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Is banana value chain in East Africa sustainable? Evidence from Ethiopia

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DOI: 10.1016/j.resenv.2022.100060

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 Resources, Environment and Sustainability 8 (2022) 100060

Contents lists available at ScienceDirect

Resources, Environment and Sustainability

journal homepage: www.elsevier.com/locate/resenv

Is banana value chain in East Africa sustainable? Evidence from Ethiopia

Girma Gezimu Gebre a ,∗, Asmiro Abeje Fikadu b , Teshome Kassahun Gebeyehu a
a
Faculty of Environment, Gender and Development Studies, College of Agriculture, Hawassa University, Hawassa, Ethiopia
b Department of Agricultural Economics, Debre Tabor University, 272 Debre Tabor, Ethiopia

ARTICLE INFO ABSTRACT

Keywords: Banana is an essential commercial fruit for smallholder farmers in East Africa including Ethiopia. It is also
Arba Minch lifeblood of the majority of the farmers in Arba Minch district of Ethiopia. However, this sector is experiencing
Banana many constraints with limited investment on sustainable value chain management. Thus, this study aims to
East Africa
examine the sustainability performance assessment of the banana value chain by comparing and analyzing
Ethiopia
25 attributes through triple bottom-line indicators. The critical aspects of the qualitative data were analyzed
Sustainability
Value-chain
using Sustainability Assessment of Food and Agriculture Systems version 3.0 at Ethiopian context. The results
show that banana product flow from the farmer and ends with the consumer through three market channels
which link farmers directly with rural retailers, traveling traders, and farmer cooperatives. Largest volume of
banana was sold through the traveling trader channel while the smallest volume was sold via the rural retailer
channels. The banana payment flow begins from consumers and ends with input suppliers. Farmers have limited
access to alternative markets for their banana products, but wholesalers have many connections and marketing
options across the country. The results of the banana value chain sustainability assessment also reveal that
the economic, social, and environmental indicators have moderate sustainability performance in the study
area. The value of the Cronbach’s alpha coefficient was 0.7993 which shows that the five-point scale items of
the experts’ judgment on the sustainability of banana value chain are consistent and reliable. The chain has
several advantages in terms of profitability, emission of air pollutants, employment, and constraints in terms
of coordination, profit margin, value share, market diversity, transportation, product and market information,
safety and hygiene, and waste management. Thus, Government and non-governmental organizations give due
attention towards the sustainable banana value chain.

1. Background initiatives through focusing on the economic, social, and environmental

dimensions (Webber and Labaste, 2010). The Comprehensive Africa
A supply chain of an agricultural product starts with the pro- Agricultural Development Programme [CAADP] and a program of the
duction of input materials for a primary commodity, ends with the New Partnership for Africa’s Development [NEPAD] are directly aimed
consumption of the final product which includes all the economic at raising productivity and increasing the efficiency of the agriculture
activities undertaken between those phases, for instance; processing, value chain.
delivery, retailing, and wholesaling. These issues are important for Banana (Musa spp.) is one of the major agriculture commodities that
designing the overall sustainability of the agricultural supply chain
is traded and has a great supply chain path in the globe. It is a valuable
(Food and Agriculture Organization of the United Nations, FAO, 2014).
cash fruit and has an economic significance in the world (Gebre et al.,
Value chains are the key framework for understanding how inputs
2020). It represents the world’s largest fruit crop with an annual
and services are brought together and then used to grow; manufacture
a product, transform as well it helps to see how the product then production of 115,737,861 metric tons in 2018 (Food and Agriculture
moves physically from the producer to the customer and how the Organization Statistical Division (FAOSTAT), 2012). Banana is the lead-
value increases along the way (Kaplinsky and Morris, 2000). The agri- ing fruit crop in terms of volume and value in the global market (Woldu
cultural value chain perspective provides vital insights to understand et al., 2015). Banana can be produced and traded on a sustainable
business-to-business connections which help to improve efficiency and basis across the globe with appropriate management. However, the
enhance productivity and finally gain profit by adding value. From a journey from field to retail destination is delicate and finely tuned
sustainability point of view, the agricultural value chain approach is process which must be carefully managed at every stage to ensure
a significant concern to guide and drive high-impact and sustainable safety and quality of the product (Kema and Drenth, 2018). Rising

∗ Corresponding author.
E-mail addresses: [email protected] (G.G. Gebre), [email protected] (A.A. Fikadu), [email protected] (T.K. Gebeyehu).

