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Staple Food Prices in Ethiopia

Author

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  • Rashid, Shahidur
Abstract
Cereal production and marketing are the means of livelihood for millions of households in Ethiopia. It is the single largest sub-sector within Ethiopia’s agriculture, far exceeding all others in terms of its share in rural employment, agricultural land use, calorie intake, and contribution to national income. Therefore, while the country has experimented with almost all dominant forms of political and economic ideologies,2 keeping the cereal subsector stable has influenced the agricultural policy thinking of all three political regimes over the past half century. The monarchic regime instituted grain market board; the central planning region (1974-91) renamed it the Agricultural Marketing Corporation (AMC) and expanded its scope to practically take over the staple food markets; and while the current government implemented substantial reforms, it continues to maintain the necessary policy instruments to intervene in case of emergencies. There is a widespread recognition that parastatal-centric policies of cereal price stabilization proved expensive and led to inequitable distribution of benefits. However, recent policy actions suggest that, like many other developing countries, Ethiopia is not yet ready to fully rely on markets. This became particularly evident during the food price crisis when the government re-instituted urban food rationing programs, carried out open market sales, and suspended local procurement by the World Food Programme (WFP), country’s food logistic agency (Ethiopian Grain Trading Enterprise), and non-governmental organizations (NGOs). This perhaps reflects the fact that risks of price instability—in term of economic, human, and political costs—is still the predominant consideration in food policy making of the country. This paper discusses the sources of such concerns and how they are reflected in recent policy actions. It provides evidence of the subsector’s significance; characterizes the key cereal markets in terms of production, trade, and price patterns; and summarizes the policy actions following food price crisis. The evidence on the importance of selected cereals is presented in Section 2, which is followed by a discussion of production and trade of those cereals. Section 4 analyzes price patterns, focusing on seasonality and tradability. A summary of public policy actions following the global food crisis is presented in Section 5; and the paper concludes with a summary and implications.

Suggested Citation

  • Rashid, Shahidur, 2010. "Staple Food Prices in Ethiopia," Food Security Collaborative Working Papers 58552, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    • Handle: RePEc:ags:midcwp:58552
    DOI: 10.22004/ag.econ.58552
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    Citations

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    Cited by:

    1. Tefera, Nigussie, 2012. "Welfare Impacts of Rising Food Prices in Rural Ethiopia: a Quadratic Almost Ideal Demand System Approach," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126698, International Association of Agricultural Economists.
    2. Anbes Tenaye, 2020. "New Evidence Using a Dynamic Panel Data Approach: Cereal Supply Response in Smallholder Agriculture in Ethiopia," Economies, MDPI, vol. 8(3), pages 1-24, July.
    3. Aragie, Emerta Asaminew & Balié, Jean & Magrini, Emiliano & Morales Opazo, Cristian, 2016. "Can a cereal export ban affect a net food-importing economy? The case of Ethiopia," Conference papers 332747, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Admassie, Assefa, 2013. "The Political Economy of Food Price: The Case of Ethiopia," WIDER Working Paper Series 001, World Institute for Development Economic Research (UNU-WIDER).
    5. Musa, H. Ahmed & Lemma, Z. & Endrias, G., 2015. "Measuring Technical, Economic and Allocative Efficiency of Maize Production in Subsistence Farming: Evidence from the Central Rift Valley of Ethiopia," APSTRACT: Applied Studies in Agribusiness and Commerce, AGRIMBA, vol. 9(3), pages 1-12, December.
    6. Rashid, Shahidur, 2011. "Intercommodity price transmission and food price policies: An analysis of Ethiopian cereal markets," IFPRI discussion papers 1079, International Food Policy Research Institute (IFPRI).
    7. Durevall, Dick & Loening, Josef L. & Ayalew Birru, Yohannes, 2013. "Inflation dynamics and food prices in Ethiopia," Journal of Development Economics, Elsevier, vol. 104(C), pages 89-106.
    8. Habte, Zewdie & Legesse, Belaineh & Haji, Jima & Jeleta, Moti, 2016. "Supply analysis in wheat industry: contributions of value chain analysis in Ethiopia: Cases from Arsi and East Shewa Zones in Oromia National and Regional State," 2016 Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 246949, African Association of Agricultural Economists (AAAE).

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