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Seasonal price variability for cereals is two to three times higher in Africa than on the international reference market. Seasonality is even more pronounced when access to appropriate storage and opportunities for price arbitrage are limited. As smallholder farmers typically sell their production after harvest, when prices are low, this leads to lower incomes as well as higher food insecurity during the lean season, when prices are high. One solution to reduce seasonal stress is the use of improved storage technologies. Using data from a randomised controlled trial, in a major maize-growing region of Western Ethiopia, we study the impact of hermetic bags, a technology that protects stored grain against insect pests, so that the grain can be stored longer. Despite considerable price seasonality—maize prices in the lean season are 36% higher than after harvesting—we find no evidence that hermetic bags improve welfare, except that access to these bags allowed for a marginally longer storage period of maize intended for sale by 2 weeks. But this did not translate into measurable welfare gains as we found no changes in any of our welfare outcome indicators. This ‘near-null’ effect is due to the fact that maize storage losses in our study region are relatively lower than previous studies suggested—around 10% of the quantity stored—likely because of the widespread use of an alternative to protect maize during storage, for example a cheap but highly toxic fumigant. These findings are important for policies that seek to promote improved storage technologies in these settings.

Non-PR, IFPRI5, DSGD, African seasonal price variability for cereals is two to three times higher than price variability on the international reference market. Seasonality is even more pronounced when access to storage is limited, leading to low opportunities for price arbitrage. This leads to low incomes and food insecurity for smallholder farmers during the lean season, the “higher price” season. One solution to reduce seasonal stress is the use of improved storage technologies. Using data from a randomized controlled trial, we study the impact of hermetic bags, a technology that protects stored maize grain against insect pests, and helps to store it longer, in a major maizegrowing region of Western Ethiopia. We find considerable price seasonality: maize prices in the lean season are up to 36% higher than maize prices after harvesting. However, we find no evidence that hermetic bags improve welfare, except that these bags allowed for a marginally longer storage period of maize intended for sale. This “near-null” effect is due to the fact that maize storage losses in our study region are not as high as previous studies suggested, but just under 2% of annual storage. To safely store maize, farmers have benefited from the recent advance in access to a cheap but toxic alternative fumigant. Looking at heterogeneity treatment effects, we find that farmers who are cash constrained store 4% less than those who are not. This behavior generates a large scale price seasonality that further lowers farmers’ welfare.

PR, IFPRI3; CRP2; DCA; ISI; 3 Building Inclusive and Efficient Markets, Trade Systems, and Food Industry, Development Strategies and Governance (DSG); Transformation Strategies; PIM, CGIAR Research Program on Policies, Institutions, and Markets (PIM), Seasonal price variability for cereals is two to three times higher in Africa than on the international reference market. Seasonality is even more pronounced when access to appropriate storage and opportunities for price arbitrage are limited. As smallholder farmers typically sell their production after harvest, when prices are low, this leads to lower incomes as well as higher food insecurity during the lean season, when prices are high. One solution to reduce seasonal stress is the use of improved storage technologies. Using data from a randomised controlled trial, in a major maize-growing region of Western Ethiopia, we study the impact of hermetic bags, a technology that protects stored grain against insect pests, so that the grain can be stored longer. Despite considerable price seasonality—maize prices in the lean season are 36% higher than after harvesting—we find no evidence that hermetic bags improve welfare, except that access to these bags allowed for a marginally longer storage period of maize intended for sale by 2 weeks. But this did not translate into measurable welfare gains as we found no changes in any of our welfare outcome indicators. This ‘near-null’ effect is due to the fact that maize storage losses in our study region are relatively lower than previous studies suggested—around 10% of the quantity stored—likely because of the widespread use of an alternative to protect maize during storage, for example a cheap but highly toxic fumigant. These findings are important for policies that seek to promote improved storage technologies in these settings.