https://doi.org/10.1016/j.resenv.2022.100060
Received 26 October 2021; Received in revised form 21 March 2022; Accepted 8 April 2022
Available online 19 April 2022
2666-9161/© 2022 The Author(s). Published by Elsevier B.V. on behalf of Lishui Institute of Ecology and Environment, Nanjing University. This is an open
access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).
G.G. Gebre, A.A. Fikadu and T.K. Gebeyehu Resources, Environment and Sustainability 8 (2022) 100060

health awareness of consumers is contributing to higher fruit consump- has increased at an increasing rate since 2011 and 2012 (Central
tion in the world, with bananas among the most popular choice due Statistical Agency of the Ethiopia (CSA), 2015). Whereas, the cultivated
to their nutritious, filling, and convenient characteristics (Food and land area under banana fruit production showed a tremendous incre-
Agriculture Organization of the United Nations [FAO], 2018). In terms mental trend for the last ten years except for 2008 and 2009. Banana
of production and export potential, India is the largest producer, but productivity has been increased by 100% from 18,565 hectares in 2003
Ecuador is the leading exporter in the world followed by the Philippines and 2004 to about 37,076.85 hectares in 2014 and 2015 (Central
(Food and Agriculture Organization Statistical Division (FAOSTAT), Statistical Agency of the Ethiopia (CSA), 2015).
2019). The European Union, United States, the Russian Federation, Arba Minch district is the major banana producing districts in the
China, and Japan are the top five leading importers of banana in the SNNP regional state in Ethiopia. A Banana from Arba Minch district has
world (Food and Agriculture Organization of the United Nations [FAO], more demand than bananas from other parts of Ethiopia due to its qual-
2018). ity and taste for consumers (Temesgen, 2014; Alemu, 2017). Banana is
Banana production is an important source of income for many an important commercial commodity and a major source of livelihood
smallholder sub-Saharan Africa farmers (Food and Agriculture Orga- for farmers and traders in the Arba Minch district. Though the living
nization Statistical Division (FAOSTAT), 2012). However, in 2017, standard of the banana producers in Arba Minch has improved in recent
Africa’s export decreased by an estimated three percent from the level years, they still face many challenges (Gebre et al., 2020). Banana
of 2016, with the highest decline in Cameroon, the second leading yield per hectare is declining and the current marketing system benefits
exporting country in the continent, followed by Cote d’Ivoire (Food and traders rather more than producers in Arba Minch (Mekonnen, 2014).
Agriculture Organization Statistical Division (FAOSTAT), 2012). Ad- Banana cooperatives are not strong enough to compete with private
verse weather conditions hampered production in the country, which traders and hence do not benefit their members as expected. Farmers
resulted in an eight percent decline in export between October 2016 sell their bananas to local private traders who unilaterally decide the
and October 2017 (Food and Agriculture Organization of the United farm gate prices of banana; hence, the farm gate price of smallholder
Nations [FAO], 2018). In addition, smallholders’ banana production banana farmers is much lower than the market price. Such situations
and yields in many sub-Saharan African countries are severely affected raise a question on the sustainability of banana value chain in Arba
by a variety of biotic and abiotic factors such as soil degradation, access Minch district.
to clean planting material, management of pests and diseases, post- Sustainable banana value chain management requires knowledge
harvest losses, value addition, and market access (Kema and Drenth, of value chain development, especially the pivotal processes of bunch
2018). Moreover, the main constraints of the banana value chain in formation, fruit management, market information, post-harvest han-
dling including correct ripening process, which is essential for optimum
east Africa are weak linkage within the banana value chain with
taste, appearance, shelf life and consumer satisfaction. Thus, the main
poor integration of actors throughout the chain, inappropriate storage
driving factors that influence the sustainability of banana value chain
facilities, poor information flow, and high transaction cost (Ouma and
in Ethiopia are effective communication, competition, knowledge, and
Jagwe, 2010).
power distribution. Moreover, the sustainability of banana value chain
Banana production and marketing, in East Africa, is more chal-
has been influenced by economic, social and environmental variables
lenging compared to other African regions. At the production level,
while those driving factors have not fully investigated in the study
bananas trees remain vulnerable to various diseases and producers also
areas, yet as well as the existing studies on the sustainability of banana
suffer from aging of banana plantations which leads to yield decline
value chain lack methodological issues, those they did not consider
as well as it faced by weak extension service provision and weak
the qualitative analysis. Thus, this paper attempt to evaluate the sus-
market integration (European Commission [EC], 2020). At marketing
tainability of banana value chain in Arba Minch district, which is one
level, banana supply chains are characterized by many links that add
of the major bananas producing area in Ethiopia and East Africa, by
little value and result in only a small proportion of the retail price
comparing 25 attributes owing to economic, social and environmental
reaching farmers, providing little incentive for investment to improve
dimensions. Moreover, this study filled gaps on methodological issues
production (Beed et al., 2012). East African banana producers are
towards the sustainability performance of the banana value chain, for
usually disadvantaged in bargaining for higher prices because of the
which, in-depth qualitative analysis approach is employed to evaluate
highly perishable nature of bananas, lack of local capacity to process or
the banana value chain sustainability performance.
store the commodity, and their low placement in the value chain. Their
situation is worsened by lack of information on prices, rendering them 2. Conceptual framework
vulnerable to intermediaries as there is no or minimal information flow
along the chain (Bihunirwa et al., 2012). These driving factors might In this study, the sustainable value chain is defined as value-adding
lead to poor sustainable path for east African farmers as well as hard activities that produce particular raw materials and transform them into
to continue in banana farming. particular products that are sold to final consumers and disposed of af-
Ethiopia, which lies entirely in the tropics, has great potential for ter use. It is profitable throughout, has broad-based benefits for society,
banana production (Gebre et al., 2020). Cavendish banana is the major and does not permanently deplete natural resources. As stated by Neven
fruit crop which is most widely grown and consumed in the country. (2014), the sustainability of the value chain plays out simultaneously
Especially in the south and southwestern parts of the country, it is along three dimensions: economic, social, and environmental or the
of great socio-economic importance contributing much to the overall ‘‘triple bottom line’’ (profit, planet, and people). In line with this triple-
well-being of the rural communities, including food security, income bottom line, the core value chain actors and enabling environments for
generation and job creation (Woldu et al., 2015). Arba Minch banana value chain were identified in this study. Regarding
In Ethiopia, banana production contributes around 47.83% for pro- the economic dimension, an existing or proposed upgraded value chain
ducers’ own consumption in Ethiopia, specifically, about 49.19% for is considered sustainable if the required activities at the level of each
income generation, 0.47 for animal feed, and 2.52% for other purposes actor or support provider are commercially profitable. On the aspect of
(Central Statistical Agency of the Ethiopia (CSA), 2015). It covers about social dimension, sustainability refers to socially acceptable outcomes
59.64% (53,956.16 hectares) of the total fruit area, about 68.00% in terms of the distribution of the benefits and costs associated with the
(478,251.04 tones) of the total fruits produced, and about 38.30% increased value creation. Regarding the aspect of the environmental
(2,574,035) of the total fruit-producing farmers in Ethiopia (Central dimension, sustainability is primarily determined by the ability of
Statistical Agency of the Ethiopia (CSA), 2015). The Southern Nations value chain actors to show little or no negative impact on the natural
Nationalities and People (SNNP) regional state is the primary banana environment from their value-adding activities; where possible, they
producing region in Ethiopia. Banana production in the SNNP region should offer a positive effect on the environment (Neven, 2014).

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G.G. Gebre, A.A. Fikadu and T.K. Gebeyehu Resources, Environment and Sustainability 8 (2022) 100060

Table 1
The triple bottom-line indicators for sustainability of the banana value chain in Arba Minch.
Source: Adopted from Gebre and Rik (2016).
Indicators for economic Indicators for social Indicators for environmental
- Value added received - Labor condition - Waste management
- Market diversity - Employment - Emission of air pollutants
- Value adding activities - Gender - Soil degradation
- Profitability - Product information - Water usage
- Governance/power - Market information - Biodiversity
- Productivity - Farmers’ cooperation for bargaining power
- Fair trade - Safety and hygiene
- Product loss - Product quality
- Road
- Transportation
- Stakeholder relations
- Farming methods

Sustainability indicators are particularly hard to define and mea- that banana from Arba Minch forms more than 80% of the domestic
sure. The basic problem is that sustainability is something that only market share in Ethiopia (Temesgen, 2014). Arba Minch zuriya Woreda
occurs in the future while the indicators are something that can be has a high potential for the availability of quality water for irrigation.
measured in the present (United States Agency for International Devel- It is surrounded by the two big Rift Valley lakes, namely Chamo and
opment USAID, 2012). The three dimensions of sustainability including Abaya, which have a great economic as well as ecological value for
social, environmental, and economic are treated individually; however, the area (Fig. 2). Moreover, it has a big perennial river crossing the
in practice they overlap (USAID, 2012). Once the core processes of banana farmlands. Because of its suitable agro-ecological conditions
the value chain are mapped, indicators must be associated with each and high irrigation potentials, the Arba Minch district is a major banana
chain for those three sustainability dimensions. The selection of the producing area in Ethiopia. Arba Minch is known for dwarf, medium
sustainability indicators depends on the level of the organization and height, and giant Cavendish bananas production using traditional and
the type of activities or sectors (Moreno and Salgado, 2012). modern irrigation schemes in the country (Mekonnen, 2014; Gebre
Moreover, many academic studies have assessed the sustainability et al., 2020). Arba Minch is also a significant source of banana seedlings
of Agri-food chains, but no agreement has been reached about the for many other parts of the country (Temesgen, 2014).
overall sustainability performance of local food systems (Galli et al.,
2015; Hand and Martinez, 2010; Durham et al., 2009). Indeed, those
3.2. Sampling techniques
assessments are challenging in their attempts to integrate Agri-food
production and consumption within comprehensive decision making
tools. However, the scientific community has not yet agreed on a shared A multi-stage sampling technique was employed to select a study
methodology which allows for robust and simultaneous comparisons area and sample banana producers. First, Arba Minch zuriya Woreda
over the sustainability dimensions of Agri-food chains. For this study, was selected based on the volume of banana production in the country.
the selection of triple bottom-line, sustainability indicators was thus Second, from the total of 12 banana producing1 kebeles in the Woreda,
specifically adapted to the context of the Ethiopian banana farming two kebeles, namely ‘‘Shele and Lante’’, were selected based on the
sector in Arba Minch. The study proposed a multi-dimensional sus- volume of banana production. Finally, about 43 banana producers were
tainability assessment based on a set of 25 criteria. The assessment selected from two kebeles (22 from Shele and 21 from Lante kebeles)
for each dimension was made at the local level in the study area. through simple random sampling technique. The sample frame of the
Since the sustainability of the banana value chain comprises economic, banana producers was found from each Kebele Agricultural Develop-
environmental and social dimensions, the theoretical framework for ment Agents. Further, about four additional farmers were selected from
the study was designed as illustrated in Fig. 1. Also, those dimensions the lists of each kebeles for Focus Group Discussion.
are qualitatively evaluated based on the sample experts’ judgment by Data from each actor of the value chain across the chain were
accounting the local context of Arba Minch district. Also, the selected also collected using the snowball sampling technique because the mar-
sustainability indicators in the lens of economic, social and environ- keting information is not simply retrieved; so, the authors picked an
mental elements of the banana value chain in Arba Minch are depicted initial small sample of respondents from the overall banana traders.
in Table 1. Each indicator was also evaluated by experts qualitatively Thus, about six local traveling trades, six retailers (two rural and
to grasp the real scenarios towards the sustainable banana value chain four urban), four wholesalers, and six consumers were selected for
