Inspired by the World Bank and the International Monetary Fund, many less developed countries have carried out economic policy reforms and institutional changes. However, it has become increasingly clear that due to lags in institutional and infrastructure development results of policy reforms are unsatisfactory. This study focuses on assessing the impact of policy reform on agricultural production in Ethiopia. It investigates components of output growth, input use, technical efficiency and technological progress by applying a Stochastic Production Frontier model on a detailed rural household database. It also examines the degree of product price instability and its impacts on modern input use and food supply using a Vector Error Correction model on time series data. The study concludes by pointing out the prospects and constraints of agricultural transformation in Ethiopia.

The Author: Beyene Tadesse Ferenji received a BSc degree in Agricultural Economics from Alemaya University of Agriculture in 1989 and MSc in Economic Policy Analysis from Addis Ababa University in 1998. He obtained a Ph.D. degree from the faculty of agriculture at the University of Hohenheim in 2004, and specialized in economic development policy analysis. From 1989 to 1996 he worked as a researcher at the socioeconomic department for the Ethiopian Agricultural Research Organization at Holota, Bakko and Sirinqa research centers. From 1998 to 2000, the author served as a lecturer in economics at the Addis Ababa University and the Ethiopian Civil Service College. He conducts research in the fields of food security, poverty, rural finance and impacts of policy and institutional changes on economic development.