ESSP Working Papers

× Important changes in farms and farm demographics are noted in Ethiopia since 2004/05. These changes have important implications on discussions of the future of Ethiopian agriculture. Comparing the national agricultural sample survey of the Ethiopian Statistical Services (ESS) data between 2004/05 and 2016/17, we find that:
(1) Average farm sizes of smallholders declined by more than 10 percent over the decade, from 1.2 to 0.9 hectares; the decline in farm sizes of female headed households is more pronounced at over 21 percent,
(2) Farmers are becoming older: the share of Ethiopian farmers under 35 declined from 36 to 30 percent,
(3) The youth have smaller and declining farm sizes, declining from 0.9 to 0.8 hectares,
(4) Rental markets are becoming more important, with 12 percent of crop land being rented in at the end of the period; especially the youth rely more on rental markets to access land, with 20 percent of their land rented in, and
(5) Education levels are rapidly increasing, with the share of illiterate youth farmers declining from 56 to 30 percent.
This has important implications for the future of Ethiopian agriculture and the overall economy.

× We study production practices of larger and more capital-intensive farmers (“horti-preneurs”) in horticultural commercial clusters in the central Rift Valley of Ethiopia. Attracted by profitable vegetable markets, more educated farmers rent in land for vegetable production from a large number of smallholders to meet rapidly growing urban vegetable demand. We find that these hortipreneurs obtain more than double the profit per unit of land compared to smallholders. Compared to smallholders, horti-preneurs grow different vegetables – particularly those that require more upfront investments – and in the case that they grow the same crops as smallholders, we find that they use significantly more inputs, such as fertilizer, agro-chemicals, and labor; have higher production costs; and obtain better yields. Moreover, they are also more efficient and able to produce better quality vegetables and obtain better prices. This increasing emergence of more efficient medium-scale farmers in supplying local urban markets challenges the traditional smallholder model in Africa, at least for horticulture.

× We study price behavior of vegetables and fruits in Ethiopia over the 15 year period from 2005 to 2019 based on large-scale retail and producer price datasets. This is an important topic given the importance of prices for consumption decisions for these nutritious crops. A number of notable findings come from the analysis. First, prices are rapidly increasing both in real terms and when compared to cereals. At the end of the study period in 2019, vegetables and fruits in real terms were significantly more expensive than 15 years earlier. Especially green leafy vegetables show a significant price rise, likely because few high-yielding varieties of these vegetables have been made available and adopted by producers. Second, part of the rise in prices is explained by increased marketing margins. To understand what accounts for these increases in the marketing margins for fruits and vegetables requires more research, as they contrast with stable or declining margins seen for other food crops over the study period. Third, we see significant seasonality in vegetable prices that is mostly driven by supply factors, but also by demand shifts due to increased demand in fasting periods. Fruit prices do not show such high seasonal variation, however. Fourth, there is significant spatial price variation in the country – vegetable prices are 60 percent more expensive in lowland regions than in the Amhara region, where vegetables are cheapest. Fruit prices in the lowlands are double the prices in the major producing area, the Southern Nations, Nationalities, and Peoples' (SNNP) region.

× While social protection programs have multiplied over the last two decades across sub-Saharan Africa, these co-exist alongside humanitarian assistance in many places, calling for better integration of assistance delivered through the two channels. Progress on this front is hampered by limited evidence of whether and how these historically siloed sectors can work together. Using quantitative and qualitative data from districts covered by Ethiopia’s Productive Safety Net Program (PSNP) and where humanitarian food assistance (HFA) was delivered, we assess differences in targeting and transfer values. We find that PSNP and HFA were targeted to households with different characteristics. PSNP transfers did, on average, reach those households that were chronically food insecure. HFA, while delivered through PSNP systems, was targeted to households that were acutely vulnerable. These are promising findings as they suggest that social protection systems are able to effectively deliver a continuum of support in response to different types of vulnerability and risk. On transfer values, we find that the value of PSNP transfers is greater than those for HFA. One reason for this may be due to social pressure on local officials to distribute support more widely across a drought- affected population when faced with acute needs.

× We combine in-person survey data collected in February 2018 with phone survey data collected in June and September 2021 to study how dairy value chains in Ethiopia have coped with the COVID-19 pandemic. Focusing on the major dairy value chain connecting farmers in North and West Shewa as well as peri-urban and urban producers in and around Addis Ababa to consumers in Addis Ababa, we applied a cascading survey approach in which we collected data at all levels of the value chain: dairy farmers, rural wholesalers, and urban retailers.

× We combine in-person survey data collected in February 2020 (i.e., just before the pandemic was declared) with phone survey data collected in March 2021 (i.e., one year into the pandemic) and August 2021 (i.e., approximately 18 months into the pandemic) to study how vegetable value chains in Ethiopia have coped with the COVID-19 pandemic. Focusing on the major vegetable value chain connecting farmers in East Shewa zone to consumers in Addis Ababa, we applied a cascading survey approach in which we collected data at all levels of the value chain: vegetable farmers, urban wholesalers, and retailers.

× Despite several studies showing the effect of access to markets and weather conditions on crop production, we know quite little on whether and how livestock production systems respond to variation in weather risk and access to markets. In this paper, we study whether and how livestock production responds to access to markets and varying weather risk. We also explore whether such responses vary across livelihood zones and livestock production systems. We study these research questions using information on the livestock production, ownership, and marketing decisions of households in Ethiopia. We find that households living close to markets are more likely to engage in market-oriented livestock production and use modern livestock inputs. We also find that households exposed to more unpredictable weather are less likely to engage in livestock production for markets. Rather, they are more likely to engage in livestock production for precautionary savings and insurance. Furthermore, greater rainfall uncertainty influences livestock portfolio allocation towards those types of livestock which can be easily liquidated, while also discouraging investment in modern livestock inputs. However, these responses and patterns vary across livelihood zones and production systems - most of these stylized responses and impacts are more pronounced in the arid and semi-arid lands of Ethiopia, where livestock herding remains a dominant source of livelihood. Those households relying only on livestock production seem more sensitive and responsive to weather risk and weather shocks. The heterogeneity in responses to and impacts of weather risk among farming systems and livelihoods highlights the need for more tailored livestock sector policies and interventions.

× Overweight and obesity are rising rapidly in Ethiopia's urban areas, constituting a major public health concern. Dietary choices can be one of the key drivers of adult body-weight. Using data collected from a large household survey in Addis Ababa, we provide a snapshot of dietary patterns in Ethiopia's largest urban area. We find that starchy staples (cereals, roots, and tubers) are prominent in household food baskets, taking up 25 percent of the food budget and providing more than 50 percent of consumed calories, on average. In contrast, the consumption of all kinds of fruits and vitamin A-rich vegetables is very low. For the average household, meat products account for nearly 18 percent of the food budget but provide only 2 percent of total calories. Richer households consume relatively less starchy staples than poorer households, but more animal-source foods and vegetables. However, the importance of fruits in household diets rises very slowly with household incomes. Together, these findings suggest that further income growth will result in drastic changes in the composition of food demand in Addis Ababa. Considering projections for increasing incomes, especially in urban areas, this will have major implications for agricultural production in rural areas connected to Ethiopia’s cities. There is also an urgent need to design cost-effective public health campaigns to reduce the emerging overweight and obesity crisis in urban Ethiopia.

× This study assesses progress in the implementation of the nutrition-sensitive interventions of the fourth phase of Ethiopia’s Productive Safety Net Programme (PSNP-4) and its impact on: (1) the pathways underpinning children’s nutritional status; and (2) the roles it plays in reducing the malign effect of seasonality on the nutritional status of women and pre-school children. The analysis is based on four rounds of household survey data, conducted in March and August 2017 (baseline) and March and August 2019 (endline). These surveys focused on households with a child less than 24 months of age (index child) and his/her mother (index mother). In 2017 and 2019, the survey teams visited more than 2,500 households in 264 kebeles in 88 PSNP woredas in the Amhara, Oromia, SNNP, and Tigray regions.

× The impact of food taboos – often because of religion – is understudied. In Ethiopia, religious fasting by Orthodox Christians is assumed to be an important impediment for the sustainable development of a competitive dairy sector and desired higher milk consumption, especially by children. However, evidence is limited. Relying on unique data, we shed light on three major issues. First, we observe that the average annual number of fasting days that Orthodox adults are effectively adhering to is 140, less than commonly cited averages. Using this as an estimate for extrapolation, fasting is estimated to reduce annual dairy consumption by approximately 12 percent nationally. Second, farms adapt to declining milk demand during fasting by increased processing of milk into storable products – fasting contributes to larger price swings for these products. We further note continued sales of milk by non-remote farmers and reduced production – by adjusting lactation times for dairy animals – for remote farmers. Third, fasting is mostly associated with increased milk consumption by the children of dairy farmers, seemingly because of excess milk availability during fasting periods. Our results suggest that fasting habits are not a major explanation for the observed poor performance of Ethiopia’s dairy sector nor low milk consumption by children. To reduce the impact of fasting on the dairy sector in Ethiopia further, investment is called for in improved milk processing, storage, and infrastructure facilities.

× Immediately after the first confirmed case of COVID-19 in Ethiopia in March 2020, the Government of Ethiopia took several public health measures to prevent increased levels of infection These included closing all schools and restricting large gatherings and movements of people. Hand-washing and social distancing were the main prevention measures that government has communicated to the general public through various media platforms. Using the latest round of the Ethiopian Demographic and Health Survey, COVID-19 relevant indicators related to household access to communication platforms; access to water, sanitation, and hygiene (WASH); and characteristics of the home environment were assessed. The analysis shows that a sizeable proportion of the rural population does not have access to the media platforms used to publicize COVID-19 prevention measures. Moreover, without aggressive interventions, current levels of access to water and soap are suboptimal to adopt the hand-washing recommendations, particularly in rural areas. The low proportion of households with electricity, refrigeration, or internet connection and the relatively high prevalence of partner violence suggest that implementing the stay and work from home measures will be challenging. Public health measures that slow down the transmission of the virus should be continued and efforts to prevent transmission to rural areas should be prioritized. Communication platforms and messaging will need to be adapted to different local realities to make any COVID-19 containment recommendations operational. WASH-related support should be ramped-up, and addressing barriers to staying at home, such as the risk of partner violence, should be considered. The efforts needed to end the current pandemic in Ethiopia, as well as similar pandemics in the future, illuminates the serious challenges related to WASH and to the inequalities between rural and urban areas that need urgent attention.

× We called by telephone a representative sample of 600 households in Addis Ababa, Ethiopia to assess household food and nutrition security status during the COVID-19 pandemic. More than half the households indicated that their incomes were lower than expected and more than one-third reported that they are extremely stressed about the situation. Using a pre-pandemic wealth index, we find that less-wealthy households were considerably more likely to report income losses and high stress levels than were wealthier households. Compared to a period just before the pandemic (January and February 2020), indicators measuring food security have significantly worsened. In April, households were less frequently consuming relatively more expensive but nutritionally richer foods, such as fruit and dairy products. However, overall food security status in Addis Ababa is not yet alarming, possibly because most households have used their savings to buffer food consumption. It is likely that these savings will not last for much longer, calling for a rapid scale-up of existing support programs.

× Ethiopia has witnessed significant reductions in child mortality, undernutrition, and communicable diseases, but more substantial and faster progress is still needed. The rise in obesity and in noncommunicable diseases, particularly in urban areas, is alarming and requires urgent policy and programmatic attention. Unhealthy diets drive both undernutrition and obesity and are the underlying cause of significant proportion of both communicable and non-communicable diseases. Maintaining the relatively high breastfeeding practices and increasing the diversity of diets will be critical to improving nutrition in Ethiopia. Implementation of effective nutrition messaging that shapes consumer behavior to adopt healthy dietary patterns, while bridging gaps in both the reach and the quality of such messaging is warranted. The health extension program, which is the cornerstone of the transformation of the health sector, may need to be redesigned in a way that improves its reach and the quality of the services it provides and minimizes the risk of burnout of frontline health workers. Interventions focusing on making healthy diets available, affordable, and accessible are urgently needed.

