NEW ROLE OF COOPERATIVES IN ETHIOPIA: THE CASE OF ETHIOPIAN COFFEE FARMERS COOPERATIVES

Since 1991, policies of economic liberalization in Ethiopia have been effective in releasing the economy from rigid state control. At the same time, they have also exposed Ethiopian people to domestic and international free market competition. In African countries, the retreat of governments from rural development due to economic liberalization policies has led to the re-evaluation of the role of cooperatives. Since 1999, in Ethiopia, several coffee farmers cooperative unions have been established to support peasants who are handicapped by their lack of negotiating power in the global economy. Coffee cooperatives have become market-oriented and are now relatively democratic compared to the former Marxist cooperatives of the previous regime. Thus far, these coffee cooperatives have provided higher profits to coffee farmers than have private traders. The actual volume of purchase, however, is limited　due to financial constraints. Because of this, the majority of cooperatives continues to rely on conventional marketing channels rather than on unions. Considering their weak financial condition, it is too early to judge the sustainability of the cooperatives because international prices have been high recently, and it is not yet clear how they would survive a downward international price trend.

Transport Sector and Regional Price Differentials: A SCGE Model for Chinese Provinces

With regression formulas replaced by equilibrium conditions, a spatial CGE model can substantially reduce data requirements. Detailed regional analyses are thus possible in countries where only limited regional statistics are available. While regional price differentials play important roles in multi-regional settings, transport does not receive much attention in existing models. This paper formulates a spatial CGE model that explicitly considers the transport sector and FOB/CIF prices. After describing the model, performance of our model is evaluated by comparing the benchmark equilibrium for China with survey-based regional I-O and interregional I-O tables for 1987. The structure of Chinese economies is summarized using information obtained from the benchmark equilibrium computation. This includes regional and sectoral production distributions and price differentials. The equilibrium for 1997 facilitates discussion of changes in regional economic structures that China has experienced in the decade.

Cost Reduction Effects of "pseudo FTAs" in Asia -Application of a price model based on a multilateral I/O table-

This paper examines the repercussion effects on the production cost of industries in Asian countries when some countries eliminate tariffs and import commodity taxes on all imports. This kind of analysis is related in some sense to that measuring the effects of FTAs on economies, and thus may be considered as an analysis of “pseudo FTAs.” Examining a number of combinations of “pseudo FTAs” between China, Japan, and ASEAN, it is found that the case of China plus Japan plus ASEAN is the most effective “pseudo FTA” of the combinations in terms of production cost reduction. The method is a form of price model based on the Asian International Input-Output Table. Almost no studies on price models related to multilateral I/O tables have been implemented thus far.

Strategic trade policy and non-linear subsidy : in the case of price competition

In a strategic trade policy, it is assumed, in this paper, that a government changes disbursement or levy method so that the reaction function of home firm approaches infinitely close to that of foreign firm. In the framework of Bertrand-Nash equilibrium, Eaton and Grossman[1986] showed that export tax is preferable to export subsidy. In this paper, it is shown that export subsidy is preferable to export tax in some cases in the framework of Bertrand-Nash equilibrium, considering the uncertainty in demand. Historically, many economists mentioned non-linear subsidy or tax. However, optimum solution of it has not yet been shown. The optimum solution is shown in this paper.

The rise and fall in the price of food, fuel and manufactured goods : interdependency between prices and technology determining comparative advantages and development paths

Green innovation, which enables us to extract energy from food crops, caused a food shortage in 2008. Countries suffering severe damage started to reconsider their agricultural policy with the aim of becoming more autonomous. The food price hike of the time looks like a reversal of the celebrated Singer-Prebisch thesis proposed in the 1950s. This paper examines the consequences of this trend on the comparative advantages and development strategies of developing countries. For that purpose, first, trends and short-run fluctuations in the prices of fuel and bio-energy crops are investigated. It is shown that the price series of fuels and the crops are synchronized only after the fuel extracting technology came into effect. Second, the reversal of the Singer-Prebisch thesis is underpinned by the generic form of an endogenous growth model developed by Rebelo (1991). It is shown that as an economy grows, appreciation of the non-reproducible, such as mineral resources and raw labor, over the reproducible, such as capital goods, is the norm rather than an anomaly. Third, the consequences of the food price hike and underlying capital accumulation on the development strategies of labor-abundant and low-income countries are explored. It is concluded that the impact of the food price hikes on the alteration of a development strategy is only incremental, without reinforcement from raw-labor-saving innovation. A case study of inventions by JUKI Corporation, a world-leader in the sewing machine market exemplifies the fact that, of all the major inventions the company have made, raw-labor-saving inventions have not dominated, although JUKI's machines are sold to one of the most raw-labor-intensive industries.

Regional differences regarding land tenancy in rural Rwanda, with special reference to sharecropping in a coffee production area

This paper examines land tenancy systems and tenant contracts in Rwanda, with respect to socioeconomic contexts. Our research in southern and eastern Rwanda produced data suggesting that land borrowing with fixed rents has been generally practiced, and that rent levels have been low in comparison to expected revenues from field production. In the western areas of coffee production, however, the practice of sharecropping has recently appeared. This system is advantageous to landowners, as they are able to acquire half of the harvests; in addition, the fixed rent levels in this region are much higher than those of other regions. In the southern and eastern regions, because land borrowing with fixed rents has been the only tenancy pattern and rent levels have remained low, the economic situation should be interpreted in the context of a continuing traditional Rwandan land tenure system. In contrast, in the western coffee production area, the soaring of fixed rents and the emergence of sharecropping have been brought about by high pressures for land use, which were caused not only by a population increase but also by the development of cash crop production and the existence of a labor exchange system. The increase in rent levels has therefore been offset by a corresponding increase in agricultural productivity.

Spatial price equilibrium and the transport sector : a trade-consistent SCGE model

This paper presents a framework for an SCGE model that is compatible with the Armington assumption and explicitly considers transport activities. In the model, the trade coefficient takes the form of a potential function,and the equilibrium market price becomes similar to the price index of varietal goods in the context of new economic geography (NEG). The features of the model are investigated by using the minimal setting, which comprises two non-transport sectors and three regions. Because transport costs are given exogenously to facilitate study of their impacts, commodity prices are also determined relative to them. The model can be described as a system of homogeneous equations, where an output in one region can arbitrarily be determined similarly as a price in the Walrasian equilibrium. The model closure is sensitive to formulation consistency so that homogeneity of the system would be lost by use of an alternative form of trade coefficients.

Is there any premium for unobservable quality? : a hedonic price analysis of the Malagasy rice market

This paper examines if consumers pay a premium for unobservable quality in the absence of quality standards and/or quality grading systems and, if so, how they assess that unobservable quality, using a rice retail market in Madagascar as an example. In Madagascar, the lack of quality standards and/or grading systems for rice makes is considered to be one of the causes of the rice market's spatial disintegration. Thus, quality standards and grading systems will be necessary to increase the market's efficiency. We hypothesize that consumers and retailers use product origin and rice name as observable indictors of unobservable quality and test the hypothesis using hedonic price regressions. We find that the interaction terms of product origin and rice name significantly affect the price after controlling for both observable quality and spatial and temporal price variation, but that the contribution of product origin and rice name to rice price variation is smaller than spatial and temporal factors. We thus conclude that consumers pay a premium for unobservable quality throughout Madagascar. This finding implies that quality standards and/or grading systems will work in the Malagasy market and that improving market infrastructure such as roads and storage will make them even more effective.