Demographic and socio economic characteristics of highland bamboo traders
Highland bamboo trade is male dominated business that all of the traders are male headed. It indicates that in bamboo trading activity the participation of women is very limited due to different barriers like working culture of the community. The education level of the trader varies from the informal education to completion of secondary school. The proportion of education level is as follows; 7.7% of the trader cannot read and write, 61.5% of the traders can read and write without attending formal education, 15.4% attend primary school and 15.4% of the sampled traders have attended high school education. Bamboo traders have a mean experience of 10.08 with a standard deviation of 5.074 years. In the study area wholesalers, retailers and local collectors were involved. There are different barrier of entry to bamboo trading activity such as issues related to trade license and existence of unlicensed bamboo traders in the area. The livelihood of traders depends on the farming activity and trading of bamboo and related products (Table 2).
Table 2: Demographic and socio economic characteristics of sampled traders
Categorical variables
|
Item
|
Frequency
|
Percent
|
Sex
|
Male
|
13
|
100
|
Marital status
|
Female
Married
|
0
13
|
0
100
|
Education status
|
Cannot read and write
|
1
|
7.7
|
|
Can read and write
|
8
|
61.5
|
Attend primary school
|
2
|
15.4
|
Attend secondary school
|
2
|
15.4
|
Continuous variables
|
Min max
|
Mean
|
SD
|
Experience
|
4 20
|
10.08
|
5.074
|
Source: Field survey result, 2020
Demographic and socio economic characteristics of bamboo processors
As shown in the table below all of the bamboo processors were male headed and 15.4% of the processor were married. It indicates that in the bamboo processing mostly the young people especially the students were involved in this activity. In the study area some females participate on the production of bamboo mat near to the main road of the city. The education level result showed that 46% of the processors have attended secondary school and 30.8% of the processors have attended the primary school education. This indicates that the bamboo processing activity is a good source of job opportunity and it needs educated people. The sampled bamboo processors have a mean working experience of 6.62 years with a variation of 3.84 year among them. Bamboo processing is used as a means of livelihood for bamboo processors.
Table 3: Demographic and socio economic characteristics of bamboo processor
Categorical variable
|
Item
|
Frequency
|
Percent
|
Sex
|
Male
|
13
|
100
|
Marital status
|
Single
|
11
|
84.6
|
Education status
|
Married
Can read and write
|
2
1
|
15.4
7.7
|
|
Attend primary school
|
4
|
30.8
|
|
Attend secondary school
|
6
|
46.2
|
|
Attend higher education
|
2
|
15.4
|
Continuous variable
|
Min max
|
Mean
|
SD
|
Experience
|
2 15
|
6.62
|
3.841
|
Source: Field survey result, 2020
Profitability analysis of bamboo products
Profitability analysis of bamboo culm at producers level
Bamboo producers have used family labour and own land for bamboo production. Therefore, in the profitability analysis the opportunity cost of labour and rent for own land were considered and the market price to purchase inputs were used. On average producers allocate 0.15 ha of land for bamboo plantation and the average number of bamboo culm supplied by producer was 374.97bamboo culm.
The average production cost per bamboo culm is 8.41 ETB. Bamboo producers did not incur monetary cost rather opportunity cost of family labour and rent for land were considered. These constitute 31.98% rent for land and 46.24% opportunity costs of labour. On average producers supply 374.79 bamboo culms and earn revenue of 7,623.23 ETB. By deducting all the production and marketing costs from the total revenue producers earn 4475.71 ETB which makes 58.71% of profit margin (Table 4). Tefera et al. (2013) found that producers earn 90.89% of profit margin. The present study indicates that the profit of producers become decrease through time. The total value added at the producer level was 15.64 ETB per culm. It is the summation of profit, remuneration (labour) and government revenue but at the producer level bamboo producers did not pay tax for the government.
