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Dynamics in teff value chains
- 1. ETHIOPIAN DEVELOPMENT RESEARCH INSTITUTE 1 Dynamicsin teff value chains Bart Minten, Seneshaw Tamru, Ermias Engida and Tadesse Kuma IFPRI ESSP Ethiopian Economics Association 16th International Conference on the Ethiopian Economy July 19-21, 2018 Addis Ababa
- 2. 2 1. Introduction • Economictransformation usually seen as shift from agricultural activities towards services and manufacturing; Few empirical studies around changes within the agricultural sector in this process • More in particular not clear to what extent staple food value chains are transforming in Africa, often because of a lack of good primary data. • Documenting this in the case of teff in Ethiopia is the aim of this chapter.
- 3. 3 2. Data • Surveyswith: - producers and communities upstream - rural and urban wholesalers midstream - cereal shops, mills, and cooperative retail downstream
- 4. 4 3. Changes upstream •Increasing adoption of modern input over time Unit 10 years before survey At the time of survey Modern inputs Adoption of improved seed share (%) 7 36 Use of chemical fertilizer: DAP kgs/ha 50 91 urea kgs/ha 34 64 Adoption of herbicides share (%) 32 65 Adoption of pesticides share (%) 4 13
- 5. 5 Heterogeneity in adoption:Fertilizer 0 .5 1 1.5 0 50 100 150 Transport costs to Addis (Birr/quintal) DAP now DAP 10 years ago urea now urea 10 years ago
- 6. 6 Heterogeneity in adoption:Herbicides0 20406080 100 0 50 100 150 Transport costs to Addis (Birr/quintal) herbicides now herbicides 10 years ago
- 7. 7 Heterogeneity in adoption:Improved seeds0 20406080 0 50 100 150 Transport costs to Addis (Birr/quintal) Improved seeds now Improved seed 10 years ago
- 8. 8 3. Changes upstream •Impact of modern inputs on teff productivity Dep. variable = log(quintals of output) Unit Fixed effect Random effect Coeff. Z-value Coeff. Z-value Improved seeds Yes=1 0.09 3.15 0.11 5.24 DAP use Log() 0.17 1.96 0.21 3.36 Urea use Log() 0.17 1.83 0.33 5.37 Herbicide use Log() 0.04 2.81 0.00 0.63 Other inputs included Characteristics plots included
- 9. 9 4. Changes mid-and downstream • Teff retailing in Addis: 61% mills; 29% cereal shops; and 8% consumer cooperatives • Traditionally (as seen in other towns or rural areas), mills only did milling and households typically would: a/ buy teff on market/cereal shop; b/ clean teff at home; c/ take teff to mill; d/ prepare enjera at home • Now they are increasingly becoming one-stop shops
- 10. 10 4. Changes mid-and downstream - Competition and service delivery improving - Food service industry sizable (20% of teff sold as prepared enjera)
- 11. 11 4. Changes mid-and downstream - Declining milling costs (ratio milling/teff price) 0 0.01 0.02 0.03 0.04 0.05 0.06 200107 200202 200209 200305 200312 200407 200502 200509 200604 200611 200706 200801 200808 200903 200910 201005 201012 201107 201202
- 12. 12 4. Changes mid-and downstream - Increasing importance of white and magna teff
- 13. 13 5. Conclusions Important changesin the teff value chain: 1. Modern inputs increasingly adopted, especially by these farmers living close to urban areas, leading to higher land productivity 2. Quality demands are on the rise, important shifts from cheap red varieties to more expensive white ones 3. Increasing willingness to pay for convenience in urban areas, as illustrated by the emergence of one-stop shops 4. Reduction in processing/milling costs
- 14. ETHIOPIAN DEVELOPMENT RESEARCH INSTITUTE 14 5.Conclusions Despite changes, still in early stage of agricultural transformation: 1. Upstream: a/ Adoption of improved varieties but still low in less connected areas; b/ Fertilizer used is below recommended level; c/ Mechanization absent; d/ Vertical integration and coordination absent 2. Downstream: a/ Little evidence of up-scaling; b/ Small share of modern retail; c/ Almost no branding