Why is transformation needed in this program area?

The transformation of subsistence agricultural production into a commercially oriented system requires two essential dynamics: 1) efficient market services for timely delivery of quality inputs to farmers at competitive prices, and 2) transparent output markets that provide signals to the farmers, allowing them to make informed decisions on what to produce and at what quality standards, as well as where and when to sell their outputs.

Currently, Ethiopian agricultural markets are characterized by very limited market support services, coupled with extended market chains between producers and consumers, adding costs. On the other hand, the expansion of global and local markets necessitates the fulfilment of stringent quality requirements and supply sustainability by developing market services. These include such areas as: standardization and grading, packaging, processing and food quality, safety, and traceability, as well as other services such as financial, business development and market information. Unfortunately, most of these market services are very limited or almost non-existent in Ethiopia, which impedes the competitiveness of most agricultural value chains and therefore their effective integration into regional and global markets.

As such, accessible market support services significantly contribute to increasing the efficiency and effectiveness of agricultural marketing systems by putting in place functioning output opportunities for farmers to market their agricultural surpluses. They also enable an efficient and sustainable agricultural marketing system through improved competitiveness of selected agricultural commodities within domestic and global value chains.

What are the objectives and focus areas of this program area during GTP II?

The main objectives of this program area during GTP II are to improve specific aspects of markets for the benefit of smallholder farmers and consumers, including a focus on Warehouse Receipt Systems. The focus areas of this program are currently being identified as part of a diagnostic study. Based on the results, a roadmap will be created to identify systemic bottlenecks and the respective interventions needed to create effective market services.