New Commodity Exchange Modernizes Ethiopia’s Farming System
Selling crops used to be a complicated process for Aweke Teshome. The Ethiopian farmer never knew the fair market price for his products, or how they rated in quality. He was forced to sell at whatever price the traders offered. Worse, with no crop storage he lost money in times of surplus.
"We were not encouraged to produce bigger volume of crop as there was neither a coordinated market place to sell our products nor warehouse facilities to store the surplus from our sales," he explained. "Additionally, commodities were sold through long channels."
The new Ethiopia Commodity Exchange cuts through those channels. With a trading floor, electronic price information, quality assurance, and delivery warehouses, the ECX is bringing modern agricultural marketing to one of Africa’s most fertile countries.
The quality rating was a motivating experience for Teshome. "In our first participation at ECX," he said, "our product got the least grade… which strengthened our resolve to produce quality products with higher grades."
According to former IFPRI researcher Eleni Zaude Gabre-Madhin, the driving force behind the exchange, and its current CEO, the ECX contributes to freeing Ethiopia from a cycle of famine and starvation. "When farmers have better market incentives and can manage risk better, they can produce more…Ethiopia will be much less prone to food crises."
Teshome is enjoying the benefits in his own farm. "Now we are members of the ECX," he says, "and are happy that big volume sales can take place in a less risky environment."
More information:
- Speculation and World Food Markets
IFPRI Forum, July 2008. - Rising Prices and the Role of Commodity Exchanges
Statement to the Press by Eleni Z. Gabre-Madhin, CEO, ECX, April 17, 2008 (PDF download - 52K) - Ethiopia's Commodity Exchange Opens its Doors
IFPRI Press Release, April 14, 2008. - Physical and Virtual Global Food Reserves to Protect the Poor and Prevent Market Failure
IFPRI Policy Brief, June 2008. - Ethiopia Commodity Exchange website
1-ethiopian agriculture cxan not grow in a country where all land is owned by teh government.
2-ethiopian economy is at a stand still becaus eteh country is governed by dictators who failed to institute basic human rights.
3-Meles Zenawi has divided Ethiopia into ethnic zones which makes for peoplr of other ethnic groups very difficult to move and make trade within ethiopia and other zones.
4-There are thousands of political prioners in ethiopia and thoudands have been murdered by TPLF regime. Ethiopian hunger is man made problem and has nothing to do with rain.
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