Table 4: Bamboo producer costs, profit margin and value added
Cost items
|
Birr per 374.97 culm/ 0.15 ha
|
Cost per culm(ETB)
|
Production cost (%)
|
Site preparation
|
290.37
|
0.77
|
9.47
|
Planting labor
|
201.13
|
0.54
|
6.64
|
Weeding cost
|
114.81
|
0.31
|
3.81
|
Fencing material cost
|
194.75
|
0.52
|
6.4
|
Fencing labor cost
|
213.61
|
0.57
|
7.01
|
Culm cutting cost
|
294.98
|
0.79
|
9.72
|
Culm harvesting cost
|
291.6
|
0.78
|
9.59
|
Rent for land
Material cost
|
973.81
100
|
2.6
0. 27
|
31.98
|
Total production cost(A)
|
2675.06
|
7.15
|
84.62
|
Marketing cost(B)
Transportation cost
|
472.46
|
1.26
|
15.38
|
Overall cost (A+B)=C
|
3147.52
|
8.41
|
100
|
Average selling price per culm
|
20.34
|
|
|
Total revenue ( p*Q)=D
|
7623.23
|
20.34
|
|
Net return/profit (D-C)
|
4479.37
|
11.93
|
|
Profit margin
|
58.73%
|
|
|
Value added
|
5885.87
|
15.69
|
|
Source: Field survey result, 2020
Profitability analysis of bamboo culm at traders’ level
On average local traders, retailers and wholesalers earn 7.52%, 9.51% and 9.23% of profit
Margin and these traders earn average revenue of 66,420 ETB, 129,360ETB and 280,343 ETB respectively. These low profit margins discourage the traders to engage in bamboo trading business. From these traders, wholesalers incur the highest marketing cost since these traders purchase large number of bamboo culm than other traders. The value added at local trader, retail level and wholesale level was 2.81 ETB, 4.84 ETB and 3.77ETB respectively (Table 5). Tefera et al. (2013) reported that traders earn 32.78% of the profit margin
Table 5: Profitability analysis of bamboo culm traders
|
Local traders
|
Retailers
|
Wholesalers
|
Cost items and price
|
Total
|
Birr/Culm
|
Total
|
Birr/culm
|
Total
|
Birr/culm
|
Average Culm handled
|
2460
|
|
4200
|
|
9667
|
|
purchasing price
|
55,104
|
22.4
|
103,320
|
24.6
|
225,531
|
23.33
|
Transportation cost
|
3260
|
1.33
|
4000
|
0.95
|
14000
|
1.45
|
Telephone cost
|
1120
|
0.46
|
1730
|
0.41
|
4333.33
|
0.45
|
Loading and unloading
|
1940
|
0.79
|
4675
|
1.11
|
9866.67
|
1.02
|
Tax
|
0.00
|
0.00
|
2880
|
0.69
|
4000
|
0.41
|
Levy
|
0.00
|
0.00
|
460
|
0.12
|
766.67
|
0.08
|
Total marketing costs
|
6320
|
2.58
|
13745
|
3.28
|
32966.67
|
3.41
|
Total cost
|
61424
|
24.98
|
117065
|
27.88
|
254497.67
|
26.74
|
Average selling price
|
-
|
27
|
-
|
30.8
|
-
|
29
|
Gross revenue
|
66420
|
|
129360
|
|
280343
|
|
Net profit
Profit margin (%)
|
4996
7.52
|
2.02
|
12295
9.51
|
2.92
|
25845.33
9.23
|
2.26
|
Value added
|
6936
|
2.81
|
20,310
|
4.84
|
40478.67
|
3.77
|
Source: Field survey result, 2020
Profitability analysis of bamboo processors
Traditional bamboo product processors produce 687 traditional bamboo chairs on average per year. To produce a single three setter bamboo chair on average two bamboo culm is required. The cost of processing constitutes 64.42% purchasing price for bamboo culm, 34.7% opportunity cost for labor, 0.62% cost for drill and cost for brush constitutes 0.26% of the total production cost. Annually bamboo processors earn 4,211.31ETB by selling 687 three setter bamboo chair. As indicated in Table 6 processors gained 3.06 ETB per culm as a net profit .It indicates that the profit is not balanced with the processing activity. In the study area all of the traditional bamboo chair producers produce the bamboo products manually. It needs attention to transform these processors into better business work. Solomon et al. (2016) indicated that bamboo processors gained 10.95 ETB per culm. The author stated that the cost benefit analyses in the existing market chain processors were highly beneficial. But in this study it did not encourage the processor to engage in bamboo processing business.
