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Real exchange rate price and agricultural supply response in Ethiopia: The case of perennial crops

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  • Asmerom Kidane

    (Department of Statistics and Demography University of Asmara, Asmara, Ethiopia)

Abstract

In this study the relationship between RER, price and supply response of coffee is described in detail. The objective is to see if devaluation affects RER agricultural price and supply of coffee—a perennial crop that is the major source of foreign exchange of Ethiopia. After developing a model of perennial crop supply, panel data were gathered from small-scale farmers. Both descriptive statistics as well as the econometric estimates (where fixed effect model was applied) showed that there was positive response for both the short run and the long run. In the former farmers were able to increase yield through increased use of labour and fertilizer on existing stock of trees. There was also an increase in the uprooting of old trees and replacing them by new ones, as well as the use of extra acreage at the expense of other perennials and annuals

Suggested Citation

  • Asmerom Kidane, 1999. "Real exchange rate price and agricultural supply response in Ethiopia: The case of perennial crops," Working Papers 99, African Economic Research Consortium, Research Department.
    • Handle: RePEc:aer:wpaper:99
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    File URL: ftp://41.215.20.26/RePEc/aer/wpaper/RP99.pdf
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    Cited by:

    1. Mathias, Wakulira, 2009. "Factors Influencing Hulling Of Coffee Among Farmers In Masaka District, Uganda," Research Theses 117798, Collaborative Masters Program in Agricultural and Applied Economics.
    2. Salah M. Elawad & Elrashied E. Elkhiedir & Mahmoud A. Amassaib & Ahmed M. El Naim, 2017. "Government Policies and Food Security in Sudan (1970-2007): Incentives, Efficiencies and Comparative Advantage for Sorghum Producing in Mechanised Rain-fed Subsector," Academic Journal of Life Sciences, Academic Research Publishing Group, vol. 3(3), pages 12-17, 03-2017.
    3. A.I Achike & M. Mkpado & C.J. Arene, 2013. "Effects of Trade Liberalization and Exchange Rate Changes on Prices of Carbohydrate Staples in Nigeria," Working Papers 256, African Economic Research Consortium, Research Department.
    4. Abule Mehare & Abdi K. Edriss, 2013. "Evaluation of the Effect of Exchange Rate Variability on the Export of Ethiopia’s Agricultural Product: A Case of Coffee," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 7(2), pages 171-183, May.
    5. nnamdi, Kelechi & ifionu, Ebele, 2013. "Exchange rate volatility and exchange rate uncertainty in Nigeria: a financial econometric analysis (1970- 2012)," MPRA Paper 48316, University Library of Munich, Germany, revised 2013.
    6. Firdu Gemech & John Struthers, 2007. "Coffee price volatility in Ethiopia: effects of market reform programmes," Journal of International Development, John Wiley & Sons, Ltd., vol. 19(8), pages 1131-1142.

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