The main aim of this analysis to estimate minimum farmgate price for paddy rice and to indicate paddy rice collection modalities from farmers and provide an overview of current rice production status in Oromia. Rice (Oryza sativa) is one of the most stable foods and expected to contribute to ensuring food security in Ethiopia. The success of rice production depends somewhat on its high yield potential, processing technologies and marketing facilities. Improving rice production and productivity as well as facilitating its processing and marketing access is therefore one of a key part of the economic growth strategies in the Oromia government’s food self-sufficiency initiatives. Both local production and import are the two key sources of rice grain supply and meet consumption demand of Oromia people. Consumption trends in Oromia as well as in Ethiopia have shown a substantial increase from time to time. Using a quantitative secondary data and a review of existing literature, this study provides an overview of the rice production and estimating the farmgate price of paddy rice. The study stresses the need for estimation of farmgate price, formulation of rice processing technologies and market-enhancing policies, such as supplying and installing rice processing technologies, better access to market facilities and market information and to improve rice productivity.
Published in | American Journal of Operations Management and Information Systems (Volume 9, Issue 2) |
DOI | 10.11648/j.ajomis.20240902.11 |
Page(s) | 25-33 |
Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
Copyright |
Copyright © The Author(s), 2024. Published by Science Publishing Group |
Paddy Rice, Farmgate Price, Food Self-Sufficiency, Marketing, Oromia
Cost Items | Unit | Total Cost and return ETB/Ha |
---|---|---|
A. Labor cost | ||
Land preparation cost | ETB | 12,000.00 |
Person required to ploughing | Person/oxen | 8.0 |
Frequency of ploughing | Round | 3.0 |
Labor wage to ploughing | Wage/oxen | 500.0 |
Sowing | ETB | 5,600.00 |
Person required for sowing (person day/ha) | Person/oxen | 16.0 |
Labor wage to sowing (wage/person) | Wage | 350.0 |
Weeding cost | ETB | 12,250.00 |
Labor wage for weeding | Wage | 350.0 |
Frequency weeding | Round | 1.0 |
Person required to weed | Person | 35.0 |
Harvesting cost | ETB | 12,250.00 |
Person required to harvest | Person | 35.0 |
Average Labor wage to harvest | Wage | 350.0 |
Labor cost for threshing and winnowing | ETB | 12,330.00 |
Labor wage for threshing and winnowing | Wage | 350.0 |
Person required to threshing & winnowing | Person | 30.0 |
Transporting cost | ETB | 1,830.0 |
B. Material input cost | ETB | |
Seed cost | ETB | 6,000.00 |
Amount of seed | Kg | 100.0 |
average seed unit cost | ETB/kg | 60.0 |
Herbicides cost | ETB | 3,100.00 |
Amount of 2-4, D | Liter | 2.0 |
Average 2-4, D unit cost | ETB/liter | 1,100.0 |
Labor cost for 2-4, D spraying | Wage | 700.0 |
Sprayer rent | Cost | 200.0 |
Fertilizer cost | ETB | 10,097.50 |
Amount of fertilizer NPS | Kg | 100.0 |
Average fertilizer cost NPS | ETB | 40.4 |
amount of Fertilizer urea | Kg | 150.0 |
Average fertilizer cost urea | ETB | 40.4 |
Sacks cost | ETB | 1,480.00 |
Sacks | No | 37.0 |
Unit price of sack | ETB | 40.0 |
Other costs | ETB | 14,000.00 |
Land rent/Contract | ETB | 14,000.0 |
Total cost | ETB | 89,107.50 |
D. Break-even price and Return | ||
Rice yield from pre-harvest assessment of 2016 E.C | Qt | 36.9 |
Break-even price | ETB | 2,416.1 |
Break-even yield | Qt | 29.5 |
Minimum selling price of paddy rice @25% markup percentage | ETB | 3,020.2 |
Total Revenue @25% Markup Percentage | ETB | 111,384.4 |
Net profit (TR_TC)@25% Markup Percentage | ETB | 22,276.9 |
Benefit Cost Ratio (BCR) @25% Markup Percentage | 1.3 | |
Minimum selling price of paddy @30% markup percentage | ETB | 3,141.0 |
Break-even yield | Qt | 28.4 |
Total Revenue 30% | ETB | 115,839.8 |
Net profit (TR_TC) @30% Markup Percentage | ETB | 26,732.3 |
Benefit Cost Ratio (BCR) @30% Markup Percentage | 1.3 | |
Minimum selling price of paddy @40% markup percentage | ETB | 3,382.6 |
Break-even yield | Qt | 26.3 |
Total Revenue 40% Markup Percentage | ETB | 124,750.5 |
Net profit (TR_TC) @40% Markup Percentage | ETB | 35,643.0 |
Benefit Cost Ratio (BCR) @40% Markup Percentage | 1.40 |
S.N | Cost variable | Marketing cost of Primary cooperative/Union (ETB/Qt) |
---|---|---|
1 | Transportation | 38.2 |
2 | Loading/unloading | 40.00 |
3 | Sack | 40.00 |
4 | Storage Rent | - |
5 | Admin cost | 30.00 |
Total estimated cost | 148.00 |
Actors | Marketing cost | Purchasing price | Expected markup percentage (@1%) | Selling price |
---|---|---|---|---|
Producers | - | - | 3,020.2 | |
Primary cooperatives/Union | 148.2 | 3,020.20 | 31.68 | 3200.08 |
Rice products | International Rice Ratio | MIG Rice Ratio | Farmers Rice expected Ratio |
---|---|---|---|
Paddy rice | 100% | 100% | 100% |
Brown rice | 78% | 78% | 78% |
Head rice | 25% | 19% | 16% |
Broken rice | 55% | 60% | 65% |
Bran | 16% | 16% | 15% |
Dust | 4% | 5% | 4% |
Description | Unit Cost (ETB/qt) | Total Cost (ETB) | Total Amount (ETB) |
---|---|---|---|
