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Market Information System and the Ethiopia Commodity Exchange

INTRODUCTION

Market Information System and the Ethiopia Commodity Exchange – The majority of Ethiopian population lives in the countryside and makes a living by producing agricultural products. Farmers in the rural areas sell their agricultural products to merchants from the cities at very low prices.

This is because farmers do not have access to major market places in Ethiopia. In addition, farmers do not have the option of getting market information of agricultural products in the major market places other than their localities. In spite of this fact, it is ironic that the Ethiopia’s economy depends on agricultural products that come mainly from the primitive rural areas of the country.

Due to this fact, the livelihood of farmers is deteriorating day by day. This has a direct impact on the Ethiopian economy since the economy strongly depends on agriculture. To improve the livelihood of farmers, it is important that they get access to major markets in the country and get up-to-date market information to enable them sell what they have at fair prices.

Ethiopian farmers bring only 30 percent of what they produce to the market. Subsistence farming is way of life in rural Ethiopia. Studies show that Ethiopia produces more maize than the total maize production of Kenya, Uganda, and Tanzania combined.

Equipping Ethiopian farmers with information on the types of agricultural products they can grow and the price they can sell their products can help improve livelihood of farmers. Furthermore, it will bring profits back to the agricultural sector helping it to grow. In spite of the fact that Ethiopia is the second largest maize producer, Ethiopian farmers are getting poorer and poorer. (Baldauf, 2007)

Currently, Ethiopia is on track of establishing its first organized commodity market. The success of a commodity exchange depends on the proper installation of the following three key functions,

• The legal and regulatory fundamentals underlying the market mechanism, • The financial services provided through the Exchange, • Information and communication technology (ICT) that supports the marketing system. (Gebre-Madhin, 2006) Using tools of information and communication technology, one can provide accurate market information to farmers in the rural areas.

However, the majority of the population in the rural areas is not educated enough to use computers. In addition, installing computers and computer network in the villages of the countryside can also be very expensive. Furthermore, the necessary infrastructure, such as electricity, for setting up computer networks is not available in most places.

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