An Economic Evaluation of Food Grain Marketing and Pricing Policies in Ethiopia.

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Food grain marketing and pricing system in the pre- revolution period were analysed in terms of function performed , influence over function and power relations. Comprehensive analysis of addis Abeba, found grain wholesale prices has also been made . the results confirm the monopolistic nature of the system than its competitiveness. The system was incapable of closing the seasonal and temporal gaps in production and consumption . it did not motivate producers through price incentives and market infrastructures. Far reaching institutional changes in the national food grain marketing and pricing system have taken place after the 1974 revolution . The creating for parastatal agency. The agricultural marketing Corporation (AMC) increasing role of service cooperative and “ kebele ‘’ societies in procurement and distribution of food grain are elements of the new system in food grain marketing. The private sector also operate in parallel with the state and mass organizations although it has been subjected to strict control. The elements of the new system have been analyzed by comparing outcomes with declared objectives particularly for the state sector. The results suggest that thre are ample rooms for improvement in the operation of the system before it yields positive results on production . How the new marketing system influence production at the farm level has been analyzed using farm household level data obtained from sample survey. The analysis and results from the data have shown that the supply of consumer goods and non farm inputs, credit relative price of out put to input costs, storage and packing at farm levels, the capacity to remove produce in order to avoid congestion and prompt cost payment for producers upon grain delivery needs improvement if the system has to create positive inducement as producers . producers are also responsive to prices and marketing changes. Based on the assumption of responsiveness of producers prices elasticity of out put has been estimated . the elasticity frame work has been combined with the marshallian economic surplus theory of standard partial equilibrium to study the welfare effects of the prevailing pricing and marketing system . The results show that an increase in production prices will increases demotic production. Besides increasing production, it also conserve the public financial resources reduces subsidy )save foreign exchange and plods the agriculture sector at a pace faster than its moves today.



An Economic Evaluation of Food Grain, Marketing and Pricing Policies in Ethiopia