Dynamics in teff value chains

1. ETHIOPIAN DEVELOPMENT
RESEARCH INSTITUTE
1
Dynamics in teff value chains
Bart Minten, Seneshaw Tamru, Ermias Engida and Tadesse Kuma
IFPRI ESSP
Ethiopian Economics Association
16th International Conference on the Ethiopian Economy
July 19-21, 2018
Addis Ababa

2. 2
1. Introduction
• Economic transformation usually seen as shift from
agricultural activities towards services and
manufacturing; Few empirical studies around changes
within the agricultural sector in this process
• More in particular not clear to what extent staple food
value chains are transforming in Africa, often because of
a lack of good primary data.
• Documenting this in the case of teff in Ethiopia is the
aim of this chapter.

3. 3
2. Data
• Surveys with:
- producers and communities upstream
- rural and urban wholesalers midstream
- cereal shops, mills, and cooperative retail downstream

4. 4
3. Changes upstream
• Increasing adoption of modern input over time
Unit 10 years
before
survey
At the
time of
survey
Modern inputs
Adoption of improved seed share (%) 7 36
Use of chemical fertilizer:
DAP kgs/ha 50 91
urea kgs/ha 34 64
Adoption of herbicides share (%) 32 65
Adoption of pesticides share (%) 4 13

5. 5
Heterogeneity in adoption: Fertilizer
0
.5
1
1.5
0 50 100 150
Transport costs to Addis (Birr/quintal)
DAP now DAP 10 years ago
urea now urea 10 years ago

6. 6
Heterogeneity in adoption: Herbicides0
20406080
100
0 50 100 150
Transport costs to Addis (Birr/quintal)
herbicides now herbicides 10 years ago

7. 7
Heterogeneity in adoption: Improved
seeds0
20406080
0 50 100 150
Transport costs to Addis (Birr/quintal)
Improved seeds now Improved seed 10 years ago

8. 8
3. Changes upstream
• Impact of modern inputs on teff productivity
Dep. variable =
log(quintals of output) Unit Fixed effect Random effect
Coeff. Z-value Coeff. Z-value
Improved seeds Yes=1 0.09 3.15 0.11 5.24
DAP use Log() 0.17 1.96 0.21 3.36
Urea use Log() 0.17 1.83 0.33 5.37
Herbicide use Log() 0.04 2.81 0.00 0.63
Other inputs included
Characteristics plots
included

9. 9
4. Changes mid- and downstream
• Teff retailing in Addis: 61% mills; 29% cereal shops; and
8% consumer cooperatives
• Traditionally (as seen in other towns or rural areas), mills
only did milling and households typically would:
a/ buy teff on market/cereal shop;
b/ clean teff at home;
c/ take teff to mill;
d/ prepare enjera at home
• Now they are increasingly becoming one-stop shops

10. 10
4. Changes mid- and downstream
- Competition and service delivery improving
- Food service industry sizable (20% of teff sold as prepared
enjera)

11. 11
4. Changes mid- and downstream
- Declining milling costs (ratio milling/teff price)
0
0.01
0.02
0.03
0.04
0.05
0.06
200107
200202
200209
200305
200312
200407
200502
200509
200604
200611
200706
200801
200808
200903
200910
201005
201012
201107
201202

12. 12
4. Changes mid- and downstream
- Increasing importance of white and magna teff

13. 13
5. Conclusions
Important changes in the teff value chain:
1. Modern inputs increasingly adopted, especially by these
farmers living close to urban areas, leading to higher land
productivity
2. Quality demands are on the rise, important shifts from
cheap red varieties to more expensive white ones
3. Increasing willingness to pay for convenience in urban
areas, as illustrated by the emergence of one-stop shops
4. Reduction in processing/milling costs

14. ETHIOPIAN DEVELOPMENT
RESEARCH INSTITUTE
14
5. Conclusions
Despite changes, still in early stage of agricultural
transformation:
1. Upstream: a/ Adoption of improved varieties but still
low in less connected areas; b/ Fertilizer used is below
recommended level; c/ Mechanization absent; d/ Vertical
integration and coordination absent
2. Downstream: a/ Little evidence of up-scaling; b/ Small
share of modern retail; c/ Almost no branding