Impact of soaring food price in Ethiopia: Does location matter?

"Previous studies implicitly assume uniform price-effects across regions or provinces within countries. They also do not address the issue of integration between the world food market and local markets. Instead, they assume a complete transmission of changes in world food prices to local food prices. In this paper, we first establish evidence of regional price heterogeneity across Ethiopia. We also applied the Johansen test for market integration over 95 local maize markets and found that none of the Ethiopian regional markets for maize is integrated to the world market. However, there is significant short-term price effects between the world maize market and some Ethiopian regional markets. Using the Almost Ideal Demand System, we estimate loss in household consumption and calorie intake as induced by food price increases. The results suggest a great deal of heterogeneity across regions as well as between rural and urban areas. Studies that fail to account for the characteristics of household demand across locations are more likely to induce misleading policy recommendations. " from authors' abstractPrice, Integration, Demand, Elasticity, Poverty, Food prices, maize,

How Effective is Public Spending? Public Investment Composition and Rural Welfare in Ethiopia

One of the most important policy tools in developing countries for affecting economic growth and poverty reduction is expenditure policy. As governments decide how to allocate public spending, they need a clear understanding of how public investments translate into development outcomes. Using regional, zonal, and household-level data from Ethiopia, this paper analyses the relative returns, in terms of rural welfare, to different forms of public investment, including investment in agriculture, health, education, road infrastructure, and health.Public Economics,

Measuring Male-Female Productivity Differentials in Ethiopian Agriculture: Policy Implications for Improving the Livelihood of Female Farmers

An understanding of the efficiency with which women farmers are operating, particularly where they account for the largest share of the labor force required for agricultural production, is essential for designing appropriate policies to improve the overall performance of agriculture as well as the livelihood of women farmers. This paper contributes to the gender productivity debate by drawing on crop production data collected in three districts (Ada, Akaki and Gimbichu) in East Shoa, Ethiopia during the 1999/2000 cropping season through detailed multi-visit surveys of 80 farm households of which 39 were female-headed households. Using the Tornqvist-Theil index, Total factor productivity (TFP) is measured to analyze crop production efficiency differentials between male and female headed households. The analysis demonstrates that there is little evidence that male-female differences per se account f or productivity differentials in crop production. The results imply that the variation in overall TFP can only arise due to differentials in access to the quality of human and physical resources and services, and differential control of the benefits from output by women versus men. Hence, appropriate institutional frameworks that reduce cultural and social barriers associated with women farmers' access to such resources and benefits should be developed. Policies targeted towards increasing female farmers' access to education, extension services, credit, adequate amount of quality land and other resources including control over the benefits, will improve the overall productivity and livelihood of female farmers.Agricultural efficiency, total factor productivity, gender, Ethiopian agriculture, Labor and Human Capital, D2, Q12, Q18,

Trader Behaviour and Performance in Live Animal Marketing in Rural Ethiopian Markets

In this paper, performance of a sample of 131 livestock traders in 38 rural Ethiopian highland markets was analysed in terms of their costs and margins, how these were influenced by their assets and trading practices, and the implications of the findings for policy were outlined. The paper is divided into three main sections: description of the profiles of traders, their assets, trading behaviour and practices; estimates of costs and margins for a set of recent transactions; and econometric analysis of the factors explaining differences in performance with a particular focus on transaction costs. Most traders used own capital as access to credit, especially formal credit, was limited. The livestock market was characterised by non-standardised products and lack of information in the public domain about supply, demand and prices. Consequently, livestock trading was largely a personalised business though brokers and regular buyers and sellers, a form of social capital, were sometimes used for gathering information, searching buyers/sellers, price negotiation, contract enforcement. Business relationships with these intermediaries were principally based on trust, without strong ethnic, religious or family ties. Although most transactions were conducted in physical presence of parties, contract violations were common, which were settled mainly through informal means as formal legal systems were either absent or time consuming. Estimated costs and margins of case transactions showed low returns, and losses in some cases. Market levies, transport, travel, and feeds were major items of variable cost, with some variation between cattle and shoats. Multiple regression analysis showed that traders' financial and human capital and trading practices like use of brokers and regular suppliers and customers had varying effects on margins and costs of cattle and shoat trade. Unstable price, multiple taxes, non-transparent tax system, limited access to credit and weak demand for the quality of the products traded were perceived by traders as major problems of marketing. All the problems were amenable to public policy for improving the market environment and marketing efficiency.Livestock Production/Industries, Marketing, D4, L1, O1, Q13,