Agricultural & Resource Economics

Fair Trade for Agriculture in Ethiopia

May 22, 2013, 9:13 pm
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Women and children pick green beans at the Dodicha Vegetable Cooperative in Ethiopia. The beans will be sold to a local exporter, who will sell them to supermarkets in Europe. Photo Credit: K. Stefanova/USAID.

Brief Introduction of Fair Trade

While no officially accepted definition exists, fair trade is widely recognized as a certification to represent a good that was produced using environmentally sustainable methods under socially just conditions. Further, the certification ensures that the producer received fair prices for their goods. Often these goods are commodities for export. The most well-known of these exports include coffee, chocolate, and handicrafts. These goods originate largely in developing countries that previously lacked access to a market in which to sell their goods at a fair price. There are several organizations worldwide which certify the products to be sold under the fair trade certification. These organizations regulate and certify goods for the fair trade market and attach one of the fair trade logos or labels to the product to be sold.

The key to success of the fair trade industry is consumer consciousness. Producers and distributors of these goods are relying on consumers to make socially just and ecologically sustainable decisions based on individual or community moral and ethical values. As intended, the fair trade certification has appealed to a wide pool of consumers and continues to play a part in the reduction of poverty for the producers worldwide. In addition to positive social impacts, fair trade can also benefit the environment. Provided with additional income, producers can are able to invest in the health of their environment and are more willing to do so in an effort to achieve fair trade certification.

Fair Trade for Agriculture in Ethiopia

Fair trade has potential to improve the lives and livelihoods of small-farmers in Ethiopia. Ethiopia is plagued by food insecurity; evidenced by reoccurring famine and chronic malnutrition. Causes of the food insecurity in Ethiopia are various and numbered, including drought, political corruption, civil conflict and border disputes, complexities of the global food market among others. However, agriculture arguably has the largest role to play in the eradication of food insecurity in Ethiopia. In order to realize the potential of Ethiopian agriculture, four issues which threaten its success most must be overcome. These major challenges include poverty, land tenure, climate change, and distribution of goods. While these factors significantly limit the ability of agriculture to overcome food insecurity, they can have positive implications with the integration of fair trade into the agricultural system.

The agriculture sector in Ethiopia is dominated by small-farmers and accounts for a large majority of the employment in the nation. Poverty prevents the people of Ethiopia (even, in some cases, the farmers) from gaining access to food. It also prevents farmers from being able to access and purchase the inputs needed for an agricultural system which is productive and environmentally sustainable.

Land tenure issues in Ethiopia prevent these same farmers from investing in the land they till because they are neither the owners of that land (and therefore it may be taken from them) nor the sole beneficiaries of its productivity (and therefore maintaining the condition and quality of the land for the future is not in their best interest economically).

Human-induced land degradation is further exacerbated by climate change, rendering the land less conducive to support agriculture. Without harvests, the farmers do not have income and the people of Ethiopia do not have food.

In the event that land rights are secured, the land is productive, and yields are successful, it may still be difficult for farmers to earn a profit on their harvest. This lack of profit can be attributed in large part to the lack of markets regionally, nationally, and internationally. Lack of roads, communication, and storage facilities characteristic of Ethiopia are major limits to accessing local markets and consumers. On the national and international level, mechanisms to market their goods for fair prices and under reliable conditions are also limited.

Through integration of fair trade, many of the challenges Ethiopian agriculture faces can be alleviated. Farmers would gain access to a burgeoning market. As the largest commodity exporter of coffee in Africa, this is especially significant in terms of the income it can bring in for its producers. With this income and the aspiration of a fair trade logo, farmers are given some incentive to invest in their land and decrease practices which degrade the land causing them to be even more susceptible to impacts of climate change. Profits from fair trade in Ethiopia can be used on a larger scale as a source of development for not only the agricultural sector, but the economy in general in order to decrease their dependence on international foreign aid, be it food or financial. All of these impacts could potentially be realized if consumers harness their purchasing power for the good of the producer and our planet. 

References and Further Reading



Viars, A. (2013). Fair Trade for Agriculture in Ethiopia. Retrieved from