× In early June 2020, we called by telephone a representative sample of nearly 600 households in Addis Ababa, Ethiopia to assess income changes and household food and nutrition security status during the COVID-19 pandemic (survey period covering May). This was the second administration of a COVID-19 related survey to these households, following an initial survey conducted in early May 2020 covering the situation of the survey households in April. More than two-third of the households indicated in the second survey that their incomes were lower than expected (up from 58 percent in April) and 45 percent reported that they are extremely stressed about the situation (up from 35 percent in April). Using a pre-pandemic wealth index, we find that less-wealthy households were considerably more likely to report income losses and high stress levels than were wealthier households. Compared to a period just before the pandemic (January and February 2020), indicators measuring food security have significantly worsened but have remained the same since April. During the pandemic, households are less and less frequently consuming relatively more expensive but nutritionally richer foods, such as fruit and dairy products. However, overall food security status in Addis Ababa is not yet alarming, possibly because many households have been able to use their savings to buffer food consumption. As the pandemic is still in an early stage in Ethiopia, it is likely that these savings will not last throughout the pandemic, calling for a rapid scale-up of existing support programs.

× Modern marketing arrangements are increasingly being implemented to assure improved food quality and safety. However, it is not well known how these modern marketing arrangements perform in early stages of roll-out. We study this issue in the case of rural-urban milk value chains in Ethiopia, where modern processing companies – selling branded pasteurized milk – and modern retail have expanded rapidly in recent years. We find overall that the adoption levels of hygienic practices and practices leading to safer milk by dairy producers in Ethiopia are low and that there are no significant differences between traditional and modern milk value chains. While suppliers to modern processing companies are associated with more formal milk testing, they do not obtain price premiums for the adoption of improved practices nor do they obtain higher prices overall. Rewards to suppliers by modern processing companies are mostly done through non-price mechanisms. At the urban retail level, we surprisingly find that there are no price differences between branded pasteurized and raw milk and that modern retailers sell pasteurized milk at lower prices, ceteris paribus. Modern value chains to better reward hygiene and food safety in these settings are therefore called for.

× Increased deployment of agricultural extension agents (EAs) in rural areas is grounded on their importance to spur agricultural productivity and mitigate spatial imbalances in welfare. However, the high turnover and the low motivation levels of EAs in remote areas pose challenges for equitable service provision and, in some cases, exacerbates geographic disparities. We assess the effectiveness of selected potential policy interventions to incentivize and retain EAs in remote areas of Ethiopia. To this end, we conducted a choice experiment to elicit preferences for job attributes of 761 EAs. We applied a random parameters logit model to estimate parameters of interest and to simulate the impact of possible policy interventions. The main results show that offering continuing education opportunities after two years of service increases uptake of an extension job in remote locations by 77 percentage points, which is significantly higher than the effect from doubling current salary levels (70 percentage points). EAs also expressed a strong preference for work environments with basic amenities, housing, transportation services, and wellequipped Farmer Training Centers (FTCs). Furthermore, the results from sub-sample analyses show that female EAs are less responsive to pecuniary incentives and are more concerned with the availability of infrastructure and services. Current salary levels, years of employment, and location of work are also important sources of heterogeneity in the response of EAs to potential policy changes.

× In early July 2020, we called by telephone a representative sample of nearly 600 households in Addis Ababa, Ethiopia to assess income changes and household food and nutrition security status during the COVID-19 pandemic (recall period covering June). This was the third administration of a COVID-19 related survey to these households, following surveys in early May 2020 and early June. About 64 percent of the households indicated in the third survey that their incomes were lower than expected (down from 67 percent reporting lower incomes than expected in previous month) and 42 percent reported that they are extremely stressed about the situation (down from 45 percent in previous month). Using a pre-pandemic wealth index, we find that less-wealthy households were considerably more likely to report income losses and high stress levels than were wealthier households. Compared to the period just before the pandemic (January and February 2020), indicators measuring food security have significantly worsened but during the pandemic they have remained relatively stable. Households now are less frequently consuming relatively more expensive but nutritionally richer foods, such as fruit and dairy products. However, overall food security status in Addis Ababa is not yet alarming and we see small signs of improvements in this July phone survey relative to previous months. However, many households have drawn down their savings over past months to buffer their food consumption. As the daily COVID-19 infection rates are still rising in Ethiopia, the food security situation in Addis Ababa may deteriorate over coming months, especially as the savings levels among the poorest households are now low. This calls for a further scale-up and strengthening of existing support programs.

× Driven by the fast spread of private irrigation pumps, there has been a rapid expansion of intensive vegetable cultivation in the central Rift Valley in Ethiopia, making it the most important commercial vegetable production cluster in the country. Supporting that “quiet revolution” has been an inflow of migrant laborers – paid through daily, monthly, or piecemeal contracts, with few employment benefits attached to them – and a gig economy as widely-used contractors organize, among others, mechanized land preparation, the digging of wells and ponds, seedling propagation, and loading of trucks. Almost 60 percent of the irrigated area is cultivated by medium-scale tenant farmers relying on short-term rental contracts. It seems that gig economies characterized by flexible contract arrangements implemented by outside contractors, which are increasingly fueling sophisticated sectors in developed countries, are important in these commercial agrarian settings in Africa as well. We further find that the COVID-19 pandemic has led to significant disruptions of this model, as seen by more limited access to services and the unavailability or high price increases in factor markets, especially for labor. We further note large but heterogenous price changes in output markets. The pandemic seems especially to have had important effects on the medium-scale tenant farmers as they depend relatively more than smallholders on outside inputs, labor markets, and these gig economies. However, on the other hand, they benefit more than smallholders from favorable output markets for vegetables.

× It is widely feared that the COVID-19 pandemic will lead to a significant worsening of the food security situation in low and middle-income countries. One reason for this is the disruption of food marketing systems and subsequent changes in farm and consumer prices. Based on primary data in Ethiopia collected just before the start and a few months into the pandemic, we assess changes in farm and consumer prices of four major vegetables and the contribution of different segments of the rural-urban value chain in urban retail price formation. We find large, but heterogeneous, price changes for different vegetables with relatively larger changes seen at the farm level, compared to the consumer level, leading to winners and losers among local vegetable farmers due to pandemicrelated trade disruptions. We further note that despite substantial hurdles in domestic trade reported by most value chain agents, increases in marketing – and especially transportation – costs have not been the major contributor to overall changes in retail prices. Marketing margins even declined for half of the vegetables studied. The relatively small changes in marketing margins overall indicate the resilience of these domestic value chains during the pandemic in Ethiopia.

× As in most low and middle-income countries, the paucity of timely economic data in Ethiopia makes it difficult to understand the economic impacts of the COVID-19 pandemic. To mitigate this, several organizations have launched phone surveys to gather more information about the crisis. This research report reviews the available phone survey evidence as of mid-August 2020 and identifies knowledge gaps. First, the available evidence suggest that the pandemic has not led to unusually large increases in food prices. However, a case study in the vegetable sector suggests that price dynamics are highly context and crop specific, calling for more comprehensive price monitoring to identify food value chains and areas where food price increases may have been unusually rapid. Second, employment losses have concentrated on informal sector workers while redundancies in the formal sector have been less significant. Third, there is considerable uncertainty about the income, poverty, and food security implications of this crisis. While most households report income losses, the qualitative and subjective nature of these questions mean that the magnitudes of these losses are unknown. In Addis Ababa, less subjective food security measures indicate only small negative changes in household food and nutrition security. Finally, due to limited access to mobile phones in rural areas, we have imperfect and incomplete information on how this crisis is affecting rural households.

× Eggs have high potential for improving nutrition outcomes in low-income countries, yet very few children in such settings consume eggs on a regular basis despite widespread poultry ownership. To redress this disconnect, a number of interventions have been implemented to improve household production of poultry products, as well as caregiver awareness of the nutritional benefits of eggs and other animal-sourced foods. However, very few of these interventions have tried to leverage food markets to improve nutrition, even though most rural people predominantly rely on markets for the majority of their non-staple food consumption. This study was implemented to better understand the constraints to purchasing eggs for consumption by young children in rural Ethiopia, with a view to informing the design of marketoriented interventions that might cost-effectively increase children’s egg consumption. To do so we analyzed secondary datasets on poultry ownership, household and child egg consumption, and retail egg prices to understand egg markets and the egg value chain in Tigray. Similar to other contexts in sub-Saharan Africa, we find that two-thirds of households own poultry, though only onequarter of young children consumed eggs in the past 24 hours. Although markets in Tigray are well integrated – likely because of the important role of egg aggregators – egg prices remain high. A modest consumption level of 2.5 eggs per person per week would cost around 10 percent of the total budget of households in the poorest quintile of households, even though eggs are more affordable than other animal-sourced foods. We find that egg consumption among young children is not constrained by fasting associated with Orthodox Christianity. High prices are likely the main constraint and are a function of low levels of intensification in egg production, which is dominated by backyard poultry systems characterized by high mortality rates and low productivity.
Localized increases in egg production will therefore be needed to lower prices, at least in the short to medium term. We hypothesize that extending the presence of private sector poultry input suppliers in Tigray – who provide chicks through semi-independent agents – offers an entry point for increasing production, lowering prices, and increasing consumption. These input suppliers already have a scalable micro- ranchising model that provides strong economic returns to raising poultry. That model could potentially also be leveraged to raise awareness of the nutritional benefits of eggs.

× In this paper, we analyze the economic impacts of response measures adopted in Ethiopia to curtail the spread of the COVID-19 pandemic. We carry out simulations using an economywide multiplier model based on a 2017 Social Accounting Matrix (SAM) for the country that properly depicts interactions between economic agents. The pandemic’s impact on the global economy combined with disruptions it causes in Ethiopia represents a large, unprecedented shock to the country’s economy. In such situations, a SAM-based multiplier model provides an ideal tool for measuring the short-term direct and indirect impacts of a shock on an economic system since there is limited room for proper adjustment of economic decisions. We model the seven-week partial lockdown policy implemented in Ethiopia from mid-March to early May 2020. We also consider two possible economic recovery scenarios that may emerge as the COVID-19 control policies are relaxed during the latter part of 2020 in order to generate insights on the potential continuing impact of the virus at the end of 2020. Although the country took early swift measures, our assessment of the partial lockdown measures suggests that they were not as strict as those observed in other Africa countries. Accordingly, our estimates of the economic costs of COVID-19 on Ethiopia are significantly lower than those reported for other countries on the continent. We estimate that during the lockdown period Ethiopia’s GDP suffered a 14 percent loss (43.5 billion Birr or 1.9 billion USD) compared to a no-COVID case over the same period. Nearly two-thirds of the losses were in the services sector. Although no direct restrictions were imposed on the agriculture sector, which serves as the primary means of livelihood for most Ethiopians, the sector faced a 4.7 percent loss in output due to its linkages with the rest of the economy. Poor export performance due to a slowdown in global trade and restrictions on the transport sector also partly explain the decline in agricultural output. The broader agri-food system also was affected considerably because of its linkages with the rest of the economy. In terms of the welfare of Ethiopians, we estimate that the economic impacts during the lockdown caused 10.1 million additional people to fall below the poverty line. These findings have implications for better understanding the direct and indirect impacts of COVID-19 and for policy design during the recovery period to return Ethiopia’s economy to a normal growth trajectory and to protect the livelihoods of the most vulnerable in the process.

× The COVID-19 pandemic is expected to considerably affect the Ethiopian economy directly and indirectly due to global shocks and to the different restrictive preventative measures the country is taking. We analyze these economic effects using multisector economywide income multiplier models built on the two latest Social Accounting Matrices (SAMs) developed for Ethiopia. Three external sector channels are the focus of the analysis: commodity exports, strategic imports, and remittances. Results indicate that in the absence of any policy responses, the Ethiopian economy is expected to experience a loss of approximately 4.3 to 5.5 percent of its annual GDP due to exports, strategic imports, and remittances that are one-third lower relative to the no-COVID situation over a period of six-months. This translates into estimated reductions in labor income of between 4.2 and 5.2 percent. The SAM multiplier model estimates also imply that these negative shocks lead to household income losses that amount to between 3.9 and 6.4 percent. In particular, the urban poor will be the most affected as they lose real incomes in the range of 6.6 to 8.5 percent. These income losses are estimated to result in a 3.5 percentage point rise in the national poverty headcount.

× Little is known about the impacts of urbanization on women’s attitudes toward intimate partner violence (IPV). The scarcity of empirical studies on this relationship can be partly attributed to the lack of an objective measure of urbanization levels. In this study, we investigate the effects of urbanization on both women’s attitudes toward IPV using three continuous measures of urbanization: nightlight intensity, distance to urban areas, and total urban area within a 10-km radius. These measures are defined from satellite-based nighttime-light-intensity and multispectralsensor data. We find that despite a generally strong positive association between urbanization and progressive attitudes among women toward IPV, some stages of urbanization show a more significant association than others. Such nonlinear relationships are apparent in all estimations and across different measurements of urbanization. The heterogeneities in the effect of urbanization on women’s attitudes toward intimate partner violence further show that the effects of urbanization are sharply heterogeneous across wealth indicator terciles. While we find that urbanization is associated with an overall decrease in the acceptance of IPV, the effect is mostly concentrated in higher wealth terciles. For women in lower wealth terciles, urbanization is either insignificant or even associated with an increase in the acceptance of IPV.

