IDEAS home Printed from https://ideas.repec.org/a/ags/qjiage/206296.html
   My bibliography  Save this article

Transaction Costs on the Ethiopian Formal Seed Market and Innovations for Encouraging Private Sector Investments

Author

Listed:
  • Husmann, Christine

Abstract

There is a considerable shortage of improved seed in Ethiopia. Despite good reasons to invest in this market, private sector investments are not observed. Using an institutional economics theoretical framework, this paper analyzes the formal Ethiopian seed system and identifies transaction costs to find potential starting points for institutional innovations. Analyzing data from more than 60 expert interviews conducted in Ethiopia mainly in 2012, it appears that transaction costs are high along the whole seed value chain and mainly born by the government as public organizations dominate the Ethiopian seed system, leaving little room for the private sector. However, direct marketing pilots that have been started recently are a signal of careful market liberalization efforts.

Suggested Citation

  • Husmann, Christine, 2015. "Transaction Costs on the Ethiopian Formal Seed Market and Innovations for Encouraging Private Sector Investments," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 54(1), pages 1-18, February.
    • Handle: RePEc:ags:qjiage:206296
    DOI: 10.22004/ag.econ.206296
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/206296/files/3_Husmann.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.206296?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Kherallah, Mylene & Kirsten, Johann F, 2002. "The New Institutional Economics: Applications For Agricultural Policy Research In Developing Countries," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 41(2).
    2. Taffesse, Alemayehu Seyoum & Dorosh, Paul A. & Gemessa, Sinafikeh Asrat, 2012. "Crop production in Ethiopia: Regional patterns and trends," IFPRI book chapters, in: Dorosh, Paul A. & Rashid, Shahidur (ed.), Food and agriculture in Ethiopia: Progress and policy challenges, chapter 3, International Food Policy Research Institute (IFPRI).
    3. Ministry of Finance Government of India,, 2011. "Economic Survey 2010-11," OUP Catalogue, Oxford University Press, number 9780198074090.
    4. Nigel Key & Elisabeth Sadoulet & Alain De Janvry, 2000. "Transactions Costs and Agricultural Household Supply Response," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 245-259.
    5. Herbert Kyeyamwa & Stijn Speelman & Guido Van Huylenbroeck & John Opuda‐Asibo & Wim Verbeke, 2008. "Raising offtake from cattle grazed on natural rangelands in sub‐Saharan Africa: a transaction cost economics approach," Agricultural Economics, International Association of Agricultural Economists, vol. 39(1), pages 63-72, July.
    6. Emily Ouma & John Jagwe & Gideon Aiko Obare & Steffen Abele, 2010. "Determinants of smallholder farmers' participation in banana markets in Central Africa: the role of transaction costs," Agricultural Economics, International Association of Agricultural Economists, vol. 41(2), pages 111-122, March.
    7. Demsetz, Harold, 1969. "Information and Efficiency: Another Viewpoint," Journal of Law and Economics, University of Chicago Press, vol. 12(1), pages 1-22, April.
    8. Irini Maltsoglou & Aysen Tanyeri-Abur, 2005. "Transaction Costs, Institutions and Smallholder Market Integration: Potato Producers in Peru," Working Papers 05-04, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    9. Spielman, David J. & Mekonnen, Dawit Kelemework & Alemu, Dawit, 2012. "Seed, fertilizer, and agricultural extension in Ethiopia," IFPRI book chapters, in: Dorosh, Paul A. & Rashid, Shahidur (ed.), Food and agriculture in Ethiopia: Progress and policy challenges, chapter 4, International Food Policy Research Institute (IFPRI).
    10. North, Douglass C., 1989. "Institutions and economic growth: An historical introduction," World Development, Elsevier, vol. 17(9), pages 1319-1332, September.
    11. Staal, Steven & Delgado, Christopher & Nicholson, Charles, 1997. "Smallholder dairying under transactions costs in East Africa," World Development, Elsevier, vol. 25(5), pages 779-794, May.
