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

Year 2012, Volume: 4 Issue: 1, 11 - 20, 01.06.2012

Abebe Ejigu Alemu Erik Mathijs Miet Maertens Jozef Deckers Kidanemariam G.egziabher Hans Bauer Kindeya G.hiwot

Abstract

Closer coordination has improved smallholder access to resources, technology
and markets. The absence of contracts has led the coordination of the local food
chains in rural Ethiopia to remain poorly functioning. Despite the huge agrifood
potential in Ethiopia, the loose coordination among the actors resulted in failure
of the supply chain to offer economic incentives to producers and to deliver
quality products to processors/traders. This study aims at examining key
determinants for farmers’ participation in contracts or cooperatives. A structured
survey was administered to 827 farmers in Tigray, Ethiopia. Household’s land
size, livestock, product characteristics, need of credit for inputs and technology
and transaction costs were found to influence participation. Based on our findings
we suggest policy makers to recognize the role contracts play in the supply of
credits, inputs and improving market conditions in rural Ethiopia.

Keywords

Vertical coordination, agrifood, supply chain, farmers.

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