× We present results of model simulations of maize, wheat, and sorghum yields in Ethiopia through 2085. The analysis draws on climate outcomes from 32 global climate models and an agronomic crop model to estimate effects on the yields of these cereals of expected higher temperatures and, for most of Ethiopia, increased rainfall. The simulation results suggest that climate change will likely have only relatively small effects on average yields of maize, wheat, and sorghum in Ethiopia up to 2055, as agronomic conditions for cultivation of these crops may actually improve in large parts of the country. Nonetheless, yields will need to increase over time to enable cereal production to keep pace with expected demand growth due to increases in population and per capita incomes. Moreover, even if future changes in climate have only moderate impacts on average crop yields in Ethiopia, there is growing evidence that weather outcomes are likely to become more variable in the future, implying that severe droughts and floods may very well have a greater impact on cereal production in the future than in the past.

× Using survey data collected from 996 representative households in Addis Ababa, Ethiopia, this paper documents several insights to help understand urban consumer food purchasing and consumption choices. The findings can be summarized as follows: 1) We find that households face important dietary gaps; a large proportion eats insufficient amounts of nutrient-dense vegetables, animal-source foods, and fruits. 2) The consumption of ultra-processed foods increases with income and may become a pressing health concern as incomes rise. 3) From a purchasing perspective, we find that consumers buy foods for different purposes at different outlets. Nearby kiosks and informal street markets are frequented for small food items and for fruits and vegetables, while formal open markets and consumer cooperatives are used for bulky food items. 4) Respondents make food and food outlet choices based on their health and food safety concerns, but few consider the nutritional value of food when purchasing it. Concurrently, the availability of a wide variety of healthy and safe foods is highly valued by most respondents for outlet choice. Among consumers in lower income categories, they tend to make food and food outlet choices based on prices and location convenience. 5) Although nutrition is not a primary concern when making choices about food, consumers appear to have reasonable nutritional knowledge. Most respondents considered a healthy diet to be primarily plant-based. Most people are aware that they should eat more fruits and vegetables and less sugary, fatty, and salty foods, but they have limited knowledge on the nutrient content of specific foods and the causes of obesity. 6) Labelling would not be an effective way to increase nutritional knowledge; most respondents have limited understanding of the information that labels provide. Rather, most respondents trust the information provided by health professionals over other sources.
In sum, these results are potentially relevant for policy and the design of future programs for improving nutritional outcomes through enhanced diets.

× This study evaluates the impact in the main cropping season of 2015 of a new approach to the distribution of improved seed in Ethiopia, known as Direct Seed Marketing (DSM). Under DSM, seed producers are allowed to sell seed directly to farmers, in contrast to the conventional seed marketing (CSM) system in which seed passes from seed producers to regional Bureaus of Agriculture to woreda Agricultural Offices to Development Agents, cooperative unions, and primary cooperatives, who, in turn, sell the seed to farmers. The study is based on a survey of 800 farmers, 118 agricultural extension workers, 75 seed sellers, and 24 seed producers in Amhara, Oromia, Southern Nations, Nationalities, and Peoples (SNNP), and Tigray regions. The performance of the DSM program in 2015 was evaluated on eight criteria: seed availability, sufficiency of supply, timeliness of delivery, seed pricing, quality, ensuring accountability for low-quality seed, ease of purchase, and use of public resources. The results indicate that DSM had heterogeneous effects across the different regions, showing the need to strengthen the sharing of experiences with the program across the regions of Ethiopia to scale up DSM’s benefits. However, when we consider the overall DSM program without regional disaggregation, the DSM and CSM systems do not differ significantly on most of the eight criteria, although DSM required significantly less of the time of the farmer-level agricultural extension agents, the Development Agents. DSM performed as well as CSM across the eight criteria examined, while requiring 39 percent less time for the involvement the Development Agents. Farmers’ subjective views of DSM were quite positive. On most criteria, 50 to 65 percent of farmers said DSM performed “better” or “much better” than CSM. The study also identifies specific areas where the performance of DSM needs to be improved. A review of international experience with seed systems is used to provide some additional recommendations regarding the longer-term development of seed systems in Ethiopia.

× Remote areas are often characterized by lower welfare outcomes due to economic disadvantages and higher transaction costs for trade. But their worse situation may also be linked to worse public service delivery. Relying on large household surveys in rural Ethiopia, we explore this by assessing the association of two measures of remoteness – (1) the distance of villages and primary service centers to district capitals and (2) the distance of households to service centers (the last mile) – with public service delivery in agriculture and health sectors. In the agriculture sector, we document statistically significant and economically meaningful associations between exposure to agriculture extension and the two measures of remoteness. For health extension, only the last mile matters. These differences between the two sectors could be due to the fact that more remote villages tend to have fewer agriculture extension workers who also put in fewer hours than their peers in more connected areas. This does not apply in the health sector. These findings provide valuable inputs for policymakers aiming to improve inclusiveness in poor rural areas.

× Costs of healthy diets are worryingly rising in a number of developed and emerging economies. However, less is known on these costs for developing countries. Using price data from a large number of markets in Ethiopia, we find that real prices of all nutritionally-rich food groups increased significantly (between 19 and 62 percent) over the period 2007 to 2016. This contrasts with (1) staple crops (grains, roots, and tubers), which did not show any price increase, and (2) oils, fats, and sugar, the prices of which decreased substantially. Using detailed nationwide datasets and relying on time series methods, we link these price increases to changes in local markets, demand and supply factors, transaction costs, and international trade. We find that prices of nutritionally-rich food groups – compared to cereals – are relatively less affected by international trade and exchange rate changes but more so by rapidly increasing local and city demand. This rising demand is likely due to recent income growth and rapid urbanization and the high-income elasticities for nutritious foods in Ethiopia. Moreover, we find that local production changes affected prices of nutritious items little, but national price rises were found to have been significantly linked with food price rises in commercial clusters in the country. Changes in transaction costs – fuel and transport costs – explained relatively little of the observed food price changes.

× We study post-harvest losses (PHL) in important and rapidly growing rural-urban value chains in Ethiopia. We analyze self-reported PHL from different value chain agents – farmers, wholesale traders, processors, and retailers – based on unique large-scale data sets for two major commercial commodities, the storable staple teff and the perishable liquid milk. PHL in the most prevalent value chain pathways for teff and milk amount to between 2.2 and 3.3 percent and 2.1 and 4.3 percent of total produced quantities, respectively. We complement these findings with primary data from urban food retailers for more than 4,000 commodities. Estimates of PHL from this research overall are found to be significantly lower than is commonly assumed. We further find that the emerging modern retail sector in Ethiopia is characterized by half the level of PHL than are observed in the traditional retail sector. This is likely due to more stringent quality requirements at procurement, sales of more packaged – and therefore better protected – commodities, and better refrigeration, storage, and sales facilities. The further expected expansion of modern retail in these settings should likely lead to a lowering of PHL in food value chains, at least at the retail level.

× Exchange rate policies can have important implications on incentives for export agriculture. However, their effects are often not well understood. We study the issue of foreign exchange controls and pricing in the value chain for Ethiopia’s coffee - its most important export crop. Relying on unique pricing and cost data, we find that coffee exporters are willing to incur losses during exporting by offering high prices for coffee locally in order to access scarce foreign exchange. The losses in export markets are then more than recovered in importing, indicating rents - import parity prices are significantly lower than the prices charged for imported goods, so that profits on imports are much higher than the losses incurred in exporting. We further show that the high coffee wholesale prices are transmitted to farmers, so that they benefit from the rents downstream. These results suggest that a better exchange rate alignment to reduce the overvaluation of the local currency in this case would have a lower impact on export crop producer prices than typically is anticipated.

× This paper explores the spatial heterogeneity in dairy production in the highland production area around the capital of Ethiopia, Addis Ababa. We look at how urban proximity – defined as the travel time from the farm to the central market of Addis Ababa – affects the production decisions of Ethiopian dairy farmers. We sampled 870 households from the major rural production zones around Addis Ababa, where villages were stratified according to their distance to Addis Ababa. Using an instrumental variable approach, we find evidence of strong spatial heterogeneity in dairy milk productivity in Ethiopia. With each additional hour of travel time, the milk productivity per cow is reduced by almost 1 liter per day, a reduction by 26 percent on average. This spatial heterogeneity in milk productivity reflects a pronounced spatial variation in dairy production decisions (producing liquid milk or processed dairy products), the application of modern inputs, and marketing. When trying to disentangle the mechanisms through which urban proximity affects dairy productivity, we show that the effect of travel time mainly runs through farmers’ inclusion into ‘modern’ value chains and more specifically through their access to commercial milk buyers. This finding holds when we control for prices, indicating that access to commercial value chains are an important determinant of dairy productivity. However, as only a limited number of farmers now have access to such value chains in these settings, measures to make dairy value chains more inclusive to remote farmers can have important economic development benefits for them.

× Using unique nationally representative household consumption data sets that extend from 1995/96 to 2010/11, this study looks at patterns and changes in ASF (animal-source food) consumption and attempts to identify some of the drivers of these dynamics. We further assess future demand in overall ASF consumption as well as for commercial market development.

× In 2015, Ethiopia experienced one of its worst droughts in decades. Using nationally representative data from before and after this event, we find that this drought did not lead to widespread increases in chronic or acute child undernutrition rates in the country. However, chronic undernutrition rates increased due to the drought in areas characterized by limited road network. Moreover, the share of households receiving humanitarian aid doubled in drought-affected areas. Together, these findings highlight the role of road infrastructure in contributing to resilience as well as the efficiency of the humanitarian system in delivering and targeting aid in the country.

× Storage losses at the farm are often assumed to be an important contributor to presumed large postharvest losses in developing countries. However, reliable and representative data on these losses are often lacking. We study farmers’ storage decisions and self-reported storage losses for grain based on two recent large-scale household surveys conducted in major agricultural areas in Ethiopia. We show that a relatively large share of grain production is stored by farm households themselves, mainly for own consumption, and that storage technologies are rudimentary. We find that farmers’ self-reported storage losses amount to an average of 4 percent of all grain stored and 2 percent of the total harvest. These storage losses are shown to differ significantly by socio-economic variables and wealth, but also by crop and humidity. We further see strong spatial heterogeneity in storage losses, being significantly higher in the southwestern part of the country. Efforts to scale up the adoption of improved storage technologies to reduce storage losses at the farm level should take into consideration these characteristics.

× There has long been concern that cash and in-kind transfers might affect prices in developing country food markets. While there have been a number of studies at highly aggregated levels, much less is known about the effects of cash transfers on local food prices and even less about how they compare to food transfers. We consider this issue in the context of a large social protection intervention, Ethiopia’s Productive Safety Net Programme. Using 12 months of price data from 233 localities and controlling for temporal, location, and market characteristics we find: Cash transfers have no effect on food prices. There is some evidence that food transfers reduce food prices. Maize transfers reduce aggregate grain prices, wheat transfers reduce the price of maize, and the negative effect of food transfers on food prices is larger in more remote markets. However, the magnitudes of these effects are trivially small, both in absolute and percentage terms.

× Ethiopia’s food systems are rapidly evolving, being driven by major contextual changes including high population growth, rapid urbanization, infrastructure investments, and income growth. These changes are illustrated by dietary, agricultural, and supply chain transformations. These transformations in Ethiopia’s food systems are expected to continue at a rapid pace given similar even more pronounced changes going forward. We expect to see especially rapid growth in commercial food markets. This will have enormous implications on farming and on the required development of efficient private-led agricultural input supply, logistics, trading, and distribution sectors.

× We document the state of the extension system in Ethiopia and review the empirical evidence on the links between the key extension services provided, adoption of modern inputs, and agricultural productivity. In particular, we take stock of the provision of agricultural extension services, synthesize the evidence on the performance of the system, and suggest ways that it might contribute to accelerating agricultural growth and poverty reduction in the years ahead.

