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ETHIOPIAN DEVELOPMENT
RESEARCH INSTITUTE
Impact, drivers, and constraints to
changes at the farm
1
Bart Minten
IFPRI ESSP
...
1. Improved practices and production
• What are factors associated with the adoption of
improved practices (compost, weedi...
1. Improved practices and production
• What explains higher productivity (use production
function approach; Cobb-Douglas f...
2. Improved practices and prices
• Determinants of adoption of improved post-harvest
practices (Selective harvesting; impr...
2. Improved practices and prices
• Impact on prices:
- No impact of quantities sold on price
- Red cherries: if mostly gre...
3. Drivers for change
Driver 1: Extension: Improvement in access to
extension agents as well as in perceived quality of
ex...
3. Drivers for change
Driver 2. Market reform. Perceptions on primary
marketing centers (PMC) by farmers (100% = all
farme...
3. Drivers for change
Driver 2. Market reform. However, some processors not
happy
“Since the start of the PMCs, … Yes No D...
3. Drivers for change
Driver 3. Large price improvements over time
0
50
100
150
200
250
300
20
04
20
05
20
06
20
07
20
08
...
3. Drivers for change
Driver 3. Price changes. Because of high prices, farmers
consume less coffee themselves.
“When price...
4. Constraints to change
Constraint 1. Access to improved seedlings. Despite
efforts, access to improved seedlings an issu...
4. Constraints to change
Constraint 2. Constraints to uptake of improved
techniques such as washing.
Agree Disagree Depend...
4. Constraints to change
Constraints: 3. Weather and diseases.
Early Late Normal
“This season, the rains were […] compared...
5. Conclusions
• Important changes are happening in the Ethiopian
coffee sector
• At the production level, increasing adop...
5. Conclusions
• At the marketing level, important changes in
markets; Policy of primary market centers is
unevenly implem...
5. Conclusions
• Policy implications for further changes upstream:
1. Further improve extension system; still work to be d...
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Impact, drivers, and constraints to changes at the farm

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Impact, drivers, and constraints to changes at the farm

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Impact, drivers, and constraints to changes at the farm

