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Emerging Market and Policy Responses to Ethiopia's Grain Harvest of 1995-96

  • Political Science


Grain Marketing Research Project Ministry of Economic Development and Cooperation, Addis Ababa MARKET ANALYSIS NOTE #1 Grain Marketing Research Project Ministry of Economic Development and Cooperation July 1996 EMERGING MARKET AND POLICY RESPONSES TO ETHIOPIA'S GRAIN HARVEST OF 1995-961 SUMMARY been sufficient to restore maize prices close to Important supply management issues have country. This may have important arisen in 1995/96 in response to the bumper implications for farmer planting decisions and meher harvest. As early as October 1995, grain production in the upcoming 1996 meher concerns arose that the bumper crop could season. depress farm prices, inhibit adoption of fertilizer and improved seed currently being The major lessons from the 1995 experience aggressively promoted through government are that: extension programs, and retard the country's ability to overcome its 0.5 to 1.0 million ton � Given the size of the 1995 meher harvest, annual structural grain deficit. Government greater purchases from the market were and donors have responded with various necessary to meaningfully stabilize producer attempts to stabilize cereal prices, including prices at specified support levels. (a) a price support policy implemented by the Ethiopian Grain Trading Enterprise (EGTE) � Effectively stabilizing producer prices at since November 1995, (b) a reduction in food specified support levels would have involved aid imports by donors, and (c) donor-funded substantially greater costs than what was procurement of maize, wheat, and sorghum on actually incurred in 1996. local markets. This report provides emerging findings on the prices at desired levels would benefit from market's response in the first half of 1996 to more accurate methods to estimate marketed these efforts to stabilize cereal prices for grain output and producer price responses to farmers. The evidence to date indicates that local purchase operations. prices for teff and wheat during the first half of 1996 have be

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