IFPRIDiscussionPaper02156cemberAgriculturalCommercializationinEthiopiaTrendsDriversandImpactonWell-BeingNicholasMinotWarnerwdieMarketsMarkets,Trade,andInstitutionsDivisionAfricaRegionalOfficeINTERNATIONALFOODPOLICYRESEARCHINSTITUTETheInternationalFoodPolicyResearchInstitute(IFPRI),aCGIARResearchCenterestablishedin1975,providesresearch-basedpolicysolutionstosustainablyreducepovertyandendhungerandmalnutrition.IFPRI’sstrategicresearchaimstofosteraclimate-resilientandsustainablefoodsupply;promotehealthydietsandnutritionforall;buildinclusiveandefficientmarkets,tradesystems,andfoodindustries;transformagriculturalandruraleconomies;andstrengtheninstitutionsandgovernance.GenderisintegratedinalltheInstitute’swork.Partnerships,communications,capacitystrengthening,anddataandknowledgemanagementareessentialcomponentstotranslateIFPRI’sresearchfromactiontoimpact.TheInstitute’sregionalandcountryprogramsplayacriticalroleinrespondingtodemandforfoodpolicyresearchandindeliveringholisticsupportforcountry-leddevelopment.IFPRIcollaborateswithpartnersaroundtheworld.THORSNicholasMinot(n.minot@)isaSeniorResaerchFellowintheMarkets,Trade,andInstitutionsDivisionoftheInternationalFoodPolicyResearchInstitute(IFPRI),Washington,DC.JamesWarner)isaResearchCoordinatorinIFPRI’sMarkets,Trade,andInstitutionsDivision,AddisAbaba,Ethiopia.SamsonDejenesdejenearedocgiarorgisaResearchAnalystinIFPRI’sMarkets,Trade,andInstitutionsDivision,Washington,DC.TadiwosZewdiewasaResearchOfficeratIFPRI’sAfricaRegionalOffice,AddisAbaba,Ethiopia.IFPRIDiscussionPaperscontainpreliminarymaterialandresearchresultsandarecirculatedinordertostimulatediscussionandcriticalcommentTheyhavenotbeensubjecttoaformalexternalreviewviaIFPRI’sPublicationsReviewCommittee.Anyopinionsstatedhereinarethoseoftheauthor(s)andarenotnecessarilyrepresentativeoforendorsedbyIFPRI.2Theboundariesandnamesshownandthedesignationsusedonthemap(s)hereindonotimplyofficialendorsementoracceptancebytheInternationalFoodPolicyResearchInstitute(IFPRI)oritspartnersandcontributors.3Copyrightremainswiththeauthors.Theauthorsarefreetoproceed,withoutfurtherIFPRIpermission,topublishthispaper,oranyrevisedversionofitinoutletssuchasjournalsbooks,andotherpublicationsractAgriculturaltransformationreferstoaseriesofchangesinagriculturethatbothreflectanddriverisingincomeandeconomicdevelopmentmorebroadly.Whilethemacroeconomicpatternsofagriculturaltransformationarerelativelywelldocumented,lessisknownabouthowitismanifestedatthehouseholdlevel.Ethiopiamakesanexcellentcasestudyasithashadoneofthefastestgrowingeconomiesintheworld.Thispaperfocusesononeaspectofthisprocess:agriculturalcommercialization,thatis,theprocessthroughwhichanincreasingshareofagriculturaloutputissoldonthemarketratherthanbeingconsumedathome.Theanalysisusesthreenationallyrepresentativeruralhouseholdsurveyscarriedoutin2012,2016,and2019,includingapanelof1,900households.Theresultsshowthattheshareofmarketedagriculturaloutputhasincreasedsignificantlyovertheseven-yearperiod.Somewhatsurprisingly,thisincreaseisnotduetoashiftincropmixtowardmorecommercialcropsbutratheranincreaseinthedegreeofcommercializationofeachcrop.Usingacorrelatedrandomeffectsmodel,wefindmarketedsharetobesignificantlyrelatedtoageoftheheadofhousehold,farmsize,wealth,distancetoroad,rainfall,rainfallvariability,andregion.Althoughendogeneityisachallenge,descriptivestatisticsandregressionanalysisfurthersuggestthatagriculturalcommercializationcontributestohigherincome,largelybecausecommercialcropsgeneratehigherreturnsperhectarethanstaplegrains.Theresultsindicatethatthereisnoclearlinebetween“subsistence”and“commercial”farms.Alargemajorityoffarmshavesomecropsales,whilevirtuallynoneofthemsellalltheiroutput.Similarly,thecontrastbetweensubsistencecropsandcashcropscanbemisleading.Forexample,thevalueofstaplecerealsalesinEthiopiaisalmostthreetimesgreaterthanthatofcoffee,themaincashcrop.Wedrawlessonsfromtheresultsforthedesignofprogramstoraiseruralincomesbyfacilitatingmarket-orientedagriculturalproduction.KeywordsAfricaEthiopiaagriculturaltransformation,commercialization,povertycknowledgementsThisworkwasfundedbytheBillandMelindaGatesFoundation(BMGF).Itisoneoffivepaperspreparedundertheprojectentitled“AgriculturalTransformationinEthiopia:AssessingEvidenceofDriversandImpacts.”ThispapermakesuseofthreeroundsoftheAgriculturalCommercializationCluster(ACC)SurveysimplementedbytheInternationalFoodPolicyResearchInstitute(IFPRI)insupportoftheEthiopiaAgriculturalTransformationAgencyundertheprojectTechnicalsupporttotheEthiopiaAgriculturalTransformationAgency.”ThefirsttworoundsofthesurveywerefundedbytheBillandMelindaGatesFoundationandthethirdroundwasfundedbytheDanishInternationalDevelopmentAgencyandtheEthiopiaAgriculturalTransformationAgency.TheauthorsthankStanWoodandhiscolleaguesattheBMGFforprovidingguidanceandfeedbackonthispaper.TheauthorsalsothankMichaelMannofGeorgeWashingtonUniversityandChrisFunkoftheUniversityofCaliforniaatSantaBarbarafortheirassistanceinobtainingandprocessingtheCHIRPSrainfalldata.Finally,theauthorswishtothankShahidurRashid,whowastheprojectmanagerfortheimplementationofthethreeACCsurveys,guidingthedesignofthesurveysandtheinterpretationoftheirresults.1nAgriculturaltransformationdescribesasetofchangesthatoccurintheagriculturalsectorastheeconomyexpandsandincomerises.Thesechangesincludegreateruseofpurchasedagriculturalinputssuchaspurchasedseedandfertilizer,risingagriculturalproductivity,adeclineinsubsistencefoodproductionasfarmersshifttogrowingforthemarket,andtheexpandingimportanceofnonfarmactivitiesandincome.Thisispartofbroaderchangesintheeconomyknownasstructuraltransformation,inwhichtheagriculturalsectorgrowsmoreslowlythantherestoftheeconomysothatitsshareinnationaloutputdeclines,alongwithashiftinlaborfromruraltourbanareasandfromagriculturaltonon-agriculturalactivities.Atsomepoint,theprocessofurbanizationoftenresultsinaabsolutedeclineintheruralpopulation,leadingtorisingruralwagesandgrowingaveragefarmsize,bothofwhichcontributetoimprovedstandardsoflivinginruralareas.Agriculturalcommercializationreferstothegradualincreaseintheshareofagriculturaloutputthatissoldasopposedtobeingconsumeddirectlybythefarmhousehold.Thisisakeycomponentoftheprocessofagriculturaltransformation.Theimmediatecausesincluderisingagriculturalproductivitygeneratingasurpluswhichcanbesold,andimprovementsininfrastructurewhichfacilitatethesaleofagriculturaloutput.Itiswidelyassumedthatshiftingfromlowvaluestaplefoodcropstohigher