Food marketing margins during the COVID-19 pandemic: Evidence from vegetables in Ethiopia

Abstract

It is widely feared that the COVID-19 pandemic will lead to a significant worsening of the food security situation in low and middle-income countries. One reason for this is the disruption of food marketing systems and subsequent changes in farm and consumer prices. Based on primary data in Ethiopia collected just before the start and a few months into the pandemic, we assess changes in farm and consumer prices of four major vegetables and the contribution of different segments of the rural-urban value chain in urban retail price formation. We find large, but heterogeneous, price changes for different vegetables with relatively larger changes seen at the farm level, compared to the consumer level, leading to winners and losers among local vegetable farmers due to pandemicrelated trade disruptions. We further note that despite substantial hurdles in domestic trade reported by most value chain agents, increases in marketing -and especially transportation -costs have not been the major contributor to overall changes in retail prices. Marketing margins even declined for half of the vegetables studied. The relatively small changes in marketing margins overall indicate the resilience of these domestic value chains during the pandemic in Ethiopia.

COVID‐19 and impacts on global food systems and household welfare: Introduction to a special issue

“…(2021) (this issue) also shows that income declines cause increases in food insecurity and particularly reduction in more expensive but also more nutritious foods like fruits, vegetables, and animal‐sourced foods. This is consistent with findings from a recent survey in Ethiopia (Hirvonen et al., 2021), which found that reductions in household food consumption mainly reduced purchases of nutrient‐dense foods such as fruit, meat, eggs, and dairy. These adjustments limit declines in calorie intake but reduce dietary diversity and increase deficiencies of micronutrient consumption with potentially lasting adverse consequences for human health and development.…”

“…Hirvonen et al. (2021) (this issue) study domestic vegetable value chains in Ethiopia and find that the supply of vegetables in Ethiopia's urban markets was severely affected by disruptions in transport and in the supply of key farm inputs, as well as by trade restrictions. In telephone interviews conducted among traders, transporters, and processors, value chain agents indicated that their businesses were seriously affected by the COVID‐19 pandemic.…”

“…Interestingly, Hirvonen et al. (2021) find that despite substantial hurdles in domestic trade reported by most value chain agents, increases in marketing—and especially transportation—costs have not been the major contributor to overall changes in retail prices. Marketing margins even declined for half of the vegetables studied, which could suggest these domestic value chains have been rather resilient as trade restrictions and disrupted inter‐regional trade led to a more localized marketing system.…”

“…Several other studies in this volume provide indirect evidence of nutrition impacts as at the same time poor people's incomes have declined and consumer prices of nutritious foods have increased, such as in the case of fresh vegetables in Ethiopia and Senegal (see Hirvonen et al., 2021: this issue; and Van Hoyweghen et al., 2021: this issue).…”

COVID‐19 and food prices in sub‐Saharan Africa

“…Food security and human development are intricately linked (Conceição et al, 2011), which shows potential human development implications as the lasting effect on the pandemic in Africa. It is not surprising, therefore, to notice increased concerns for food security on the continent (Hirvonen et al, 2020) because of the disruption to the trade of staple foods (Laborde et al, 2020) due to the enforcement measures to combat COVID‐19.…”