Table 6: Profitability analysis of bamboo processors
Cost item
|
Cost(ETB)/chair
|
Cost/culm
|
Percent
|
Purchasing price
|
47.84
|
23.93
|
64.42
|
Labor cost (opportunity cost)
|
25.77
|
12.89
|
34.70
|
Drill cost
|
0.46
|
0.23
|
0.62
|
Brush
|
0.19
|
0.095
|
0.26
|
Total processing cost (A)
|
74.26
|
37.15
|
100
|
Selling price(B)
|
80.39
|
40.2
|
|
Gross revenue(p*Q)
|
55227.97
|
-
|
|
Profit (B-A)
|
6.13
|
3.06
|
|
Profit margin (%)
|
7.62%
|
7.62%
|
|
Value added
|
31.9
|
15.95
|
|
Source: Field survey data, 2020
Profitability analysis of bamboo furniture enterprises
Bamboo furniture enterprises on average process 823 modern bamboo chair per year. All bamboo furniture enterprises used on average two bamboo culm to make a single modern bamboo chair. Bamboo furniture enterprises earn highest annual income than other actors. These enterprises produce better value added products than the traditional bamboo product producers. On average the bamboo furniture enterprises earn 197.91 ETB per chair. The cost for culm and labour cost constitutes 26.25% and 20.67% of the total processing cost. The profitability analysis at bamboo furniture enterprise level indicates that the enterprises gained 197.91ETB per chair .It indicates that investing on modern bamboo processing business leads to better business profit. Dafroza (2016) reported that processors received 46% of the profit margin.
Table 7: Costs, profit margin and value added at bamboo furniture enterprise level
Cost item
|
Cost (ETB)/chair
|
Cost per culm percent
|
Culm purchasing price
|
48.67
|
24.34
|
26.25
|
Electricity and house rent
|
7.48
|
3.74
|
4.03
|
Labor cost
|
38.33
|
19.17
|
20.67
|
Tax
|
3.77
|
1.89
|
2.03
|
Varnish
|
29.5
|
14.75
|
15.91
|
Glue
|
10.67
|
5.34
|
5.76
|
Nail
|
24
|
12
|
12.94
|
Cost for coloring
|
23
|
11.5
|
12.4
|
Total cost(A)
|
185.42
|
92.71
|
100
|
Selling price(B)
Gross revenue (p*Q)
|
383.33
315,480.59
|
191.67
-
|
|
Profit(B-A)
Profit margin (%)
Value added
|
197.91
51.63
240.01
|
98.96
51.63%
120.01
|
|
Source: Field survey data, 2020
Demographic and socio economic characteristics of highland bamboo traders
Highland bamboo trade is male dominated business that all of the traders are male headed. It indicates that in bamboo trading activity the participation of women is very limited due to different barriers like working culture of the community. The education level of the trader varies from the informal education to completion of secondary school. The proportion of education level is as follows; 7.7% of the trader cannot read and write, 61.5% of the traders can read and write without attending formal education, 15.4% attend primary school and 15.4% of the sampled traders have attended high school education. Bamboo traders have a mean experience of 10.08 with a standard deviation of 5.074 years. In the study area wholesalers, retailers and local collectors were involved. There are different barrier of entry to bamboo trading activity such as issues related to trade license and existence of unlicensed bamboo traders in the area. The livelihood of traders depends on the farming activity and trading of bamboo and related products (Table 2).
Table 2: Demographic and socio economic characteristics of sampled traders
Categorical variables
|
Item
|
Frequency
|
Percent
|
Sex
|
Male
|
13
|
100
|
Marital status
|
Female
Married
|
0
13
|
0
100
|
Education status
|
Cannot read and write
|
1
|
7.7
|
|
Can read and write
|
8
|
61.5
|
Attend primary school
|
2
|
15.4
|
Attend secondary school
|
2
|
15.4
|
Continuous variables
|
Min max
|
Mean
|
SD
|
Experience
|
4 20
|
10.08
|
5.074
|
Source: Field survey result, 2020
Demographic and socio economic characteristics of bamboo processors
As shown in the table below all of the bamboo processors were male headed and 15.4% of the processor were married. It indicates that in the bamboo processing mostly the young people especially the students were involved in this activity. In the study area some females participate on the production of bamboo mat near to the main road of the city. The education level result showed that 46% of the processors have attended secondary school and 30.8% of the processors have attended the primary school education. This indicates that the bamboo processing activity is a good source of job opportunity and it needs educated people. The sampled bamboo processors have a mean working experience of 6.62 years with a variation of 3.84 year among them. Bamboo processing is used as a means of livelihood for bamboo processors.
