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On The Role Of The Brokerage Institution In The Development Of Ethiopian Agricultural Markets


  • Quattri, Maria A.
  • Ozanne, Adam
  • Wang, Xioabing
  • Hall, Alastair R.


The recognition that policies aimed at “getting prices right” in less developed countries were failing due to incomplete markets has spurred a new wave of reforms, directed instead at “getting markets and institutions right”. Although previous studies have documented the potentially crucial role of the brokerage institution in crop commercialisation, few have investigated what determines wholesalers’ decisions to use brokers. Using data collected in 2006/07 by Gabre-Madhin, IFPRI and EDRI, we examine Ethiopian traders’ decisions regarding whether or not they should use brokers, and how much. Independent variables are human, financial and social asset availability, implemented trading practices, access to infrastructure and institutions, location, travelled distance and traded crops. Results show that brokerage services are particularly valuable for wholesalers lacking social capital and storage capacity, who are based in areas with low population density, and who trade at a distance especially when roads are not asphalted. Buyers in drought-prone domains rely on brokers more for their long-distance purchases, while sellers in moisture-reliable domains employ brokers more for their long-distance sales. These results provide useful indications regarding where and how the recent formalisation of brokerage functions through the ECX could be most beneficial for the functioning of Ethiopian agricultural markets.

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  • Quattri, Maria A. & Ozanne, Adam & Wang, Xioabing & Hall, Alastair R., 2011. "On The Role Of The Brokerage Institution In The Development Of Ethiopian Agricultural Markets," 85th Annual Conference, April 18-20, 2011, Warwick University, Coventry, UK 108941, Agricultural Economics Society.
  • Handle: RePEc:ags:aesc11:108941

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    Cited by:

    1. Andersson, Camilla & Bezabih, Mintewab & Mannberg, Andrea, 2017. "The Ethiopian Commodity Exchange and spatial price dispersion," Food Policy, Elsevier, vol. 66(C), pages 1-11.

    More about this item


    Agribusiness; O12; O13; O18;

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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