-valuecommercialcropsraisesfarmhouseholdincome,althoughfirmlyestablishingcausalityisnoteasy.Thepatternsofagriculturaltransformationhavebeenextensivelyresearchedatthenationallevelusingcross-countryanalysisofthecompositionofgrossdomesticproduct(GDP),demographicdataonurbanization,andemploymentdatabysector.However,lessresearchhasbeencarriedoutonhowthesenationaltrendsaremanifestedatthehouseholdlevel.Thisstudywillfocusonthefollowingresearchquestions:?Hasthemarketedshareofcropproductionincreasedovertime?GiventherapideconomicgrowthinEthiopia,weexpectcropcommercializationtohaveincreasedaspartofthebroaderprocessofagriculturaltransformation.?Ifso,howdoestheincreaseincommercializationvaryacrossdifferenttypesofhouseholds?Forexamplewewouldliketoknowwhethertheincreaseislimitedtohigher-income,larger2farmersinfavorablelocationsordoesitextendtopoorerhouseholdswithsmallfarmsinremoteareas.?Whatarethehousehold-leveldeterminantsofcropcommercialization,suchasfarmsize,regionremoteness,sexofheadofhousehold,ageofheadofhousehold,andincome??Giventhatriskplaysanimportantroleinagriculturalcommercialization,iscommercializationlowerinareascharacterizedbyloworunreliablerainfall??Whatarethehouseholdcharacteristicsofmorecommercialfarmersandhowdotheydifferfrommoresubsistence-orientedfarmers?Ifriskisamajorimpedimenttocommercialization,wemightexpecthouseholdstostartbymarketingstaplecropbeforemovingtowardnon-perishablefoodcropsandeventuallyhigh-riskperishableandnon-foodcrops.?Doescommercializationcontributetohigherincomeandbetterstandardofliving?Manyprogramsassumethathelpingfarmersshiftintocommercialagriculturewillincreasetheirincome,butisthistrue?Theanswerstothesequestionshaveimportantimplicationsforthedesignandimplementationofprogramstoincreaseincomeandreducepovertyinruralareas.Shouldthegovernmentanddevelopmentpartnerspromoteagriculturalcommercializationtoimproveruralwelfare?Ifso,shouldtheprogramsbebroadbasedortargetedatcertaintypesofhouseholdsandcertainregions?Andwhataretheconstraintsthatpreventhouseholdsfromusingcommercialproductiontoraisetheirincomesandstandardofliving?ThispaperexaminesthetrendsandpatternsinagriculturalcommercializationinEthiopiaovertheperiod12to2019.Ethiopiamakesagoodcasestudyforseveralreasons.First,ithasexperiencedsomeofthehighestratesofgrowthinpercapitaincomeofanycountryintheworld.Thismakesitmorelikelythatwecanobservechangesinagriculturaltransformationoverarelativelyshortperiodofsevenyears.Second,theEthiopiangovernmenthaspursuedastrategyofagricultural-ledeconomicgrowth,makingsignificantinvestmentsinruralinfrastructure,creatinganenablingenvironmentforagriculturalgrowth,anddevotingresourcestoidentifyingandrelievingobstaclestoagriculturalgrowth.Third,thestudyisfacilitatedbytheavailabilityofthreehighlycomparablehouseholdsurveyswithrelativelylargesamples(3,000to5,000households)andasubsampleofalmost1,900householdsthatformapanel.ThethreesurveysaretheAgriculturalCommercializationClusterACCSurveysof2012,2016,andTheywerecarriedoutbytheInternationalFoodPolicyResearchInstitute(IFPRI)for3theEthiopiaAgriculturalTransformationAgency(ATA)withfundingfromtheBillandMelindaGatesFoundation.TheEthiopiaATAisasemi-autonomousdevelopmentagencywiththemandatetoaccelerateagriculturaltransformationinthecountrybytestingnewtechnologyandinstitutionalarrangementsTheATAwasoriginallyfundedbytheBillandMelindaGatesFoundationandlaterattractedsupportfromotherinternationaldevelopmentorganizations.TheATAfocusedonclustersofworedasinareasofhighagro-ecologicalpotentialwiththeideaofimprovingthedeliveryandadoptionofmoderninputs,increasingcropandlivestockproductivity,raisingthecompetitivenessofagriculturalmarkets,andgenerallyraisingthestandardsoflivinginruralareas.ThepaperisorganizedasfollowsSection2describesprevioustheoreticalandempiricalresearchonagriculturalcommercializationwithanemphasisonsub-SaharanAfricaandEthiopia.Section3providesanoutlineofthedataandmethodsusedinthisstudy.Section4describestheresultsoftheanalysisofthethreeACCSurveys.AndSection5summarizestheresultsanddiscussestheimplicationsforpolicyandprograms.PreviousresearchonagriculturalcommercializationOneofthemostsalientcharacteristicsofagricultureinlowincomecountriesistheimportanceofsubsistencefoodproduction.Mostfarmersgrowcropsandraiselivestockonarelativelysmallscale,withfarmsoflessthan2hectares.Alargeshareoftheircropproductionconsistsofstaplefoodcrops,includingcereals,cassava,andotherinexpensivesourcesofcalories.Whilefewfarmersarecompletelydisconnectedfromthemarket,alargemajorityselllessthanhalfoftheircropproduction.Inordertounderstandtheagriculturalcommercialization,itisimportanttobeginbyexplainingsubsistencefoodproduction.2.1.EconomicrationaleforsubsistencefoodproductionInanidealizedworldwithperfectinformationcompetitivemarkets,andnotransactioncosts,eachfarmerwouldproducethecropthatmaximizesprofit,sellallofthecrop,andusetherevenuetopurchaseautility-maximizingbasketofconsumergoods.Productiondecisionswouldbeseparable”fromconsumptiondecisionsinthatthelatterwouldhavenoeffectontheformerSingh,Squire,andStrauss,1986).Thus,aneconomicexplanationforsubsistenceproductionmustbelinkedtoaviolationofoneoftheseassumptions.4Forexample,marketsintherealworldarecharacterizedbytransactioncosts,thatisthecostofgettingtothemarket,findingabuyer,negotiatingaprice,andsellingtheproduct.Transactioncostsareparticularlyimportantforsmall-scalefarmerslivinginruralareas.IntheirseminalstudydeJanvryetal.(1991)showthattransactioncosts(includingthecostoftransportation)betweenthefarmandmarketcreatesagapbetweenthe(higher)farm-gatepurchasepriceandthe(lower)farm-gatesellingpriceofastaplefoodcrop.Thegapbetweenthepurchasepriceandthesellingpricewillbelargeforfarmerslivinginremoteareasandrelativelylargeforlow-valuestaplegrainsWhentransactioncostsaresignificant,theshadowpriceofthecropatthefarmlevelmaywellbetoolowtojustifybuyingthecommoditybuttoohightojustifysellingit.Thiscreatesasituationinwhichtherationalfarmerproducesenoughofafoodcropfortheconsumptionofthehousehold,neithersellinganyoftheproductionnorbuyingfromthemarket.Inotherwords,afarmeris“forced”tosupplyalmostallhisfoodrequirementsbecauseofthehighcostofsellingcropsorbuyingfood.Thisbreaks“separability”sincenowproductiondecisionsareinfluencedbyconsumptionpreferences.Italsomakesthefarm-levelsupplyinelastictopricechangesoverarangeofpricesandmakesaggregatesupplylessresponsivetopricesHightransactioncostscanalsoexplainlowuseofpurchasedinputslikeseedandfertilizer,whichreducesproductivityandincome.Asecondexplanationisrisk.Evenwithouttransactioncosts,riskmaybeanobstacletoaccessingagriculturalmarketsMosthouseholdsavoidrisk,butsmallfarmersandotherslivingatthemarginofsurvivalareparticularlyriskaverseintheirlivelihooddecisionsbecauseanegativeshocktoincomecouldthreatentheirhealthandsurvival.Producingafoodcropforownconsumptioncertainlyinvolvessomerisk:iftheweatherisbad,theharvestmaybetoosmalltofeedthefamily.However,producingcropsforthemarketinvolvesmultiplerisks,includingtheriskofpoorweather,theriskofadropinthepriceofthecashcrop,andtheriskofanincreaseinthepriceofthefoodtheyneedtobuy.High-valuecropssuchasvegetablesintroducegreaterproductionrisk(particularlyiftheyareperishable)andhighpricerisksbecausetheirpricestendtobemorevolatile.Thus,commercialcropproductionislikelytoberiskier,whichdiscouragefarmers,particularlythosethataremoreriskaverse.Thirdproducingsomecommercialcropsmayinvolveinitialinvestmentsthatareoutofthereachofsubsistencefarmers.Forexample,switchingfromsorghumtovegetablesislikelytoinvolvehighercostsforseed,fertilizer,andlabor.Andswitchingfromafoodcroptocoffee5requiresathree-yearwaitbeforethefirstharvest.Ineconomicterms,eveniftheinvestmentisprofitable,thefarmerdoesnothavethesavingsoraccesstocreditthatwouldbeneededtocovertheupfrontcosts.Thelackofaccesstocreditislinkedtomarketfailuressuchaslackofinformationonthepartoflendersaboutcreditworthinessofthefarmerandthehighcostsofenforcingrepayment.Insummaryeconomictheorysuggeststhat,inanidealizedworldofcompetitivemarketsandperfectinformation,farmerswhospecializeincropssuitedtotheiragro-ecologicalconditionsandsellthemwillearnmorethanfarmersproducingarangeofstaplefoodcropsfortheirownconsumption.However,inruralareasofdevelopingcountries,mostfarmersgrowarangeoffoodcropsfortheirownconsumptionandselllessthanhalfoftheircropoutput.Subsistenceagriculturalproductioncanbeexplainedbytransactioncosts,risk,andinvestmentcostsassociatedwithcommercialproduction.Relaxingthesethreeconstraintswouldallowfarmerstoproduceforthemarket,therebyraisingtheirincomeandimprovingfoodsecurity.2.2.LevelofcommercializationAsimplemeasureofcommercializationistheproportionoffarmersthatparticipateincommercialization,meaningthattheyhavesomecropsales.EarlierresearchinEthiopiaestimatedthataboutpercentofEthiopianfarmerswereinvolvedinsellingcrops(PenderandAlemu2007).Incontrast,arecentstudyfoundthattheshareoffarmersparticipatinginthemarketwaspercentinMalawi,80percentinUganda,and68percentinTanzania(Carlettoetal.,2017).Abettermeasureofcommercializationisthemarketedshareofcropproduction,whichtakesintoaccountthedegreeofcommercializationamongthosesellingcrops.Table1summarizesanumberofstudiesonhouseholdcropcommercializationbycountryandbycroptype.Themarketedsharerangesfrom17percentto72percent,butroughlyhalfoftheestimatesareintherangeof0percent.Ingeneral,theliteraturesuggeststhatalargeshareoffarmerssellatleastsomecrops,butmostsellarelativelysmallshareoftheirharvest.1Table1.EstimatesofthelevelofcommercializationStudyCountryCrop(s)Marketedshareofoutput(%)PenderandAlemu(2007)EthiopiaTeff24PenderandAlemu(2007)EthiopiaWheatGebremedhin&Jaleta(2010)EthiopiaAllcrops25Minotetal.(2015)EthiopiaWheatMamoetal.