THE IMPAC SCHEDULE POLICY ON COMPETITIVENESS OF GRAIN PRODUCTION IN WELMERA DISTRICT, ETHIOPIA

Authors

  • Mr. Mesfin Haile Makerere University Author

Abstract

In the last few years, agricultural polices were designed to benefit farmers. The 
agricultural extension program being implemented enabled smallholder farmers to 
use new agricultural technologies on time and hence increased productivity and 
output obtained per unit of land. However, credit repayment schedule policy put in 
place, forced farmers to repay input loans when price of output is very much low. The 
policy analysis matrix (PAM) was used for this study as a main methodology 
combined with a seasonal price Index. The study showed Welmera district having a 
comparative advantage for barley but not competitive while it has only a competitive 
advantage for tef and wheat. For two reasons farmers did not receive the actual price 
of grains that was equivalent with the true price. First, the system confirmed the 
presence of market failure in fertilizer market. Second, domestic cost of seed 
production was lower than the world price. The data also clearly pointed out how 
government policy negatively affected private profitability by undervaluing land. The 
seasonal analysis demonstrated price variability of grains exists in the study area. 
Moreover, the repayment period for input loan arranged when output prices are at 
their lowest levels. Therefore, the removal of credit repayment schedule policy would 
make grain production more competitive if farmers shift the sale of its produce to 
peak price periods. This call for review of the existing agricultural polices for the 
benefit of small scale farmers.

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Published

22-08-2024

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How to Cite

THE IMPAC SCHEDULE POLICY ON COMPETITIVENESS OF GRAIN PRODUCTION IN WELMERA DISTRICT, ETHIOPIA. (2024). Ethiopian Journal of Economics, 14(1), 49-78. http://ethiopianjournalofeconomics.org/index.php/EJE/article/view/49