Sector Linkages and Industrial Policy Effects on Regional Wheat Value Chain Actors’ Outputs and Consumption in Ethiopia

Abstract

The article estimates sector linkages, output, income and employment multipliers. It also measures the effects of industrial policy on income and consumption and wheat factory’s outputs in aggregate terms. This study indicates that non-agro processing industry has relatively a weaker linkage with the rest of regional economy. The study found that the impacts, measured by social accounting matrix multiplier analysis, agricultural and service sectors have relatively the highest output, income and employment multipliers. Computable general equilibrium model result indicates that shock injections into regional wheat value chain brought about much higher changes in outputs of wheat producers and wheat processing factories, urban and rural household consumption of wheat and wheat product. The agro-processing industrial policy should be set up on the basis of balanced development of only limited sectors along the value chain to impact the wheat economy significantly and ensure higher productivity in the chains.

Keywords: Linkages, industrial policy, multiplier effects, impact, wheat value chain