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Does food aid disrupt local food market? Evidence from rural Ethiopia

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  • Nathalie Ferrière
  • Akiko Suwa-Eisenmann

Abstract

This paper analyses empirically the impact of food aid on wheat production,sales and purchases in rural Ethiopia between 1994 and 2009. We distinguish between the impact at the intensive margin(on quantities)and at the extensive margin(on the very decision to produce or go to the market to buy or sell).The panel dimension allows us to deal with food aid selection. We find that the impact of food aid goes through the extensive margin while pure quantity effects,once controlled for market participationand production choice,are not significant. Foodaid reduces the probability of being a producer albeit the size of the effect is small. It also increases the probability of being a seller and decreases the probability of being a buyer after 2004,the year when the rules of food aid allocation changed in Ethiopia. Other factors such as storage capacity,distance to the nearest market,and the frequency the market is held also matter in the decision to sell or buy.

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  • Nathalie Ferrière & Akiko Suwa-Eisenmann, 2014. "Does food aid disrupt local food market? Evidence from rural Ethiopia," FOODSECURE Working papers 26, LEI Wageningen UR.
    • Handle: RePEc:fsc:fspubl:26
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    References listed on IDEAS

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    3. Gautam, Yograj, 2019. "“Food aid is killing Himalayan farms”. Debunking the false dependency narrative in Karnali, Nepal," World Development, Elsevier, vol. 116(C), pages 54-65.
    4. Geoffrey M. Kistruck & Patrick Shulist, 2021. "Linking Management Theory with Poverty Alleviation Efforts Through Market Orchestration," Journal of Business Ethics, Springer, vol. 173(2), pages 423-446, October.
    5. Danny Cassimon & Olusegun Fadare & George Mavrotas, 2023. "The Impact of Food Aid and Governance on Food and Nutrition Security in Sub-Saharan Africa," Sustainability, MDPI, vol. 15(2), pages 1-19, January.
    6. Owusu-Amankwah, Georgette, 2018. "Willingness of Rural and Peri-urban Women Smallholder Farmers to Participate in Home-grown School Feeding Farming Contracts," 2018 Annual Meeting, February 2-6, 2018, Jacksonville, Florida 266714, Southern Agricultural Economics Association.
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    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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