The Effect of Transaction Cost on Cereal and Pulse Crops producer farmers in Salale (North Shewa Zone), (Ethiopia)

This study provides empirical suggestion listed effect of transaction cost on cereal and pulse crops producer farmer households in Salale (North Shewa Zone), (Ethiopia). The purpose of this study is to provide empirical evidence on the transaction cost effects on farmer house hold in the area.To select sample size respondents multistage sampling technique is used. In addition to this, 2 Salale Union worker, 15 government employee and 15 merchant respondents were included on focus group discussion. To make the result more fruitful mixed research method was employed. To describe the data some descriptive statistic and probabilistic regression were used as econometric part. The result of the probabilistic model shows that transaction cost negatively affected the profitability of the farmer. Transaction cost happened because of malmarketing of agricultural products merchants on the small house hold farmers. Farmers use agricultural inputs from market cooperatives and buy their crops to the cooperatives have less transaction cost, highly productive and more profitable. Minimizing transaction cost and increasing road access to farmer by concerned local government institution and nongovernmental organization is recommended.