Agricultural Inputs

By Sara Gustafson

Over the last decade, Ethiopia’s dairy sector has expanded rapidly. Urban consumers have significantly increased the amount of money they spend on dairy products, and the number of domestic dairy processing firms has tripled to meet the growing demand. All of these signs point to significant structural transformation, which plays an important role in reducing poverty and increasing welfare in developing countries. However, a new study finds that despite its recent strong growth, Ethiopia’s dairy sector still faces some important hurdles.

Recent occurrences in the global arena, such as volatile commodity and resource markets, suggest the urgent need for African countries to develop policy options that can mitigate resource constraints and their attendant consequences. The transformation and development of Africa’s agricultural sector, especially the development of functional value chains, hold huge potentials for African economies through employment creation, income generation, and improvement of household livelihoods.

By: Sara Gustafson

Providing smallholder farmers access to markets and price information is key to improving agricultural productivity and growth, along with food and nutrition security. In line with this, the Agricultural Commodity Exchange for Africa (ACE) has operated a Market Information System (MIS) and a Warehouse Receipt System (WRS) since 2011. The MIS provides farmers, traders and other market participants with access to regular updates on the prices of the commodities they trade via SMS and email, along with its online trading platforms.

Crop yields in Africa south of the Sahara are generally low, in large part because of low fertilizer use. A recent study of six countries in the region showed that only 35% of farmers applied fertilizer. There are many possible reasons why farmers do not use fertilizer. They may be unaware of its effectiveness; or have degraded soils that do not respond to fertilizer; they may not have the cash to purchase it; or unpredictable rainfall may make such investments risky. Local fertilizer prices may also cut into potential profits for many farmers.