Ethiopia: Government Marketing Operations

Posted: June 7, 2011 in History

Ethiopia
Government Marketing Operations
Private traders and the Agricultural Marketing Corporation (AMC), established in l976, marketed Ethiopia’s agricultural output. The AMC was a government agency whose objective was to influence the supply and price of crops. It purchased grain from peasant associations at fixed prices. The AMC set quotas of grain purchases to be delivered by peasant associations and cooperatives and also bought from private wholesalers, who were required to sell half of their purchases at predetermined prices. State farms sold their output to the AMC. Although the AMC had agents in all regions, it was particularly active in the major cerealproducing regions, namely, Gojam, Shewa, Arsi, and Gonder. In 1981/82, out of the AMC’s purchases of 257,000 tons of grain, Gojam accounted for 32 percent of the purchases, and Arsi, Shewa, and Gonder accounted for 23, 22, and l0 percent, respectively. The government’s price controls and the AMC’s operations had led to the development of different price systems at various levels. For instance, the l984/85 official procurement price for 100 kilograms of teff was 42 birr at the farm level and 60 birr when the AMC purchased it from wholesalers. But the same quantity of teff retailed at 81 birr at food stores belonging to the urban dwellers’ associations ( kebeles –see Glossary) in Addis Ababa and sold for as much as l8l birr in the open market. Such wide price variations created food shortages because farmers as well as private merchants withheld crops to sell on the black market at higher prices.

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