which helps to penetrate the local and global market by creating an interview. Furthermore, 12 experts (two from each institutions) were
efficient and sustainable banana value chain. In sum, this study clearly selected from Arba Minch University, Arba Minch research center,
showed the core actors, enabling environment, and possible market Arba Minch district agriculture and rural development office, Woreda
channel as well as sustainability performance for banana value chain marketing and cooperative office, banana marketing cooperatives, and
in Arba Minch district. non-governmental organization (e.g. International Livestock Research
Institute (ILRI)) to discuss and judge on the sustainability performance
3. Methodological framework of banana value chain in the Woreda. The expert knowledge on the sus-
tainability performance of the banana value chain was evaluated based
3.1. The study area
on the selected sustainability indicators from the lens of economic,
social, and environmental dimensions in the banana value chain in the
The study was conducted in Arba Minch zuriya Woreda of Ethiopia,
study area. Also, the sample experts evaluated the logistics, farm field,
as it is one of the major banana producing areas in East Africa. Arba
handling practice during transportation, wholesale and retail markets,
Minch zuriya district is located at about 505 kilometers south of the
banana fruit management, waste management practice at marketing,
capital city of Ethiopia, Addis Ababa. Arba Minch zuriya Woreda lies
and transportation sites towards the banana value chain.
at an altitude ranging between 746 to 1800 meters above sea level,
with the mean temperature ranging between 15 ◦ C and 30 ◦ C and
1
mean annual rainfall above 888 mm (Yishak, 2013). It is estimated Kebele is the smallest administrative unit in Ethiopia

3
G.G. Gebre, A.A. Fikadu and T.K. Gebeyehu Resources, Environment and Sustainability 8 (2022) 100060

Fig. 1. Conceptual framework of the study.

Source: Adopted from Gebre and Rik (2016).

3.3. Methods of data analysis Regarding the first step, sustainability indicators were derived from
the FAO (2014) and Moreno and Salgado (2012) and the author’s on-
Qualitative data were analyzed using a thematic analysis approach/ the-ground observations in the study area of the performance of Agri-
narrated, while the quantitative data analysis was done using de- food chains applicable to banana value chains. A set of 25 attributes
scriptive statistics to calculate the profit margins along with the core across the lens of economic, social and environmental sustainability
processes of the banana value chain. Moreover, the Cronbach’s alpha dimensions was revealed through a process of selection and aggregation
coefficient has been employed to check the reliability and consistency of the indicators at the local level in Arba Minch. These represented the
of the summative rating of the Expert’s judgment scale on the sus- most relevant societal expectations on the sustainability performance of
tainability indicators of the banana value chain perception (StataCorp, banana value chain (Table 1). In the second step, a banana value chain
map was developed indicating product and price flow across the chain
2015); that means, it helps to assess the internal consistency among
at the local level (Fig. 3).
the five-point scale items to evaluate the overall sustainability of ba-
In the third step, the authors turned to selected experts asking them
nana value chain in terms of economic, social, and environmental
to formulate an assessment of the ability of each selected sustainability
dimensions. As a rule of thumb, the Cronbach’s alpha coefficient is
indicator to be applied across local chains and give a preliminary
greater than 0.78, then the five-point scales data become reliable and
assessment on the best performing local chain relate to each indica-
consistence (StataCorp, 2015).
tor. 12 experts were selected purposively to cover as many scientific
The selection of triple-bottom-line sustainability indicators was domains as possible including experts in production, harvest, post-
specifically adapted in context of the Ethiopian banana farming sector harvest, trading and policy-making across local chains. The sample
in the case of Arba Minch. The analytical methods used entails three experts were chosen from Ministry of Agriculture, Regional Bureau of
main steps: (1) analysis of academic literature to identify a pre-defined Agriculture, Zonal Agricultural Office, Woreda Agriculture Office, Ke-
set of sustainability indicators applicable to the banana value chain; belle level Agriculture Office, various non-governmental organizations
(2) mapping of a local banana value chain in terms of localness; and who are working in Agriculture sector. The sample Experts have also
(3) expert qualitative assessment of the value chains case-studies with different in terms of their professions, such as; Agricultural Economists,
regard to the ability of the selected sustainability indicators to assess Agronomists, Breeders, Seed Science Experts, Agricultural Engineering,
the sustainability performance of the banana chain in the local context Entomologists, Agricultural Extension Experts, Policy Analysts, and
in Arba Minch, Ethiopia. Development Agents.

