Ethiopia’s commodity exchange launched; hopes for agricultural development

http://www.america.gov/st/econ-english/2008/October/20081031174240cpataruk0.134823.html?CP.rss=true

Many thanks again to Shlomo Bachrach – founder/editor of the East Africa Forum for his comments on this item.

“Ethiopia’s Commodity Exchange greatly strengthens the country’s agricultural market system.  It is a critical element in a system that until now has changed little for centuries.  While it improves the efficiency of trade and the transparency of pricing, it cannot increase food production.  To do that, a comprehensive agricultural strategy is needed, at the center of which is the issue of land reform.  Most land is held in small, scattered plots unsuited to modern practices.  Consolidating land into larger farms raises extremely sensitive political issues of land tenure, land privatization, land sales, movement of populations, etc.  Gaining experience and comfort with the Exchange is now under way, and can only be positive in the long term.  But if related issues are not addressed, it will be a very long time before its potential benefits will be realized.  In the meantime, it is unlikely that the Exchange will affect the great numbers of subsistence farmers — perhaps the majority — who are not part of a commercial agricultural system.”

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