Hot Pepper Production and Marketing in Southwest Ethiopia: An Alternative Enterprise for Small Scale Farmers

This study was initiated with the objective of examining the existing hot pepper production and marketing, assess its socioeconomic role in the life of producers and other actors and point out the existing bottlenecks of production and marketing. Descriptive statistics, net benefit and margin analysis were employed to analyze the data. The result indicated that local varieties called marco (in Omo Nada) and kolesh (in Gojeb) are largely used by farmers and provide a yield ha-1 of 16.39 and 12.21 quintal, respectively through using fertilizer and spacing technology. The assessment of the market structure revealed that the largest volume (50%) of sale directly goes to the local consumers followed by the volume channeled to assemblers (28.5%) and retailers (21.5%). The margin analysis revealed that producers take the highest profit margin of 100 and 68.2% when the product is sold directly to the local consumers and retailers, respectively. But when hot pepper is channeled to Jima and Addis Ababa, producers get a profit margin of 53.3 and 42.8%, respectively making the respective total gross margin taken by the intermediaries to be 46.7 and 57.2 out of which the largest share is taken by the assemblers without having a significant value addition activity. Therefore, with the assumption that their possible linkage role can effectively be taken by the local wholesalers and retailers, banning of local assemblers from the market chain can be taken as one option for improving the efficiency of the chain. Low productivity, illegal act of actors in the chain, poor quality of product, low and fluctuating price, small and confined market place together with long market distance were found to be the major problems adversely influencing the production and marketing of hot pepper in the area.