Ethiopia is one of the sub-Saharan countries of Africa which liberalized their economies and developed poverty reduction strategies that underpin market-led strategies for broad-based agricultural development and economic growth. The country has successively adopted economic reform programs that aimed to open up the agricultural marketing system for active participation of the private sector. The liberalization of the Ethiopian grain economy has undergone successive adjustments such as lifting of restriction on private trade, rejection of government trading monopolies, removing of official price setting (Dadi et al. 1992; Gabre-Madhin 2001). The centralized grain marketing activities of the 1980s where pan-territorial input and output prices were determined by the central government have given way to liberalized agricultural markets. Market liberalization means input and output prices are determined by market forces. It has substantially increased participation of the private sector in grain marketing. The current policy environment attempts to promote production and marketing of high value agricultural products with a view to increase competitiveness in domestic, regional and international markets. This is because markets for agricultural products are changing rapidly with different market participants expanding rapidly in controlling the emerging market opportunities. In addition markets are changing in response to changing consumption behaviour towards high value agricultural products induced by rising per capita income, migration, urbanization and globalization.
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