The Wheat Supply Chain in Ethiopia: Patterns, trends, and policy options

The State of wheat in Ethiopia. Can farmers meet the growing demand for wheat in Ethiopia? Photo credit: Flickr/ Bioversity International

Can farmers meet the growing demand for wheat in Ethiopia? Photo credit: Flickr/ Bioversity International

Wheat is the second most important food commodity in Ethiopia as measured by its caloric contribution to the diet. While wheat farmers are producing more than ever before, the demand for the grain has consistently outpaced supply. Each year, Ethiopia imports about a million tons of wheat, a portion of which is subsidized by the government. While the subsidy does benefit wheat consumers by providing a lower price, the overall benefit of the subsidy is outweighed by the costs to both the government (in terms of money allocated to the subsidy) and farmers (in terms of lower prices for their crops). The majority of wheat that farmers grow is consumed by the household; only about 25 percent is sold.

To close the gap between production and consumption, in simple terms, the amount of marketed wheat must increase. Researchers took a look at the wheat supply chain, looking at patterns and constraints in production, marketing, trade, and consumption.

The research team set out to answer several questions about the state of wheat in Ethiopia.

  • What proportion of production is marketed by type of farm and by location?
  • What are the major routes to market, from surplus producers to consumers?
  • What is the volume and value of these channels, and how does it vary by season?
  • What are the margins for smallholders and other value chain actors?
  • What is the status of the market infrastructure in terms of storage, processing, wholesaling, and retailing?
  • Who are the major market actors in marketing the commodity?
  • What are the main challenges to increasing marketable surpluses as well as expanding the market infrastructure to handle larger volumes?
  • What are the main challenges to achieving competitive markets and becoming competitive on international markets?

To learn more, read: “The Wheat Supply Chain in Ethiopia: Patterns, trends, and policy options.”