The study was conducted to identify cattle market channels, determinant factors of household market participation and supply level based on data from 121 randomly selected households, export abattoirs, traders, collectors, and market experts. The result showed 4(four) informal cattle channels and about 9(nine) formal cattle market channels. Informal cattle marketing shares 47.6% of market volume, while 54.4% pass through formal cattle marketing channels. Only about 52.89% of sampled households participated in cattle marketing. Cattle market participants, on average, hold 9.81 cattle size in their herds and sell on average 1.93 in 12-month duration, which is a 1:9 ratio. The result of Heckman’s two-step selection model showed that, among other variables, market information, credit use, milk production, and herd size positively contributed to market participation. Off-farm income, aid receiver, by-product production and distance to market negatively affect market participation. Age of household, herd size, credit use, and market information positively contributed to cattle market supply, while education, off-farm income, milk production, and aid negatively affected cattle market supply. Focused group discussion and informal interview results showed water/feed, rangeland shrinkage, a single trade dimension, border and market conflict, long and complex supply channels, non-market-oriented production, and market information asymmetry problems hindering cattle production and marketing in the area. Thus, cattle market intervention and a modification of policy variables related to market participation and supply were suggested recommendations.

Keywords: Borana Zone, cattle market, market channel, market participation, Heckman, two-step selection model