Banana producers in Ethiopia sell their produce through wholesale traders, cooperatives, and to village retailers and local consumers. Factors determining the selection of marketing channels and their implication on the agri-food industrial organization have been given little attention in the literature. This paper uses a transaction cost economics (TCE) approach to explain farmers' choice between wholesale traders and marketing cooperatives. By using a Tobit model, an effort is exerted to demonstrate the empirical application of TCE theory and to measure transaction costs that influence agricultural marketing. The results on the basis of survey data collected in 2007 from different villages in Southern Ethiopia suggests that transaction costs play an important role in determining farmers' marketing channel choice decision. The paper has potential policy implications pertaining to the improvement of the agricultural market structure, conduct and performance and, eventually, the welfare of farmers. [Econ Lit citations: Q130, Q120]. r

Climate change and variability adversely affect smallholder farmers in developing countries, including Ethiopia. In response, farmers are adopting various adaptation strategies. However, there is a paucity of studies examining whether or not these responses benefit farmers in increasing crop productivity. Cognizant of this fact and its policy importance, this study empirically analyzes the impact of adaptation strategies on crop productivity in northwest Ethiopia. We collected data through household survey questionnaire, focus group discussion and key informant interview. We also analyzed time-series climate data to see how crop yield responds to climate variability. The empirical model employs the endogenous switching regression. Climate information and distance to market are validated as instrumental variables. The model revealed that farmers who adopted adaptation strategies would have gained lower yield if they had not adopted them; and those who did not adopt a strategy would have gained higher yield than if they had. Improved seed, contact with development agents (DAs), urea, compost and rainfall are significantly associated with the likelihood of increasing yield. The results also show systematic difference where age is inversely related with adapters and vice versa for non-adapters. Hence, adaptation interventions should consider these heterogeneities.

In this paper, we simulate the macroeconomic and distributional impacts of exchange rate devaluation in Ethiopia using a dynamic single country Computable General Equilibrium model. We find that although devaluation helps exports to be more competitive in the short term, thereby increasing export earnings, over the long term the policy is found to have a contractionary and inflationary impact in a developing country like Ethiopia. It also comes at the cost of a reduction in household welfare and investment. In terms of distributional impact, the policy simulation result suggests that devaluation disproportionately affects urban households than rural households in Ethiopia given the nature of their consumption basket.

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