This document summarizes research on changes in Ethiopia's teff value chain over the past 10 years. Key findings include: 1) Adoption of modern inputs like improved seeds, fertilizers, and pesticides by teff farmers has increased significantly, though remains below recommended levels. 2) There has been a decline in production of cheaper red teff varieties and rise in more expensive white varieties due to quality demands and preferences. 3) Urban retailers have started providing more convenient services like milling and home delivery, while foodservice industry catering to prepared teff has grown. 4) Though changes indicate improved efficiency, the teff value chain remains at an early stage of transformation with room for

1. ETHIOPIAN DEVELOPMENT
RESEARCH INSTITUTE
Ethiopia’s value chains on the move:
The case of teff
Bart Minten, Seneshaw Tamiru, Ermias Engeda,
and Tadesse Kuma
IFPRI-ESSP-EDRI
Conference on “Improved evidence towards
better policies for the teff value chain”
10 October 2013
Addis Ababa
1

2. 2
1. Introduction
• Major changes happening in food markets worldwide and
especially in developing countries:
- Supermarket revolution
- Share of high-value crops increasing
- Quality demands on the rise
- Food safety requirement export countries
- Vertical integration
- Up-scaling, dis-intermediation, and branding
• No clear to what extent value chains are transforming in
Africa and/or Ethiopia, often because of a lack of good
primary data. This is the purpose of the analysis.

3. • Purpose of the study is to understand major value chains
from rural producers in major production zones to Addis,
the major city in the country.
• Organization of surveys: 1/ Interviews with key informants
September – October 2012; 2/ Fielding of surveys in
November – December 2012.
• Surveys with producers and communities upstream; rural
and urban wholesalers and truckers midstream; cereal
shops, mills, and cooperative retail downstream
2. Data and methodology

4. • Increasing adoption of modern input use over time
3. Teff upstream in the value chain
Unit Number of 10 years Now
observations ago
Modern inputs
Adoption of improved seed share (%) 1199 7.3 35.8
Use of chemical fertilizer:
DAP kgs/ha 1128 50 91
urea kgs/ha 1121 34 64
Adoption of herbicides share (%) 1197 31.9 65.3
Adoption of pesticides share (%) 1197 4.3 13.1

5. • Type of teff: rapid decline of red teff; increase of
white/magna
3. Teff upstream in the value chain
Unit Number of 10 years Now
observations ago
Type of teff
Farmers' interviews:
Red teff share (%) 1200 36.2 19.9
Mixed teff share (%) 1200 17.6 11.7
White teff share (%) 1200 40.7 54.2
Magna teff share (%) 1200 5.4 14.1
Community focus group interviews:
Red teff share (%) 60 32.7 14.4
Mixed teff share (%) 60 31.8 21.6
White teff share (%) 60 26.5 40.2
Magna teff share (%) 60 7.7 24.3

6. • Reasons for the decline of red teff:
1. Lower prices of red teff compared to white teff. Higher
prices of white teff driven by: a. lower conversion ratios
of red teff to enjeras; b. longer shelf life for white enjeras;
c. preference of consumers
2. Higher productivity of white teff now because of
availability of improved varieties; traditionally red teff
would do better compared to white teff
3. Teff upstream in the value chain

7. • 93% of teff farmers use chemical fertilizer; 34% uses
improved seeds
• Stated reasons for not using or for not using enough
modern inputs:
1. Chemical fertilizer: Lack of money at the time of need
2. Improved teff seeds: Unable to find them or unable to
find more
3. Teff upstream in the value chain

8. Dynamics in adoption of fertilizer
0
.5
1
1.5
0 50 100 150
Transport costs to Addis (Birr/quintal)
DAP now DAP 10 years ago
urea now urea 10 years ago

9. Adoption of quncho (new variety)
0
10203040
0 50 100 150
Transport costs to Addis (Birr/quintal)

10. • Quncho only started in 2010; in 2013, 32% farmers used it
Take-off of quncho
0
10
20
30
40
50
60
70
80
90
100
2010 2011 2012
%ofqunchoadopters
Year of adoption of quncho

11. • Teff retailing in Addis: 61% mills; 29% cereal shops; and
8% consumer cooperatives
• Traditionally (as seen in other towns or rural areas), mills
only did milling and household typically would:
a/ buy teff on market/cereal shop;
b/ clean teff at home;
c/ take teff to mill;
d/ prepare enjera at home
4. Teff downstream in the value chain

