Forecasting Demand for Seed: The Case of Ethiopia
This post is written by Bhramar Dey with Support Seed Systems for Development at Catholic Relief Services and Bezabih Emana.
Ethiopia is one of the few countries in sub-Saharan Africa to have a working process and system to forecast seed demand across all administrative levels in the country. The system is used every year to forecast demand for certified seed and early-generation seeds. However, despite the efforts made, the current system is often unable to match the demand and supply of seeds. Thus, the priority of the Ethiopian seed sector is to strengthen and modernize the current system and processes in place. To that end, Supporting Seed Systems for Development (S34D), led by Catholic Relief Services, undertook a study to assess the present system and methods employed to forecast demand. The goal was to provide a roadmap on what the next steps could be to modernize the approach such that the gap between effective and realized demand narrows over time.
Using the framework of a seed data value chain and bottom-up approach, S34D-Catholic Relief Services designed customized survey instruments for each of the different administrative levels, as well as for national and regional stakeholders who perform critical functions in the seed demand forecasting process. Thirty-one key informant interviews were conducted to collect information regarding the system and processes used at present. These informants spanned across more than two dozen institutions and administrative levels in Amhara and Oromia regions, which are the dominant seed producers and users in Ethiopia.
Recommendations for a system that works
Results indicate that Ethiopia has a system that works and there is a strong momentum among actors and stakeholders to improve the processes, to modernize the system, and to strengthen the methodology used. For example, currently there is no digitized data archives that could enable panel analyses and trends analyses using rigorous econometric approaches. Therefore, shifts in the demand curve cannot be estimated from the present system. Inability to do that leads to mismatches in demand and supply on the ground. Additionally, market information is rarely used (nor collected) in the methodology to estimate demand, leading to biased results. For example, survey results indicate stakeholders would appreciate the collection and utilization of important parameters such as seed-grain price ratio. Figure 1 shows the key variables for which data is collected.
Discussions with stakeholders indicate gender and age disaggregated information is neither uniformly collected nor systematically used throughout the process. Furthermore, data adjustments that are made at different administrative levels are not always transparent and well documented. The seed price-setting includes only the public seed enterprises and omits the private sector players. The actual production costs (and associated cost functions) are not transparent. The final price at which the seeds are sold varies based on distribution and handling costs. The process is furthermore complicated through various communication channels – often transmitting similar information bits – without the use of a single platform, leading to a time lapse in receipt of the data.
Recommendations from the assessment are provided in Box 1.
Figure 1. Mapping of Variables for Which Certified Seed Demand Data is Collected at Different Administrative and Stakeholder Levels
Box 1. Recommendations
Seed demand forecasting is a function of many variables, including infrastructure and institutional factors. For that reason, all major stakeholders have a role to play in it. Avoiding or excluding some is not beneficial for the long run. Ethiopia has a good system and process in place (unlike many countries in sub-Saharan Africa). That is already a promising start to augment the current system through modernization using digital approaches and rigorous forecasting methodologies that incorporate both micro-level and big-data structures.
Currently there exists positive momentum for strengthening and enhancing the seed-demand forecasting process. There is abundant talent and capacity within the country to match the requirements. However, often that is not uniformly spread across the country and administrative levels. Mobilizing technical capacity and resources to initiate this change is a necessary.
Finally, it is possible to modernize the system only through partnerships – this is not a “one-project” or “one-stakeholder” task. This encompasses multiple groups, stakeholders, administrative levels, geographies, crop varieties, etc. Going forward, Ethiopia could initiate a representative working group to pilot the recommendations laid out in this assessment.