4
G.G. Gebre, A.A. Fikadu and T.K. Gebeyehu Resources, Environment and Sustainability 8 (2022) 100060

Fig. 2. Map of Arba Minch district.

Source: Ministry of Agriculture and
Rural Development (MoARD) (2005)

Table 2 farmers, traders, and consumers; farmers group and experts from gov-
SAFA guidelines V-3.0 formulated by FAO (2014).
ernmental and non-governmental organizations. The map of the banana
Source: FAO (2014)
value chain in Fig. 3 shows information, the flow of payment, and quan-
Chain performance rating Points scored Percentage score (%)
tity of banana across the chain. It also illustrates activities undertaken
Best 5 80–100 and the connection between different stakeholders at each stage of
Good 4 60–80 the banana chain and activities that were undertaken. Input supplying,
production, collection, and transportation, wholesaling, retailing, and
Moderate 3 40–60
consumption were the stages of the banana chain in the study area
Limited 2 20–40 (Fig. 3).
Unacceptable 1 0–20 As illustrated in Fig. 3, the product flow begins from the farmer and
ends with the consumer. Banana farmers sell their banana to traveling
traders, banana marketing cooperatives, and rural retailers. The ba-
nana farmers sold approximately 887.04, 3241.92, and 95.04 quintals
For Expert’s judgment, the assessment method adopted was the (Qt)2 (one quintal = 100 kilogram) of the banana through marketing
Sustainability Assessment of Food and Agriculture systems (SAFA) cooperatives, traveling traders, and rural retailers, respectively.
Guidelines from the FAO (2014), which were developed for assessing According to interviews with banana marketing cooperatives, trav-
the impact of food and agriculture operations on the environment, eling traders, retailers, wholesalers, and consumers; about three main
economy and society. The assessment was done by a qualitative method channels for banana marketing in the Arba Minch district were identi-
with five score categories. For each of the selected indicators, we fied. These were: (1) Producer → rural retailers’ → consumers = 2.25%
defined an assessment range from a minimum of 1 for the ‘‘unaccept- (95.04 quintals); (2) Producer → marketing cooperatives → Wholesaler
able situations’’ and a maximum of 5 for the ‘‘best situations’’. Then,
→ Urban Retailers → Consumer = 21% (887.04 quintals); (3) Producer
multiply the actual assessment value of each indicator by the standard
→ traveling traders → wholesalers → Urban Retailers → consumers =
performance value of it and then sum up the value of those indicates
76.75% (3, 241, 92 quintals).
with each dimension. Then, subtract the actual scores for dimension
The agriculture and rural development experts, agricultural devel-
from the maximum potential scores of the same dimension. Finally,
opment agents were disseminating information on technical practices
convert the data into scores in percentage scale and interpret the
to farmers, plant managers, and post-harvest handlers. Information was
final result based on SAFA guidelines, which are depicted in Table 2.
also shared on the quantity of banana flows from producer to traders
The reference points for the assessment performance were Ethiopian
and consumers. There was no information enabling the traceability of
national sustainability goals within Arba Minch district.
banana products for consumers. The results showed that the informa-
tion flow among the producers was very limited but there was a high
4. Results
information flow among traveling traders. The wholesalers also had
4.1. Mapping the banana value chain much communication with each other. Overall, there was a horizontal
and vertical flow of market information for traders, while horizontal
We mapped the banana value chain by ascertaining and plotting the
2
current value chain as revealed during our case study of smallholder Quintal (Qt) is a measurement unit equivalent to 100 kg.

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G.G. Gebre, A.A. Fikadu and T.K. Gebeyehu Resources, Environment and Sustainability 8 (2022) 100060

Fig. 3. Banana value chain map in Arba Minch district.

