Value addition and farmers: Evidence from coffee in Ethiopia
Local value-addition in developing countries is often aimed at for upgrading of agricultural value chains, since it is assumed that doing so will make farmers better off. However, transmission of the added value through the value chain and constraints to adoption of value-adding activities by farmer...
| Main Authors: | , |
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| Format: | Journal Article |
| Language: | Inglés |
| Published: |
2023
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| Online Access: | https://hdl.handle.net/10568/140010 |
| _version_ | 1855543421191585792 |
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| author | Tamru, Seneshaw Minten, Bart |
| author_browse | Minten, Bart Tamru, Seneshaw |
| author_facet | Tamru, Seneshaw Minten, Bart |
| author_sort | Tamru, Seneshaw |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | Local value-addition in developing countries is often aimed at for upgrading of agricultural value chains, since it is assumed that doing so will make farmers better off. However, transmission of the added value through the value chain and constraints to adoption of value-adding activities by farmers are not well understood. We look at this issue in the case of coffee in Ethiopia–the country’s most important export product–and value-addition in the coffee value-chain through ‘washing’ coffee, which is done in wet mills. Washed coffee is sold internationally with a significant premium compared to ‘natural’ coffee but the share of washed coffee in Ethiopia’s coffee exports has stagnated. Relying on a unique primary large-scale dataset and a combination of qualitative and quantitative methods, we examine the reasons for this puzzle. The reasons seemingly are twofold. First, labor productivity in producing red cherries, which wet mills require, is lower than for natural coffee, reducing incentives for adoption, especially for those farmers with higher opportunity costs of labor. Second, only impatient, often smaller, farmers sell red cherries, as more patient farmers use the storable dried coffee cherries as a rewarding savings instrument, given the negative real deposit rates in formal savings institutions. |
| format | Journal Article |
| id | CGSpace140010 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2023 |
| publishDateRange | 2023 |
| publishDateSort | 2023 |
| record_format | dspace |
| spelling | CGSpace1400102025-12-08T10:11:39Z Value addition and farmers: Evidence from coffee in Ethiopia Tamru, Seneshaw Minten, Bart value chains exports farmers agriculture labour productivity developing countries value added tax coffee Local value-addition in developing countries is often aimed at for upgrading of agricultural value chains, since it is assumed that doing so will make farmers better off. However, transmission of the added value through the value chain and constraints to adoption of value-adding activities by farmers are not well understood. We look at this issue in the case of coffee in Ethiopia–the country’s most important export product–and value-addition in the coffee value-chain through ‘washing’ coffee, which is done in wet mills. Washed coffee is sold internationally with a significant premium compared to ‘natural’ coffee but the share of washed coffee in Ethiopia’s coffee exports has stagnated. Relying on a unique primary large-scale dataset and a combination of qualitative and quantitative methods, we examine the reasons for this puzzle. The reasons seemingly are twofold. First, labor productivity in producing red cherries, which wet mills require, is lower than for natural coffee, reducing incentives for adoption, especially for those farmers with higher opportunity costs of labor. Second, only impatient, often smaller, farmers sell red cherries, as more patient farmers use the storable dried coffee cherries as a rewarding savings instrument, given the negative real deposit rates in formal savings institutions. 2023-01-30 2024-03-14T12:08:49Z 2024-03-14T12:08:49Z Journal Article https://hdl.handle.net/10568/140010 en Open Access Tamru, Seneshaw; and Minten, Bart. 2023. Value addition and farmers: Evidence from coffee in Ethiopia. PLoS ONE 18(1): e0273121. https://doi.org/10.1371/journal.pone.0273121 |
| spellingShingle | value chains exports farmers agriculture labour productivity developing countries value added tax coffee Tamru, Seneshaw Minten, Bart Value addition and farmers: Evidence from coffee in Ethiopia |
| title | Value addition and farmers: Evidence from coffee in Ethiopia |
| title_full | Value addition and farmers: Evidence from coffee in Ethiopia |
| title_fullStr | Value addition and farmers: Evidence from coffee in Ethiopia |
| title_full_unstemmed | Value addition and farmers: Evidence from coffee in Ethiopia |
| title_short | Value addition and farmers: Evidence from coffee in Ethiopia |
| title_sort | value addition and farmers evidence from coffee in ethiopia |
| topic | value chains exports farmers agriculture labour productivity developing countries value added tax coffee |
| url | https://hdl.handle.net/10568/140010 |
| work_keys_str_mv | AT tamruseneshaw valueadditionandfarmersevidencefromcoffeeinethiopia AT mintenbart valueadditionandfarmersevidencefromcoffeeinethiopia |