Income Creation and Distribution along the Value Chain: A Case of Finger Millet Value Chain in Hambanthota District

Abstract

This research aimed to explore the income creation and distribution along the value chain of finger millets. The objectives were (1) to identify the structure of the value chain, (2) to find out the functions and roles of value chain actors placed in different nodes, (3) to recognize the current income flow, and (4) to determine the factors influencing the value creation and income generation in finger millet value chain. Hambanthota district was selected as the research area and the total sample size was 150. Sample technique was a purposive sampling technique and the interviewer administrated questionnaires were used as a data collection tool. Mainly descriptive and the Pearson Chi-square analysis were used to the analyses data. Processors who provide product base value addition and other actors provide service based value additions. The most complex node was the middleman node which shows a network. Before processing activities, actors are called middleman level 1 and after the processing, actors are called middleman level 2. There is a significant positive relationship between market margins of the farmers and the level II middlemen. Age, educational levels and the experiences about their professionals are the causal factors of income generation and value addition in finger millet value chain nodes. Farmers and middlemen experiences positive for profit margin. This research concluded that, finger millet value chain structure is very complex and driven by the middleman actors.