Economic Feasibility of Onion Production Under Irrigated Conditions in Gebiresu zone, Afar Region, Ethiopia

Abstract

Onion (Allium cepa L.) is one of the most important high-value vegetable crops in Ethiopia, contributing substantially to household income, employment, and agricultural commercialization. This study assessed the economic viability of irrigated onion production in the Gebiresu Zone of the Afar Regional State, Ethiopia. Data were collected from a sample of 200 onion producers selected from the Amibara, Gewane, Haruka, and Gelealo districts using structured questionnaires, key informant interviews, and market price information. Descriptive statistics and economic analysis were employed using SPSS and Microsoft Excel to evaluate production costs, returns, profitability, investment efficiency, and break-even indicators. The results showed that onion production is predominantly managed by male producers (89.5%), while most producers (53%) cultivated more than one hectare, indicating a strong commercial orientation. Furthermore, 51.5% of producers had 10–20 years of farming experience, whereas 10.5% were relatively new entrants. Economically, onion production was highly profitable, generating a gross return of ETB 2,125,000 ha⁻¹ and a net return of ETB 1,478,120 ha⁻¹. The benefit–cost ratio (3.28), profitability index (3.28), and return on investment (228.51%) demonstrated strong financial performance. The average yield of 250 qt ha⁻¹ substantially exceeded the break-even yield of 76.11 qt ha⁻¹, confirming the economic viability of the enterprise under irrigated conditions. Despite its profitability, onion production was constrained by high marketing costs, which accounted for 38.64% of total costs, as well as rising expenditures on labor and agrochemicals. Therefore, improving market infrastructure and market linkages, promoting efficient input use, strengthening extension and training services for less-experienced producers, and expanding access to rural credit are recommended to reduce production and marketing costs and enhance the profitability and sustainability of irrigated onion production.