Feeding Africa's Cities: The Case of the Supply Chain of Teff to Addis Ababa

The increasing urbanization in developing countries raises important questions on how food value chains function and on how opportunities can be harnessed from these changes to allow for better food security for rural as well as urban poor. Surveys were fielded at each layer of the value chain from major production areas accounting for 42% of national commercial surplus and for more than 90%of the supply to the main terminal market in Addis Ababa, the capital of Ethiopia and also its largest city. The authors find that these value chains are relatively unsophisticated. At the farm level, there are no interlinked transactions with buyers of the produce, the role of credit is minor, and most of the transactions are cash transactions. Due to lack of grading and standardization the authors see significant efforts in checking quality and quantity at the time of each transaction along the value chain. Producer prices decline in line with transportation costs, seasonal prices are relatively small, and storage release is smooth over the year. In contrast with common perceptions, commercialization in these major teff-producing areas of Ethiopia seems therefore fairly well organized, and while there are areas for marketing improvement, these are not likely to lead to major reductions in consumer price levels or increases in farmer prices given the relatively small share of marketing costs.