× This paper evaluates Ethiopia’s urbanization trend during the last four decades, while also considering Ethiopia’s structural transformation and recent public investments to promote greater industrialization within the country. Ethiopia’s urban population grew 4.2 percent per year between 1994 and 2015, far outpacing the overall population growth rate of 2.5 percent. Compared to the urban growth rate of Africa (3.5 percent per year), Ethiopia experienced a 20 percent faster urban population growth rate (UNDESA 2015). Urbanization in Ethiopia is expected to reach 38 percent by 2050. However, this level is relatively low compared to the majority of sub-Saharan Africa (SSA) countries. Improved road infrastructure, rural to urban migration and secondary city development is increasing urbanization within the country. In addition, recent public investments to promote industrialization and increase manufacturing labor opportunities via newly constructed and planned industrial parks are projected to increase urbanization and bolster structural transformation across the country. We evaluate these investments and demographic trends within the context of other countries in sub-Saharan Africa, as well as with the experience of India and China.
Ethiopia’s investment in higher-value manufacturing and service activities via economic zones may provide similar infrastructure to that of China and India’s ‘township and village enterprises’ (TVE). However, a focus on increasing human capacity and labor mobility will be necessary to ensure that rural farmers are able to take advantage of labor opportunities outside of the agriculture sector. We calculate the projected economic impact of Ethiopia’s planned industrial zones and sugar factories and find that while public and private investment in industrial and agro-industrial parks may provide a catalyst for future growth, they are likely to provide only a small share of total output and employment. Investments in sugar factories are anticipated to total USD 5.2 billion, with estimated production of USD 3.6 billion and value-added of USD 3.3 billion. However, an increase in sugar output of this magnitude would imply massive sugar exports that may not be financially profitable.

× Timely and accurate agricultural impact assessments for droughts are critical for designing appropriate interventions and policy. These assessments are often ad hoc, late, or spatially imprecise, with reporting at the zonal or regional level. This is problematic as we find substantial variability in losses at the village-level that are missing when reporting even at the zonal level. In this paper we propose a new data fusion method combining remotely-sensed data with agricultural survey data that might address these limitations. We apply the method to Ethiopia, which is regularly hit by droughts and is a substantial recipient of ad hoc imported food aid. We then utilize remotely-sensed data obtained near mid-season to predict substantial crop losses of greater than or equal to 25 percent due to drought at the village level for five primary cereal crops. We train machine learning models to predict the likelihood of losses and explore the most influential variables. On independent samples, the models identify substantial drought loss cases with up to 70 percent accuracy by mid- to late-September. We believe the proposed models could be used to help monitor and predict yields for disaster response teams and policy makers, particularly with further development of the models and integration of newly available high resolution remotely-sensed data, such as the Harmonized Landsat Sentinel (HLS) data set.

× Livestock is important in Ethiopia’s agricultural economy as almost all farmers own some livestock. Livestock assets are valued at 720 USD per farm on average. Overall livestock output has grown rapidly over the last decade, estimated at almost 6 percent per year, but about 80 percent of that growth came from increases in the number of livestock. The stock of different livestock species was about 50 percent higher in 2015 than a decade earlier, while modern input use and improvements in production methods contributed little to growth in the livestock sector. Linked to improved access to extension and markets, adoption of improved breeds and improved feeding practices increased, but such adoption patterns started from a very low base. Within the livestock sector, cattle are dominant, making up an estimated three-quarters of the value of livestock stock. However, the share of cattle in total livestock output is declining, and small ruminants are on the rise, especially in pastoralist areas. Given the rapid growth in livestock numbers and the increasing livestock density per unit of land, we find that feeding practices are changing. Grazing land is declining in availability, so reliance on commercial feed markets is increasing. Access to vaccinations and veterinary service provision have improved, and livestock death rates declined slightly over the last decade. However, the number of livestock lost to deaths is still more than twice the number sold for meat production, indicating important challenges remaining for the development of the livestock sector in Ethiopia.

× Local value-addition in developing countries is often aimed at the upgrading of agricultural value chains, since it is assumed that doing so will make farmers better off. However, transmission of the added value through the value chain and constraints to adoption of value-adding activities by farmers are not well understood. We look at this issue in the case of coffee in Ethiopia – the country’s most important export product – and value-addition in the coffee value-chain through ‘washing’ coffee, which is done in wet mills. Washed coffee is sold internationally with a significant premium compared to ‘natural’ coffee, and we find that this premium is largely transmitted to producers. However, while wet mills have become more widespread, the share of washed coffee in Ethiopia’s coffee exports is not increasing over time and, even if coffee farmers have access to a wet mill, they often do not sell all their coffee cherries to them. Relying on a unique primary large-scale dataset and a combination of qualitative and quantitative methods, we examine the reasons for this puzzle. The reasons seemingly are twofold. First, labor productivity in producing red cherries, which wet mills require, is lower than for natural coffee, reducing incentives for adoption, especially for those farmers with higher opportunity costs of labor. Second, only impatient, often smaller, farmers sell red cherries, as more patient farmers use the storable dried coffee cherries as a rewarding savings instrument, given the negative real deposit rates in formal savings institutions.

× This paper explores these issues for Ethiopia utilizing an economy-wide computable general equilibrium (CGE) model based on a detailed social accounting matrix (SAM). We present the results of four alternative investment scenarios -- faster investment in i) cities; ii) crop agriculture; iii) the rural non-farm sector and agro-industry; and iv) livestock. The simulations suggest that investments in cities generate faster economic growth and structural transformation. However, given the large share of the population with incomes linked to agriculture and the rural economy, investments in the rural economy are likely to continue to be more pro-poor than urban public investments through the mid-2020s. After the mid-2020s, investments in cities become more pro-poor. In short, though rapid economic growth and structural transformation have diminished the relative importance of the agricultural sector in Ethiopia’s economy, continued public investments in agriculture and the broader agri-food system remain crucial for equity and poverty alleviation in Ethiopia, as well as for reducing food import dependency.

× In the Ethiopian highlands, the Productive Safety Net Programme (PSNP) is a successful social safety net intervention in terms of both targeting and impact. By contrast, existing studies situated in the country's lowland Afar and Somali regions suggest that PSNP targeting is beset with difficulties. This is deeply concerning given that these predominantly agro-pastoral and pastoral areas have some of the country's highest levels of poverty and food insecurity and that there is an absence of viable livelihoods outside of pastoralism in these localities. In this paper, which draws on three rounds of household survey data from 2012, 2014, and 2016, we show that there has been no meaningful improvement in targeting performance since 2010. We assess five explanations for this – resources and under-coverage; the involvement of traditional leaders in targeting; insufficient training; attitudes of program implementers; and transparency – adducing that norms regarding fairness and a lack of transparency are the most likely explanations for continued poor targeting. The PSNP experience calls into question the effectiveness of technocratic fixes as well as the appropriateness of targeting transfers in pastoralist societies.

× Economists typically default to the assumption that cash is always preferable to an in-kind transfer. We extend the classic Southworth (1945) framework to predict under what conditions this assumption holds. We take the model to longitudinal household data from Ethiopia where a large-scale social safety net intervention – the Productive Safety Net Programme (PSNP) – operates. Even though most PSNP payments are paid in cash, and even though the (temporal) transaction costs associated with food payments are higher than payments received as cash, the overwhelming majority of the beneficiary households prefer their payments only or partly in food. However, these preferences are neither homogeneous nor stable. Higher food prices induce shifts in preferences towards in-kind transfers, but more food secure households and those closer to food markets and to financial services prefer cash. There is suggestive evidence that preferences for food are also driven by self-control concerns.

× Increases in cereal prices can have adverse effects on poor net food buyers. This is a particular problem in Ethiopia because of frequent natural calamities – especially droughts – that lead to significant price hikes. Conversely, falling domestic prices of some cereals (especially maize), typically at harvest time, can be detrimental to producers who are net sellers. Price stabilization efforts are therefore an important consideration for Ethiopian policy makers. This paper sheds light on options for cereal price stabilization in Ethiopia drawing on experiences of other developing countries. The international experience in food price stabilization shows that while some countries have achieved success, the efforts of many others have actually destabilized market prices at great fiscal cost. We assess the extent to which price stabilization efforts in Ethiopia were effective during the major El Niño induced drought of 2015/16 and find that opportunities were missed to enhance food security and consumer welfare through permitting private sector imports in order to curtail the rise in cereal prices and to reduce fiscal costs for the government and donors.

× Agricultural GDP in Ethiopia grew at an average 7.3 percent per year between 2001/02 and 2012/13. Most of this dynamism occurred in the highlands, where high population density and land scarcity begs the question of how future agricultural output can be maintained to sustain the previous decade’s momentum. This paper uses a spatial regression approach to calculate the maximum crop area potential of each kebele in Ethiopia. We find that although the highlands have a greater potential for cropped area, there is little room to expand. A substantial share of the highlands has limited economic potential to expand the land base devoted to agriculture. In fact, many areas may be reaching an environmental threshold that will require the local agricultural land area to contract to maintain the agricultural productivity outcomes realized in previous years.

× Credit markets are key instruments by which liquidity constrained smallholder farmers may finance productivity investments. However, the documented low demand and uptake of agricultural credit by smallholder farmers in sub-Saharan Africa poses challenges for energizing rural transformation in the region. In this paper we investigate the impact of rainfall uncertainty (and risk more generally) on the expressed demand for credit among rural households in Ethiopia. We explore potential mechanisms through which weather risk may explain the low demand for credit. We also examine the consequences of uninsured rainfall uncertainty on productivity-enhancing and loss-reducing agricultural investments. We provide evidence that rainfall uncertainty dampens households’ demand for agricultural credit. Rainfall uncertainty is associated with credit risk-rationing, which underlies the low demand for agricultural credit in Ethiopia. We also show that rainfall uncertainty helps to explain the low uptake of productivity-enhancing agricultural technologies, such as fertilizers. On the other hand, rainfall uncertainty encourages investments in defensive agricultural inputs, such as pesticides, herbicides, and fungicides. Our results highlight the impacts of uninsured production risk on agricultural investments made by African smallholders.

× In the transformation of agri-food systems in developing countries, we usually see rapid changes in the livestock sector. However, good data for clearly understanding this transformation are often lacking, especially so in Africa. Relying on a combination of diverse large-scale datasets and methods, we analyze transformation patterns in the dairy value chain supplying Addis Ababa, the capital and biggest city of Ethiopia. Over the last decade, we note a rapid increase in expenditures on dairy products by urban consumers, especially among the better-off. Relatedly, the number of dairy processing firms in Ethiopia tripled over the same period, supplying a significant part of these dairy products, especially pasteurized milk, to the city’s residents. The number of dairy traders increased rapidly as well, with competition between them becoming more intense over time. Upstream at the production level, we find improved access to livestock services, higher adoption of cross-bred cows, a shift from grazing to commercial feeds, an increase in milk yields, expanding liquid milk markets, a sizable urban farm sector supplying almost one-third of all liquid milk consumed in the city, and an upscaling process with larger commercial dairy farms becoming more prevalent. However, average milk yields are still low and not all dairy farmers are included in this transformation process. Small farms with dairy animals as well as those in more remote areas benefit less from access to services and adopt less these modern practices. For these more disadvantaged farmers, stagnation in milk yields and even declines – depending on the data source used – are observed.

× Ethiopia’s Productive Safety Net Programme (PSNP) is a large-scale social protection intervention aimed at improving food security and stabilizing asset levels. The PSNP contains a mix of public works employment and unconditional cash and food transfers. It is a well-targeted program; however, several years passed before payment levels reached the intended amounts. The PSNP has been successful in improving household food security. However, children’s nutritional status in the localities where the PSNP operates is poor, with 48 percent of children stunted in 2012. This leads to the question of whether the PSNP could improve child nutrition. In this paper, we examine the impact of the PSNP on children’s nutritional status over the period 2008–2012. Doing so requires paying particular attention to the targeting of the PSNP and how payment levels have evolved over time. Using inverse-probability-weighted regression-adjustment estimators, we find no evidence that the PSNP reduces either chronic undernutrition (height-for-age z-scores, stunting) or acute undernutrition (weight-for-height z-scores, wasting). While we cannot definitively identify the reason for this non-result, we note that child diet quality is poor. We find no evidence that the PSNP improves child consumption of pulses, oils, fruits, vegetables, dairy products, or animal-source proteins. Most mothers have not had contact with health extension workers nor have they received information on good feeding practices. Water practices, as captured by the likelihood that mothers boil drinking water, are poor. These findings, along with work by other researchers, have informed revisions to the PSNP. Future research will assess whether these revisions have led to improvements in the diets and anthropometric status of preschool children in Ethiopia.

