In Ethiopia, sheep is the second most important species of livestock next to cattle. The sheep and goats population of Ethiopia, including expert estimates of the pastoral areas, is 66 million head of which around 35 million are sheep. They provide 46% of national meat consumption and 58% of the value of hide and skin production. Although sheep value production major agricultural activity in the study area (Hula), producers complain that their margin from the practice is low. Abattoirs also complain that they are working below their potential due to lack of sheep supply. Therefore, this study is aimed to identify factors affecting performance of sheep supply and marketing chain in terms of value chain analysis. To do that, data were collected from randomly selected 134 sheep producers, 4 cooperatives, 27 traders, 10 processors and 25 consumers. The data collected were analyzed using descriptive statistics, mapping approach and econometric model. The result indicated that there were 5 main value chain actors in Abera. Namely, input suppliers, producers, traders, processors and consumers. Feed, veterinary, transport, training/advisory; and credit suppliers were identified as support chain actors. 22 sheep flow channels were identified. Channels I, II, VI, VII, and XV were long and sophisticated. Large volume of sheep was flowed through channel XXI from which farmers got low margins. The mean profit of producers was birr 427.25; of traders was birr 507.13; and of processors was birr 3097. Largest profit was earned by processors and the smallest by producers. 13 variables were hypothesized to determine intensity of participation in sheep value addition. Of these, 7 variables, namely total income, experience, family size, education, total landholding, membership to cooperative and credit use, were found to be significantly affecting households’ extent of participation in sheep value addition. The study indicated the need to establish linkage among farmers; improve sheep through breeding, provide veterinary services, shorten long supply chain; expand formal education, supply credit; introduce IGAs; and provide experience sharing mechanisms.

 

Keywords: Value chain analysis, Value addition, Sheep flow channels, Determinants of sheep market supply