Table 3: Demographic and socio economic characteristics of bamboo processor
Categorical variable
|
Item
|
Frequency
|
Percent
|
Sex
|
Male
|
13
|
100
|
Marital status
|
Single
|
11
|
84.6
|
Education status
|
Married
Can read and write
|
2
1
|
15.4
7.7
|
|
Attend primary school
|
4
|
30.8
|
|
Attend secondary school
|
6
|
46.2
|
|
Attend higher education
|
2
|
15.4
|
Continuous variable
|
Min max
|
Mean
|
SD
|
Experience
|
2 15
|
6.62
|
3.841
|
Source: Field survey result, 2020
Profitability analysis of bamboo products
Profitability analysis of bamboo culm at producers level
Bamboo producers have used family labour and own land for bamboo production. Therefore, in the profitability analysis the opportunity cost of labour and rent for own land were considered and the market price to purchase inputs were used. On average producers allocate 0.15 ha of land for bamboo plantation and the average number of bamboo culm supplied by producer was 374.97bamboo culm.
The average production cost per bamboo culm is 8.41 ETB. Bamboo producers did not incur monetary cost rather opportunity cost of family labour and rent for land were considered. These constitute 31.98% rent for land and 46.24% opportunity costs of labour. On average producers supply 374.79 bamboo culms and earn revenue of 7,623.23 ETB. By deducting all the production and marketing costs from the total revenue producers earn 4475.71 ETB which makes 58.71% of profit margin (Table 4). Tefera et al. (2013) found that producers earn 90.89% of profit margin. The present study indicates that the profit of producers become decrease through time. The total value added at the producer level was 15.64 ETB per culm. It is the summation of profit, remuneration (labour) and government revenue but at the producer level bamboo producers did not pay tax for the government.
Table 4: Bamboo producer costs, profit margin and value added
Cost items
|
Birr per 374.97 culm/ 0.15 ha
|
Cost per culm(ETB)
|
Production cost (%)
|
Site preparation
|
290.37
|
0.77
|
9.47
|
Planting labor
|
201.13
|
0.54
|
6.64
|
Weeding cost
|
114.81
|
0.31
|
3.81
|
Fencing material cost
|
194.75
|
0.52
|
6.4
|
Fencing labor cost
|
213.61
|
0.57
|
7.01
|
Culm cutting cost
|
294.98
|
0.79
|
9.72
|
Culm harvesting cost
|
291.6
|
0.78
|
9.59
|
Rent for land
Material cost
|
973.81
100
|
2.6
0. 27
|
31.98
|
Total production cost(A)
|
2675.06
|
7.15
|
84.62
|
Marketing cost(B)
Transportation cost
|
472.46
|
1.26
|
15.38
|
Overall cost (A+B)=C
|
3147.52
|
8.41
|
100
|
Average selling price per culm
|
20.34
|
|
|
Total revenue ( p*Q)=D
|
7623.23
|
20.34
|
|
Net return/profit (D-C)
|
4479.37
|
11.93
|
|
Profit margin
|
58.73%
|
|
|
Value added
|
5885.87
|
15.69
|
|
Source: Field survey result, 2020
Profitability analysis of bamboo culm at traders’ level
On average local traders, retailers and wholesalers earn 7.52%, 9.51% and 9.23% of profit
Margin and these traders earn average revenue of 66,420 ETB, 129,360ETB and 280,343 ETB respectively. These low profit margins discourage the traders to engage in bamboo trading business. From these traders, wholesalers incur the highest marketing cost since these traders purchase large number of bamboo culm than other traders. The value added at local trader, retail level and wholesale level was 2.81 ETB, 4.84 ETB and 3.77ETB respectively (Table 5). Tefera et al. (2013) reported that traders earn 32.78% of the profit margin
Table 5: Profitability analysis of bamboo culm traders
|
Local traders