    12. Benson, Todd & Spielman, David J. & Kasa, Leulsegged, 2014. "Direct seed marketing program in Ethiopia in 2013: An operational evaluation to guide seed-sector reform:," IFPRI discussion papers 1350, International Food Policy Research Institute (IFPRI).
    13. Byerlee, Derek & Spielman, David J. & Alemu, Dawit & Gautam, Madhur, 2007. "Policies to promote cereal intensification in Ethiopia: A review of evidence and experience," IFPRI discussion papers 707, International Food Policy Research Institute (IFPRI).
    14. Alene, Arega D. & Manyong, V.M. & Omanya, G. & Mignouna, H.D. & Bokanga, M. & Odhiambo, G., 2008. "Smallholder market participation under transactions costs: Maize supply and fertilizer demand in Kenya," Food Policy, Elsevier, vol. 33(4), pages 318-328, August.
    15. Maltsoglou, Irini & Tanyeri-Abur, Aysen, 2005. "Transaction costs, institutions and smallholder market integration: potato producers in Peru," ESA Working Papers 289074, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    16. Francis M. Bator, 1958. "The Anatomy of Market Failure," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 72(3), pages 351-379.
    17. Holloway, Garth & Nicholson, Charles & Delgado, Chris & Staal, Steve & Ehui, Simeon, 2000. "Agroindustrialization through institutional innovation: Transaction costs, cooperatives and milk-market development in the east-African highlands," Agricultural Economics, Blackwell, vol. 23(3), pages 279-288, September.
    18. Arega, D.A. & Manyong, Victor M. & Omanya, G. & Mignouna, H.D. & Bokanga, M. & Odhiambo, George D., 2008. "Smallholder marketed surplus and input use under transactions costs: maize supply and fertilizer demand in Kenya," 2007 Second International Conference, August 20-22, 2007, Accra, Ghana 52074, African Association of Agricultural Economists (AAAE).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Benedicta Nsiah Frimpong & Bright Owusu Asante & Maxwell Darko Asante & Stephen John Ayeh & Bernard Sakyiamah & Eileen Nchanji & Gaudiose Mujawamariya & Negussie Zenna & Hale Tufan, 2023. "Identification of Gendered Trait Preferences among Rice Producers Using the G+ Breeding Tools: Implications for Rice Improvement in Ghana," Sustainability, MDPI, vol. 15(11), pages 1-24, May.
    2. Mengistu, T.W., 2018. "Institutional arrangements and governance challenges in regulating seed quality in Ethiopia," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 276018, International Association of Agricultural Economists.
    3. Essegbemon Akpo & Gebrekidan Feleke & Asnake Fikre & Mekasha Chichaybelu & Chris O. Ojiewo & Rajeev K. Varshney, 2020. "Analyzing Pathways of Nurturing Informal Seed Production into Formal Private Ventures for Sustainable Seed Delivery and Crop Productivity: Experiences from Ethiopia," Sustainability, MDPI, vol. 12(17), pages 1-18, August.
    4. Clifton Makate & Arild Angelsen & Stein Terje Holden & Ola Tveitereid Westengen, 2024. "Smallholder access to purchased seeds in the presence of pervasive market imperfections and rainfall shocks: panel data evidence from Malawi and Ethiopia," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 12(1), pages 1-28, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yao, B. & Shanoyan, A., 2018. "The Use of Mobile Money Application and Smallholder Farmer Market Participation: Evidence form Cote d Ivoire and Tanzania," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277259, International Association of Agricultural Economists.
    2. Momanyi, Denis & Lagat, Prof. Job K. & Ayuya, Dr. Oscar I., 2016. "Analysis of the Marketing Behaviour of African Indigenous Leafy Vegetables among Smallholder Farmers in Nyamira County, Kenya," MPRA Paper 69202, University Library of Munich, Germany, revised 27 Jan 2016.
    3. Mignouna, D.B. & Abdoulaye, T. & Alene, A. & Akinola, A.A. & Manyong, V.M., 2015. "Drivers of Market Participation Decisions among Small-scale Farmers in Yam Growing Areas of Nigeria and Ghana," 2015 Conference, August 9-14, 2015, Milan, Italy 230219, International Association of Agricultural Economists.
    4. Hayatullah Ahmadzai, 2018. "Factor market participation and tests for separability in Afghanistan," Discussion Papers 2018-10, University of Nottingham, CREDIT.
