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The Private Sector and the Marginalized Poor

An Assessment of the Potential Role of Business in Reducing Poverty and Marginality in Rural Ethiopia


Christine Husmann

The book examines the role that the private sector can play in reducing poverty and marginality in Ethiopia by providing improved agricultural inputs to marginalized poor farmers. By creating a marginality map the author analyzes who and where the marginalized poor are. Data from a household survey about purchasing behavior, demand and needs indicates that this group can be a promising market segment for the private sector if adequate business models are applied. Yet, an analysis of the institutions governing agricultural input markets shows that investments by the private sector are discouraged by de facto monopolies of the government on crucial elements of the different supply chains, including seed breeding, fertilizer imports and finance.
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This work would not have been possible without the support of many people. First and foremost, I would like to thank Prof. Dr. Joachim von Braun. He guided me through this work and provided invaluable support during my research. Dr. Franz Gatzweiler challenged me with his questions and insights that advanced my work. Furthermore, I am deeply grateful to Heike Baumüller for her motivational support and many smart thoughts and suggestions throughout the last three years. I also want to express my gratitude to my Ethiopian colleagues at ZEF, especially Dawit Diriba Guta and Tigabu Degu Getahun, who provided me with many useful contacts in Ethiopia and sacrificed a lot of time to comment an earlier version of this book. Parts of the mapping methodology that is used in this study were developed together with Valerie Graw. Guido Luechters inspired me many times with his positive spirit and his deep insights into mathematical and statistical problems.

Of course, this work mostly benefits from all the valuable insights I gained in Ethiopia. There, many people dedicated their time and other resources to share information with me and advance my research. I especially want to thank all Ethiopian farmers who readily welcomed my assistants and me at their homes and willingly told us about their lives. Special thanks also go to Dr. Dawit Alemu for offering me his insights about the Ethiopian agricultural input markets during and after my visits to Ethiopia and for his very useful...

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