Agricultural Supply Chain Analysis During Supply Chain Disruptions: Case of Teff Commodity Supply Chain in Ethiopia in the era of COVID-19

Matiwos Ensermu Jaleta

doi:10.5539/sar.v10n3p63

Abstract

Current state agricultural supply chain analysis for essential commodities like Teff in Ethiopia is necessary to avoid supply chain disruption caused by events like COVID 19. The objective of this study is to assess the effect of COVID-19 on the agriculture and food sector. It has taken into account both qualitative and quantitative mixed approaches. The study has been conducted to analyze the resilient teff value chain across teff supply chain members from production to consumption by comparing two production areas in Ethiopia. Cross-sectional descriptive surveys at different stages of the supply chain are identified. Data collection has been made based on the purposive sampling technique. It has then, analyzed the data and reach on conclusion. The findings revealed that wealth was not accumulated by farmers to create a sustainable supply of Teff to the consumers which is not enough to respond to the demand gap created in the event of supply chain disruption. Teff value chain analysis also indicated that consumers have low price expectations of Teff regardless of its high price at the retail shop. Since March 2020 Due to COVID 19 prevalence in Ethiopia, lockdown that disrupts goods and people move from rural to urban has resulted in a sharp Teff price increase from an average of 4200 per Quintal to 5000 Birr per Quintal in just one month at the retail shop. This has significantly benefited downstream supply chain members like wholesalers and retailers by hoarding Teff supply to consumers until regulatory bodies took action on price hikes by retailers. Finally, recommendations have been forwarded among the others include: to enlarge subsidies for Ethiopian farmers to boost agricultural production, hedge farmers against price fluctuation and avail warehouses for stocking agricultural commodities to buffer against future uncertainties are the major ones that the government has to apply.

Highlights

Unexpected natural and human-made events like earthquakes, war, Coronavirus (COVID 19), are very likely to cause Supply Chain (SC) disruptions
The ability of developing countries like Ethiopia to recover quickly from shocks and the flexibility of the supply chain system; to weather variations caused by an unprecedented crisis such as COVID-19 requires developed agriculture and well-functioning supply chain members
Teff supply chain creation in Ethiopia is a long way to go even under normal course of operation than supply chain disruption like the COVID 19. This is due to agricultural supply chain structural problem created as a result of under-costing of agricultural produce like Teff, low yield per hectare, low gross profit margin at upstream supply chain member, and high profit-margin for retailers without intrinsic value addition, and high-profit margin after value addition of Teff into manufactured consumable goods

Summary

Introduction

Unexpected natural and human-made events like earthquakes, war, Coronavirus (COVID 19), are very likely to cause Supply Chain (SC) disruptions. State actors are expected to make policy decisions on what to do if the virus is detected in a country, how to make available all necessary prevention resources for personal hygiene, improve surveillance and case detection, capacitate health facilities including human resources and provide mass education and awareness building at all levels (Mirgissa & Yayehyirad, 2020). In the event of lack of buffer for uncertainty like COVID 19, agriculture commodity supply to the market can be disrupted and can cause shortage from the market side and sudden price increase on the available goods, especially essential food items, like Teff. A study made in India showed that disruption in of food supply chains due to COVID-19 induced economic shut down and resulted in product availability falls by 10% for vegetables, fruits, and edible http://sar.ccsenet.org

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