|
Retailers
|
Wholesalers
|
Cost items and price
|
Total
|
Birr/Culm
|
Total
|
Birr/culm
|
Total
|
Birr/culm
|
Average Culm handled
|
2460
|
|
4200
|
|
9667
|
|
purchasing price
|
55,104
|
22.4
|
103,320
|
24.6
|
225,531
|
23.33
|
Transportation cost
|
3260
|
1.33
|
4000
|
0.95
|
14000
|
1.45
|
Telephone cost
|
1120
|
0.46
|
1730
|
0.41
|
4333.33
|
0.45
|
Loading and unloading
|
1940
|
0.79
|
4675
|
1.11
|
9866.67
|
1.02
|
Tax
|
0.00
|
0.00
|
2880
|
0.69
|
4000
|
0.41
|
Levy
|
0.00
|
0.00
|
460
|
0.12
|
766.67
|
0.08
|
Total marketing costs
|
6320
|
2.58
|
13745
|
3.28
|
32966.67
|
3.41
|
Total cost
|
61424
|
24.98
|
117065
|
27.88
|
254497.67
|
26.74
|
Average selling price
|
-
|
27
|
-
|
30.8
|
-
|
29
|
Gross revenue
|
66420
|
|
129360
|
|
280343
|
|
Net profit
Profit margin (%)
|
4996
7.52
|
2.02
|
12295
9.51
|
2.92
|
25845.33
9.23
|
2.26
|
Value added
|
6936
|
2.81
|
20,310
|
4.84
|
40478.67
|
3.77
|
Source: Field survey result, 2020
Profitability analysis of bamboo processors
Traditional bamboo product processors produce 687 traditional bamboo chairs on average per year. To produce a single three setter bamboo chair on average two bamboo culm is required. The cost of processing constitutes 64.42% purchasing price for bamboo culm, 34.7% opportunity cost for labor, 0.62% cost for drill and cost for brush constitutes 0.26% of the total production cost. Annually bamboo processors earn 4,211.31ETB by selling 687 three setter bamboo chair. As indicated in Table 6 processors gained 3.06 ETB per culm as a net profit .It indicates that the profit is not balanced with the processing activity. In the study area all of the traditional bamboo chair producers produce the bamboo products manually. It needs attention to transform these processors into better business work. Solomon et al. (2016) indicated that bamboo processors gained 10.95 ETB per culm. The author stated that the cost benefit analyses in the existing market chain processors were highly beneficial. But in this study it did not encourage the processor to engage in bamboo processing business.
Table 6: Profitability analysis of bamboo processors
Cost item
|
Cost(ETB)/chair
|
Cost/culm
|
Percent
|
Purchasing price
|
47.84
|
23.93
|
64.42
|
Labor cost (opportunity cost)
|
25.77
|
12.89
|
34.70
|
Drill cost
|
0.46
|
0.23
|
0.62
|
Brush
|
0.19
|
0.095
|
0.26
|
Total processing cost (A)
|
74.26
|
37.15
|
100
|
Selling price(B)
|
80.39
|
40.2
|
|
Gross revenue(p*Q)
|
55227.97
|
-
|
|
Profit (B-A)
|
6.13
|
3.06
|
|
Profit margin (%)
|
7.62%
|
7.62%
|
|
Value added
|
31.9
|
15.95
|
|
Source: Field survey data, 2020
Profitability analysis of bamboo furniture enterprises
Bamboo furniture enterprises on average process 823 modern bamboo chair per year. All bamboo furniture enterprises used on average two bamboo culm to make a single modern bamboo chair. Bamboo furniture enterprises earn highest annual income than other actors. These enterprises produce better value added products than the traditional bamboo product producers. On average the bamboo furniture enterprises earn 197.91 ETB per chair. The cost for culm and labour cost constitutes 26.25% and 20.67% of the total processing cost. The profitability analysis at bamboo furniture enterprise level indicates that the enterprises gained 197.91ETB per chair .It indicates that investing on modern bamboo processing business leads to better business profit. Dafroza (2016) reported that processors received 46% of the profit margin.
