Investigating Value Capture and Marketing Margins among Actors in Onion Supply Chains in Northern Ethiopia

Abstract Understanding how value is created and distributed among actors in food supply chains is essential for building inclusive and efficient food systems. This study examines who captures value in the onion supply chain by analyzing governance structures and marketing margins in Ofla Woreda, Northern Ethiopia. Data were collected from a systematically selected sample of 491 households engaged in onion production and marketing. Both primary and secondary data sources were utilized. Primary data were collected through household surveys, key informant interviews, and focus group discussions, which provided insights into production practices, marketing channels, costs, and constraints. Secondary data were obtained from reports, published studies, and official records of governmental and non-governmental institutions. This mixed approach ensured both the reliability and comprehensiveness of the findings. For primary data collection, structured questionnaires were designed and pre-tested according to the study objectives. The data were analyzed using descriptive and econometric methods. Descriptive statistics were used to summarize household characteristics, while an Ordinary Least Squares (OLS) model was applied to identify the determinants of onion value chain marketing margins. The findings show that government agencies and farmers' cooperatives supplied most of the inputs for onion growers. The longest and most prominent value chain pathway was producer → wholesaler → retailer → consumer. Producers captured the largest marketing margin (48%), followed by retailers and wholesalers. The regression analysis revealed that the main factors influencing onion marketing margins included age, education, farming experience, access to credit, communication costs, labor costs, offloading costs, storage costs, and access to market information. To improve the onion value chain, participants should join or establish farmers' cooperatives, self-help groups, and rural microfinance institutions. Institutions such as the Ofla Woreda Trade and Market Development Office, the Agriculture and Rural Development Office, and NGOs like the Dedebit Microfinance Institution should integrate market information into their services to better inform value chain actors about the potential of onion marketing.