Evaluation of Effect of Exchange Rate Variability on Export of Ethiopia’s Agricultural Product: Case of Oilseeds

This research was carried out to find out the effect of exchange rate variability on export of oilseeds. It has employed annual time series data (1992-2010) collected from the country’s different institutions, namely: National Bank of Ethiopia (NBE), Central Statistical Agency of Ethiopia (CSA), and Ethiopian Custom Authority (ECA). Tools of descriptive statistics were used to analyze the data and understand the dynamics of the variables included in the analysis. Autoregressive Distributive Lag (ARDL) with Wald test was used to test the hypothesis that ‘there is no short run and long run relationship between export oilseeds and explanatory variables included in the model’. The result revealed that export oilseeds have negative relationship with exchange rate variability. Terms of Trade (TOT) was found to be negative and significant. Gross Domestic Product (GDP) is found to be insignificant; implying contribution of oilseeds to the export basket of the country is decreasing. Moreover, the underlined hypothesis was rejected confirming that there is a long run relationship between export and oilseeds and explanatory variables included. Export diversification and value addition are of possible solutions the country should focus on to improve the ever decreasing terms of trade and extract the gain from policy changes. Key Words: Exchange rate variability, Devaluation, Export, Oilseeds, ARDL and Wald tes

Valuation of Soil Conservation Practices in Adwa Woreda, Ethiopia: A Contingent Valuation Study

Soil degradation is one of the most serious environmental problems in the high­lands of Ethiopia. The prevalence of traditional agricultural land use and the absence of appropriate resource management often result in the degradation of natural soil fertility in the country. Thus, in this study we have attempted to investigate the value that the farmers have attached to soil conservation practices and the determinants of willingness to pay for it using a Contingent Valuation Method. In the CVM survey, Double Bounded Dichotomous Choice format with an open ended follow up was used to elicit the households’ willingness to pay. Based on data collected from 218 respondents, probit model was employed to assess the determinants of willingness to pay. The model shows that age, sex, education level, family size, perception, tenure, Total Livestock Units and initial bid were the important variables in determining willingness to pay for soil conservation practices in the study area. Our study also shows that the mean willingness to pay (WTP) estimated from the Double Bounded Dichotomous Choice format was computed at 56.65 person days per household per annum. The respective total aggregate value of soil conservation in the study area (Adwa Woreda) was computed to be 1 373 592 person days per annum, which is equivalent to 16 483 104 Ethiopian Birr. Therefore, if new intervention program for soil conservation is to be implemented, policy makers should consider those factors for better results. In Our study, we found very few protest zeros only (1.8%) which shows CVM is suitable method for valuing non marketed goods in less developing countries like Ethiopia. Keywords: Contingent Valuation Method, Willingness to Pay, Soil Conservation, Double Bounded Dichotomous Choic

Selected Macroeconomic Variables Affecting Private Investment in Malawi

This study provides an empirical test of the macroeconomic variables that can potentially affect private investment decisions in Malawi in a short and long run perspective using time series data. Both the theory and the empirical literature are reviewed in order to identify a private investment function for the last three decades (1979-2009). The results reveal that investment decisions seem to be determined by public investment, bank credit to the private sector and the real interest rate in the short run. Besides, there is evidence of a crowding-out effect of public investment. In the long run, the capital accumulation path seems to be closely dependent on both GDP growth and real exchange rates

Selected Macroeconomic Variables Affecting Private Investment in Malawi

This study provides an empirical test of the macroeconomic variables that can potentially affect private investment decisions in Malawi in a short and long run perspective using time series data. Both the theory and the empirical literature are reviewed in order to identify a private investment function for the last three decades (1979-2009). The results reveal that investment decisions seem to be determined by public investment, bank credit to the private sector and the real interest rate in the short run. Besides, there is evidence of a crowding-out effect of public investment. In the long run, the capital accumulation path seems to be closely dependent on both GDP growth and real exchange rates

Differential Impact of In-Kind Agricultural Assistance and Per Capita Net Crop Income in Subsistence Economy: the Malawi Case