(2016)EthiopiaWheat27FAO(2019)EthiopiaWheatMurichoetal.(2017)KenyaAllcrops37FriesenandPalmer(2004)KenyaMaize40Carlettoetal.(2017)MalawiAllcropsCarlettoetal.(2017)TanzaniaAllcrops27.5Carlettoetal.(2017)UgandaAllcrops26.3Agwuetal.(2013)NigeriaCassava29.6Agwuetal.(2013)NigeriaMaize24.0Marteyetal.,(2012)GhanaMaize53Marteyetal.,(2012)GhanaCassava72Marteyetal.,(2012)GhanaAllcrops66Note:Itisnotclearwhetherthesefiguresrepresenttheaveragemarketedshareorthetotalvalueofsalesasapercentageofthetotalvalueofproduction.ThisdistinctionisdiscussedmoreinSection.DeterminantsofagriculturalcommercializationGiventhevariationinthecommercializationthenextquestionis:whathouseholdandcommunitylevelfactorsinfluence,oratleastarecorrelatedwith,agriculturalcommercializationAtthehouseholdlevel,mostdiscussionofcommercializationstartsfromthepremisethatfarmersmustproducebeyondtheirperceivedconsumptionneedsinordertoparticipateinthemarket,whichimpliesthathigherproductivityleadstohigherdegreeofcommercializationBarrett,2008;vonBraunandKennedy,1994).StudiesinmanyAfricancountrieshavereportedapositivecorrelationbetweenlevelsofproductionandcommercialization(e.g.,Carlettoetal.2017,Pender&Alemu2007,GebremedhinandJaletaMamoetal.2017).Thus,itisnotsurprisingthatmanystudiesfindthatthedegreeofcommercializationincreaseswithfarmsize(Carlettoetal.,2017).Researchalsofoundconsistentlystrongpositiveassociationsacrossmultiplecountries,cropsandyears,betweencropsales,livestockownership,creditaccessorothermeasuresofwealth.Conversely,lowerlevelsofoutputproductionaremainlyassociatedwithpoorassetownershipandlowadoptionofproductiontechnologies.2Giventhesmallfarmsizeofmanyfarmsinsub-SaharanAfricaandthedifficultyofgeneratingincomeabovetheminimumneededforsubsistence,itisnotsurprisingthatstudiesgenerallyfindthatfarmersareriskaverse(GuttormsenandRoll,2014;GebremedhinandJaleta,2010;Barrett,008;Aimin,2010;Pandey,2006).Riskaversioninhibitstheadoptionofpurchasedinputs,suchasfertilizerandimprovedseed,becausetheyinvolvecertaincostsanduncertainreturns.Forexample,Africanaverageuseoffertilizeris11kgofnutrientsperhectareofarablelandcomparedwiththeworldaverageof62kg/ha(Obayeluetal.,2021).Inthisway,riskaversionreducesproductivityandindirectlymakesitmoredifficulttoachievemarketablesurpluses.Thereisevidenceofthisinresearchwhichshowsasignificantimpactoftheagriculturalservicesontheintensityofinputuse,agriculturalproductivityandmarketparticipationofEthiopiansmallholders(Gebremedhinetal.,2009).Riskaversioncanalsodirectlyinhibitproductionforthemarketbecauseitexposesfarmerstopricerisksand(forperishablecrops)greaterproductionrisk.Anothersetoffactorsinfluencingagriculturalcommercializationarerelatedtoaccesstoinfrastructuresuchasmarketsandroads.Forexample,longdistancetothemarketleadstohighcostsoftransportation,limitingbothhouseholdlevelmarketparticipationandsalesvolume(FosterandBriceno2010;Barrett,2008).AstudybyAleneetal.