Fortune News | Jan 05,2020
Infographic: Root Cause Remains Puzzle, Yet Cost of Living Keeps Rising
March 17 , 2020
The latest figures from the Central Statistical Agency show that food inflation has marked a 3.1-percentage-point increase to reach 25.1pc, year-over-year. This has pushed a quintal of white teff to more than 4,000 Br. As consumers struggle, experts blame agricultural productivity, long supply chains and a growing monetary base for the increase in food prices, writes TEMESGEN MULUGETA, FORTUNE STAFF WRITER.
Under normal circumstances, February is an amiable month to consumers of food items. Supply increases and inflation stabilises, offering a breath of fresh air in an economy where the cost of goods often puts severe pressure on citizens.
This was not the case this year in February. Despite being a harvest season, when traders rush to unload their items in storage in anticipation of increased supply in the market, food inflation has reached 25.1pc. This pushed headline inflation to 21.8pc last month, its second highest level in the past six years.
The rise in prices has been no less steep for Ethiopia’s staple food, teff, an indigenous cereal crop used to make injera. Within the past two months, white and red teff has gone up by 400 Br and 300 Br a quintal, respectively, an increase of around 10pc. Consumers with lower incomes have been forced to transition to the red teff, a less popular variety of the cereal, and mix it with rice and maize to meet their nutritional needs.
There is confusion over why the cost of food has not been letting up for the past two years. Factors from supply shortages to population growth and natural disasters are blamed. Farmers stress that no extra cash is going into their pockets and that intermediaries are hogging all the profits from the increase in the price of food.
This is a view shared by the government. But the authorities and policymakers are of the opinion that a permanent means of addressing the problem is improving productivity. They argue that agricultural productivity has increased by 21pc since the 2014/15 fiscal year, and commercial clustering, the introduction of contract farming and tax exemption for agricultural equipment to improve mechanisation could help improve that number further.
Experts knowledgeable of the agricultural sector do not believe that the government's approach is incorrect. They cite an increased money supply in the market and long supply chains as causes of the problem, as well as low productivity. But they also insist that short-term plans, such as subsidisation of major food items, can alleviate some of the problems. This will be prudent, they believe, especially as the global outbreak of the Novel Coronavirus disrupts supply chains and causes further inflationary pressure.
You can read the full story here .
PUBLISHED ON
Mar 17,2020 [ VOL
20 , NO
1038]
Related Posts
Fortune News | Feb 15,2020
Featured | Dec 28,2019
Viewpoints | Jun 08,2019
Radar | Jun 22,2019
Fortune News | Jun 01,2019
Life Matters | Jun 22,2019
Radar | Jan 11,2020
Fortune News | Jan 09,2020
Radar | Apr 26,2019
Editors' Pick
Fortune News
NO GASOIL! WHY?
June 27 , 2020 . By SEBLE WONDEMAGEGN
Ethiopia is no stranger to the shortage of fuel. But drivers have lately been greeted by a sign that reads “No Gasoil” at gas stations,...
Agenda
Gasoil Shortage Irks Drivers, Gas Stations
June 27 , 2020 . By SEBLE WONDEMAGEGN
Over the last week, main roads of the capital were crowded and the traffic was heavy since most of the ro...
Editorial
With Cat out of Bag, Better to Double Down on Statehood
June 27 , 2020
In the popular imagination, Ethiopia's current federal organisation was the brainchild of leaders of an a...
Commentaries
Egypt’s Shifting Positions, Intransigence, Fear Politics Slow GERD Talks
June 27 , 2020 . By Fisseha Adugna
The dramatic events between Ethiopia and Egypt over the Grand Ethiopian Renaissance Dam (GERD) have only...
Commentaries
Fineline
Editorial
Where Did it all Go Wrong? Lessons from History
July 10 , 2020
When the situation was manageable, it was neglected, and now that it is thoroughly o...
With Cat out of Bag, Better to Double Down on Statehood
June 27 , 2020
In the popular imagination, Ethiopia's current federal organisation was the brainchil...
Egypt Changes Water Security Strategy, the Answer to Nile Dispute
June 20 , 2020
The messages from Washington, DC are unambiguous. They urge Ethiopia to relent to Egy...
History May Look Back on this Time as Needless Moment
June 17 , 2020
It is characteristic of the general climate of confusion the year 2020 has set in Eth...