flow information among farmers was limited. For private farmers, 4.2. Profit margin, value shares, and added value
local traveling traders set a low price for bananas without proper
negotiations with them. As a result, these traders have monopolized The result of our study reveals that the profit margins of banana
banana marketing, and outsiders are not allowed to buy bananas. value chain actors vary along the chain. Wholesalers earned the high-
In response to limited marketing opportunities, farmers organized in est profit margin followed by retailers, traveling traders, and finally,
the form of banana marketing cooperatives that have relatively better farmers. The share of profit margins for wholesalers, retailers, travel-
access to market information. Within these cooperatives utilizing the ing traders, and farmers were 34.91%, 25.71%, 21.48% and 17.90%,
three market channels discussed above, banana market prices flowed to respectively. The gross margin for farmers was 29.32% whereas for
producers through traveling traders and rural retailers. The result of our
traveling traders, wholesalers and retailers, it was 22.31%, 21.13%,
study shows that the farm gate banana price for private farmer ranges
and 11.19%, respectively (Table 3). Each of the banana value chain
from3 ETB 3 (4 USD 0.13) to 5 (USD 0.22) per kg (ETB 300 (USD 13.44)
actors added certain value to the product as the product passes from
to 500 (USD 22.39) per quintal whereas for cooperative members it
one actor to another. Actors improve the form of the product through
was ETB 5 (USD 0.22) per kg (ETB 500 (USD 22.39) per quintal and
sorting by quality and time utility. Total value-added along the banana
varies according to information they received from wholesalers. The
average banana price paid to farmers at their farm gate was ETB value chain was ETB 1600 (USD 71.66) per quintal. The banana farmers
4.25 (USD 0.19) per kg, while the farm gate banana price for private earned 26.56% of the final retail price, while traveling traders, whole-
farmers was ETB 3.85 (USD 0.17) per kg, whereas cooperative members salers, and retailers earn 15.32%, 30%, and 28.12%, respectively. Gross
received ETB 5.00 (USD 0.22) per kg. Regarding the payment method margins along the banana value chain declined from farmers to retailers
for the farmers, the traveling traders made advance or immediate (Table 3).
payment for the amount of bananas they purchased while cooperatives We found that farmers earn the highest gross margin and retailers
made late payment after receiving money from the wholesaler. As a earn the lowest in the chain. However, the distribution among actors of
result, private farmers sell to local traveling traders for the advance value added share varied across market channels in the banana chain.
payment that was made by traders before harvest. With respect to the three market channels, farmers got the highest value
share from channel 1 (46.67%) and the lowest share from channel
3
ETB stands for Ethiopian currency (Birr); one ETB is equal to 0.045 USD 2 (24.83%) due to the involvement of local traders in this channel.
during time of data collection (2016). Wholesalers received their highest value share from channel 3 (34.62%)
4
USD stands for the United States Dollar. and their lowest from channel 2 (29.67%). Farmers got higher value

6
G.G. Gebre, A.A. Fikadu and T.K. Gebeyehu Resources, Environment and Sustainability 8 (2022) 100060

Table 3
Value shares and profit margin of producers and traders in Arba Minch.5 .
Items (Birr/quintal) Farmers Traveling traders Wholesalers Retailers Horizontal sum
Purchase price – 425 670 1150 1800
Production cost 95.37 – – – 90.83
Marketing cost – – – – –
Labor 25 10 11.5 18 54.5
Transport cost – 12 20 15 35
Storage/shop house rent – – 20 100 120
Tax – 8.4 172.5 23 195.5
Spoilage 180 65 13 115 308 71
Total marketing cost 205 95.4 237 271 713
Total cost 300.37 95.4 237 271 899.23
Sale price (Revenue) 425 670 1150 1600 3175
Profit margin 124.63 149.5 243 179 696.13
% share of profit margin 17.90 21.48 34.91 25.71 100
Gross Margin (%) 29.32 22.31 21.13 11.20 83.95
Added value 425 245 480 450 1600
Value Share (%) 26.56 15.32 30 28.12 100

Table 4
Distribution of added value share of the actors in the marketing channels.
Actors Farmers Cooperative Traveling traders Wholesalers Rural retailer Urban retailer Rural consumer Urban consumer
Unit ETB/Qt % ETB/Qt % ETB/Qt % ETB/Qt % ETB/Qt % ETB/Qt % ETB/Qt ETB/Qt
Channel 1 350 46.67 – – – – – – 400 53.33 – – 750 –
Channel 2 385 24.83 – – 255 15.45 460 29.67 – – 450 28.125 – 1550
Channel 3 500 31.25 80 5.00 – – 570 34.62 – – 450 28.125 – 1600