× What is the optimal size and composition of Rural Financial Cooperatives (RFCs)? With this broad question in mind, we characterize alternative formation of RFCs and their implications in improving the access of rural households to financial services, including savings, credit, and insurance services. We find that some features of RFCs have varying implications for delivering various financial services. The size of RFCs is found to have a nonlinear relationship with the various financial services RFCs provide. We also show that compositional heterogeneity among members, including diversity in wealth, is associated with higher access to credit services, while this has little implication on households’ savings behavior. Similarly, social cohesion among members is strongly associated with higher access to financial services. These empirical descriptions suggest that the optimal size and composition of RFCs may vary across the domains of financial services they are designed to facilitate. This evidence provides suggestive insights on how to ensure financial inclusion among smallholders, a pressing agenda and priority of policy makers in developing countries, including Ethiopia. The results also provide some insights into rural microfinance operations which are striving to satisfy members’ demand for financial services.

× The livestock subsector has contributed little to the remarkable economic growth recorded in Ethiopia in the last decade. In an effort to stimulate livestock production, the Ethiopian government has recently recognized livestock as an important strategic subsector in which to invest. Unlike most studies that focus purely on aspects of livestock production, this study provides a detailed descriptive assessment of the livestock production and marketing behavior of smallholder mixed crop-livestock farmers.
The study uses a dataset collected in the Agricultural Growth Program baseline survey from farm households in districts of Ethiopia with high potential in grain crops production, areas which have a significant share of the livestock in the country. Smallholder livestock production is characterized by lower levels of livestock ownership, limited market orientation, and lower productivity. These characteristics restrict the capacity of these livestock systems from taking advantage of the emerging opportunities in both domestic and export livestock markets. We find a high degree of heterogeneity in access to livestock assets, production practices, marketing, and livelihood strategies among farm households. Hence, a single policy recommendation might not work for all farmers.
Our assessment apprises the current status of livestock production systems in Ethiopia and highlights potential income sources from livestock, including positive synergies between these income sources to help reduce poverty and to promote economic growth in rural communities.

× Urbanization is happening fast in the developing world and especially so in sub-Saharan Africa where growth rates of cities are among the highest in the world. While cities and, in particular, secondary towns, where most of the urban population in sub-Saharan Africa resides, affect agricultural practices in their rural hinterlands, this relationship is not well understood. To fill this gap, we develop a conceptual model to analyze how farmers’ proximity to cities of different sizes affects agricultural prices and intensification of farming. We then test these predictions using large-scale survey data from producers of teff, a major staple crop in Ethiopia, relying on unique data on transport costs and road networks and implementing an array of econometric models. We find that agricultural price behavior and intensification is determined by proximity to a city and the type of city. While proximity to cities has a strong positive effect on agricultural output prices and on uptake of modern inputs and yields on farms, the effects on prices and intensification measures are lower for farmers in the rural hinterlands of secondary towns compared to primate cities.

× This Working paper has been published as a journal article, available at http://ebrary.ifpri.org/cdm/ref/collection/p15738coll5/id/6603 Agricultural productivity in the highlands of Ethiopia is threatened by severe land degradation, resulting in significant reductions in agricultural GDP. In order to mitigate ongoing erosion and soil nutrient loss in the productive agricultural highlands of the country, the government of Ethiopia initiated a Sustainable Land Management Program (SLMP) targeting 209 woredas (districts) in six regions of the country. This study evaluates the impact of SLMP on the value of agricultural production in select woredas by using a panel survey from 2010 to 2014. Whereas previous studies have used cross-sectional data and short timeframe field trials to measure sustainable land management (SLM) effects on agricultural productivity, this analysis exploits data collected over four years to assess impact. The results of this analysis show that participation by farmers in SLMP, regardless of the number of years of participation in the program, is not associated with significant increases in value of production. This may be due to several reasons. First, similar to previous studies, it is possible that longer term maintenance is necessary in order to experience significant benefits. For example, Schmidt and Tadesse (2014) report that farmers must maintain SLM for a minimum of seven years to reap benefits in value of production. Second, this analysis finds that value of production, as well as SLM investments, increased significantly in both treatment and non-treatment areas over the study period. Previous research has found that non-treatment neighbors learn from nearby program areas, and adopt technologies similar to programmed areas, which would dilute the impact measurement of program effects (Bernard et al. 2007; Angelucci and DiMaro 2010). Finally, it is important to note that kebeles that were not selected in the SLMP, but are downstream relative to a targeted kebele may receive indirect benefits through reduced flooding, increased water tables, etc. Thus, the impact of the SLMP may be underestimated in this analysis if non-program kebeles are benefiting indirectly from the program.

× In Ethiopia, there are two binding forces (push and pull) that deserve attention when it comes to youth occupational and spatial mobility choices and the national land use and transfer policy. On the one hand, the fact that the land rental market in Ethiopia is supply constrained due to market and policy distortions marginalizes youth and serves as a push factor leading them to look elsewhere for a livelihood strategy. On the other hand, the regulatory conditions and restrictions attached to land use and inheritance rights may serve as a pull factor and force youth to be tied to the rural and/or farming sector. Our study thus aims to explore how youth land access (both inheritance and market-based) affects their migration and employment decisions. We explore this question in the context of rural Ethiopia using panel data from 2010 and 2014. We find that larger expected land inheritances significantly lower the likelihood of long-distance permanent migration and of permanent migration to urban areas during this time. Inheriting more land is also associated with a significantly higher likelihood of employment in agriculture and a lower likelihood of employment in the nonagricultural sector. Conversely, the decision to attend school is unaffected. These results appear to be most heavily driven by males and by the older half of our youth sample. We also find several mediating factors matter. Land inheritance plays a much more pronounced role in predicting rural-to-urban permanent migration and nonagricultural-sector employment in areas with less vibrant land markets and in relatively remote areas (those far from major urban centers). Overall, the results reaffirm the notion that push factors dominate pull factors in dictating occupational and migration decisions in Ethiopia and highlight youth preferences to use migration or non-agricultural employment as a last resort after exhausting other means of accessing land, such as temporary land rental.

× The uptake of agricultural mechanization in Ethiopia is low with less than one percent of agricultural plots plowed with a tractor. However, in recent years the uptake of agricultural machinery has accelerated. We note an impressive increase in imports of combine-harvesters and of tractors, seemingly associated with the increasing costs of agricultural labor and animal traction, substitutes for agricultural mechanization. We estimate that a quarter of the area in Ethiopia planted to wheat – the fourth most important cereal in the country – is currently harvested by combine-harvesters, and they are widely used in the major wheat growing zones in the southeast of the country in particular. Private mechanization service providers have rapidly emerged. Smallholders in these wheat growing zones rely heavily on agricultural machinery rental services for plowing, harrowing, or harvesting. We find that mechanization is associated with significantly lower labor use, and that the adoption of combine-harvesters – but not tractors – is significantly associated with higher yields, seemingly due to lower post-harvest losses. While further expansion of mechanization in the country is desired, given the environmental and financial cost of holding oxen and the higher yields linked with some forms of mechanization, it appears to be hampered by farm structures, particularly small farm sizes and consequent limits in scale; fragmented plots; crop diversity; physical constraints, such as presence of stones, steepness of fields, and soil types; and economic and financial constraints, including limited access to foreign exchange and credit and the still relatively low wages in less commercialized zones.

× We analyze the evolution of crop and livestock producer prices and wages of unskilled laborers in Ethiopia between January 2014 and January 2017 to evaluate the effect of El Niño triggered droughts – which started in 2015 – that massively impacted parts of the country. The analyses reveal no evidence of widespread adverse price effects of the drought in cereal and labor markets. Real prices of major cereals were lower in January 2017 compared to three years earlier, especially for maize, sorghum, and wheat – the crops that are the major source of calories in areas that were most hit by drought. The decline in the cost of cereals in the food basket in January 2017 compared to three years earlier was estimated at 13.3 percent at the national level. Moreover, this decline in cereal costs was highest in areas most affected by the drought, possibly indicating the effect of major cereal imports and food aid directed to these areas. Considering crop and livestock prices jointly, the analysis reveals that livestock-cereal terms of trade improved. This is mainly due to the fact that although livestock prices declined during this period, as is usually seen in droughts, this decline was less than the decline in prices of cereals in such areas. The fluctuating behavior of cereal prices since January 2015 strikingly contrasts with the El Niño triggered major drought during 1997/98 in Ethiopia. During that period, cereal production declined by 25 percent compared to the year before, with significant increases in the real price of cereals, ranging between 15 and 45 percent. In contrast, in 2016 real cereal prices declined, which appears consistent with the relatively larger cereal imports and lower impacts of the drought on national cereal production in 2015/16.

× We examine the impact of a social protection program, Ethiopia’s Productive Safety Net Programme (PSNP), on household size and the factors that cause household size to change: fertility, child fosterage, and in and out migration related to work and marriage. Participation in the PSNP leads to an increase in household size of 0.3 members. PSNP participation lowers fertility by 7.6 to 9.9 percentage points. The increase in household size arises from an increase in the number of girls aged 12 to 18 years. We present suggestive evidence that this occurs because the PSNP causes households to delay marrying out adolescent females.

× In many developing countries in which staple foods dominate the composition of diets, higher consumption of animal-source foods (ASF) is associated with significant nutritional benefits. Given the importance of prices for consumption decisions in these settings, we analyze ASF price patterns in the last decade (2007-2016), relying on a large-scale price dataset collected in 116 urban retail markets in Ethiopia. We document important seasonal and spatial patterns and we find, worryingly, that real prices of ASF have been increasing in the last decade by between 32 to 36 percent for three major ASF – milk, eggs, and meat. Similar price increases are noted in rural and urban areas and for tradable and non-tradable ASFs. This price trend is in contrast with staple cereals for which real prices stayed at similar levels over the last decade. As we estimate that a price increase of this magnitude would reduce consumption of ASF by approximately 25 percent, holding other things constant, it seems that more investments and attention to the production of ASF and the livestock sector are needed to reduce ASF prices and increase their consumption in Ethiopia.

× The malign effect of shocks has long been a concern within economics, partly because they result in transitory welfare losses and partly because they may have persistent effects. In development discourse, this latter concern has spurred interest in the concept of resilience and how public interventions can enhance resilience. Within this context, we assess the impact of a social protection program, Ethiopia’s Productive Safety Net Program, on the longer term impacts of drought on household food security. We find that drought shocks reduce the number of months a household considers itself food secure and that these impacts persist for up to four years after the drought has ended. Using a Hausman instrumental variable estimator, we find that receipt of PSNP payments reduced the initial impact of drought shocks by 57 percent and eliminates their adverse impact on food security within two years. In this way, the PSNP strengthens the resilience of its beneficiaries against adverse shocks. This impact is largest for PSNP beneficiaries with little or no land. Results are robust to using an objective measure of drought derived from satellite data, the Standard Evapotranspiration Index. They are also robust to changes in sample composition, the presence of other interventions, and the estimator used.

× This paper uses an economy-wide model to identify agricultural activities and value-chains in Ethiopia whose expansion would be most effective at generating economic growth, reducing national and rural poverty, creating jobs, and diversifying diets. Results indicate that expanding cereals production would continue to contribute positively to national pro-poor growth. However, the analysis suggests that there is no single value-chain that can achieve all policy objectives. Instead, a more balanced portfolio of valuechains would not only enhance agriculture’s future contribution to poverty reduction and economic growth, but also promote faster rural transformation and dietary diversification, both of which are needed to create job opportunities and improve nutrition outcomes over the longer-term. After considering alternative weighting schemes for competing policy goals, the final analysis suggests that vegetables and fruits/tree crops should be considered “priority” value-chains, because these are among the most effective at achieving multiple policy objectives. Other highly-ranked value-chains include oilseeds, tobacco/cotton/tea, and milk/dairy.

× This paper studies associations between farm size, food security, and welfare. Given agricultural land constraints and the rapidly increasing rural population in Ethiopia, with 26 million more people being projected to be residing in rural Ethiopia in 2030 relative to 2016, this is a major concern for the country.

× Social protection policies typically involve multiple sectors, ranging from food security to health care. Despite this, limited research is directed toward understanding how different social protection programs complement each other. In this study, we explore complementarities between three major national social protection programs in rural Ethiopia: the Productive Safety Net Programme (PSNP), the Health Fee Waiver (HFW) system, and the Community Based Health Insurance (CBHI) in the Ethiopian highlands (Amhara, Oromia, SNNP, and Tigray regions).

