cities and agricultural transformation in ethiopia
TRANSCRIPT
ETHIOPIAN DEVELOPMENT RESEARCH INSTITUTE
Cities and agricultural transformation in Ethiopia Joachim Vandercasteelen, Seneshaw Tamru, Bart Minten and Johan SwinnenIFPRI ESSP
Transformation and vulnerability in Ethiopia: New evidence to inform policy and investmentsGetfam HotelMay 27, 2016Addis Ababa
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Introduction Transformation of agriculture deemed
important but progress has been slow in Africa
Urbanization – a new factor for transformation in Africa
City dwelling in Sub-Saharan Africa increased by 160% between 1990-2014
Urban population in Africa expected to triple by 2050
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Why study this? Most research focused on changes in
crops or off-farm employment
Little evidence on impacts on staple crops, that most of the rural population makes a living from
Therefore, Does proximity to urban centers affect
farmers’ agricultural practices?
We study the case of Ethiopia and teff
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From 3.7% to 14% between 1984 and 2007
In 2012: 17% in cities
Projections World Bank (2015): 5.4% annual growth; In 2028: 30% of population in cities
1996/1997 2010/2011
Urbanization in Ethiopia
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Ethiopia’s super crop-teff
23.4% - grain area 17.1 % - grain production
Most important crop in value terms in the country: o 2.5 billion USD in 2013/14
More demanded by urban consumers Rapid growth of cities and income
growth leading to greater demand
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Methodology Stratified random sample in 2012 1,200 farmers in five major teff
production zones 38% of national teff area 42% of the commercial surplus
Urban proximity - main independent variable (ETB/quintal):
1. from the farm to the market center2. from the market center to the Addis wholesale market by truck
Non-parametric regressions Advantage: No functional form specified
What are the relationships between proximity and different outcomes of interest?
Three major outcome variables:1. Prices2. Input3. Intensification
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Prices
1020
3040
50W
age
/ day
0 50 100 150Transport cost (Birr /Qt)
Wage (Birr /day)40
060
080
010
0012
00P
rice
(Birr
/Qt)
0 50 100 150Transport cost (Birr /Qt)
Teff price (Birr /Qt)
-200
00
2000
4000
6000
8000
Birr
/ H
a/ Y
ear
0 50 100 150
Transport cost (Birr /Qt)
Land rent (Birr /Ha/year)
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Use of inputs
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Intensification
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Multi-variate regression Strong effect of urban proximity on:
Prices Use of inputs Measures of intensification (land and labor
productivity) Profits
No strong effects of population pressure
A strong direct effect (through better transaction costs, knowledge, information)
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Explaining the direct effect• Channel 1: Transaction costs
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Explaining the direct effect• Channel 2: Monetization of production factors
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Explaining the direct effect• Channel 3: Access to information and
knowledge
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What did we find? Strong positive effect of urban
proximity on: output prices, wages, land rental rates, input use, and profitability
Strong indirect effect - changing price ratios of factor and output prices
Strong direct effect -transaction costs, knowledge, information
No significant effect of rural population increases (population density increases)
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Implications1. Market access matters for rural populations
- ensuring appropriate infrastructure and low transportation costs
2. Cities - engine for agricultural transformation
- ensuring that cities can grow, e.g. stimulating rural-urban migration and improved tenure conditions.
3. Access to inputs and knowledge
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THANK YOU!