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Optimal Farmer Choice of Marketing Channels in the Ethiopian Banana Market

  • Woldie Getachew Abebe

    (Justus-Liebig-Universität Giessen)

In this paper, we propose an optimal marketing decision model in the context of poor agrarian economies. We consider a risk averse banana producer who faces an optimal allocation decision on how much to sell to a cooperative vis-à-vis private traders. To validate the model, a numerical exercise was undertaken using farm-gate transaction data. The overall result suggests that under different risk scenarios, an optimal earning is obtained if a farmer allocates 70 to 85 percent of his produce to a cooperative and the rest in the private market. Any allocation more than 85 percent or less than 70 percent is likely to result in a sub-optimal solution given the current market structure and price setting.

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Article provided by De Gruyter in its journal Journal of Agricultural & Food Industrial Organization.

Volume (Year): 8 (2010)
Issue (Month): 1 (October)
Pages: 1-19

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Handle: RePEc:bpj:bjafio:v:8:y:2010:i:1:n:7
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