VERTICAL COORDINATION IN THE LOCAL FOOD CHAINS:EVIDENCE FROM FARMERS’ INETHIOPIA

• Main Authors: Abebe Ejigu Alemu, Erik Mathijs, Miet Maertens, Jozef Deckers, Kidanemariam G.egziabher, Hans Bauer, Kindeya G.hiwot
• Format: Article
• Language: English
• Published: Social Sciences Research Society 2012-01-01
• Series: International Journal of Economics and Finance Studies
• Online Access: http://www.sobiad.org/eJOURNALS/journal_IJEF/archieves/2012_1/abebe_ejigu.pdf

Closer coordination has improved smallholder access to resources, technologyand markets. The absence of contracts has led the coordination of the local foodchains in ruralEthiopia to remain poorly functioning. Despite the huge agrifoodpotential inEthiopia, the loose coordination among the actors resulted in failureof the supply chain to offer economic incentives to producers and to deliver quality products to processors/traders.This study aims at examining keydeterminants for farmers’ participation in contracts or cooperatives. A structuredsurvey was administered to 827 farmers inTigray,Ethiopia.Household’s landsize, livestock, product characteristics, need of credit for inputs and technologyand transaction costs were found to influence participation.Based on our findingswe suggest policy makers to recognize the role contracts play in the supply ofcredits, inputs and improving market conditions in ruralEthiopia.