Revealed Comparative Advantage of Select Agricultural Products of Ethiopian States

Abstract

RCA approach is extensively used to identify the comparative advantage of a nation in relation to other nations, this article has attempted to adapt the concept towards the domestic trade among states of a nation, on the assumption that the dominant trade practices in developing countries are intra-state trade rather than inter-country trade. The study is done to examine the revealed comparative advantages of Ethiopian states in nine select agricultural crop production using Balassa’s index (1965). The analysis is done based on the 2017 raw data collected from the Central Statistical Agency of Ethiopia. The RCA concept as adapted to domestic cases help to uncover the comparative advantage status of states within a Nation to serve as a stepping stone for international trade. It is uncovered that Tigrai State has the highest revealed comparative advantage in millet, barley, wheat, and teff; Amhara State also has the highest revealed comparative advantage in vetch/grass peas, lentils, chickpeas, and horse beans. In addition, it is disclosed that Benshangul Gumuz has the highest revealed comparative advantage in maize production. Considering the Revealed comparative advantage (RCA) indices strength as proxies for a community’s utilization of the crop linked with the community’s cultural background and historical feeding habit, and if historical feeding habit is also considered as an indication of the origin from where the crop has evolved first in Ethiopia, the origin of barley, millet, teff, and wheat would be in Tigrai; maize in Benshangul Gumuz; and chickpeas, horse beans, vetch/grass peas, and lentils would be in Amhara State.