  1. 1. ETHIOPIAN DEVELOPMENT RESEARCH INSTITUTE Impact, drivers, and constraints to changes at the farm 1 Bart Minten IFPRI ESSP Ethiopia’s coffee value chain: Evidence towards improved investments and policies Addis Ababa Hilton September 15, 2015 Addis Ababa
  2. 2. 1. Improved practices and production • What are factors associated with the adoption of improved practices (compost, weeding, tilling, improved varieties)? Run a regression with the following results: - Extension visits positively related to adoption of improved practices - Distance of plot to residence all negatively related - Forest and semi-forest negatively related - Richer households more likely to adopt - Titling of plot ambiguous effect on adoption decision
  3. 3. 1. Improved practices and production • What explains higher productivity (use production function approach; Cobb-Douglas fixed and random effect model)? 1. Characteristics of trees: a/ Density of trees; too dense lead to lower productivity; b/ Increase share improved trees from 0 to 100%; doubling of yields 2. Improved practices: all practices linked with higher productivity but especially weeding and compost use significant for productivity 3. Shocks: especially disease shocks important and large and significant negative effects
  4. 4. 2. Improved practices and prices • Determinants of adoption of improved post-harvest practices (Selective harvesting; improved drying; share red cherries); Run a regression with the following results: - Extension visits have a positive effect - Remoteness of the household negative effect - Distances to wet mills negative effect on adoption of washing
  5. 5. 2. Improved practices and prices • Impact on prices: - No impact of quantities sold on price - Red cherries: if mostly green, price is 10% lower - 7% lower price if dried on bare ground - Farmers with choice between traders 11% higher price - Lower prices for red cherries sold at the roadside; higher prices for those sold at place of akrabi or cooperative; no significant difference in price between PMC and farmgate
  6. 6. 3. Drivers for change Driver 1: Extension: Improvement in access to extension agents as well as in perceived quality of extension advice At the time of the survey Ten years earlier Availability of coffee extension agents … - Very available (%) - A bit available (%) - Not available (%) - Do not know (%) 47 36 12 5 11 46 29 13 Quality of extension advice on coffee related issues: - Very good (%) - Moderately useful (%) - Not useful (%) - Do not know (%) 48 31 9 11 14 32 22 31
  7. 7. 3. Drivers for change Driver 2. Market reform. Perceptions on primary marketing centers (PMC) by farmers (100% = all farmers) “Since the start of the PMCs, … Agree Disagree Depends Do not know … there is more competition among traders” 82 12 2 4 … there is more price transparency” 67 27 2 4 … I have to walk less far” 69 28 1 3 … I strip less as I have to walk less far to sell my cherries” 60 36 2 3
  8. 8. 3. Drivers for change Driver 2. Market reform. However, some processors not happy “Since the start of the PMCs, … Yes No Do not know … the quality of procured red cherries has declined” 34 64 2 If yes, this is due to …. … The agents I use are not very capable in assessing the quality of coffee” 51 … The quality of cherries deteriorates during storage at the market” 60 … The quality of cherries deteriorates during transport to/from market” 69 … The time between procurement and processing is too long” 62 … Because of increased competition between akrabis, I am obliged to buy lower quality” 87
  9. 9. 3. Drivers for change Driver 3. Large price improvements over time 0 50 100 150 200 250 300 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 UScentsperlb. year producer export NY/London price
  10. 10. 3. Drivers for change Driver 3. Price changes. Because of high prices, farmers consume less coffee themselves. “When prices of coffee go up … Agree Disagree Depends Do not know … I consume less coffee” 46 52 1 1 … I use coffee husks more to prepare coffee drinks” 35 63 1 0 … I use coffee leaves more” 15 85 1 0
  11. 11. 4. Constraints to change Constraint 1. Access to improved seedlings. Despite efforts, access to improved seedlings an issue. Agree Disagree Depends Do not know “Improved coffee varieties have higher yields than traditional varieties” 86 11 2 1 “ I do not trust the improved seedlings sold by the BoA” 24 73 1 2 “It is hard to find reliable improved coffee seedlings” 47 51 1 1
  12. 12. 4. Constraints to change Constraint 2. Constraints to uptake of improved techniques such as washing. Agree Disagree Depends Do not know “I make more money when I sell coffee as dried cherries” 67 31 1 0 “I prefer selling coffee in dried form (instead of red) as I can spread out my income that way (it is a way of saving)” 76 19 5 1
  13. 13. 4. Constraints to change Constraints: 3. Weather and diseases. Early Late Normal “This season, the rains were […] compared to normal” 18 60 21 Less than More than Normal “The beans for this season were affected by pests or diseases […] compared to normal” 13 28 59
  14. 14. 5. Conclusions • Important changes are happening in the Ethiopian coffee sector • At the production level, increasing adoption of improved practices for production inputs, improved good access to extension agents and better harvest and post-harvest practices; • However, no major effect on production possibly due to disease problems and climate change (but also older less productive trees)
  15. 15. 5. Conclusions • At the marketing level, important changes in markets; Policy of primary market centers is unevenly implemented over regions and by coffee type • Overall, farmers have more choice between traders, have the additional option to sell to cooperatives, have to walk less far for their sales, and sell more washed coffee; however, no perceived quality premium
  16. 16. 5. Conclusions • Policy implications for further changes upstream: 1. Further improve extension system; still work to be done 2. Stimulate higher adoption of improved tree varieties (good for yields; reduce disease vulnerability; adjust to climate and weather changes) 3. A more conducive and liberalized market. Well-intended market reform can sometimes lead to negative impacts 4. Stimulate other institutions, such as savings institutions, as they impact coffee sector as well 5. Improved information, monitoring and evaluation of the sector needed: will lead to better policy design/investments

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