Appendix to Chapter 6


index for wheat remained significantly below the steep price increases shown by all other
foodgrains.

 Table A-6.2: Monthly average wholesale cereal prices in Addis Ababa, 1994

 January Augustl) December % increase % increase
Cereal Birr/quintal Birr/quintal Birr/quintal Jan. Aug. Jan. Dec.
Wheat 124 175 143 41.1 15.3
Teff2) 157 236 209 50.3 33.1
Maize 88 165 118 87.5 34.1
Sorghum 109 183 195 67.9 78.9
Barley 107 168 142 57.0 32.7
Average 117 185 161 58.1 37.6
 1) lean season, prices usually reach peak levels
 2) a special local type of cereal, main staple food in parts of Ethiopia

 Source of price data: Ethiopian Grain Trading Enterprise

 The above analysis allows us to draw several relevant conclusions as to the role, scope and
 approaches of food aid in Ethiopia:

 The largest part of food aid provided to Ethiopia has been in the form of emergency
 food aid for free distribution, in order to cover the effective demand deficit resulting
 from production shortfalls, caused by natural and man-made disasters, and from
 widespread poverty.

 Monetised food aid in 1994 has effectively contributed to cover an existing market
 supply deficit in cereals and more or less absorbed the excess market demand for wheat.

 Programme and monetised emergency food aid has contributed to stabilising the market
 prices of wheat at a level significantly below the steep price increases of all other
 foodgrains, yet has not depressed the wheat prices below levels of the general retail
 price index.

 It can, therefore, be assumed that the market deficit in wheat, to be covered by
 commercial imports and/or programme food aid, has amounted to about 150,000 MT.
 This figure serves as a reference for the absorption capacity for commercial imports plus
 programme food aid deliveries and monetisation in wheat.

 There exists substantial scope for additional programme food aid. This should,
 however, be provided in foodgrains other than wheat (e.g. maize and sorghum), in order
 to avoid distorting effects on domestic wheat production and marketing.

 An appropriate timing of programme aid deliveries/monetisation according to the
 seasonal variations in domestic supplies will increase the effectiveness in terms of price
 and supply stabilisation. (Programme food aid deliveries should preferably arrive in the


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