Trade, value chains, and rent distribution with foreign exchange controls: Coffee exports in Ethiopia
Exchange rate policies can have important implications on incentives for export agriculture. However, their effects are often not well understood. We study the issue of foreign exchange controls and pricing in the value chain for Ethiopia’s coffee - its most important export crop. Relying on unique...
| Autores principales: | , , |
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| Formato: | Artículo preliminar |
| Lenguaje: | Inglés |
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International Food Policy Research Institute
2019
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| Materias: | |
| Acceso en línea: | https://hdl.handle.net/10568/146004 |
| _version_ | 1855513388482822144 |
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| author | Tamru, Seneshaw Minten, Bart Swinnen, Johan |
| author_browse | Minten, Bart Swinnen, Johan Tamru, Seneshaw |
| author_facet | Tamru, Seneshaw Minten, Bart Swinnen, Johan |
| author_sort | Tamru, Seneshaw |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | Exchange rate policies can have important implications on incentives for export agriculture. However, their effects are often not well understood. We study the issue of foreign exchange controls and pricing in the value chain for Ethiopia’s coffee - its most important export crop. Relying on unique pricing and cost data, we find that coffee exporters are willing to incur losses during exporting by offering high prices for coffee locally in order to access scarce foreign exchange. The losses in export markets are then more than recovered in importing, indicating rents - import parity prices are significantly lower than the prices charged for imported goods, so that profits on imports are much higher than the losses incurred in exporting. We further show that the high coffee wholesale prices are transmitted to farmers, so that they benefit from the rents downstream. These results suggest that a better exchange rate alignment to reduce the overvaluation of the local currency in this case would have a lower impact on export crop producer prices than typically is anticipated. |
| format | Artículo preliminar |
| id | CGSpace146004 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2019 |
| publishDateRange | 2019 |
| publishDateSort | 2019 |
| publisher | International Food Policy Research Institute |
| publisherStr | International Food Policy Research Institute |
| record_format | dspace |
| spelling | CGSpace1460042025-11-06T05:02:35Z Trade, value chains, and rent distribution with foreign exchange controls: Coffee exports in Ethiopia Tamru, Seneshaw Minten, Bart Swinnen, Johan imports supply chains exports trade coffee food prices exchange rate prices Exchange rate policies can have important implications on incentives for export agriculture. However, their effects are often not well understood. We study the issue of foreign exchange controls and pricing in the value chain for Ethiopia’s coffee - its most important export crop. Relying on unique pricing and cost data, we find that coffee exporters are willing to incur losses during exporting by offering high prices for coffee locally in order to access scarce foreign exchange. The losses in export markets are then more than recovered in importing, indicating rents - import parity prices are significantly lower than the prices charged for imported goods, so that profits on imports are much higher than the losses incurred in exporting. We further show that the high coffee wholesale prices are transmitted to farmers, so that they benefit from the rents downstream. These results suggest that a better exchange rate alignment to reduce the overvaluation of the local currency in this case would have a lower impact on export crop producer prices than typically is anticipated. 2019-09-18 2024-06-21T09:05:33Z 2024-06-21T09:05:33Z Working Paper https://hdl.handle.net/10568/146004 en https://doi.org/10.1111/agec.12608 Open Access application/pdf International Food Policy Research Institute Federal Democratic Republic of Ethiopia Policy Studies Institute Tamru, Seneshaw; Minten, Bart; and Swinnen, Johan. 2019. Trade, value chains, and rent distribution with foreign exchange controls: Coffee exports in Ethiopia. ESSP Working Paper 136. Washington, DC; Addis Ababa, Ethiopia: International Food Policy Research Institute (IFPRI); Federal Democratic Republic of Ethiopia Policy Studies Institute. https://hdl.handle.net/10568/146004 |
| spellingShingle | imports supply chains exports trade coffee food prices exchange rate prices Tamru, Seneshaw Minten, Bart Swinnen, Johan Trade, value chains, and rent distribution with foreign exchange controls: Coffee exports in Ethiopia |
| title | Trade, value chains, and rent distribution with foreign exchange controls: Coffee exports in Ethiopia |
| title_full | Trade, value chains, and rent distribution with foreign exchange controls: Coffee exports in Ethiopia |
| title_fullStr | Trade, value chains, and rent distribution with foreign exchange controls: Coffee exports in Ethiopia |
| title_full_unstemmed | Trade, value chains, and rent distribution with foreign exchange controls: Coffee exports in Ethiopia |
| title_short | Trade, value chains, and rent distribution with foreign exchange controls: Coffee exports in Ethiopia |
| title_sort | trade value chains and rent distribution with foreign exchange controls coffee exports in ethiopia |
| topic | imports supply chains exports trade coffee food prices exchange rate prices |
| url | https://hdl.handle.net/10568/146004 |
| work_keys_str_mv | AT tamruseneshaw tradevaluechainsandrentdistributionwithforeignexchangecontrolscoffeeexportsinethiopia AT mintenbart tradevaluechainsandrentdistributionwithforeignexchangecontrolscoffeeexportsinethiopia AT swinnenjohan tradevaluechainsandrentdistributionwithforeignexchangecontrolscoffeeexportsinethiopia |