share (31.20%) through in cooperative market outlet than traveling As revealed in Table 5 (I), we have eight economic dimension
traders’ networks (Table 4). indicators. The maximum potential score for the economic dimension
Where; was 8 indicators × 5 points (best/dark green) = 40. However, the actual
ratings economic indicators were 1 dark green (1 × 5), 3 light yellow
– Average farm gate price for rural retailers was ETB 350 per quin- (3 × 3), 1 dark yellow (1 × 2), and 3 red (3 × 1) = 19. The final score
tal and rural retailer sells for rural consumers in ETB 750 per quin- of the economic dimension was 47.5%, which corresponds to a light
tal yellow rating or moderate performance.
– Average farm gate price for traveling traders was ETB 385 per quin- As shown in Table 5 (II), we employed twelve indicators for mea-
tal suring the social dimension of banana value chain sustainability perfor-
– Average traveling traders selling price to wholesalers was ETB mance. Hence, the maximum potential score for the social dimension
670 was 12 indicators × 5 points (best/dark green) = 60. The actual ratings
– Average wholesalers selling price to the urban retailer was ETB of social indicators were 2 light green (2 × 4), 3 light yellow (3 ×
1150 per quintal 3), 2 dark yellow (2 × 2) and 3 red (3 × 1) = 28. The final score of
– Average urban retailer selling price to the consumer, in channel the social dimension of banana value chain sustainability performance
2 was ETB 1550 and channel 3 was ETB 1600 per quintal, respec- was 46.67%, which corresponds to a light yellow rating or moderate
tively performance.
– Cooperatives added ETB 80 per quintal for service charge As presented in Table 5 (III), we used five indicators for measur-
ing of the banana value chain sustainability performance in the lens
4.3. Sustainability performance assessment of environmental dimension. Thus, the maximum potential score for
the environmental dimension was 5 indicators × 5 points (best/dark
The sustainability of the banana value chain in Arba Minch dis- green) = 25. The final score of the environmental dimension was
trict was assessed through selected local-level indicators by different 12/25 = 48%, which corresponds to a light yellow rating or moderate
experts. Thus, these indicators were based on discussions with experts performance as well.
on the banana value chain with reference to the Ethiopia’s national In sum, as depicted in Table 5, the overall sustainability perfor-
sustainable development goals in applied to the Arba Minch situation. mance of banana value chain in the lens of Economic, social, and
The results of banana value chain sustainability performance score with environmental dimensions in Arba Minch is moderate level of perfor-
meaningful color for each indicator in the lens of economic, social and mance with relation to the references which is coined by FAO (2014).
environmental dimension, which has been in line with the concept and The color of each segment in the Table 5 is in line with the SAFA’s
definition of FAO’s Sustainability performance assessment (FAO, 2014). guidelines which are mentioned in FAO (2014) rather than simply it is
Furthermore, the banana value chain performance for each indicator as identification of one segment to another. Finally, the value of the
through statement and its performance score with percentage scale in Cronbach’s alpha reliability statistics (𝛼) was 0.7993 which showed
Arba Minch district is presented in Table 5. that the information generated through the sample Experts (Experts’
judgment scale) on the sustainability of banana value chain in terms of
economic, social, and environmental dimensions, were consistent and
5
Gross income or operating profit is calculated by deducting a variable cost reliable.
from revenues. Gross margin is calculated by dividing the gross income by the
revenue earned from sales. Then multiply by 100 to give a percentage. Added
value is the difference between the price the actor pays for the produce and 5. Discussion
the price she or he sells it for. Value share is the percentage of the final, retail
price that the actor earns. It can be calculated as the added value divided by As indicated in the chain map at Fig. 3, structure of existing ba-
the final retail price. Then multiply by 100 to give a percentage. nana value chain in Arba Minch district includes different actors,

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G.G. Gebre, A.A. Fikadu and T.K. Gebeyehu Resources, Environment and Sustainability 8 (2022) 100060

Table 5
The banana chain performance for each indicator and its performance score in Arba Minch.
Indicators Chain performance Performance score (%)
I) Indicators for economic dimension
Profitability Revenue earned from banana sales exceeded production and marketing costs for farmers 80–100
and traders
Added value shares 30% of value was shared by wholesalers while 26.56% and 15% were shared by 40–60
farmers and traveling trade
Chain Governance Wholesaler set prices without negotiation with farmers 0–20
Fair Trade Traders were not paid fair price to farmers 0–20
Diversity of market Less effort was made to access alternative market channels, in case, relationship with 40–60
existing traders are discontinued
Productivity Banana productivity was less than the potentials of the area and not adapted to 40–60
environmental shocks. According to experts from the Arba Minch research center, the
production potential of banana is 300 quintal per hectare
Value-adding activities Sorting and labeling was done by retailers. There were no processing activities for 20–40
banana fruits
Product loss High loss of product due to post-harvest handling and logistic problems 0–20

Overall sustainability performance of banana value chain in the lens of Economics (Profit) dimension compare with the reference Moderate
by FAO (2014)
II) Indicators for Social dimension
Employment Created job opportunities for youths 60–80
Labor condition No child labor 60–80
Gender No gender equality in banana production & marketing. At the farm level, men were 20–40
engaged in both production and marketing while at the retailer level, women were
engaged in marketing
Transportation Transported by open truck for long-distance 0–20
Road Road from farm gate to distributor was not uniformly distributed for banana 20–40
transportation.
Market information 100% of market information was in the hands of traders 0–20
Product information There was no complete and accessible information on product quality and safety for 0–20
consumers
Stakeholders Relationship There was a good relationship between farmers, input suppliers, supporters, and 40–60
influencers. The relationship between farmers and traders was trust-based.
Safety and hygiene Banana waste released at loading, unloading and marketing area adversely affects the 20–40
human and environmental health in the market
Product quality Low banana product quality due to careless handling and logistic problem. 40–60
Farming method Most farmers practice mono-cropping method 20–40
Farmers’ cooperation for bargaining Cooperative members have relatively higher bargaining power than private farmers for 40–60
power the banana price

Overall sustainability performance of banana value chain in the lens of Social (People) dimension compare with the reference by Moderate
FAO (2014)
III) Indicators for Environmental Dimension
Emission of air pollutants Banana production was free from emission of pollutant. No chemicals were used in the 60–80
production process
Irrigation water usage Inefficient use and application of irrigation water for banana cultivation 20–40
Waste management Inappropriate waste management (deposit of banana leaves at road and marketing 0–20
center)
Soil degradation Soil degradation due to poor farming practice 20–40
Biodiversity Reduction of wild animals and plant species due to expansion of the banana farm. But 40–60
introduction of new banana varieties by the research centers to banana farmers.

