The Role of Ethiopian Commodity Exchange (ECX) in Crop Value Chain Development in Ethiopia

Bizualem Assefa Gashaw; Saron Mebratu Kibret

doi:doi:10.11648/j.ijber.20180706.12

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The Role of Ethiopian Commodity Exchange (ECX) in Crop Value Chain Development in Ethiopia

Bizualem Assefa Gashaw, Saron Mebratu Kibret

Published in International Journal of Business and Economics Research (Volume 7, Issue 6)

Received: 20 September 2018 Accepted: 16 October 2018 Published: 29 October 2018

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Abstract

This study intended to assess the role of Ethiopian Commodity Exchange (ECX) in crop value chain development with the aim of identifying agribusiness and Value Chain activities in ECX; identifying development intervention and its underlying impact and associated chain problems of ECX; identifying major value chain enterprises operating under ECX; and map the generic value chain for some selected commodities. ECX is Ethiopia’s latest attempt to enhance the performance of agricultural markets. Conceived as a meeting point for buyers and sellers of grains and coffee, the ECX seeks to organize efficient and transparent market operations. Before the establishment of ECX, agricultural markets in Ethiopia had been characterized by high costs and high risks of transaction forcing much of Ethiopia in to global isolation. With only one third of output reaching the market, only buyers and sellers tended to trade only with those they knew, to avoid the risk of being cheated. ECX developed a new method of exchange; a marketing system that coordinates better, links faster, and protects of both side of the trade. ECX is a modern trading system based on standard crop contracts, establishes standard parameters for commodity grades, transaction, size, payment and delivery, and trading order matching, while at the same time, preserving the origins and types of crops as distinct unlike the previous. Quality certification is also another important issue in value chain in ECX which is based on a modification of the previous quality grading system, with a new crop classification based on classes, types and grades of the commodity. The role of the ECX has been to specifically address the ways suppliers and exporters transact, with more efficient and transparent ways of trading as the main outcome. Despite the engagements of ECX have positive impact on the existing marketing system and for the development of agricultural value chains in Ethiopia, through creating a more reliable way to connect buyers and sellers in an efficient way to discover market prices, a way to level the playing platform by providing market information to all, there are still problems which are faced by all actors in value chain as infrastructural problems, legality problem, exploitation of farmers at the farm gate, marketing imperfections, systematic rigidity and traceability issue. In this regard, the study suggest ECX to develop strategies benefiting smallholder farmers in particular, facilitating financial and other logistics, promoting traceability in trading system for the private traders, creating regulatory platform for controlling the illegal traders operating in the system and capacitating the cooperative unions in the value chain.

Published in	International Journal of Business and Economics Research (Volume 7, Issue 6)
DOI	10.11648/j.ijber.20180706.12
Page(s)	183-190
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2018. Published by Science Publishing Group

Keywords

ECX, Value Chain, Traceability, Sesame, Coffee

References

[1]	Ethiopia Commodity Exchange' (Last updated 2010). http://www.ecx.com.et/.
[2]	Brown, A., 2009. The Market Maker Cane, E. (producer) Video: PBS, Wide Angle.
[3]	Gabre Madhin, E. 2007a. The Ethiopian Commodity Exchange (ECX): Making the Market Work for all. Expert Meeting on the Trade and Development Implications of Financial Services and Commodity Exchanges.' UNCTAD.
[4]	Nicolas Petit, 2007. Ethiopia’s Coffee Sector: A Bitter or Better Future? Journal of Agrarian Change, Vol. 7 No. 2. 225–263.
[5]	Daviron, B. and S. Ponte, 2005. The Coffee Paradox. London [etc.]: Zed Books.
[6]	Dahlberg Gustaf. 2011. Ethiopian coffee and fair trade –agricultural sample survey volume 1. Report on area and production of major crops, Addis Ababa, Ethiopia.
[7]	FAO, 2012. Food and Agriculture Organization of the United Nations.
[8]	FAO, FAOSTAT 2012. Food and Agriculture Organization of the United Nations.
[9]	Schawane-Albright, O. 2009. Ethiopia Shuts Down Coffee Exporters. New York Times Blog.
[10]	Debela Gelalch 2009. Sesame trade arrangements, costs and risks in Ethiopia: A baseline survey.
[11]	Bezabih Emana, 2010. Market assessment and value chain analysis in Benishangul Gumuz Regional State, Ethiopia. SID-Consult-Support Integrated Development, Addis Ababa, Ethiopia.