× Agriculture growth in Africa is often characterized by low aggregate levels of technology adoption. Recent evidence, however, points to co-existence of substantial adoption heterogeneities across farm households and a lack of a suitable mix of inputs for farmers to take advantage of input complementarities, thereby limiting the potential for learning towards the use of an optimal mix of inputs. We use a detailed large longitudinal dataset from Ethiopia to understand the significance of input complementarities, unobserved heterogeneities, and dynamic learning behavior of farmers facing multiple agricultural technologies. We introduce a random coefficients multivariate probit model, which enables us to quantify the complementarities between agricultural inputs, while also controlling for alternative forms of unobserved heterogeneity effects. The empirical analysis reveals that, conditional on various types of unobserved heterogeneity effects, technology adoption exhibits strong complementarity (about 70 percent) between chemical fertilizers and improved seeds, and relatively weaker complementarity (between 6 and 23 percent) between these two inputs and extension services. Stronger complementarities are observed between specific extension services (advice on land preparation) and improved seed and chemical fertilizers, as opposed to simple visits by extension agents, suggesting that additional benefits can be gained if the extension system is backed by “knowledge” inputs and not just focus on “nudging” of farmers to use these inputs. The analysis also uncovers substantial unobserved heterogeneity effects, which induce heterogeneous impacts in the effect of the explanatory variables among farmers with similar observable characteristics. We also show that ignoring these behavioral features bears important implications in quantifying the effect of some policy interventions which are meant to facilitate technology adoption. For instance, ignoring these features leads to significant overestimation of the effectiveness of extension services in facilitating technology adoption. We also document strong learning behavior, a process that involves learning-by-doing as well as learning from extension agents.

× The study assesses factors that explain households’ perceived tenure insecurity and the demand for new formalization of land rights in Ethiopia. We use data from the 2013 Agricultural Growth Program (AGP) survey of 7,500 households from high agricultural potential areas of Ethiopia. The results from a logistic estimation and a descriptive analysis reveal that the de-mand for further land demarcation is positively associated with higher perception of tenure insecurity. Moreover, disaggre-gated regression results indicate that ownership and boundary-related disputes characterize peri-urban locations and vibrant communities, whereas perceived risk of government expropriation of land is mainly manifested in predominantly rural com-munities and areas where administrative land redistribution is a recent practices. Hence, the rollout strategy for the recent wave of the Second-Level Land Certification agenda should avoid a blanket approach, as it can only be considered a best fit for those vibrant and peri-urban locations where demand for further formalization is higher and boundary and ownership-related disputes are more common. However, focusing similar interventions in predominantly agrarian communities and communities with recent administrative land distributions may not be advisable since expropriation risk seems to be dictating perceived tenure insecurity of households in such locations. Rather, regulatory reforms in the form of strengthening the depth of rights over land, such as formalization of rural land lease markets and abolishing conditional restrictions on inter-generational land transfers via inheritance or gifting, could be considered as alternative and cost-effective intervention pack-ages in this latter context.

× Chronic undernutrition in Ethiopia is widespread and many children consume highly monotonous diets. To improve feeding practices in Ethiopia, a strong focus in nutrition programming has been placed on improving the nutrition knowledge of caregivers. In this paper, we study the impact of improving nutrition knowledge within households and its complementarity with market access. To test whether the effect of nutrition knowledge on children’s dietary diversity depends on market access, we use survey data from an area with a large variation in transportation costs over a relatively short distance. This allows us to carefully assess the impact of households’ nutrition knowledge with varying access to markets, but still within similar agro-climatic conditions. We find that nutrition knowledge leads to considerable improvements in children’s diets, but only in areas with relatively good market access.

× Seasonality in agricultural production continues to shape intra-annual food availability and prices in low-income countries. Using high-frequency panel data from northern Ethiopia, this study attempts to quantify seasonal fluctuations in children's weights. In line with earlier studies, we document considerable seasonality in children’s age and height adjusted weights. While children located closer to local food markets are better nourished compared to their counterparts residing in more remote areas, their weights are also subject to considerable seasonality. Further analysis provides evidence that children located closer to food markets consume more diverse diets than those located farther away. However, the content of these diets varies across seasons: children are less likely to consume animal source foods during the lean season.

× Centralized implementation mandates of Ethiopia’s Productive Safety Net Program (PSNP) require a full and uniform payment to each person in an eligible household. In practice, however, communities do not receive enough funding to fully implement the program. Therefore, communities must exercise local discretion in allocating aid. We recover the preferences revealed by local communities’ aid allocations and find they are pro-poor, allocating more to underprivileged groups with lower wage earning potential (e.g., teenage girls vs. teenage boys, adult women vs. adult men, elderly vs. working age adults). Despite communities’ pro-poor implementation, the program with constrained funding does not significantly lower overall poverty rates. In simulations with full funding, the program reduces poverty in both cases of centralized and decentralized program control, using different criteria for the allocation of funds. The major policy implication is that the financial scale of the safety net program is more important to poverty reduction than the locus of control over implementation.

× Africa's food systems are changing fast amid rapid economic growth, emerging urbanization, and structural transformation. In this study, we use four rounds of nationally representative data from Ethiopia to examine changes in household food consumption patterns over a period of unprecedented economic growth. We find that while there is a general decline in the share of food in the total consumption basket of households in Ethiopia, food quantities and intake of calories have increased considerably over the period 1996 to 2011. This was mostly driven by improvements in household incomes, as shown using decomposition analysis. Furthermore, the content of the food basket is changing with a gradual shift towards high-value foods, such as animal products, fruits and vegetables, and processed foods. However, irrespective of the level of income, a heavy focus on starchy staples in the Ethiopian diet remains. Overall, this diet transformation has important implications for the food security debate and for agricultural and food policy in the country.

× We analyze the evolution of crop and livestock producer prices and wages of unskilled laborers in Ethiopia over the January 2014 to January 2016 period, during which time the country was massively impacted by El Niño triggered droughts, which started in 2015. The analyses reveal no evidence of widespread adverse price effects of the drought in the labor and cereal markets. Real prices of the major cereals were lower at the beginning of 2016 compared to two years earlier, especially for maize, sorghum and wheat, the crops that make up the major source of calories in the areas that were most hit by the drought. Conversely, prices of root crops and pulses increased. However, given the large importance attached to cereal consumption, the overall real food consumption basket price has declined compared to two years earlier. In particular, the decline in the cost of cereals in the food basket was estimated at 11.2 percent at the national level. However, the overall declines were lower in drought-affected (decline of 8 percent) than in non-drought affected areas (decline of 14 percent), indicating the adverse effect of failed harvests in the former areas. Considering crop and livestock prices jointly reveals that livestock-cereal terms of trade declined in the worst affected areas, mainly because livestock prices declined faster than cereal prices in such areas. In contrast, the livestock-cereal terms of trade considerably improved in areas less affected by the drought. The fluctuating behavior of cereal prices since January 2015 strikingly contrasts with the situation during the major drought of 1997/98. During that period, cereal production declined by 25 percent compared to the year before, with significant simultaneous real price increases of between 15 and 45 percent.

× An emerging body of literature shows how low diversity in diets is associated with increased risk of chronic undernutrition and micro-nutrient deficiencies in young children. The latest available Demographic and Health Survey data for Ethiopia reveals unusually large differences in children's dietary diversity between rural and urban areas. Applying recently developed non-linear decomposition methods, this large rural-urban gap in dietary diversity can almost entirely be explained by differences in household wealth, parental education, and access to health services between rural and urban areas.

× Ethiopia’s economy is rapidly transforming. However, the extent to which this is affecting off-farm income and labor markets in rural areas is not well understood. Based on a large-scale household survey in high potential agricultural areas, we find that total off-farm income (defined as wage and enterprise income) makes up 18 percent of total rural income. Wage income in both the agricultural and non-agricultural sectors accounts for 10 percent of total household income, equating in importance to livestock income. We show off-farm income and wage income to be relatively more important for the poor and female and youth-headed households. We further find that real rural wages increased by 54 percent over the last decade, mostly driven by high agricultural growth. While this wage increase is good news for the poor, it also induces adjustments in agricultural production practices, including increased adoption of labor-substituting technologies such as herbicides and mechanization. However, it also relaxes liquidity constraints in the off-season for some households, consequently leading to higher productivity.

× Improved technologies are increasingly promoted to farmers in sub-Saharan-African countries to address low agricultural productivity in their staple crops. There is, however, a lack of evidence on how adoption affects farmers’ labor use and profitability at the farm level, as well as the importance gender roles play, all essential drivers for the successful up-scaling of the use of the improved technologies. This paper analyses the labor and profitability impact of the recently introduced row planting technology in teff production in Ethiopia. Based on agronomic evidence in experimental settings, the Government of Ethiopia has focused extension efforts on promoting the widespread uptake of row planting to address low teff yields, replacing the traditional broadcasting method of plant teff. Using an innovative Randomized Controlled Trial set-up, we show that the implementation of row planting at the farm level significantly increases total labor use, but not teff yields, relative to broadcast planting, resulting in a substantial drop in labor productivity when adopting row planting. Moreover, the implementation of row planting has important consequences for inter- and intra-household labor allocation, with relatively more use of non-family labor. The adoption of row planting was further found not to be profitable for farmers in the first year of the promotion campaign, seemingly explaining the limited success in up-scaling the adoption of the technology by farmers in the second year of the program.

× Due to the rapid growth of cities in Africa, many more farmers are now living in rural hinterlands in relatively close proximity to cities where many provide food to urban residents. However, empirical evidence on how urbanization affects these farmers is scarce. To fill this gap, this paper explores the relationship between proximity to a city and the production behavior of rural staple crop producers. In particular, we analyze data from teff producing farmers in major producing areas around Addis Ababa, the Ethiopian capital. We find that farmers located closer to Addis Ababa face higher wages and land rental prices, and because they receive higher teff prices they have better incentives to intensify production. Moreover, we observe that modern input use, land and labor productivity, and profitability in teff production improve with urban proximity. This urban proximity has a strong and significant effect on these aspects of teff production, possibly related to the use of more formal factor markets, lower transaction costs in crop production and marketing, and better access to information. In contrast, we do not find a strong and positive relationship between rural population density increases and agricultural transformation – increased population density seems to lead to immiserizing effects in these settings. Our results show that urban proximity should be considered as an important determinant of the process of agricultural intensification and transformation in developing countries.

× Based on a unique large-scale data set on teff production and marketing, Ethiopia’s most important cash crop, we study post-harvest losses in rural-urban value chains, specifically between producers and urban retailers in the capital, Addis Ababa. We analyze the structure of the value chain and rely on self-reported losses by different value chain agents (farmers, wholesale traders, and retailers). We estimate that post-harvest losses in the most prevalent pathway in the rural-urban value chain, amount to between 2.2 and 3.3 percent of total harvested quantities. The variation in this figure depends on the storage facilities used and on assumed losses during transport at the farm. These losses are significantly lower than is commonly assumed for staple foods, possibly because of the rather good storage characteristics of teff due to its low moisture content. These findings, nonetheless, point to the need to gather further solid evidence on post-harvest losses in staple foods in these settings to ensure appropriate policies and investments

× We use qualitative and quantitative information from a number of datasets to study the adoption patterns and labor productivity impacts of herbicide use in Ethiopia. We find a four-fold increase in the value of herbicides imported into Ethiopia over the last decade, primarily by the private-sector. Adoption of herbicides by smallholders has grown rapidly over this period, with the application of herbicides on cereals doubling to more than a quarter of the area under cereals between 2004 and 2014. Relying on unique data from a large-scale survey of producers of teff, the most widely grown cereal in Ethiopia, we find significant positive labor productivity effects of herbicide use of between 9 and 18 percent. We show that the adoption of herbicides is strongly related to proximity to urban centers, levels of local rural wages, and access to markets. All these factors have changed significantly over the last decade in Ethiopia, explaining the rapid take-off in herbicide adoption. The significant increase in herbicide use in Ethiopia has important implications for rural labor markets, potential environmental and health considerations, and capacity development for the design and effective implementation of regulatory policies on herbicides.

× One of the key questions in food policy debates in the last decades has been the role of cash cropping for achieving food security in low income countries. We revisit this question in the context of smallholder coffee production in Ethiopia. Using unique data collected by the authors on about 1,600 coffee farmers in the country, we find that coffee income improves food security, even after controlling for total income and other factors and after addressing the endogeneity of coffee income. Further analysis suggests that the pathway for achieving this improved food security is linked to being better able to smooth consumption across agricultural seasons. In contrast with food crops, coffee sales take place almost throughout the whole year, providing farmers with cash income also during the lean season.