Table 7: Costs, profit margin and value added at bamboo furniture enterprise level
Cost item
|
Cost (ETB)/chair
|
Cost per culm percent
|
Culm purchasing price
|
48.67
|
24.34
|
26.25
|
Electricity and house rent
|
7.48
|
3.74
|
4.03
|
Labor cost
|
38.33
|
19.17
|
20.67
|
Tax
|
3.77
|
1.89
|
2.03
|
Varnish
|
29.5
|
14.75
|
15.91
|
Glue
|
10.67
|
5.34
|
5.76
|
Nail
|
24
|
12
|
12.94
|
Cost for coloring
|
23
|
11.5
|
12.4
|
Total cost(A)
|
185.42
|
92.71
|
100
|
Selling price(B)
Gross revenue (p*Q)
|
383.33
315,480.59
|
191.67
-
|
|
Profit(B-A)
Profit margin (%)
Value added
|
197.91
51.63
240.01
|
98.96
51.63%
120.01
|
|
Source: Field survey data, 2020
Value Added and its Appropriation
Value added can be distribute into the different node of the value chain as net profit, personal remuneration and taxes (Vedeld et al.,2004). Value added is not only an element of income for the enterprises but also it includes the value added distribution along the fundamental agents of the national economy: households(recipients of the return to labour, financial institutions (interest charges), government adminstration(taxes) and enterprises(gross or net profit).
The total value added in the bamboo product was estimated about 163.02 ETB per a single bamboo culm. It was distributed along the agents .About 9.59% of the total value added was shared by bamboo producers. loca traders,retailers and wholesalers account 1.72%,2.97% and 2.31% of the total value added respectively. Traditional bamboo product processors and bamboo furniture enterprises account 9.78% and 73.62% of the total value added. It indicates that bamboo furniture enterprises share the highest portion of the total value added.
Table 8: Value added at different stages
Value added stage
|
ETB per culm
|
Percent
|
Producers
|
15.64
|
9.59
|
Local traders
|
2.81
|
1.72
|
Retailers
|
4.84
|
2.97
|
Wholesalers
|
3.77
|
2.31
|
Bamboo processor
|
15.95
|
9.78
|
Bamboo furniture enterprises
|
120.01
|
73.62
|
Total
|
163.02
|
100
|
Source: extracted from the above table
The total value added is appropriated to different agents as personal remuneration for labour, profit for the enterprises and taxes and levies for government administration. Majority of the total value added (74.84 %) is appropriated as net profit for producers, traders and processors and the remaining 23.76% and 1.96% of the total value added was accounted for labour in the form of remuneration and government administration in the form of taxes and levies respectively. It indicates that the income generation and employment creation at different stages and the rise of government in bamboo value chain (Figure 1)
Value Added and its Appropriation
Value added can be distribute into the different node of the value chain as net profit, personal remuneration and taxes (Vedeld et al.,2004). Value added is not only an element of income for the enterprises but also it includes the value added distribution along the fundamental agents of the national economy: households(recipients of the return to labour, financial institutions (interest charges), government adminstration(taxes) and enterprises(gross or net profit).
The total value added in the bamboo product was estimated about 163.02 ETB per a single bamboo culm. It was distributed along the agents .About 9.59% of the total value added was shared by bamboo producers. loca traders,retailers and wholesalers account 1.72%,2.97% and 2.31% of the total value added respectively. Traditional bamboo product processors and bamboo furniture enterprises account 9.78% and 73.62% of the total value added. It indicates that bamboo furniture enterprises share the highest portion of the total value added.
Table 8: Value added at different stages
Value added stage
|
ETB per culm
|
Percent
|
Producers
|
15.64
|
9.59
|
Local traders
|
2.81
|
1.72
|
Retailers
|
4.84
|
2.97
|
Wholesalers
|
3.77
|
2.31
|
Bamboo processor
|
15.95
|
9.78
|
Bamboo furniture enterprises
|
120.01
|
73.62
|
Total
|
163.02
|
100
|
Source: extracted from the above table
The total value added is appropriated to different agents as personal remuneration for labour, profit for the enterprises and taxes and levies for government administration. Majority of the total value added (74.84 %) is appropriated as net profit for producers, traders and processors and the remaining 23.76% and 1.96% of the total value added was accounted for labour in the form of remuneration and government administration in the form of taxes and levies respectively. It indicates that the income generation and employment creation at different stages and the rise of government in bamboo value chain (Figure 1)