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APA Style

Bizualem Assefa Gashaw, Saron Mebratu Kibret. (2018). The Role of Ethiopian Commodity Exchange (ECX) in Crop Value Chain Development in Ethiopia. International Journal of Business and Economics Research, 7(6), 183-190. https://doi.org/10.11648/j.ijber.20180706.12

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ACS Style

Bizualem Assefa Gashaw; Saron Mebratu Kibret. The Role of Ethiopian Commodity Exchange (ECX) in Crop Value Chain Development in Ethiopia. Int. J. Bus. Econ. Res. 2018, 7(6), 183-190. doi: 10.11648/j.ijber.20180706.12

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AMA Style

Bizualem Assefa Gashaw, Saron Mebratu Kibret. The Role of Ethiopian Commodity Exchange (ECX) in Crop Value Chain Development in Ethiopia. Int J Bus Econ Res. 2018;7(6):183-190. doi: 10.11648/j.ijber.20180706.12

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@article{10.11648/j.ijber.20180706.12,
  author = {Bizualem Assefa Gashaw and Saron Mebratu Kibret},
  title = {The Role of Ethiopian Commodity Exchange (ECX) in Crop Value Chain Development in Ethiopia},
  journal = {International Journal of Business and Economics Research},
  volume = {7},
  number = {6},
  pages = {183-190},
  doi = {10.11648/j.ijber.20180706.12},
  url = {https://doi.org/10.11648/j.ijber.20180706.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20180706.12},
  abstract = {This study intended to assess the role of Ethiopian Commodity Exchange (ECX) in crop value chain development with the aim of identifying agribusiness and Value Chain activities in ECX; identifying development intervention and its underlying impact and associated chain problems of ECX; identifying major value chain enterprises operating under ECX; and map the generic value chain for some selected commodities. ECX is Ethiopia’s latest attempt to enhance the performance of agricultural markets. Conceived as a meeting point for buyers and sellers of grains and coffee, the ECX seeks to organize efficient and transparent market operations. Before the establishment of ECX, agricultural markets in Ethiopia had been characterized by high costs and high risks of transaction forcing much of Ethiopia in to global isolation. With only one third of output reaching the market, only buyers and sellers tended to trade only with those they knew, to avoid the risk of being cheated. ECX developed a new method of exchange; a marketing system that coordinates better, links faster, and protects of both side of the trade. ECX is a modern trading system based on standard crop contracts, establishes standard parameters for commodity grades, transaction, size, payment and delivery, and trading order matching, while at the same time, preserving the origins and types of crops as distinct unlike the previous. Quality certification is also another important issue in value chain in ECX which is based on a modification of the previous quality grading system, with a new crop classification based on classes, types and grades of the commodity. The role of the ECX has been to specifically address the ways suppliers and exporters transact, with more efficient and transparent ways of trading as the main outcome. Despite the engagements of ECX have positive impact on the existing marketing system and for the development of agricultural value chains in Ethiopia, through creating a more reliable way to connect buyers and sellers in an efficient way to discover market prices, a way to level the playing platform by providing market information to all, there are still problems which are faced by all actors in value chain as infrastructural problems, legality problem, exploitation of farmers at the farm gate, marketing imperfections, systematic rigidity and traceability issue. In this regard, the study suggest ECX to develop strategies benefiting smallholder farmers in particular, facilitating financial and other logistics, promoting traceability in trading system for the private traders, creating regulatory platform for controlling the illegal traders operating in the system and capacitating the cooperative unions in the value chain.},
 year = {2018}
}