Overall sustainability performance of banana value chain in the lens of Environmental (Planet) dimension compare with the Moderate
reference by FAO (2014)

influencers, and supporters. The main actors were input suppliers, pro- chain was enabled by offices of agriculture and rural development as
ducers, farmers marketing cooperatives, collectors/traveling traders, well as marketing and cooperatives.
consumers, wholesalers, retailers. Input suppliers were supplied in- Referring back to our conceptual framework at Fig. 1, the sustain-
puts relate to banana farming to producers. Banana producers were ability of the banana value chain considers the ‘‘triple bottom-line’’
smallholder farmers who perform functions of production and farm approach which includes environmental, social, and economic dimen-
gate sale. Famers who formed banana marketing cooperative sell for sions. Our finding suggest that the banana value chain sustainability
wholesalers through their cooperative network. Traveling traders were performance in the lens of economic, social, and environmental indica-
collect banana from farmers at their farm gate or road said and sell tors was moderate level of performance with respect to the Ethiopian
to wholesalers. Urban retailers purchase from wholesalers and sell to national sustainability goals applied to Arba Minch.
urban consumers while rural retailers directly purchase at farm gate sell As shown by the economic indicators in Table 3, the total value
to rural consumers. The main supporters of banana value chain were chain is profitable since the total revenue was greater than the total
Arba Minch research center, NGO, Arba Minch University, agriculture operational costs. But, it does not imply economic efficiency as yield
and rural development office, and marketing and cooperative office. per hectare of banana production in Arba Minch was less than at the
The research center, University, and NGO were provided improved broader regional level. In addition, added values gained by farmers
banana varieties for farmers via agriculture and rural development were less than traders indicating inefficient earnings to farmers as com-
office. Marketing cooperative provided advice on quality control, access pared to the final retail prices in the chain. A greater share of profits
to market information, and postharvest handling. The banana value was shared by traveling traders and wholesalers implying that farmers

8
G.G. Gebre, A.A. Fikadu and T.K. Gebeyehu Resources, Environment and Sustainability 8 (2022) 100060

have little or no power to influence market prices of banana. Farmers Ethiopia. However, there is a need for strengthening the training and
have imperfect access to alternative markets for their banana products advice on the agronomic practice of banana production since the
while wholesalers have many connections and marketing options across current productivity in the study area is lower than its potential.
the country. Continuous awareness creation needed for the farmers to organize
Regarding the value-adding activities, there were no innovative and join cooperatives who could take over the roles of the traveling
activities that add value to banana products. There was poor logistics traders/banana collectors in the study area. Strengthening the training
in the banana value chain leading to reduced banana quality, shelf- and advice for banana cooperative management members on business
life, and high product loss. Furthermore, farmers wrongly applied management and market linkage needed to improve bargaining power,
irrigation water in banana production which has likelihood for reducing create better market linkage, and provide update and regular market
the productivity of banana farming due to water logging. Hence, the information for farmers. There should be a well-coordinated, up to
aggregate sum of the economic indicators of the banana value chain date and reliable market information delivery service to farmers; such
became moderate sustainability performance in the Arba Minch. market information should include product price and quality of the re-
On the other hand, there was limited emission of air pollutants quired product. In sum, government and non-government organizations
at the banana production stage though there were safety and hygiene give due attention to addressing the constraints throughout the chain
problems at the marketing stage from banana waste which is associated for establishing a sustainable banana value chain.
with packed materials. Based on the finding from the discussion with
the key informant and focus group discussion, there was a reduction of Declaration of competing interest
biodiversity, such as; wildlife and plant species due to a banana planta-
tion. Thus, the aggregate score of the banana value chain sustainability The authors declare that they have no known competing finan-
performance in the lenses of environmental indicators in Arba Minch cial interests or personal relationships that could have appeared to
become moderate level of performance. influence the work reported in this paper.
Regarding the banana value chain sustainability performance in
the lens of social dimension, there was limited long-term business Acknowledgments
relationship between producers and trades as well as between traders
themselves. Traders in banana sector had both horizontal and vertical The Authors are grateful to the Gamo zone Agriculture and Rural
linkages while producers had only vertical linkage along the chain. Development Office for permission to conduct this research. We are
The communication and information flow between traders and farmers greatly indebted to experts and field assistants who have contributed
were based on trust. Producers had relationships with chain influencers to data collection.
and supporters; however, they were unable to outshine into the traders’
network. At the farm level, both farm gate marketing and production References
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