the need for the intensification and expansion of the pineapple sub-sector suitability. The government and other policy makers should increase the marketing information and ability of pineapple farmers through avenues like mass media, extension service, and other means of capacity building.

Key words: Market participation, choice of marketing out let, financial viability, Net present value, and internal rate of return.