The impact of COVID-19 on household income and participation in the agri-food value chain: Evidence from Ethiopia

Abstract

The effects of COVID-19 have been highly heterogeneous, crucially depending on household livelihoods. In the context of households reliant on agri-food systems, the extent of these effects significantly depends on their position within the value chain. An assessment of the COVID-19 effects along the agri-food value chain and the identification of pivotal factors influencing these outcomes are key for designing appropriate responses and targeting the population most in need should a crisis akin to COVID-19 emerge in the future. Using a longitudinal dataset from Ethiopia, composed of a pre-COVID baseline and six follow-up phone-based surveys, this paper estimates the COVID-19-induced change in household income and job participation, tracing its evolution throughout seven months after the pandemic onset. Applying both longitudinal and cross-sectional econometric models, we show that the COVID-19 shock reduced both employment and income, with increasingly negative impacts over time. Despite initial resilience in the face of restrictive measures, farming eventually emerged as the most affected segment within the agri-food value chain over the medium term. Access to formal institutions such as insurance and credit services, formal contractual arrangements, and secured land ownership title played a key role in mitigating the likelihood of income loss.