Journal of Biology, Agriculture and Healthcare www.iiste.org ISSN 2224-3208 (Paper) ISSN 2225-093X (Online) Vol.5, No.10, 2015 84 Review of Barley Value Chain Management in Ethiopia Tura Kaso Department of Agribusiness and Value Chain Management, Ambo University, Ethiopia; P.O. Box: 19, Ambo University, Ethiopia Email: sabir.yoom@gmail.com Gashaw Guben Department of Agribusiness, Samara University, Ethiopia; P.O. Box: Samara University, Ethiopia Email: gashewguben@gmail.com Abastract Barley is cultivated by small holders in every region of Ethiopia, since it is able to grow at all elevations, but it performs best at the higher elevations in the northern and central regions of the country. Barley is a major staple food crop in the highlands of Ethiopia. The crop is used for preparing various types of traditional foods such as Kita, Kolo, Beso, Enjera, Giat, cuko (shakeka) and many others. Although the day to day survival is linked to barley, little focus has been given to improve the productivity of the crop in the dry land. The market potential for malt barley is directly dependent on the market for beer; as such, its potential can best be assessed by looking at the evolving dynamics of Ethiopia’s growing brewery sector. Much of Ethiopia’s beer demand is currently being met by domestic brands. BGI Castel is the largest operator in the market, with production capacity of roughly 2 million hectoliters per year (out of a total market production of ~4 million hectoliters per year. The major players in the barley value chain are the input suppliers, smallholders, state and commercial farms, rural assemblers, cooperative unions, grain wholesalers, flourmills, processed food wholesalers, grain retailers, bakeries and pastries, and retailers of processed food. Donors and NGOs also play some role in procuring barley locally for their relief and development activities. To balance the demand and supply of barley the country have to be increase the productivity of the barley by using modern technology, high-yield varieties for specific location based on end user needs, with varieties to include characteristics such as resistance to drought and diseases. 1. INTRODUCTION Value-added agriculture has attracted considerable attention in recent years as a means to increase and/or stabilize farm incomes and to rejuvenate primary agriculture and the rural economy. The move to value-added agriculture is fundamentally market-driven. Value-added activities are born from the necessity to adapt to the wide-ranging changes affecting the agriculture and agri-food industry. These changes stem from many interacting factors: the quick expansion of agricultural trade and the resulting concentration in the agri-food industry, an increasingly segmented consumer base, shifting consumer preferences, changing demographics and income profiles, innovation in food and non-food uses of agricultural products and trade related issues, including border closures, in an increasingly integrated global market (AAFC, 2004). Increased competition as a result of globalization has resulted in lower returns for actors in African agriculture, including farmers and agro-processors, as they have continued to lag behind their competitors in innovation and the ability to set their products apart. With globalization, product distinction and branding are becoming increasingly important ingredients for market differentiation and upgrading strategies. This is especially due to greater consumer awareness, with demand for superior and differentiated products (FAO, 2003). Cereals are the most important food crops of the world and they provide the world with a majority of its food calories and about half its protein. They are staple foods in the diets of most population. In the year 2011, 2352.9 million metric tons of cereals were produced globally from 658.5 million hectares of land with an average productivity of 30.83 quintals per hectares (FAO, 2011). According to FAO (2O11), the world cereal production in the year 2011, was increased by more than 5% from previous year production. In the same year, Africa’s contribution to the world output was 6.35% (about 133.1 million tons). In Ethiopia, Cereal production and marketing is the means of livelihood for millions of smallholder households and it constitutes the single largest sub-sector in economy. Cereal accounts for roughly 60% of rural employment, 80% of total cultivated land, more than 40% of a typical household’s food expenditure, and more than 60% of total caloric intake. The contribution of cereals to national income is also large. According to available estimates, cereal production represents about 30% of gross domestic product (GDP). This calculation follows from the fact that agriculture is 48% of the nation’s GDP (World Bank, 2007), and that cereals’ contribute to agricultural GDP is 65% (Diao et al, 2007) In the country, cereals are also the major stable food crops taking a significant share of area cultivated and volume of production obtained. Out of the total grain crop area, 79.69% (8.7 million hectares) was covered