17 November 2012

Ethiopia: ECX's Exemplary Deeds, and the Passing of the Torch

For years, agricultural commodities in Ethiopia have been sold with in a routine and traditional market system in which market actors have no reliable information, access to major markets and devoid of fair exchange manner.

Farmers do not have the option to get market information about their agricultural products in the major market places other than their localities. This has compelled them to remain without properly enjoying from the benefit of their labor. This in turn have had a significant impact on the country's economy as the majority of the population depends on agriculture one way or the other.

To change this age old scenario and improve the livelihood of farmers via provision of adequate market information and enable them sale what they have at reasonable and fair prices, the Ethiopian Commodities Exchange(ECX), the first of its kind in Africa, was established in April 2008. The ECX aims to serve all market actors, which include, farmers, traders, processors, exporters and consumers. After its inception, the ECX has now founded its branches in many areas of the country, that the market actors that have been languishing for years in traditional ways of marketing are now enjoying a new, information based market system with reliable structure. The pioneer and architect behind the ECX, which is now taken as a role model in Africa, just after a few years of its establishment, its founder and Chief Executive Director, Dr. Eleni Gebre-Medhin. Eleni, who has an extensive work experience in African agricultural markets and various high-level posts in the United Nations and the International Food Policy Research Institute in Washington D.C.

Presently, the ECX has provided commodity options for coffee, sesame, haricot beans, wheat and maize. All major players can now get a fair, and by far a better deal with the help of commodity brokers. The farmers, commodity brokers and consumers can surely get their deserved share from the final commodity selling price. There is no room for brokers to cheat poor farmers by telling fake and dropped prices to their commodities as the ECX has put electronic displays in public places across various cities of the country. This service, coupled with the recently flourishing mobile phone service, is making the situation easier for farmers gain deserved prices from their hard-earned commodities.

It could be said that, though there are still more challenges to overcome, the ECX has laid the necessary foundation to attain its aim to develop effective market structure that could enable to link and protect local suppliers(sellers), buyers, intermediaries and the general public. It began the new exchange market in the country with coffee, wheat, maize and haricot bean since December, 2008 and added sesame since May, 2009. The opening of the ECX has also created a favorable ground for brokers to make deals just on the trading floor. Furthermore, it has introduced trading based in standardized contracts which principally aim at preserving the origins and unique qualities of coffee and maximizing the number of buyers and sellers that participate in price bidding, which in turn ensures competitiveness and transparency.

The relentless effort made by the iconic lady, Eleni Gebre- Medhin and her colleagues, has become fruitful in a short period of time that now all interested parties of the market have got comfortable situation to easily access and follow market trends directly via various electronic lines. Presently, small-scale farmers, who were previously compelled to sale at fake prices set by informal brokers, have began to share from the fair wealth distribution set by the new market system. Only with in this handful of years, the number of farmers unions and cooperatives engaging in the market system has grown from 111 to 193. As the share of the final export price for coffee too has grown from 38 percent to 65 percent, thanks to the new transparent and efficient market system, about 15 million coffee farmers in the country have started to enjoy the positive impact on their livelihood. 2.4 million farmers are presently represented via their cooperatives, and they account for 12 percent of the overall ECX members.

The ECX's trading volume also showed a dramatic rise during the period that its trading has now reached 601, 000 tons from 138,000 in 2008/2009 and has traded more than 1.2 billion dollars in commodities, the majority being in coffee. The market giant now has 329 full and active members and 10, 416 clients, more than 40 percent of whom reside outside Addis.

Laying the foundation for all these and other successful undertakings, the pioneer and architect behind all its trying tasks, Dr. Eleni Gebre-Medhin, has officially transferred the leadership role to the new leader, Anteneh Asefa, a few months before. The ECX has prepared an extraordinary farewell gala to her and made the stage for the outgoing leadership to officially pass the torch to the incoming leader. Anteneh, 38, was selected from a handful of nominees and is said successful in previous careers with commercial bank of ethiopia and bank of Abyssinia during the last 15 years. In his speech at the ceremony, he reminded the traditional and routine scenario through which the market of Ethiopian market of agricultural products has come and noted the multiple challenges this situation has posed on farmers and other market actor.

Unlike before these market actors now have the opportunity to easily know the market information beyond their domain, he added. To transfer the exchange-market to the next stage and stave of possible challenges ahead, there lies a huge task and needs collaboration and relentless effort from all actors in the system. In general, both the achievements the ECX has made real with in short span of time and its way of power relay(passing the torch to the incoming leaders) is highly exemplary.

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