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Structural Adjustment and Harar Coffee Supply Response

Abstract: 

The general purpose of the study is to investigate Harar coffee supply response to relative price and non-price factors. The time series estimation of short-run elasticity of coffee supply with respect to own price is 0.5. The coffee supply response is also affected by the relative price of coffe4 to other crops in a mixed arming system. The coefficient for the relative price of chat to coffee was significantly negative implying the shift of resources away from coffee production. Given increased chat production dramatically over the last ten years. It is most likely that resources have shifted away form coffee to chat production. Land becoming increasingly scarce in Harargh highlands, some of the increase in coffee supply might be at the experience of food production. Therefore, it is more likely that most
Of coffee supply to the caution market is diversion from unofficial export and increased husbandry practice (better weeding, mulching, pruning, and more careful harvesting). However, increase supply of coffee to the dire dawa auction market was not sustained and exports started decaling since1998/99 and continued in 2000 by 16% compared to the pervious year. The drought of 1999/00 also contributed to the decline of coffee production by 30% in east and west Hararghe zone of Oromia. Inefficiency in coffee marketing emanating from crop finance crisis is becoming the major marketing emanating from crop finance is becoming the major bottleneck that need s governance attention. Moreover during post reform period coffee is more volatile showing high coefficient of variation as compared to pre-reform period. The policy implication of the study is that increased relative producers price of coffee must be accompanied by a variety of structural reforms to remove the various constraints facing the smallholder coffee growers.

Corporate Author: 
Gebrehiwot Ageba, Jemal Mohammed and Solomon Tesfay (Editors) , Ethiopian Economic Association(EEA) , Department of Economics of AAU & Fredrich Ebert Stifung
Publisher: 
Ethiopian Economic Association (EEA)
Primary Descriptors: 

Agriculture - Coffee; price policy - Coffee

Secondary Descriptor: 

Agriculture and state; Coffee

Geographic Descriptors: 
Ethiopia, Harar
Cataloge Date: 
02/27/2013
Broad Subject heading: 
Agriculture-Economic aspects
Call Number: 
338.963 PRO 2002
Serial Key Title: 
Proceedings of the Eleventh Annual conference on the Ethiopian economy
Publication catagory: 
Content type: 
Publication date: 
2013-12-27 23:09:00
Forum or Discussion date: 
2013-02-27 15:58:23
Conference Place: 
Nov. 2-4, 2001, Nazareth, Ethiopia
Place of publication: 
Addis Ababa, Ethiopia
Type of material: 
Book
Current frequency: 
Annualy
Thematic area: 
Policy Reform, Implementation and outcome in Ethiopia