    5. Cuevas, Agham C., 2014. "Transaction Costs of Exchange in Agriculture: A Survey," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 11(1), pages 1-18, June.
    6. Shiferaw, K. & Gebremedhin, B. & Tegegne, A. & Hoekstra, D., 2018. "Analysis of milk production, butter marketing and household use of inputs in rural Ethiopia," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277104, International Association of Agricultural Economists.
    7. Tabe-Ojong, M.P.J. & Mausch, K. & Woldeyohanes, T. & Heckelei, T., 2018. "A Triple-Hurdle Model of the Impacts of Improved Chickpea Adoption on Smallholder Production and Commercialization in Ethiopia," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277287, International Association of Agricultural Economists.
    8. Eunice Adu Donkor & Elena Garnevska & Muhammad Imran Siddique & Emmanuel Donkor, 2021. "Determinants of Rice Farmer Participation in the Direct Marketing Channel in Ghana," Sustainability, MDPI, vol. 13(9), pages 1-14, April.
    9. Benjamin Musah Abu & Haruna Issahaku & Paul Kwame Nkegbe, 2016. "Farmgate versus market centre sales: a multi-crop approach," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 4(1), pages 1-16, December.
    10. B.C. Okoye & A. Abass & B. Bachwenkizi & G. Asumugha & B. Alenkhe & R. Ranaivoson & R. Randrianarivelo & N. Rabemanantsoa & I. Ralimanana, 2016. "Effect of transaction costs on market participation among smallholder cassava farmers in Central Madagascar," Cogent Economics & Finance, Taylor & Francis Journals, vol. 4(1), pages 1143597-114, December.
    11. Chamberlin, Jordan & Jayne, T.S., 2013. "Unpacking the Meaning of ‘Market Access’: Evidence from Rural Kenya," World Development, Elsevier, vol. 41(C), pages 245-264.
    12. Wanjala, Bernadette, 2016. "Can the big push approach end rural poverty in Africa? : Insights from Sauri millennium village in Kenya," Other publications TiSEM 5a686b22-6749-4e9e-8bf4-4, Tilburg University, School of Economics and Management.
    13. Martin Paul & Kai Mausch & Tesfaye B Woldeyohanes & Thomas Heckelei, 2022. "Three hurdles towards commercialisation: integrating subsistence chickpea producers in the market economy," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 49(3), pages 668-695.
    14. CAMARA, Alhassane, 2017. "Market participation of smallholders and the role of the upstream segment: evidence from Guinea," MPRA Paper 78903, University Library of Munich, Germany, revised May 2017.
    15. Larochelle, Catherine & Alwang, Jeffrey, 2015. "Explaining Marketing Strategies among Bolivian Potato Farmers," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 54(3), pages 1-24, September.
    16. Tomasz Legiedz, 2020. "Economic policy for development and the new institutional economics," Catallaxy, Institute of Economic Research, vol. 5(2), pages 61-73, December.
    17. Sokchea, An & Culas, Richard J., 2015. "Impact of Contract Farming with Farmer Organizations on Farmers’ Income: A Case Study of Reasmey Stung Sen Agricultural Development Cooperative in Cambodia," Australasian Agribusiness Review, University of Melbourne, Department of Agriculture and Food Systems, vol. 23, March.
    18. Goundan, Anatole & Faye, Amy & Henning, Christian H. C. A. & Collins-Sowah, Peron A., 2020. "Investing in risky inputs in Senegal: Implications for farm profit and food production," Working Papers of Agricultural Policy WP2020-07, University of Kiel, Department of Agricultural Economics, Chair of Agricultural Policy.
    19. Andrew McKay & Chiara Cazzufi & Emelie Perge, 2015. "Commercialization in agriculture in rural Vietnam, 2006-14," WIDER Working Paper Series 096, World Institute for Development Economic Research (UNU-WIDER).
    20. Nguyen Hung Anh & Wolfgang Bokelmann, 2019. "Determinants of Smallholders’ Market Preferences: The Case of Sustainable Certified Coffee Farmers in Vietnam," Sustainability, MDPI, vol. 11(10), pages 1-20, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:qjiage:206296. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/iahubde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.