United States Agency for International Developmen

Abdena, A.

Hanson, Jean

Kidane, T.

Negassa, A.

Shapiro, Barry I.

CGSpace

The feed shortage is one of the key constraints to the livestocksector transformation in Ethiopia limiting its contribution tohousehold income and national economic growth.Africa RISING in the Ethiopian HighlandsThe main objective of this study is to investigate the potential market demand and profit potential for private sector forage seed production in Ethiopia. BackgroundEmpirical Methods A mix of discrete choice econometric model and break-even-point (BEP) financial model was used to answer a variety of research questions.Main Results• Approximately 87% of the sample farmers reported they are aware of improved forage crops of some kind, while only 51% of the sample households reported ever using improved forage crops• There is significant potential market demand for improved forage seeds among smallholder farmers in Ethiopia. Between 64–81% of the farm households surveyed were willing to buy improved FS, if FS is commercially available in the market• The econometric analyses revealed that one of the most important factors positively influencing farmers’ WTP was their awareness of FS. Ex-Ante Assessment of Potential Market Demands and Commercial Viabilities for Private Forage Seeds Production in EthiopiaAsfaw Negassa, Barry Shapiro, Teklu Kidane, Asebe Abdena and Jean HansenObjectives of the studyData Sources Data from multiple sources were used. First, primary data was collected from a sample of 450 farm households randomly drawn from four regions in Ethiopia: Oromia; Amhara; Southern Nations, Nationalities, and Peoples (SNNP); and Tigray. Second, the financial data for the break-even point (BEP) analysis was collected using forage seed enterprise budgets constructed based on the data obtained from secondary sources. Type of forage seed  Willing-to-buy (%)Mean WTP (ETB/Unit)WTP as a percentage of current mean market price (%)Alfalfa 81 291.2 43.5Rhodes 79 211.4 47.0Pigeon Pea 71 143.0 57.2Desho 77 2.7 675.0Lablab 67 134.6 53.8Cowpea 64 150.4 60.2Oats 78 14.3 143.0Vetch 71 24.4 97.8Napier Grass 77 1.6 213.0Source: Survey data.Table 1  Summary of households’ response to WTP questionsType of FS Current Yield (Kg/ha/year)WTP (ETB/kg)Current selling price (ETB/kg)Break-even pointPrice (ETB/kg)Yield(kg/ha/year)Alfalfa 250 291.2 670.0 520.0 446.4Rhodesgrass400 211.4 450.0 262.5 496.7PigeonPea900 143.0 250.0 78.0 489.5Cowpea 650 150.4 250.0 131.0 565.2Lablab 1400 134.6 250.0 61.0 631.5Vetch 700 24.4 25.0 30.0 860.9Oats 800 14.3 10.0 32.0 1,748.2Desho 40,000 2.7 0.40 0.63 9,259.3NapierGrass1,000,000 1.6 0.75 0.08 48,461.3Source: Survey data and ILRI(2016). Conclusion and Policy Implications• There are significant market demands for different FS. However, for most FS, the amount of WTP is lower than the current market prices offered by NGOs. This indicates that (1) the NGOs and public FS projects have been providing some kind of subsidy to the FS producers; (2) Unstable FS price structure—significant drops in prices of FS could happen if the NGOs stop their participation leading to decrease in incentives for the private sector participation; (3) In a situation where WTP is less than breakeven prices, the private FS producers might find it unprofitable and cease production—especially for alfalfa, Rhodes grass, vetch and oats. Con...Table 2  Results of Break-even-point analysis for forage seeds Core partners This poster is copyrighted by the International Livestock Research Institute (ILRI). It is licensed for use under the Creative Commons Attribution 4.0 International Licence. November 2016We thank farmers and local partners in Africa RISING sites for their supportFor alfalfa, Rhodes grass, vetch and oats yield improvement and/or reductions in their costs of production is critical for commercial profitability. • The variations in the amounts of WTP for different FS indicate the need for targeted supports for different FS: (1) Price support (in the short-run); (2) Promotional support; and (3) Productivity improvements.• The demand for FS and PM is derived: the functioning of livestock and livestock products markets is also critical 

Ex-ante assessment of potential market demands and commercial viabilities for private forage seeds production in Ethiopia

https://cgspace.cgiar.org/bitstream/10568/78245/1/ARethiopia_poster_negasa_nov16.pdf

Ex-ante assessment of potential market demands and commercial viabilities for private forage seeds production in Ethiopia

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