Strategic grain reserves in Ethiopia

Holding strategic grain reserves to address food price hikes has received renewed attentions in recent years. This paper examines such a program in Ethiopia that has been successful in addressing several emergencies since the 1990s. The analysis suggests that the key ingredients behind the success are a unique institutional design, coordination during emergencies with food-based safety net programs, and keeping the grain stocks to a minimum. Institutional design is unique because, unlike similar agencies in other countries, Ethiopia’s Emergency Food Security Reserve Administration (EFSRA) is independent of price stabilization and hence is not engaged in buying and selling of grain. The paper also demonstrates that scaling up school feeding programs will generate additional food demand and an effective outlet for stock rotation; and that increasing the stock level for price stabilization will adversely affect both grain markets and the performance of the EFSRA.