Market channels, pricing efficiency, profitability and price transmissions. market efficiency analysis of jatropha value chain: case study of monduli and arumeru districts .

Abstract

This study was undertaken to assess the market efficiency of Jatropha value chain by assessing the Jatropha market channels, pricing efficiency, profitability and price transmissions. The data were collected from a sample of 130 Jatropha market chain actors who were randomly selected from the Monduli and Arumeru Districts using a structured questionnaire. Concentration indices were estimated to assess the market power. Market margin was used to estimate the differences between the selling and buying prices while gross margin was estimated to assess the income earned per each value chain actor. Pricing efficiency analysis was used to assess market efficiency at different nodes of the market chain while the average market shares were used to estimate the proportion of producers’ prices against the ultimate consumption and utilization level. The results showed the market structure of the Jatropha farmers is unconcentrated and that of Jatropha traders is non-competitive with a concentration indecesof 18% and 36% respectively. Results of profitability analysis indicated variation in gross margins with the highest margin (1 363 610Tshs/kg) obtained by processors while farmers’ market margin was the lowest (84Tshs/kg). Selling and buying prices at farmers’ level were highly correlated with each other(r = 0.713; p = 0.01). At the traders’ level, results indicate a strong correlation between the selling price and market margin (r = 0.941; p= 0.01). The average market shares results indicated farmers received 35%, while traders and processors received percentage shares of 21% and 43% respectively. In conclusion, the Jatropha marketing system is not efficient in Tanzania. Therefore, the study recommends that interventions to encourage Jatropha production and productivity in the country should be done and pricing behaviours and market information systems should be strengthened.