Economy-Wide Impacts of Technological Change in Food Staples in Ethiopia: A Macro-Micro Approach

MPIA working paper serie 2016-17

32 Pages Posted: 5 May 2018 Last revised: 12 Jul 2018

See all articles by Amarendra Sahoo

Amarendra Sahoo

Partnership for Economic Policy (PEP)

Lulit Mitik Beyene

Institute for Economic and Social Development Research

Bekele Shiferaw

Partnership for Economic Policy (PEP)

Gbegbelegbe Sika

International Institute of Tropical Agriculture (IITA)

Date Written: August 1, 2016

Abstract

This paper assesses the potential impacts from the introduction of high yielding and drought tolerant varieties of major food staples (wheat and maize) in Ethiopia. We develop a dynamic Computable General Equilibrium model with a micro-simulation module to examine the growth, poverty and distributional impacts of agricultural innovations. The analysis shows that introduction of improved varieties of these food staples is likely to boost the cereal sector in the country. Other agricultural sub-sectors grow due to increased labour supply. Given that these staple cereals represent an important share of food consumption for Ethiopian households, the poverty impact of the interventions is positive. Although rural households benefit from higher gains in real consumption, poverty declines more in urban areas compared to the rural. This is mainly because the rural poor are generally far from the poverty line with a higher initial poverty gap compared to urban households and the urban poor benefit from price effects. As productivity-enhancing technologies are introduced, there is a need for policy interventions in rural areas targeting non-agricultural sectors to enhance growth linkages, increase employment and stimulate inclusive growth.

Suggested Citation

Sahoo, Amarendra and Beyene, Lulit Mitik and Shiferaw, Bekele and Sika, Gbegbelegbe, Economy-Wide Impacts of Technological Change in Food Staples in Ethiopia: A Macro-Micro Approach (August 1, 2016). MPIA working paper serie 2016-17, Available at SSRN: https://ssrn.com/abstract=3164449 or http://dx.doi.org/10.2139/ssrn.3164449

Amarendra Sahoo (Contact Author)

Partnership for Economic Policy (PEP) ( email )

P.O. Box 30772-00100
ICIPE - Duduville Campus, Kasarani
Nairobi
Kenya

Lulit Mitik Beyene

Institute for Economic and Social Development Research ( email )

Addis Ababa
Ethiopia

Bekele Shiferaw

Partnership for Economic Policy (PEP) ( email )

P.O. Box 30772-00100
ICIPE - Duduville Campus, Kasarani
Nairobi
Kenya

Gbegbelegbe Sika

International Institute of Tropical Agriculture (IITA) ( email )

PMB 5320, Oyo Road, Ibadan
Oyo State, Dar es Salaam 200001
Tanzania

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