The impact of COVID-19 on household income and participation in the agri-food value chain: Evidence from Ethiopia

Abstract

The COVID-19 pandemic brought about disruptive consequences on many people's livelihoods around the world. Domestic food supply chains have been severely affected, resulting in income reduction and job loss. Understanding the main constraints faced by the agri-food system participants is then key for targeting appropriate responses. Using Ethiopia as a case study, this paper aims to assess the impact of COVID-19 on household employment and income at various stages along the agri-food value chain and identify the main determinants that mediate those impacts. Using both longitudinal and cross-sectional econometric models over a panel sample composed of a pre-COVID interview and 6 follow-up phone-based surveys, the paper shows the crisis has reduced both employment and income, with increasing negative impacts over time. Farming resulted the most affected sector in the agri-food value chain in the medium-long run. Access to formal institutions such as formal insurance, credit, formal contract, and land ownership title played a key role in reducing the likelihood of income loss.

Keywords

• COVID-19, food value chain, labor market, income loss, Ethiopia