Market approach recasts often-hungry Ethiopia as potential bread basket

The African nation produces more maize than neighbors Kenya, Uganda, and Tanzania combined.

By Scott Baldauf | Staff writer of The Christian Science Monitor

from the February 23, 2007 edition

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ADDIS ABABA, ETHIOPIA - Imagine if Ethiopia, that land of skin-and-bone children that defined African famine in the 1980s, could turn from the world's largest recipient of food aid into a bread basket, not only feeding itself, but its neighbors also.

It could happen.

Ethiopia actually produces more maize than east African neighbors Kenya, Uganda, and Tanzania combined, but since most Ethiopian farmers are subsistence growers, only 30 percent of that food actually reaches the market.

The quickest way to change this, says economist Eleni Gabre- Madhin, is to bring profit back into agriculture, to give Ethiopian farmers enough information so that they can grow what the world wants and get paid more for growing it.

"Ethiopia is the second-largest maize producer in Africa, and yet Ethiopian farmers are getting poorer and poorer," says Ms. Gabre-Madhin, the head of Ethiopia's soon-to-be-functioning commodities exchange. "We're going to have to do something very dramatically different. The stakes are high."

What Gabre-Madhin is proposing may sound grandiose – she wants to set up a commodities exchange, similar to the Chicago Board of Trade. But her free-market passion has convinced Ethiopia's left-leaning Prime Minister Meles Zenawi to make her proposal his top domestic priority this year. Most Ethiopians earn their livelihoods from agriculture, and anything that promises to increase incomes and help Ethiopia compete on the global stage is welcome.

"You can see in the world today that globalization is a trend, and Ethiopia cannot be a country outside the global effort," says Berhan Hailu, Ethiopia's minister of information. "The government has been following the free market since 1993-94, and now the government is taking concrete means to bring this about in agriculture."

There are 10 million farmers in Ethiopia, a country of 80 million, growing mostly cereals such as wheat, maize, sorghum, barley, sesame, and an Ethiopian grain called "teff." Yet, few farmers travel more than 12 miles from their homes in their lifetimes, so they have very little information about what their food would be worth if they did decide to sell it. When they do sell, they sell to a local trader, who then sells to another trader, and another, adding cost to the food when it finally reaches the consumer in large cities like the capital, Addis Ababa.

"The farmer doesn't know the price – he might get five cents here, but on the other side of the country, where there's a drought, he might get three times the price," says Gabre-Madhin. "So let's imagine the farmer goes to a warehouse where you have constant updates with the latest market prices. Now the farmer starts thinking nationally, not locally."

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