How Institutional Inefficiencies and Inflation are Affecting Vegetable Producers’ Livelihoods by Gurmessa on 03 February 2022

posted in: IFC Project - Ethiopia | 0

Here is what my respondent (194 ID) told me about the trends of fertilizer prices. As it is indicated in the sustainable livelihood framework developed by DFID and FAO, trends,  seasonality, and institutions are among the factors affecting the livelihood security of the poor.

What I have seen today on the ground proves this. As one of my respondents indicated, the price of fertilizer is increasing at an alarming rate. He purchased 50 kg of UREA with 650 ETB in May 2021 and, this week, he purchased the same amount of UREA (50 kg) with 1700 ETB from traders. He said that there are two causes for this inflation:

  1. The formal suppliers of fertilizers like the union supply fertilizers for farmers mainly during the summer season ( for rainfed production). As a result, local traders monopolize the supply of fertilizers and determine the price. 
  2. There are no strong institutions that regulate input price 

While these are factors, the problem may be beyond this. It may be associated with the foreign currency exchange deficit that is induced by war.