× Given the importance of agriculture in developing economies, food processing industries often dominate the industrial sector when considering employment and value addition in these settings. For example, it is estimated that the food processing industry in Ethiopia employs 1 million people, around 2 percent of the economically active population. However, the way this food processing industry is changing and how it functions is little understood. Based on a unique survey, we study the case of markets in urban Ethiopia for commercial ready-to-eat enjera, the traditional staple pancake of the country. We find that commercial enjera markets are quickly growing, employing more than 100,000 people in urban Ethiopia. Moreover, enjera is now being prepared by mixing flour from locally produced teff with that of imported rice, thus absorbing an important part of the rapidly growing rice imports (almost 200 million USD in 2015) in the country, and leading to higher profits for those enterprises engaged in this type of mixing. Increasing numbers of enjera-making enterprises (EMEs) – which mostly employ women – are emerging. Further, we note upscaling by those enjera-making enterprises that supply the growing urban food service sector. Larger enjera-making companies have better quality, different procurement mechanisms and technologies, and higher value-added. These findings are important for the policy debates in Ethiopia on food systems transformation, employment and job creation, and international trade.

× Expanding and extending an earlier assessment (ESSP Working Paper 88, April 2016), we analyze the evolution of crop and livestock producer prices and wages of unskilled laborers in Ethiopia between January 2014 and June 2016 to evaluate the effect of El Niño triggered droughts – which started in 2015 – that massively impacted parts of the country. The analyses reveal no evidence of widespread adverse price effects of the drought in cereal and labor markets. Real prices of major cereals were lower in the middle of 2016 compared to two years earlier, especially for maize, sorghum, and wheat – the crops that are the major source of calories in areas that were most hit by the drought. The decline in the cost of cereals in the food basket in June 2016 compared to two years earlier was estimated at 12.6 percent at the national level. Moreover, this decline in cereal costs was highest in areas most affected by the drought, possibly indicating the effect of major cereal imports and food aid directed to these areas. Considering crop and livestock prices jointly, the analysis reveals that livestock-cereal terms of trade improved. This is mainly because, although livestock prices declined during this period – as is usually seen in droughts, this decline was less than the decline in prices of cereals in such areas. The fluctuating behavior of cereal prices since January 2015 strikingly contrasts with the El Niño triggered major drought during 1997/98 in Ethiopia. During that period, cereal production declined by 25 percent compared to the year before, with significant increases in real price of cereals, ranging between 15 and 45 percent. In contrast, in 2016 real cereal prices declined, which appears consistent with the relatively larger cereal imports and lower impacts of the drought on national cereal production in 2015/16.

× This paper examines labor diversification in Ethiopia, focusing on youth, and explores current conditions that youth face in both the agricultural and non-farm labor markets. Using data from the Ethiopia Socioeconomic Survey (ESS) and the National Labor Force Survey (NLFS), we explore current trends in labor diversification, along with youth non-farm engagement in rural and small towns. We find that youth (ages 25 to 34 years) have a greater probability of working in non-farm enterprises compared to mature individuals (age 35-64). However, wage labor opportunities remain scant in rural Ethiopia. The majority of individuals working in non-farm employment are engaged in small-scale trade activities.

× Traditional food marketing systems in developing countries are often not trusted. In consequence, policy makers frequently try to regulate them and modern market arrangements increasingly are emerging to address some of their presumed deficiencies. However, it is unclear how trustworthy these markets actually are and if and to what extent regulation and modernization affects market governance. In this paper we look at the case of coffee in urban settings in Ethiopia to test trustworthiness along three dimensions of trade transactions - weights, quality, and the presence of illegal trade. We find that traders are relatively trustworthy on observable quality characteristics and weights.

× Using child-level panel data from rural areas of Ethiopia, this paper analyzes effects of both economic and non-economic shocks on child cognition skills measured after the early childhood age window.

× The paper revisits seasonality by assessing how the quantity and quality of diets vary across agricultural seasons in rural and urban Ethiopia. Using unique nationally representative household level data for each month over one calendar year, we document seasonal fluctuations in household diets in terms of both the quantity of calories consumed and the number of different food groups consumed. Households in both rural and urban areas consume less calories in the lean season, but interestingly, due to changes in the composition of diets, the diet diversity score increases towards the end of the lean season.

× Cereal production has exhibited unprecedented growth in Ethiopia, leading to important welfare improvements in the country. However, it is not well understood what the drivers have been of this growth and how it can be sustained. In particular, there is a lack of evidence on the contribution of improvements in productivity to growth in yields. Moreover, doubts exist on whether it is possible to sustain such growth on declining landholdings. We study cereal production using a unique large-scale survey of households and analyze productivity is-sues using stochastic frontier and data envelopment analyses, two conceptually dissimilar methods. Production frontier estimates indicate that modern inputs contribute significantly to improvements in yields. The two analytical methods used indicate that an average cereal producing household is less than half as efficient as optimally producing households, and, consequently, there is considerable opportunity for additional growth in cereal production in Ethiopia.

× In this paper, we look at the coffee sector in Ethiopia and analyze changes and their drivers upstream in the value chain. In this study we focus on three main research questions. First, we study changes in coffee production practices over the last decade and then analyze how these production practices affect coffee productivity. Second, we document changes in harvest, post-harvest, marketing, and processing activities, and analyze their links with improved quality, prices, and incomes of producers. Third, we look at drivers of and constraints to change and transformation at the level of the coffee producer. For the analysis, we rely on a unique recently collected and representative large-scale survey of coffee producers and processors. To our knowledge, no other study comprising such breadth in the upstream sector has been done recently in Ethiopia, or elsewhere.1

× We estimate the impact of improved market access on household well-being and nutrition using a quasi-experimental setting in Ethiopia. We find that households in remote areas consume substantially less than households nearer to markets, they are more food insecure, and their school enrollment rates are lower. Although their diets are also less diverse, we find no significant differences in anthropometric measures. Part of these welfare differences can be attributed to lower household agricultural production in remote areas. But agricultural production differences alone do not account for all of the differences in household consumption levels for remote households. An additional contributing factor is the deteriorating terms of trade for remote households that negatively affects both the size of the agricultural surplus that these households market and the quantity of food items that they purchase. Reducing transaction costs associated with poor rural infrastructure can pay off important dividends as it can facilitate households’ abilities to transform marketed surpluses into consumption goods and into healthier, more diverse diets.

× We study the dynamics of the supply response of smallholder grain producers to changes in crop prices and costs of production in Ethiopia. We develop an intertemporal acreage demand allocation model of a representative household under a rational expectations hypothesis. An estimable acreage demand equation is derived and estimated for teff, an important staple grain in Ethiopia. We apply systems and linear dynamic panel data models to a data set covering a time period marked with remarkable agricultural and macroeconomic growth and smallholder-focused economic policies. The results indicate that teff acreage demand increases faster than permanent increases in real teff prices, and it rises by a third of temporary price increases. Moreover, teff acreage demand declines with increases in the opportunity cost of producing teff.

× A large proportion of Ethiopians derive their livelihood from smallholder agriculture. This has provided the impetus for the smallholder agriculture focused policies that have guided agricultural development efforts in Ethiopia over the past two decades. This work studies smallholder teff producers. Teff is an important crop in terms of cultivated area, share of food expenditure, and contribution to gross domestic product. Despite the remarkable growth in teff production in the last decade, the drivers of this growth are not well understood. In particular, there is a lack of evidence on the contribution of improvements in productivity to this growth and the link between farm size and productivity. More-over, doubts exist on whether it is possible to sustain such growth on landholdings that are declining in size. This study employs data envelopment analysis on a recently collected large-scale farm household survey dataset to measure and explain the relative productivity and efficiency of smallholder teff producers.

× Intra-household resource allocation has a considerable role to play in nutritional status in developing countries. Maternal and children’s dietary diversity are linked, not only with the circumstances of the household in general, but also with the status of women in particular. The extent to which women have access to and control over re-sources largely determines the kind of care they provide for their children and for the rest of the household. As recognized by the National Nutrition Program, women’s lack of control over household resources, time, knowledge, and social support networks constitutes a major barrier to improving poor nutritional outcomes in Ethi-opia. Using household survey data from 2013, we investigate the impact of women’s empowerment in agriculture on the nutrition outcomes of children and women. The data were collected in five regions of the country from more than 7,000 households in 84 woredas. We use multivariate regression methods and instrumental variable tech-niques to establish the relationship between women’s empowerment and the dietary diversity of women and chil-dren. The results indicate that all of the women’s empowerment indicators used are positively related to better die-tary diversity for both children and women. As women’s empowerment leads to improvements in children’s and women’s dietary diversity, it follows that interventions which increase women’s empowerment contribute to im-proving child nutrition as well as their own well-being.

× Ethiopia’s agricultural sector has recorded remarkable rapid growth in the last decade. This paper documents aspects of this growth process. Over the last decade, there have been significant increases - more than a doubling - in the use of modern inputs, such as chemical fertilizers and improved seeds, explaining part of that growth. However, there was also significant land expansion, increased labor use, and Total Factor Productivity (TFP) growth, estimated at 2.3 percent per year. The expansion in modern input use appears to have been driven by high government expenditures on the agricultural sector, including agricultural extension, but also by an improved road network, higher rural education levels, and favorable international and local price incentives.

× This analysis utilizes recent hydrological and meteorological data collected from the Mizewa watershed in order to better understand the physical impact of SLWM investments. The effectiveness of the simulated conservation practices (terraces, bunds, and residue management) are evaluated using the Soil and Water Assessment Tool (SWAT) model taking into account investment decisions on different terrain types.

× In rural economies encumbered by significant market imperfections, farming decisions may partly be motivated by nutritional considerations, in addition to income and risk factors. These imperfections create the potential for farm assets to have direct dietary impacts on nutrition in addition to any indirect effects via income. We test this hypothesis for the dairy sector in rural Ethiopia, a context in which markets are very thin, own-consumption shares are very high, and milk is an important source of animal-based proteins and micronutrients for young children

× Taking advantage of a unique quasi-experi-mental survey design, this study analyzes the productivity impacts of the Ethiopian land certification program by identify-ing how the investment effects (technological gains) would measure up against the benefits from any improvements in input use intensity (technical efficiency). For this purpose, we adopted a data envelopment analysis-based Malmquist-type productivity index to decompose productivity differences into (1) within-group farm efficiency differences, reflecting the technical efficiency effect, and (2) differences in the group production frontier, reflecting the long-term investment (technological) effects. The results show that farms without a land use certificate are, on aggregate, less productive than those with formalized use rights.

× This study analyzes the perceptions, impacts, and rewards of farmers who adopted row planting for the production of teff as a result of being exposed to a technology promotion campaign for row planting of teff in the Oromia region of Ethiopia.

× We study the structure and performance of the coffee export sector in Ethiopia, Africa’s most important coffee producer, over the period 2003 to 2013. We find an evolving policy environment leading to structural changes in the export sector, including an elimination of vertical integration for most exporters. Ethiopia’s coffee export earn-ings improved dramatically over this period, i.e. a four-fold real increase. This has mostly been due to increases in international market prices. Quality improved only slightly over time, but the quantity exported increased by 50 percent, seemingly explained by increased domestic supplies as well as reduced local consumption. To further improve export performance, investments to increase the quantities produced and to improve quality are needed, including an increase in washing, certification, and traceability, as these characteristics are shown to be associ-ated with significant quality premiums in international markets.

× Teff (Eragrostis tef), has been cultivated and used for human consumption in Ethiopia for centuries. However, teff’s global use for human consumption has been restrained partly due to limited knowledge about its nutrient composition and the processing challenges faced in making teff-based food products. Over the past decade, the recognition that teff is gluten-free has raised global interest. Consequently, literature on the nutritional composition, processing quality, and health benefits of teff has grown considerably. The existing literature suggests that teff is composed of complex carbohydrates with slowly digestible starch. Teff has a similar protein content to other more common cereals like wheat, but is relatively richer than other cereals in the essential amino acid lysine. Teff is also a good source of essential fatty acids, fiber, minerals (especially calcium and iron), and phytochemicals such as polyphenols and phytates.

× We investigate the role of an indigenous social network in Ethiopia, the iddir, in facilitating factor market transactions among smallholder farmers. Using detailed longitudinal household survey data and employing a difference-in-differences approach, we find that iddir membership improves households’ access to factor markets.