12. 4. Teff downstream in the value chain
10 years ago Now
Unit No. of Value No. of Value
obs. obs.
Services
Share of customers that get
home delivery % 102 59 271 61
Share of customers that clean at
home % 96 30 254 21
Share of customers that only
come for milling % 93 30 250 24

13. 4. Teff downstream in the value chain
10 years ago Now
Unit No. of Value No. Value
obs. of obs.
Competition
Number of mills in in the
kebele number 92 6.11 250 9.30
Number of cereal shops in the
kebele number 75 2.86 202 4.10
Often queuing of consumers % 102 30 276 12

14. • About 20% of teff sold in Addis as prepared enjera
4. Teff downstream: Foodservice industry
10 years Now Now
Unit ago (weighted)
Type of customers for retailers (share)
Consumers % 80.4 87.0 82.1
Enjera wholesalers % 0.8 1.1 2.1
Enjera wholesale companies % 0.3 0.1 0.1
Enjera retailers with fixed shops % 4.7 3.1 4.3
Enjera retailers without shops % 8.7 5.6 5.5
Institutions % 0.7 0.3 0.3
Restaurants % 1.9 1.2 4.2
Supermarkets % 0.0 0.2 0.8
Others % 0.1 0.1 0.2
Total % 100.0 100.0 100.0

15. • Mixing is on the increase
5. Mixing of teff with other cereals
10 years ago Now
Unit No. of Value No. of Value
obs. obs.
% of teff consumers that mix
teff with
Sorghum % 101 22 271 26
Rice % 101 8 271 20
Wheat % 101 1 271 0
Maize % 102 8 271 12
Other cereals % 102 2 271 2

16. • The poor and enjera sellers behave differently
5. Mixing of teff with other cereals
Consumers Enjera sellers
Poorest Middle Richest
With
fixed
Without
fixed
income shops shop
Number of observations 275 274 251 79 86
Type of teff bought (%)
Red 23 5 3 3 2
Mix 64 35 5 46 70
White 11 50 35 44 25
Magna 2 9 57 7 2
Total 100 100 100 100 100
Share of customers that mix teff
with other cereals(%) 60 43 15 79 71

17. 6. Drivers for change
1. Public sector: Large investment in agricultural extension system
Unit Mean/
Percent
Contact extension agents:
Received a visit of an agricultural extension agent in the last 2
years share 74
In last 12 months:
Farmer visited a demonstration plot of teff share 37
Farmer visited a government office of agriculture and
discussed teff issues share 27
Farmer awareness of technologies:
Farmer knows the recommended fertilizer use on teff plots share 51

18. 2. Important improvements in road and communication
infrastructure
6. Drivers for change
Unit Farmers Rural Urban Urban
traders traders retailers
Owners of a phone
share
(%) 28 100 100 98
Year since they own a phone year - 2006 2007 2008
Used mobile phone in the last marketing
transaction
share
(%) 12 - 97 56
If yes, agreed on a price with the trader
by phone in the last transaction
share
(%) 74 - 52 32

19. 3. Urbanization (1.2 million more people in Addis), income
growth and economic superior characteristics of teff
(doubling of income, 110% increase in teff consumption
expenditure); these factors combined might have led to
doubling of commercial surplus into Addis in last 10 years
4. Higher opportunity costs of time, especially of women;
further impetus for foodservice industry as well as for
development of a different retail sector
6. Drivers for change

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7. Conclusions
Important changes in the teff value chain:
1. Modern inputs increasingly adopted, especially by these
farmers living close to urban areas
2. Quality demands are on the rise, important shifts from
cheap red varieties to more expensive white ones
3. Increasing willingness to pay for convenience in urban
areas, as illustrated by the emergence of one-stop shops
as well as by a sizable foodservice sector
4. The share of rural-urban marketing, urban distribution,
and milling margins is declining, indicating improved
marketing efficiency

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7. Conclusions
Despite changes, still in early stage of agricultural
transformation:
1. Upstream:
a/ Adoption of improved varieties still low
b/ Fertilizer used is below recommended level
c/ Mechanization absent
d/ Vertical integration and coordination absent
2. Downstream:
a/ Little evidence of up-scaling
b/ Small share of modern retail
c/ Almost no branding

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7. Implications
1.Major room for improved seed development; Better
knowledge on other technologies to improve teff productivity
needed. Large returns to improved technology development,
i.e. return to Quncho development more than 100%
2. Further investments in roads and communication (still one
of the lowest in Africa)
3. Urbanization motor for rural transformation (urbanization
also one of lowest in Africa)