Browsing by Author "Fitta, Terefe"

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    The Impact of the Export of Live Animals on the Meat Processing Firms and Foreign Exchange Earnings to the Economy of Ethiopia.
    (Addis Ababa University, 2008-07) Fitta, Terefe; Tadesse, Beyene (PhD)
    Agro-processing sector should have to grow in order to match the growing supply of agricultural products and increasing demand for processed agricultural products. Agro-processing designed for accelerating growth and poverty reduction, and the ultimate achievement of structural transformation, is the critical policy challenges in present day Ethiopia. This paper examines the impact of the Export of Live Animals on the Meat processing Firms and Foreign Exchange Earnings in terms of the value of meat processed and exported and assess the gain/loss/ against the value of the export of live animals particularly cattle, sheep and goat if processed in domestic firms. The study was originated from the hypothesis that meat processing firms operate far below their installed capacity due to supply shortage; meanwhile the country exports live animals. To this end the study data was collected from meat processing firms and the ECuA (from 1997-2007; though transactions were not regular) and NBE, and compiled on monthly bases for econometric analysis and yearly bases for descriptive analysis. Because of the time series nature of economic data, Error Correction econometric Model was used for analyses. The analyses results revealed that processing livestock (cattle, sheep, and goat) fetches more benefits as compared to exporting live animals. The analyses of the model, that is, the econometric result showed that the export of live animals significantly affected the performance of meat processing firms. Accordingly, the same amount of processed meat of heads of livestock generates more benefits over the export of the same amount of live animals and the estimated minimum net gain obtained per head is 23.21, 8.33 and 23.09 ETB for cattle, sheep and goat respectively. Despite the fact that it requires detailed examination, with the current capacity utilization alone, this preliminary study shows that the unutilized gap of meat processing firms in terms of the value is estimated to 192 million ETB per year while on average firm operate the value of about 32 million ETB per year. Thus, in addition to the low supply to which domestic firms are confronted, these results validate that the export of live animals has an impact on the meat processing firms.