What Are the Domestic and Regional Impacts From Ethiopia's Policy on the Export Ban of Teff?

Sriram Sankaranarayanan,Benjamin Zaitchik,Jess Carney,Yalemzewd Nigussie,Sauleh Siddiqui,Befikadu Esayas,Belay Simane,Ying Zhang

doi:10.3389/fsufs.2020.00004

Abstract

In response to global food price volatility and trends towards increased global food demand, Ethiopian policy makers were forced to adopt strategies such as restricting food exports in order to protect domestic food security. However, these policies can have a disproportionate regional impact on domestic markets and can result in lost revenue from exports. For this reason, they have been criticized as inefficient from the perspective of economic development. Here, we examine the sub-national dynamics of a ban on food exports. We do this for the case of Ethiopia’s ban on exports of teff, a staple grain in the country that has increasing global demand. We assess the impact of the ban and of proposed policies to relax the ban, across regions within the country and for various market actors along the teff value chain. Using a partial-equilibrium model developed with a detailed modeling of the agro-economic features of the country, we analyze the direct impacts on export revenue, producers’ profits, transport patterns, and consumption across the disaggregated regions in Ethiopia due to changes to its teff export policy. In particular, we show that the immediate benefit due to significant increase in international revenue due to large teff export would be enjoyed primarily by food distributors and storage operators while the farmers’ profits increase only negligibly. Simulations also indicate that lifting the export ban would be expected to have significant impacts on domestic transportation of teff between regions (for example from Mekelle to Werder), and to reduce consumption of teff significantly in some regions (for example, Semera, Jijiga), an effect due to the lack of competition in the transportation sector. The granularity of the model helps us capture the possibility of such lopsided benefits which were not captured in earlier studies.

Highlights

Ethiopia is an East African country with a population of about 105 million (Central Intelligence Agency, 2015; Central Statistical Agency of Ethiopia, 2016) and a GDP of 72 billion US dollars (Central Intelligence Agency, 2015)
We address the direct impacts in regional teff markets, transport patterns, and market actors’ profits across disaggregated regions in Ethiopia due to changes in the teff export ban policy
We will compare the regional outcomes within Ethiopia associated with different market actors under different scenarios of governmental policies and changes in global demand

Summary

Introduction

Ethiopia is an East African country with a population of about 105 million (Central Intelligence Agency, 2015; Central Statistical Agency of Ethiopia, 2016) and a GDP of 72 billion US dollars (Central Intelligence Agency, 2015). Resulting crop and livestock losses led the government of Ethiopia to call for emergency assistance to over 18 million people, via a combination of domestic and international relief efforts (USAID, 2016). These impacts are consistent with Ethiopia’s past sensitivity to climate shocks, which has motivated a number of studies on the agricultural impacts of climate variability in Ethiopia (Mccornick et al, 2008; Di Falco and Veronesi, 2012; Iizumi et al, 2014; Bakker et al, 2018) and other detailed strategies to combat food shortage (Wossen et al, 2016; Di Falco and Zoupanidou, 2017)

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Discussion

Conclusion