ETHIOPIAN DEVELOPMENT RESEARCH INSTITUTE

Patterns and Determinants of Teff Consumption in Ethiopia

Ibrahim Worku, Mekdim Dereje, Guush Berhane, Bart Minten and Alemayehu Seyoum Taffesse

IFPRI ESSP-II EDRI

October 10, 2013 Addis Ababa

1

Outline

1. Introduction

2. Data and Methodology

3. Patterns of food and teff consumption

4. Estimates of income elasticities

5. Conclusion and policy implication

In this study, we look at teff at the end the value chain, i.e. consumption of teff

Based on national representative data, we document the major patterns in food and teff consumption in Ethiopia

We further econometrically study the link of incomes with teff consumption

1. Introduction

• We use annual household expenditure data on all food and non-food items, collected roughly every five-year by the CSA, called HICEs and HCEs (for 2010).

• Survey years: 1995, 2000 ,2005 and 2010

• The HICEs is a unique dataset: nationally representative! • Sample size: ranges from 11,957 (1995) to 27,835 (2010)

• Increasing number of items considered over the years: 222 items (1995 survey) and 1186 items (2010 survey)

We acknowledge CSA for providing us the data

2. Data and methodology

To do so, we use annual household expenditure data on all food and non-food items

Annual expenditures: the total Birr value of expenditure spent or used for all possible household consumables & converted to an annual basis.

Expenditures often used as proxy for “income” and also useful to understand consumption patterns among income groups of households, across space and time.

2. Data and methodology

3. Patterns in food and teff consumption a. Food versus non-food: Share of food in the consumer basket is

declining over time

2000 2005 20100.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

FoodNon Food

3. Patterns in food and teff consumption

Food item Birr/capita Food share

Teff 198 9.0%

Wheat 168 7.6%

Barley 54 2.5%

Maize 171 7.8%

Sorghum 112 5.1%

Pulses & other cereals 238 10.8%

Other foods 1,253 57.0%

Total food 2,198 100%

b. Teff versus other foods. Teff most important cereal

8

3. Patterns in food and teff consumption c. 1) White, mixed and red teff expenditure share has leveled in 2010. 2) the share of white teff is on the rise and that of red teff has declined

2000 2005 2010 -

5

10

15

20

25

30

35

40

45

White TeffRed TeffMixed Teff

Year

Shar

e of

tef

f in

tot

al t

eff(

%)

9

3. Patterns in food and teff consumption

Shares (%) in total per capita expendituresCategories 2000 2005 2010

Teff 12.7 8.7 9.0Wheat 8.8 8.7 7.6Barley 3.8 3.5 2.5Maize 11.6 8.5 7.8Sorghum 6.1 8.0 5.1

d. Changes over time. 1/ Expenditures on cereals are overall declining 2/ In contrast to other cereals, share of teff has increased between 2005-10

10

3. Patterns in food and teff consumptiond. Changes over time. Quantities of teff consumed are increasing over time

2000 2005 2010130

135

140

145

150

155

160

165

TEFF (kg/person)

11

3. Patterns in food and teff consumption

e. Agro-ecologies (Quantity of teff consumption). Rural versus urban (2005) 1/ Urban consumption very high 2/ Large differences for different agro-ecological zones

poor nonpoor poor nonpoor poor nonpoor poor nonpoorHighland - Cereals Highland - Enset Drought Prone Large Cities

0

50

100

150

200

250

EnsetOther CerealsSorghumMaizeWheatTeff

12

3. Patterns in food and teff consumption

g. Rural versus urban. While the proportionate increase is higher for white, mixed teff still remains important in urban areas ; black is stable in rural areas

2000 2005 2010 -

10.00

20.00

30.00

40.00

50.00

60.00

White TeffMixed TeffBlack Teff

2000 2005 2010

25.427.3

32.936.6

27.7 27.3

38.0

45.0

39.9

RuralWhite Teff Mixed Teff Black Teff

Urban

13

3. Patterns in food and teff consumption

j. Calorie intake. in urban areas a third of calories derived from teff-so dominant source of calorie intake; while in rural areas, teff teff accounts only 8%

8%

13%

43%

14%

9%

2% 11%

Rural

30%

10%

23%

5%

14%

3%

15%

Urban

TeffWheat Other CerealsEnset & root cropsPulses & oil seedsAnimal productsOthers

• As income of consumers change, their food consumption basked changes

• This is measured by the income elasticity: “An % increase of income leads to an % increase of consumption of a particular food”

• These estimates tell us what will happen to the food demand when countries and people become richer

• Estimates of these differences are done by comparing consumption patterns of different wealth groups in the HICES data

4. Estimates of income elasticities

4. Estimates of income elasticities (QUAIDS model)

This controls for demographic differences, location diff, wealth diff,…

4. Estimates of income elasticities- (2005)

  Urban Rural

Teff 1.10 1.20

Wheat 0.78 1.19

Maize 0.37 0.82

Sorghum –0.36 0.51

Pulses and other cereals 0.90 0.74

Animal products 1.72 1.98

Fruits and vegetables and root crops 1.22 1.18

Other foods 0.66 0.92

1/ Income elasticity for most crops positive2/ Income elasticity for teff biggest of all cereals; teff demand is to increase faster than demand for other cereals with income growth

17

Conclusions and policy implication

•We present stylized facts on teff consumption based on national household survey:

1. Teff most important cereal in food expenditures

2. Urban consumption much higher than rural consumption

3. Teff consumption is increasing over time

18

Conclusion and policy implication (cont.) 4. White teff consumption has increased over time compared to red

and mixed teff consumption. In aggregate terms the three verities have equal importance in 2010.

5. Teff is a major contributor to calories in urban area.

6. We find large income elasticity of teff; as incomes grow, Ethiopian consumer will increasingly spend on teff. This indicates the importance of increasing investments in teff as its importance will grow over time

7. Further need to increase production to satisfy increasing demand in foreign markets - huge opportunity in international market

US produced teff on sale at Trader Joe’s Supermarket in New York City (1 LB or 454g for $6.29).

Teff – already in global supermarkets!

At this price , a quintal of teff would sale a whopping 26,000 ETB!!

Teff – already in global supermarkets!

Dutch company (since 2003)

Producing teff to make gluten free and wt conscious cookies, muffins, cakes and modern breads

Enjoy consuming . . . . Tiny-> teff

& Thank you!