The overall objective of this research was to investigate whether in-kind government agricultural assistance improves the production of maize (staple), increase input use especially fertilizer and thereby identify the main determinant of per capita net crop income among the small holder farmers in Malawi. The research was conducted in the five district of Malawi. The stratification was done purposely along the districts of Dedza, Dowa, Nkotakota, Rumphi and Mangochi because of the concentration of agricultural lending institutions, whereby most of cash loans for agricultural activities take place in these areas. The study addresses the differential impact of agricultural productivity due to in-kind and cash loans for agricultural activities through the provision of input packages to the small holders and examined the share of land allocation for the production of the staple food. The results on income and expenditure showed that in-kind packages had raised production and mean gross margins were found to be higher for in-kind inputs than the cash loan inputs. Households with strictly with in-kind input assistance realized higher per capital net crop income than households in cash loan assistance. On the other hand, farmers with the usage of cash loans for agricultural activities incurred heavy expenditure on inputs or non-farm activities and thereby reducing their gross margins. It was also found that the in-kind assistance raised the net per capita income by K380 as opposed to K116 increment obtained from cash loan farm activities. On production of maize, land holding size, extension, level of education and age of the household were found to have a greater effect while dependency burden had negatively affected the per capita net crop income. The study has also shown a significant effect of land holding size, household size and the share of maize grown on the uptake of fertilizers. Apart from the share of land allocation for maize production, the results confirmed the hypothesis that the in-kind packages has increased net crop per capita income. However, the possibility of cash loan deviation to other activities and the delays in loan processing negatively affected the crop income and hence less increment of per capital net crop income. UNISWA Research Journal of Agriculture, Science and Technology Vol. 4 (2) 2000: pp 163-17

Evaluation of Effect of Exchange Rate Variability on Export of Ethiopia’s Agricultural Product: Case of Oilseeds

This research was carried out to find out the effect of exchange rate variability on export of oilseeds. It has employed annual time series data (1992-2010) collected from the country’s different institutions, namely: National Bank of Ethiopia (NBE), Central Statistical Agency of Ethiopia (CSA), and Ethiopian Custom Authority (ECA). Tools of descriptive statistics were used to analyze the data and understand the dynamics of the variables included in the analysis. Autoregressive Distributive Lag (ARDL) with Wald test was used to test the hypothesis that ‘there is no short run and long run relationship between export oilseeds and explanatory variables included in the model’. The result revealed that export oilseeds have negative relationship with exchange rate variability. Terms of Trade (TOT) was found to be negative and significant. Gross Domestic Product (GDP) is found to be insignificant; implying contribution of oilseeds to the export basket of the country is decreasing. Moreover, the underlined hypothesis was rejected confirming that there is a long run relationship between export and oilseeds and explanatory variables included. Export diversification and value addition are of possible solutions the country should focus on to improve the ever decreasing terms of trade and extract the gain from policy changes

Production and Marketing of Smallholder Tobacco: Effect on Household Food Security, Nutritional Status and Intra-household

The underlying analysis in this paper is based on the data that were collected through the International Food Policy Research Institute (IFPRI) University of Malawi, Bunda College Rural Financial Market Study. The study was conducted during the 1994/95 and 1995/96 agricultural seasons. The objective was to assess the impact of access to agricultural credit on food security among smallholder farmers in Malawi. The analytical framework was based on estimating a recursive model to assess the effect of tobacco production and marketing on household welfare variables such as income, expenditure patterns, household food security and labour allocation.The results indicate that while the growing and marketing of tobacco has a positive and significant effect on household income, except for investments in dwelling units and agricultural equipment, there are no significant differences in household welfare variables between tobacco growers and non-growers. Smallholder farmers are unlikely to benefit from tobacco. Amongst smallholder farmers, tobacco income is only earned during the selling season and due to lack of savings, this income is unable to support the households evenly throughout the year. The level of income earned depends on the market channel that is used. This study has established that the auction market is the most viable. However, due to access problems and the urgent need for cash, most smallholder farmers end up selling their entire crop to estates or intermediate buyers at lower prices. Thus there is need to promote collective action among smallholder farmers to ensure that they sell most of their crop at the action floors. This will not only improve the prices they get but will also make savings mobilization easier. UNISWA Research Journal of Agriculture, Science and Technology Vol. 4 (1) 2000: pp 83-9