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TY  - JOUR
T1  - The Role of Ethiopian Commodity Exchange (ECX) in Crop Value Chain Development in Ethiopia
AU  - Bizualem Assefa Gashaw
AU  - Saron Mebratu Kibret
Y1  - 2018/10/29
PY  - 2018
N1  - https://doi.org/10.11648/j.ijber.20180706.12
DO  - 10.11648/j.ijber.20180706.12
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 183
EP  - 190
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20180706.12
AB  - This study intended to assess the role of Ethiopian Commodity Exchange (ECX) in crop value chain development with the aim of identifying agribusiness and Value Chain activities in ECX; identifying development intervention and its underlying impact and associated chain problems of ECX; identifying major value chain enterprises operating under ECX; and map the generic value chain for some selected commodities. ECX is Ethiopia’s latest attempt to enhance the performance of agricultural markets. Conceived as a meeting point for buyers and sellers of grains and coffee, the ECX seeks to organize efficient and transparent market operations. Before the establishment of ECX, agricultural markets in Ethiopia had been characterized by high costs and high risks of transaction forcing much of Ethiopia in to global isolation. With only one third of output reaching the market, only buyers and sellers tended to trade only with those they knew, to avoid the risk of being cheated. ECX developed a new method of exchange; a marketing system that coordinates better, links faster, and protects of both side of the trade. ECX is a modern trading system based on standard crop contracts, establishes standard parameters for commodity grades, transaction, size, payment and delivery, and trading order matching, while at the same time, preserving the origins and types of crops as distinct unlike the previous. Quality certification is also another important issue in value chain in ECX which is based on a modification of the previous quality grading system, with a new crop classification based on classes, types and grades of the commodity. The role of the ECX has been to specifically address the ways suppliers and exporters transact, with more efficient and transparent ways of trading as the main outcome. Despite the engagements of ECX have positive impact on the existing marketing system and for the development of agricultural value chains in Ethiopia, through creating a more reliable way to connect buyers and sellers in an efficient way to discover market prices, a way to level the playing platform by providing market information to all, there are still problems which are faced by all actors in value chain as infrastructural problems, legality problem, exploitation of farmers at the farm gate, marketing imperfections, systematic rigidity and traceability issue. In this regard, the study suggest ECX to develop strategies benefiting smallholder farmers in particular, facilitating financial and other logistics, promoting traceability in trading system for the private traders, creating regulatory platform for controlling the illegal traders operating in the system and capacitating the cooperative unions in the value chain.
VL  - 7
IS  - 6
ER  -

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Author Information

Bizualem Assefa Gashaw

Department of Agribusiness and Value Chain Management, Wolkite University, Wolkite, Ethiopia
Saron Mebratu Kibret

Department of Agribusiness and Value Chain Management, Wolkite University, Wolkite, Ethiopia

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Plain Text BibTeX RIS

APA Style

Bizualem Assefa Gashaw, Saron Mebratu Kibret. (2018). The Role of Ethiopian Commodity Exchange (ECX) in Crop Value Chain Development in Ethiopia. International Journal of Business and Economics Research, 7(6), 183-190. https://doi.org/10.11648/j.ijber.20180706.12

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ACS Style

Bizualem Assefa Gashaw; Saron Mebratu Kibret. The Role of Ethiopian Commodity Exchange (ECX) in Crop Value Chain Development in Ethiopia. Int. J. Bus. Econ. Res. 2018, 7(6), 183-190. doi: 10.11648/j.ijber.20180706.12

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AMA Style

Bizualem Assefa Gashaw, Saron Mebratu Kibret. The Role of Ethiopian Commodity Exchange (ECX) in Crop Value Chain Development in Ethiopia. Int J Bus Econ Res. 2018;7(6):183-190. doi: 10.11648/j.ijber.20180706.12

