The objective of this study is toprovide an updated overview on the performance of cerealmarkets in Ethiopia. Specifically, the study seeks to informand guide project operations for the Government of Ethiopia(GoE) and the World Bank. First, it aims to inform thegovernment about incentives concerning grain storage beforethe GoE makes more public investments in storage facilitiesat the cooperative and union levels. Second, both the GoEand the World Bank need a better understanding of cerealmarket performance, including the constraints for privatesector investment in storage facilities. Further, to respondto increasing demand from the government for more food-based(nonmarket) interventions to provide access to food to thepoor instead of market-based (cash or voucher transfers),the PSNP program will need to be better informed about thelevel and extent of cereal market integration. The report isorganized as follows: section two provides an overview ofthe maize and wheat subsectors. It also summarizes keyobservations about maize and wheat value chain performancebased on a field survey. Section three details theconceptual framework and the empirical strategy to assessthe maize and wheat markets performance. Section threepresents the empirical model. Section four discusses dataand section five presents the empirical results. Finally,the conclusions and policy implications are discussed insection six.
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