(2008)inKenyashowedthattransactionscostshadasignificantnegativeeffectonthemarketparticipationoffarmersinKenyaWeakinfrastructureandlimitedaccesstomarketshasalsobeenidentifiedasanobstacletocommercializationindevelopingAsiancountries(Wiggins,2018).Severalstudiesfindthatpooraccesstoroadsisanimportantfactorinreducingthelevelofcommercialization(Keyetal.,Barret2007;PenderandAlemu,2007;Aleneetal.,2008;Yamauchietal.,2009;GebremedhinandJaleta,2010;Agwuetal.,2013).2.4.EffectsofagriculturalcommercializationAgriculturalcommercializationhaslongbeenseenasawayoutofpovertyforsmallholders(vonBraunBarrett,2008,GebremedhinandJaleta,2010).Theeffectsofcommercializationandsmallholderagriculturehasbeenthesubjectofseveralstudiesthattypicallyfocusontheimpactonpovertyandnutrition.iesexploringtheimpactofagriculturalcommercializationonincomeandpovertyhavefoundgenerallypositiveeffects,thoughthemagnitudedependsonthelocalconditions.Oneofthelargeststudiesexaminedtheimpactofagriculturalcommercializationonincomeusingsub-3nationalsurveysinsevencountries:Guatemala,Kenya,Rwanda,Zambia,thePhilippines,PapuaNewGuinea,andIndia(vonBraunandKennedy,1994;vonBraun,1995).Thisstudyfoundthatthatcommercializationsignificantlyincreasedhouseholdincomeinsixofthesevencases.AstudyconductedinKenyafoundevidencethatagriculturalcommercializationsignificantlyincreasedpercapitahouseholdexpenditureamongcommercializedfarms(Murichoetal.,2017).StudiesinKenyaandtheCentralAfricaRepublicreportapositiverelationshipbetweenvegetablecommercializationandwelfare(MuriithiandMatz2015,Ochiengetal.,2020).Researchontheimpactofagriculturalcommercializationonnutritionhasbeensomewhatmoremixed.Forinstance,thesummaryoffindingsofearlystudiesinTanzania,Kenya,andPapuaNewGuineaisinconclusive,withthesamecroptypedemonstratingeitherpositiveornoeffectsbothbetweenandwithincountries(Hitchings,1982;HarveyandHeywood,NiemeijerHoorweg,1994).Intheseven-countrystudymentionedabove,theimpactofcommercializationonnutritionwasexaminedinsixofthecasestudies,withthreeshowingimprovechildnutritionandthreeshowingnoeffectMore,recentstudiesinAfricaseemtoconvergetowardstheimportanceofcommercializationinimprovinghouseholdnutrition(OgutuetalCarlettoetal.,2017;Montalbano,2018).OnestudyofVietnamfoundmixedeffectsonnutrition,dependingonthetypeofcommercializationindicatorused(Linderhofetal.,2019).Higherincomemaynotnecessarilyimprovenutritionalstatusforvariousreasons.Therearecaseswherefarmersprioritizenon-fooditems,whichoftendependonknowledge,culture,andsocialgroups(RadchenkoandCorral,2018).SomestudiesintheAfricancontextexploregenderroleswithinthehousehold(vonBraunandKennedy,1994;Haddadetal.,1997;FischerandQaim2).Incomesfromcashcrops(oftenmalecontrolled)andfromfoodcrops(oftenfemalecontrolledmaybespentdifferentlydependingontheprioritiesofthememberwhoearnsitAccordingtoHoddinottandHaddad(1995),womentendtospendmoreonfoodanddietaryqualitythanmensonutritionimpactdependspartlyonwhoearnstheincome.Insum,mostresearchfindsthatagriculturalcommercializationhasapositiveeffectonincomeandpovertyreductionwhiletheimpactonnutritionismixed,withsomeevidenceofapositiveeffectandsomethatisambiguousor(occasionally)negative.2.5.AgriculturalpolicyinEthiopiaAfterthecollapseofitsSoviet-inspiredcentralizedplannedeconomy,Ethiopiaembarkedonamoremarket-orientedstrategywhichwouldsupporttheagriculturalsector.Beginningin1993,4thegovernmentlaunchedtheAgriculturalDevelopmentLedIndustrialization(ADLI)strategy,withanemphasisonincreasingagriculturalproductivity.Agovernmentdocumentexpressedthisasfollows:“theobjectiveistobri