Copy | Download

@article{10.11648/j.ijber.20180706.12,
  author = {Bizualem Assefa Gashaw and Saron Mebratu Kibret},
  title = {The Role of Ethiopian Commodity Exchange (ECX) in Crop Value Chain Development in Ethiopia},
  journal = {International Journal of Business and Economics Research},
  volume = {7},
  number = {6},
  pages = {183-190},
  doi = {10.11648/j.ijber.20180706.12},
  url = {https://doi.org/10.11648/j.ijber.20180706.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20180706.12},
  abstract = {This study intended to assess the role of Ethiopian Commodity Exchange (ECX) in crop value chain development with the aim of identifying agribusiness and Value Chain activities in ECX; identifying development intervention and its underlying impact and associated chain problems of ECX; identifying major value chain enterprises operating under ECX; and map the generic value chain for some selected commodities. ECX is Ethiopia’s latest attempt to enhance the performance of agricultural markets. Conceived as a meeting point for buyers and sellers of grains and coffee, the ECX seeks to organize efficient and transparent market operations. Before the establishment of ECX, agricultural markets in Ethiopia had been characterized by high costs and high risks of transaction forcing much of Ethiopia in to global isolation. With only one third of output reaching the market, only buyers and sellers tended to trade only with those they knew, to avoid the risk of being cheated. ECX developed a new method of exchange; a marketing system that coordinates better, links faster, and protects of both side of the trade. ECX is a modern trading system based on standard crop contracts, establishes standard parameters for commodity grades, transaction, size, payment and delivery, and trading order matching, while at the same time, preserving the origins and types of crops as distinct unlike the previous. Quality certification is also another important issue in value chain in ECX which is based on a modification of the previous quality grading system, with a new crop classification based on classes, types and grades of the commodity. The role of the ECX has been to specifically address the ways suppliers and exporters transact, with more efficient and transparent ways of trading as the main outcome. Despite the engagements of ECX have positive impact on the existing marketing system and for the development of agricultural value chains in Ethiopia, through creating a more reliable way to connect buyers and sellers in an efficient way to discover market prices, a way to level the playing platform by providing market information to all, there are still problems which are faced by all actors in value chain as infrastructural problems, legality problem, exploitation of farmers at the farm gate, marketing imperfections, systematic rigidity and traceability issue. In this regard, the study suggest ECX to develop strategies benefiting smallholder farmers in particular, facilitating financial and other logistics, promoting traceability in trading system for the private traders, creating regulatory platform for controlling the illegal traders operating in the system and capacitating the cooperative unions in the value chain.},
 year = {2018}
}

Copy | Download

TY  - JOUR
T1  - The Role of Ethiopian Commodity Exchange (ECX) in Crop Value Chain Development in Ethiopia
AU  - Bizualem Assefa Gashaw
AU  - Saron Mebratu Kibret
Y1  - 2018/10/29
PY  - 2018
N1  - https://doi.org/10.11648/j.ijber.20180706.12
DO  - 10.11648/j.ijber.20180706.12
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 183
EP  - 190
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20180706.12
AB  - This study intended to assess the role of Ethiopian Commodity Exchange (ECX) in crop value chain development with the aim of identifying agribusiness and Value Chain activities in ECX; identifying development intervention and its underlying impact and associated chain problems of ECX; identifying major value chain enterprises operating under ECX; and map the generic value chain for some selected commodities. ECX is Ethiopia’s latest attempt to enhance the performance of agricultural markets. Conceived as a meeting point for buyers and sellers of grains and coffee, the ECX seeks to organize efficient and transparent market operations. Before the establishment of ECX, agricultural markets in Ethiopia had been characterized by high costs and high risks of transaction forcing much of Ethiopia in to global isolation. With only one third of output reaching the market, only buyers and sellers tended to trade only with those they knew, to avoid the risk of being cheated. ECX developed a new method of exchange; a marketing system that coordinates better, links faster, and protects of both side of the trade. ECX is a modern trading system based on standard crop contracts, establishes standard parameters for commodity grades, transaction, size, payment and delivery, and trading order matching, while at the same time, preserving the origins and types of crops as distinct unlike the previous. Quality certification is also another important issue in value chain in ECX which is based on a modification of the previous quality grading system, with a new crop classification based on classes, types and grades of the commodity. The role of the ECX has been to specifically address the ways suppliers and exporters transact, with more efficient and transparent ways of trading as the main outcome. Despite the engagements of ECX have positive impact on the existing marketing system and for the development of agricultural value chains in Ethiopia, through creating a more reliable way to connect buyers and sellers in an efficient way to discover market prices, a way to level the playing platform by providing market information to all, there are still problems which are faced by all actors in value chain as infrastructural problems, legality problem, exploitation of farmers at the farm gate, marketing imperfections, systematic rigidity and traceability issue. In this regard, the study suggest ECX to develop strategies benefiting smallholder farmers in particular, facilitating financial and other logistics, promoting traceability in trading system for the private traders, creating regulatory platform for controlling the illegal traders operating in the system and capacitating the cooperative unions in the value chain.
VL  - 7
IS  - 6
ER  -

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