Farmers get a sit on ECX Board of Directors

The government controlled Ethiopia Commodity Exchange (ECX) has just added for the first time a representative from a farmers' cooperative to its Board of Directors. The organization's website was updated early last week to include Yehualashet Aschenaki, General Manager of Southern Region Farmers Cooperative Federation as the 11th Director. The following is the complete list of ECX's Board of Directors (Source: ECX's website):

1. H.E. MEKONNEN MANYAZEWAL, CHAIRMAN and State Minister, Ministry of Finance and Economic Development
2. H.E. ATO AHMED TUSSA, State Minister, Ministry of Trade and Industry
3. BEKALU ZELEKE, President, Commercial Bank of Ethiopia (CBE)
4. BEYENE G/MESKEL, Director General, Privatization and Public Enterprises Supervisory Agency
5. MESFIN LEMMA, Head, Legal Affairs Bureau Prime Minister Office
6. ABDELLA BAGERSH, General Manager, S.A. BAGRESH PLC
7. BERHANE HAILU, General Manager, Ethiopia Grain Trade Enterprise
8. CAPTAIN FEKADE MAMO, General Manager, Challenge Coffee Traders PLC
9. GETU KEBEDE, General Manager, Kality Food Share Co.
10. DEBRETSION T/MICHAEL, Director General , Ethiopia Information and Communication Development Agency (EICTDA)
11. YEHUALASHET ASCHENAKI, General Manager, Southern Region Farmers Cooperative Federation

The addition of Yehualashet brings the total number of private sector representatives to three, which includes Abdella Bagersh and Captain Fekade Mamo. This is a good first step but more needs to be done. Still, ECX is controlled by the government as eight of the eleven or 73% of the Board of Directors entirely represent the interests of the government.

Such an imbalance of power in any organization is a recipe for corruption and monopoly.

The unfettered power given in ECX to the government owned Ethiopia Grain Trade Enterprise (EGTE), which is the major supplier of coffee to domestic and export markets, highlights an egregious violation of ECX's own market conduct rules concerning conflict of interest.  It also subjects the public to exploitation and the market to a dysfunctional bureaucracy.

In a market where export prices are set by international markets, enterprises, such as EGTE, maximize their profits mainly by pushing down on their purchase prices and by forcing competitors out of the business. The ultimate losers of such unchecked market monopoly and corruption are the powerless coffee farmers, private businesses, and, eventually, the coffee sector at large.

To be able to function as a viable marketplace for all, ECX needs the voluntary active participation and fair representation of the private businesses and farmers in addition to government policymakers. It is obvious that the government owned enterprises function within the policy framework developed by policymakers (listed above from 1 to 5). Since EGTE and Kality Food Share Co. are directly answerable to the Privatization and Public Enterprises Supervisory Agency, the representation in ECX Board of the General Managers of these enterprises is redundant. Therefore, in order to create a reasonable balance between public and private sectors, the government should allot these two sits to additional representatives from farmers.

In a country where 85% of the population lives in rural areas and depends on agriculture, it is only fair and sensible that farmers are given the chance to have a say in the agricultural commodity market.