A. Cost | |||
Purchase Amount of Paddy Rice | 3,200.00 | 3,104,000,000.00 | |
Cost of Transport (Bedele to Gambella) | 233.00 | 226,010,000.00 | |
Cost of Transport (Gambella to Bishoftu | 538.00 | 407,050,800.00 | |
Processing Cost of Paddy Rice to Final | 411,288,310.72 | ||
Total cost | 4,148,349,110.72 | ||
B. Revenue | Quantity (Quintal) | ||
Head Rice | 7,200.00 | 121,056.00 | 871,603,200.00 |
Broken Rice | 6,500.00 | 491,790.00 | 3,196,635,000.00 |
Bran | 1,500.00 | 113,490.00 | 170,235,000.00 |
Total revenue | 4,238,473,200.00 | ||
Difference (Gain/Loss) | 90,124,089.28 | ||
Profit margin | 2% |
MIG | Midroc Investment Group |
CSA | Centaral Statistics Agency |
EIAR | Ethiopian Institute Agricultural Research |
MoARD | Ministry of Agriculture and Rural development |
TR | Total Revenue |
TC | Total Cost |
BCR | Benefit Cost Ratio |
ETB | Ethiopian Birr |
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APA Style
Hailu, A. (2024). Rice Farmgate Price Estimation and Collection Modality in Oromia, Ethiopia. American Journal of Operations Management and Information Systems, 9(2), 25-33. https://doi.org/10.11648/j.ajomis.20240902.11
ACS Style
Hailu, A. Rice Farmgate Price Estimation and Collection Modality in Oromia, Ethiopia. Am. J. Oper. Manag. Inf. Syst. 2024, 9(2), 25-33. doi: 10.11648/j.ajomis.20240902.11
@article{10.11648/j.ajomis.20240902.11, author = {Addisu Hailu}, title = {Rice Farmgate Price Estimation and Collection Modality in Oromia, Ethiopia }, journal = {American Journal of Operations Management and Information Systems}, volume = {9}, number = {2}, pages = {25-33}, doi = {10.11648/j.ajomis.20240902.11}, url = {https://doi.org/10.11648/j.ajomis.20240902.11}, eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajomis.20240902.11}, abstract = {The main aim of this analysis to estimate minimum farmgate price for paddy rice and to indicate paddy rice collection modalities from farmers and provide an overview of current rice production status in Oromia. Rice (Oryza sativa) is one of the most stable foods and expected to contribute to ensuring food security in Ethiopia. The success of rice production depends somewhat on its high yield potential, processing technologies and marketing facilities. Improving rice production and productivity as well as facilitating its processing and marketing access is therefore one of a key part of the economic growth strategies in the Oromia government’s food self-sufficiency initiatives. Both local production and import are the two key sources of rice grain supply and meet consumption demand of Oromia people. Consumption trends in Oromia as well as in Ethiopia have shown a substantial increase from time to time. Using a quantitative secondary data and a review of existing literature, this study provides an overview of the rice production and estimating the farmgate price of paddy rice. The study stresses the need for estimation of farmgate price, formulation of rice processing technologies and market-enhancing policies, such as supplying and installing rice processing technologies, better access to market facilities and market information and to improve rice productivity. }, year = {2024} }
TY - JOUR T1 - Rice Farmgate Price Estimation and Collection Modality in Oromia, Ethiopia AU - Addisu Hailu Y1 - 2024/08/27 PY - 2024 N1 - https://doi.org/10.11648/j.ajomis.20240902.11 DO - 10.11648/j.ajomis.20240902.11 T2 - American Journal of Operations Management and Information Systems JF - American Journal of Operations Management and Information Systems JO - American Journal of Operations Management and Information Systems SP - 25 EP - 33 PB - Science Publishing Group SN - 2578-8310 UR - https://doi.org/10.11648/j.ajomis.20240902.11 AB - The main aim of this analysis to estimate minimum farmgate price for paddy rice and to indicate paddy rice collection modalities from farmers and provide an overview of current rice production status in Oromia. Rice (Oryza sativa) is one of the most stable foods and expected to contribute to ensuring food security in Ethiopia. The success of rice production depends somewhat on its high yield potential, processing technologies and marketing facilities. Improving rice production and productivity as well as facilitating its processing and marketing access is therefore one of a key part of the economic growth strategies in the Oromia government’s food self-sufficiency initiatives. Both local production and import are the two key sources of rice grain supply and meet consumption demand of Oromia people. Consumption trends in Oromia as well as in Ethiopia have shown a substantial increase from time to time. Using a quantitative secondary data and a review of existing literature, this study provides an overview of the rice production and estimating the farmgate price of paddy rice. The study stresses the need for estimation of farmgate price, formulation of rice processing technologies and market-enhancing policies, such as supplying and installing rice processing technologies, better access to market facilities and market information and to improve rice productivity. VL - 9 IS - 2 ER -