× We study the relationship between pre-school children’s food consumption and household agricultural production. Using a large household survey from rural Ethiopia, we find that increasing household production diversity leads to considerable improvements in children’s diet diversity. However, we also document how this non-separability of consumption and production does not hold for households that have access to food markets. These findings imply that nutrition-sensitive agricultural interventions that push for market-integration are likely to be more effective in reducing undernutrition than those promoting production diversity.

× This report uses two rounds of the Ethiopian Demographic Health Survey (EDHS) to statistically analyze patterns and trends in undernutrition (child growth) in Ethiopia over 2000 to 2011. Ethiopia remains one of the most undernourished populations in the world. In 2000 over half of Ethiopian preschool children were stunted (height for age z-scores (HAZ) of -2 standard deviations or less) and almost a third were severely stunted (HAZ ≤ -3.0). However, progress against child undernutrition over this period has been solid, with stunting prevalence reduced by 1.4 percent points per year between 2001 and 2011, although progress slowed to 1.0 point per year between 2011 and 2014.

× Voluntary Sustainability Standards (VSS) are rapidly increasing in global value chains. While consumers, mostly in developed countries, are willing to pay significant premiums for such standards, it is not well understood how effectively these incentives are transmitted to producing countries. We study VSS in Ethiopia’s coffee sector, the country’s most important export commodity, using a unique census of transaction data at the export level and large-scale data at the production level. We find that transmission of the export quality premiums to coffee pro-ducers is limited, with only one-third of this premium being passed on. Moreover, as quality premiums are small and average production levels in these settings are low, these premiums would only lead to an increased income for coffee farmers of 20 USD per year even with a perfect transmission scenario, and therefore would have little effect on the welfare of the average coffee farmer.

× We study food retail in Addis Ababa, one of the biggest cities in Africa. Based on a primary survey of food retail outlets selling cereals, fruits and vegetables, and processed foods, we note high variation in quality and prices in the city and an increasing differentiation in food retail markets in recent years. On the high-end, we see the emergence of domestic (as foreign direct investment in retail is not allowed) private modern retail outlets that deliver high quality products at high prices and that focus mostly on wealthier areas and consumers. At the other side, we see cooperative retail that delivers food at controlled and subsidized prices. The latter shops are characterized by typical price control policy problems, reflected in regular lack of supplies and queuing. It seems that food retail markets would be improved by stimulating the emergence of a competitive private retail sector, the abolishment of price controls, and targeted subsidies or safety nets for the poor.

× Based on unique data from a quasi-experimental setting in northwestern Ethiopia, this study examines the “last mile(s)”—from the input distribution center to the farmer—in the chemical fertilizer and improved seed distribution system. We find that increasing transaction and transportation costs over a 35 kilometer distance, along a route mainly accessible to foot traffic only, lead to a 50 percent increase of the prices of chemical fertilizer and to a 75 percent reduction in its use.

× We study the value chain of teff, Ethiopia’s most important staple food crop by area and value. Based on large-scale primary surveys, we find significant changes in the last decade. First, there is increasing adoption of modern inputs (chemical fertilizer, improved varieties, and herbicides) by farmers, especially by those living close to urban centers. Second, quality demands are rising and there are important shifts from the cheap red varieties to the more expensive white ones. Third, we see an increasing willingness-to-pay for convenience in urban areas, as illustrated by the emergence of one-stop retail shops as well as by a sizable food service industry. Fourth, the share of rural–urban marketing, urban distribution, and milling margins in final retail prices is declining, indicating improved marketing efficiency over time.

× In this paper, we use a unique panel dataset of tracked migrants and non-migrants that originate from 18 villages in Ethiopia to examine the welfare impacts of internal migration. Using a number of techniques and various objective and subjective measures, we measure the impacts of migration on the welfare of migrants versus non-migrants. We find large gains to objective welfare measures such as consumption, around 110 percent. Gains are larger among male and urban migrants. Howev-er, we also find that relative to household heads subjective welfare measures are similar for migrants. The large welfare gains to migration suggest that barriers exist, even within countries such as Ethiopia, against the free movement of people to places where they would be objectively better off.

× This study looks at the extent of and changes in spatial integration of cereal markets in Ethiopia over the last ten years. Based on weekly wholesale prices of the Ethiopian Grain Trade Enterprise (EGTE) and covering all major cereals in the country (three major types of teff [i.e., white, mixed, and red], white wheat, maize, and white sorghum), spatial integration of Addis Ababa with the most important regional wholesale markets in the country is analyzed. The estimation results indicate market integration has considerably improved over the last ten years for teff, wheat, and maize with faster price adjustments and lower estimated transaction costs. On the other hand, for white sorghum integration of regional markets with Addis Ababa did not improve over the last decade.

× This paper uses a rich dataset from a survey undertaken by the Ethiopian Economic Association (EEA) and the Interna-tional Food Policy Research Institute (IFPRI) in 2009 in eight woredas in seven regions of Ethiopia with a sample of 1,117 households and 73 agricultural cooperatives. Using descriptive statistics and econometric analysis under a critical gender lens, the paper identifies which cooperative, household, and individual level characteristics influence women’s participation in agricultural cooperatives. The findings suggest that a major barrier to women’s access are gender biases within households, communities, and cooperatives themselves that favor educated male household heads and land owners over resource-poor women.

× This paper explores the race between these two countervailing forces, with the goal of informing two important policy questions. First, how do rural Ethiopians adapt to land constraints? And second, do land constraints significantly influence welfare outcomes in rural Ethiopia? To answer these questions we use a recent household survey of high-potential areas. We first show that farm sizes are generally very small in the Ethiopian highlands and declining over time, with young rural households facing particularly severe land constraints. We then ask whether smaller and declining farm sizes are inducing agricultural intensification, and if so, how. We find strong evidence in favor of the Boserupian hypothesis that land-constrained villages typically use significantly more purchased input costs per hectare and more family labor, and achieve higher maize and teff yields and high gross income per hectare.

× This study uses five rounds of household panel data from Tigray, Ethiopia, collected in the period 1998–2010 to assess the impacts of a land registration and certification program that aimed to strengthen tenure security and how it has contributed to increased food availability and, thus, food security in this food-deficit region. Results show that land certification appears to have contributed to enhanced calorie availability (calorie intake), and more so for female-headed households, either through enhanced land rental market participation or increased investment and productivity on owner-operated land. Results also show that members of households that accessed additional land through the land rental market had a significantly higher body mass index.

× Researchers and policymakers increasingly recognize that the livestock sector supports the livelihoods of a large proportion of rural households in Africa and may have an important role to play in rural poverty reduction strategies. In order to develop this insight, economywide models should capture both the biological, dynamic relationships between the stocks and flows of livestock and the economic linkages between the sector and the rest of the economy. We extend an existing dynamic recursive general equilibrium model for the Ethiopian economy to better model the livestock sector. A separate herd dynamics module enables us to specify stock–flow relationship, distinguishing between the capital role of livestock and the flow of livestock products. We also improve the underlying system of economic accounts to better capture draft power and breeding stocks. We use this model to simulate separate, realistic Total Factor Productivity (TFP) shocks to three agricultural subsectors—cereals, cash crops, and livestock—and compare them with a baseline scenario replicating Ethiopia’s 1998 to 2007 productivity trends. In doing so, we follow Dorosh and Thurlow (2009) who have examined CAADP productivity scenarios.

× Fertility rates are important determinants of overall population growth and demographic transitions from high to low age dependency ratios. These in turn have important consequences for economic growth, poverty reduction, and improved health and nutrition outcomes. Ethiopia currently has one of the highest fertility rates in the world, although there are marked differences between rural and urban fertility rates. This paper explores the drivers of rural and urban fertility rates, including systematic tests of differences in key determinants. These further allow us to project fertility rates into the future based on alternative urbanization, economic growth, and education scenarios. Finally, we link these alternative projections with existing estimates of the benefits of fertility reduction on economic growth, nutrition, and poverty reduction.

× Recognition that policies aimed at ‘getting prices right’ in less-developed countries have not been successful due to incomplete markets has spurred a new wave of reforms aimed instead at ‘getting markets and institutions right’. Previous studies of this policy shift have documented the potentially crucial role played by the brokerage institution in crop commercialization. However, few have investigated the factors that influence wholesalers’ decisions regarding their use of brokers. Results from a primary survey with traders show that brokerage services are particularly valuable for wholesalers who lack social capital and storage capacity, who are based in areas with low population density, and who trade at a distance, especially when roads are not asphalt. Buyers in drought-prone domains rely on brokers more for their long-distance purchases, while sellers in moisture-reliable domains employ brokers more for their long-distance sales. These results provide useful indications regarding where and how the recent formalization of brokerage functions through the Ethiopian Commodity Exchange (ECX) could be most beneficial for the functioning of Ethiopian agricultural markets.

× Ethiopia is known to have one of the largest livestock populations in the world. Yet the overall contribution of livestock products to households’ daily consumption is very limited. The average per capita annual consumption of meat and dairy products are just 4.6 kg and 16.7 kg, respectively. Given recent growth in income, there is potential for growth in the demand for livestock products. This study attempts to estimate elasticities of livestock products. We use the Household Income, Consumption, and Expenditure Survey (HICES), the Welfare Monitoring Survey (WMS), and Retail Prices of Goods and Services of 2004/05 data sets of the Ethiopian Central Statistical Agency (CSA).

× We study cereal wholesale markets in Ethiopia in the last decade (2001–2011), a period that has been characterized by important local changes affecting agricultural markets, including strong economic growth, urbanization, improved road and communication infrastructure, an increase in importance of cooperatives and commercial farms, and a doubling in commercial surplus. We find that these changes are associated with significant declines in real price differences between supplying and receiving markets, in cereal milling margins, as well as in retail margins. Important improvements have thus happened in the last decade in Ethiopia’s food marketing system, traditionally identified as a major cause of food security problems in the country.

× On the back of both a global food crisis and various domestic factors, Ethiopia has experienced one of the world’s fastest rates of food inflation in recent years. Yet the lack of high frequency survey data means that very little is known about the welfare impacts of these price changes. This study attempts to fill that knowledge gap using a unique monthly series of casual wages from 119 locations in both Ethiopian cities and rural towns. We use this data for two types of analysis. First, we construct a set of “poor person’s price indices” which we then use to deflate the daily laborer wage series in an effort to gauge the welfare trends among the urban poor. Second, we conduct formal econometric tests of whether changes in nominal wages respond to changes in food and non-food prices. We find alarming results. The disposable income of daily laborer’s declined sharply as food prices soared in 2007–2008, and there is neither descriptive nor econometric evidence that wages substantially adjust to higher food prices, except in the long run.

× In recent years, microfinance institutions are seen as beacons of hope to help eradicate poverty through, among others, providing credit to poor rural households. Availability of small but repeated loans is, in the long-term, expected to impact on poverty. However, decades after the introduction of microfinance institutions into many rural areas, there are still questions as to what extent such long-term benefits are realized. This is because evaluating the long-term impact of microfinance provision on household welfare is difficult due to difficulties in controlling for heterogeneities in the borrower pool and subsequent borrowing dynamics.

× There is growing interest in the role of policy reforms to promote gender equality and empower women, two key objectives of development policy. From a policy perspective, it would be ideal for reforms undertaken in different policy areas to be consistent, so that they reinforce each other in improving gender equity. We use data from the Ethiopian Rural Household Survey (ERHS) to show how two seemingly unrelated reforms—community-based land registration, undertaken since 2003, and changes in the Family Code implemented in 2000—may have created conditions for mutually reinforcing gender-sensitive reforms. Our analysis confirms previous studies’ findings of gender gaps in awareness and information about the land registration process. Male-headed households are, on average, more likely to have heard about the process, to have attended meetings (and a greater number of meetings), and to have received some written material with information about the process. Having female members in the Land Administration Committee (LAC) has a positive impact on attendance at meetings relating to land registration. In our analysis of the changes in the family law, we find that awareness about the land registration process is positively correlated with the shift in perceptions toward equal division of land and livestock upon divorce. The presence of female members in the LAC also has a positive effect on the shift in perceptions toward a more equal division of assets upon divorce. Taken together, these findings suggest that the land registration process and the reform of the Family Code may have mutually reinforcing effects on women’s rights and welfare. While this example is obviously rooted in the Ethiopian context, it raises the possibility that similar reform efforts may be complementary in other countries as well.