ABSTRACT
The researchers combine in-person survey data collected in February 2018 with phone survey data collected in June and September 2021 to study how dairy value chains in Ethiopia have coped with the COVID-19 pandemic. Focusing on the major dairy value chain connecting farmers in North and West Shewa as well as peri-urban and urban producers in and around Addis Ababa to consumers in Addis Ababa, the researchers applied a cascading survey approach in which the researchers collected data at all levels of the value chain: dairy farmers, rural wholesalers, and urban retailers. In June and September 2021, the researchers see little evidence that the pandemic is exerting a negative effect on the dairy value chain actors. Nine percent of the dairy farmers exited the business between February 2018 and June 2021, but these exits were not caused by the pandemic. Milk yields have increased considerably between 2018 and 2021, particularly among cross-bred cow types. Meanwhile, sales patterns and sales destinations among farmers have remained similar since 2018. In 2021, farmers are processing more and the decision to process or not seems to be formed by the changes in the relative prices of liquid milk and processed dairy products. The researchers see suggestive evidence of a decline in credit availability and access to extension services. Same is true for the availability of daily workers, though not many farmers hire external help. Among farmers, by far the main concern relate to surging feed prices that increased since the onset of the pandemic and June 2021 by 80 to 100 percent. As a result, farmers report purchasing less feed and this is reducing milk yields, and thus farmer incomes. Rural traders also seem unaffected by the pandemic. The turnover among liquid milk traders is high with 36 percent of the milk wholesalers interviewed in February 2018 reported to have stopped trading dairy products by September 2021. However, only few reported that the pandemic was a factor in their decision to quit the business. The turnover among butter traders was smaller with 4 out of 30 traders quitting between February 2018 and September 2021. The researchers see no dramatic changes in procurement and sales destinations between 2018 and 2021. Traders report that the competition in their sector has increased since February 2020. Meanwhile, the availability of labor at the midstream segment of the value chain has remained the same over time. The main concern among at this segment of the value chain relates to limited supply of milk and butter from rural areas. The impact of the pandemic seems also minimal at the retail level. About 29 percent of the retail traders had quit the business since February 2018, mostly because their business was no longer profitable. Eight out of the 49 retailers that exited the sector attributed their exit, at least partly, to the pandemic. Comparison of the data collected in 2018 and 2021 reveals that the traded quantities have increased in the dairy retail sector. However, when asked to compare to the situation just before the pandemic was declared, most traders report selling less and having fewer clients now. The researchers see little change in labor use at the retail level across the survey years. Shortage of dairy coming into Addis Ababa was highlighted as the main concern among retail traders. In line with the high general inflation in Ethiopia over the past years, prices of liquid milk have increased considerably in the last three years. However, when expressed in USD terms, prices of milk have remained surprisingly stable (0.92 USD/liter in 2018 and 0.91 USD/liter in 2021). Comparing the farmgate and retail prices reveal that farm share (i.e., the share of the final retail price that is received by the farmer) increased slightly between 2018 and 2021. Finally, the researchers see no evidence that increases in post-harvest losses. The physical quantities wasted seem very low, which is in line with the more careful analysis conducted by Minten, Tamru, and Reardon (2020). If anything, these losses at the
ABSTRACT
The researchers combine in-person survey data collected in February 2020 (i.e., just before the pandemic was declared) with phone survey data collected in March 2021 (i.e., one year into the pandemic) and August 2021 (i.e., approximately 18 months into the pandemic) to study how vegetable value chains in Ethiopia have coped with the COVID-19 pandemic. Focusing on the major vegetable value chain connecting farmers in East Shewa zone to consumers in Addis Ababa, the researchers applied a cascading survey approach in which the researchers collected data at all levels of the value chain: vegetable farmers, urban wholesalers, and retailers. In March 2021 and August 2021, the COVID-19 pandemic is having only a limited impact on this major vegetable value chain. Farmers' access to credit, labor or extension services have not markedly changed since the pre-pandemic period in February 2020. The main concern among farmers relates to the soaring prices of key inputs with prices of key fertilizers having increased by more than 40 percent between February 2020 and March 2021. Among the many pandemic related policy adjustments was the relocation of the wholesale vegetable market from a crowded area in the city center to the outskirts of Addis Ababa. Most wholesale traders viewed that while the pandemic itself has had a limited impact on their business activity, the re-location of the wholesale market had a considerably larger negative impact. Most wholesaler traders reported that they are trading less vegetables and have fewer clients to sell in March 2021 compared to the situation in February 2020. Almost all of these wholesaler traders identified the re-location of the vegetable wholesale market to the outskirts of Addis Ababa as the primary reason for the declined sales and clientele, and thus, as a major concern for their trading activities. The urban retailers seem to have been relatively more affected by the pandemic than farmers and wholesalers, although many reported to have also been negatively affected by the relocation of the wholesale market. Out of the 210 retailers interviewed in February 2020, 32 had quit their business by August 2021. Out of these 32 traders that quit, only 4 responded that the pandemic was the main factor for quitting, 9 responded at it was a factor while the remaining 19 responded that the pandemic played no role in their decision to quit. In March 2021, nearly two-thirds of the retailers reported that there is less choice with respect to transporters from wholesale markets compared to the situation in February 2020. Nearly 80 percent of retailers who reported a decrease in choice of transporters, said that the change was due to the re-location of the wholesale market, while 19 percent said it was due to the COVID-19 pandemic. The researchers document considerable volatility in prices and marketing margins using four rounds of vegetable price data collected at all levels of the value chain. For instance, onion prices soared during the first months of the pandemic when imports from Sudan came to halt. Encouraged by these price increases, many farmers began allocating more land to onions. This, together with important markets being closed because of instability and conflict in some parts of the country, led to a considerable oversupply of onions in Addis Ababa which in turn resulted a sizable drop in farm gate and final consumer prices between May 2020 and February 2021. Combined with soaring input costs, these plummeting onion prices must have led to considerable losses among farmers. This price volatility was identified by many farmers, wholesalers, and retailers as the most pressing concern to their farming or trading activities. Finally, the researchers attempted to estimate post-harvest losses along the vegetable value chain. Using the data from the March-2021 survey round, the largest losses are estimated for tomato (11.5 percent), head cabbage (11.8 percent) and Ethiopia kale (10.5 percent) and lowest for green pepper (7.2 percent) and onion (2.6 percent). Interestingly, the main origin of