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Agricultural growth linkages in Ethiopia: Estimates using fixed and flexible price models

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Author Info
Diao, Xinshen
Fekadu, Belay
Haggblade, Steven
Seyoum Taffesse, Alemayehu
Wamisho, Kassu
Yu, Bingxin

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Abstract

"Accelerating growth and poverty reduction, and the ultimate achievement of structural transformation, are the critical policy challenges in present day Ethiopia. This paper examines relevant growth options in terms of their impact on overall growth and poverty reduction in the country. It deploys a fixed-price semi-input-output model and a flexible-price economy-wide multi-market model for that purpose. The paper finds that agricultural growth can induce higher overall growth and faster poverty reduction than non-agricultural growth, although the latter can also have large growth effects in some cases. Among sub-sectors within agriculture, staple crops have stronger growth linkages. Decomposition of these effects also reveals that consumption linkages are much stronger than production linkages, i.e., the impact of increased consumption demand due to growth (agricultural and non-agricultural) is much larger than that of the corresponding expansion in input demand. Moreover, non-agricultural sectors have to grow in order to match growing supply of agricultural products and increasing demand for non-agricultural products. Otherwise, falling relative prices of agricultural products may dampen the realized gains in growth and poverty reduction." from Authors' Abstract

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Paper provided by International Food Policy Research Institute (IFPRI) in its series IFPRI discussion papers with number 695.

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Date of creation: 2007
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Handle: RePEc:fpr:ifprid:695

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Related research
Keywords: Poverty reduction; Agricultural growth; Linkages; Staple food crops; non-agricultural sector; agricultural products; Prices;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Michael Lipton, 2006. "Can Small Farmers Survive, Prosper, or be the Key Channel to Cut Mass Poverty?," The Electronic Journal of Agricultural and Development Economics, Food and Agriculture Organization of the United Nations, vol. 3(1), pages 58-85. [Downloadable!]
  2. Paul Dorosh & Steven Haggblade, 2003. "Growth Linkages, Price Effects and Income Distribution in Sub-Saharan Africa," Journal of African Economies, Oxford University Press, vol. 12(2), pages 207-235, June.
  3. Block, Steven A., 1999. "Agriculture and economic growth in Ethiopia: growth multipliers from a four-sector simulation model," Agricultural Economics, Blackwell, vol. 20(3), pages 241-252, May. [Downloadable!] (restricted)
  4. Haggblade, Steven & Hazell, Peter, 1989. "Agricultural technology and farm-nonfarm growth linkages," Agricultural Economics, Blackwell, vol. 3(4), pages 345-364, December. [Downloadable!] (restricted)
  5. Diao, Xinshen & Pratt, Alejandro Nin & Ghautam, Madhur & Keough, James & Chamberlin, Jordan & You, Liangszi & Puetz, Detlev & Resnick, Danielle & Yu, Bingxin, 2005. "Growth options and poverty reduction in Ethiopia," DSGD discussion papers 20, International Food Policy Research Institute (IFPRI). [Downloadable!]
  6. Kongsamut, Piyabha & Rebelo, Sérgio & Xie, Danyang, 1997. "Beyond Balanced Growth," CEPR Discussion Papers 1693, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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