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Competitive agricultural input markets in Ethiopia: Theoretical promises versus reality

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  • Zewdie Habte Shikur

Abstract

Using the agency theory framework to develop conceptual frameworks, this study investigates the main challenges to and potential determinants of competitive agricultural input markets by comparing intervention and control districts. Specifically, this study examines the impact of the Agriculture One‐Stop Shop Project on the competitiveness of agricultural input markets in Ethiopia. The paper uses data collected from farmers and project stakeholders through interviews and focus group discussions and compiles recorded price and quantity sold for each agricultural input for four years. The study employs a content analysis, concentration ratio, market margin, and pooled panel regression models to analyze the set of data. The finding shows the existence of weak innovative system functions that is the mirror of unsatisfactory project outcomes in some intervention areas. Overall, the findings indicate that the project has increased competition by reducing market margins and relative prices, delivering a high quantity of high‐quality agricultural inputs, and providing new services and a range of input choices. An input market's level of competitiveness is determined by contractual arrangements, capital, background, and risk management. An agricultural input market's function system is influenced by the structural composition of the public–private partnership network, coordination, and cooperation. The one‐stop‐shop approach, operationalized through institutional arrangements, has the potential to facilitate and coordinate the functions necessary to change competitiveness in the agricultural input market. This study's panel model results show that the project has had statistically significant effects on the competitiveness of the agricultural input markets. The government should replicate this new approach throughout the country going forward. Este estudio utiliza el marco de la teoría de la agencia para desarrollar marcos conceptuales con los que investigar los principales retos y los posibles determinantes de los mercados competitivos de insumos agrícolas, comparando los distritos de intervención y los de control. En concreto, este estudio examina el impacto del Proyecto de Ventanilla Única Agrícola sobre la competitividad de los mercados de insumos agrícolas en Etiopía. El artículo utiliza datos recabados de los agricultores y de las partes interesadas en el proyecto mediante entrevistas y conversaciones de grupos focales, y recopila los precios registrados y las cantidades vendidas de cada insumo agrícola durante cuatro años. El estudio emplea un análisis de contenido, un coeficiente de concentración, un margen de mercado y modelos de regresión de panel combinados para analizar el conjunto de datos. El hallazgo muestra la existencia de funciones débiles del sistema innovador, lo que refleja unos resultados insatisfactorios del proyecto en algunas áreas de intervención. En general, las conclusiones indican que el proyecto ha aumentado la competencia al reducir los márgenes de mercado y los precios relativos, proporcionando una gran cantidad de insumos agrícolas de alta calidad y ofreciendo nuevos servicios y una gama de opciones de insumos. El nivel de competitividad de un mercado de insumos viene determinado por los acuerdos contractuales, el capital, los antecedentes y la gestión del riesgo. El sistema de funcionamiento de un mercado de insumos agrícolas se ve influido por la composición estructural de la red de colaboración público‐privada, la coordinación y la cooperación. El enfoque de ventanilla única, que opera a través de acuerdos institucionales, tiene el potencial de facilitar y coordinar las funciones necesarias para transformar la competitividad en el mercado de insumos agrícolas. Los resultados del modelo de panel de este estudio muestran que el proyecto ha tenido efectos estadísticamente significativos en la competitividad de los mercados de insumos agrícolas. El gobierno debería reproducir en el futuro este nuevo enfoque por todo el país. 本稿では、エージェンシー理論のフレームワークを使用して概念フレームワークを新たに作成し、介入地区と対照地区を比較して、競争力のある農業投入財市場の主な課題と潜在的な決定要因を検討する。具体的には、エチオピアの農業投入財市場の競争力に対する農業のワンストップショッププロジェクトの影響を検討する。インタビューやフォーカス・グループ・ディスカッションを通じて農家やプロジェクトの利害関係者から収集したデータを使用して、4年間の農業投入財ごとに記録された価格と販売量をまとめた。内容分析、生産集中度、市場マージン、プール・データのパネル回帰モデルを採用して一連のデータを分析した。知見から、革新的なシステム機能に弱点があることが示され、一部の介入地域におけるプロジェクトの不満な結果を反映している。全体として、ワンストップショッププロジェクトが市場マージンと相対価格を引き下げ、質の高い農業投入財を大量に供給し、新しいサービスを提供し投入財の選択肢を拡大したことで競争を激化させたことが結果から示される。投入財市場の競争力のレベルは、契約上の取り決め、資本、背景、リスク管理によって決定される。農業投入財市場の機能システムは、官民連携のネットワーク、調整、協力の構造組成に影響される。制度的な取り決めを通じて運用されるワンストップショップのアプローチには、農業投入財市場における競争力を変えるために必要な機能を促進し調整する可能性がある。パネルモデルの結果から、このプロジェクトが農業投入財市場の競争力に統計的に有意な影響を与えたことが示される。政府は、この新しいアプローチを今後も全国的に同様に展開するべきである。

Suggested Citation

  • Zewdie Habte Shikur, 2023. "Competitive agricultural input markets in Ethiopia: Theoretical promises versus reality," Regional Science Policy & Practice, Wiley Blackwell, vol. 15(6), pages 1276-1298, August.
  • Handle: RePEc:bla:rgscpp:v:15:y:2023:i:6:p:1276-1298
    DOI: 10.1111/rsp3.12656
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    References listed on IDEAS

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