A Blossoming Ethiopia

This paper will contribute to the literature on growth and poverty alleviation, focusing on the relation between certification in the agricultural sector and development. This is an area that has received growing recognition lately, as it is suggested that agricultural diversification into high-value crops may have a poverty alleviating effect. Specifically, this study analyses how the investment decision is influenced by the presence of private standards in the Ethiopian floriculture sector. The Ethiopian Horticulture Producer Exporters Association (EHPEA) Code of Practice is used as a benchmark, a standard that is to be mandatory in order to obtain an export permit in Ethiopia. Special attention is paid to four different aspects of particular interest, all in different ways related to requirements stipulated in the Code of Practice. The aspects that are studied include environmental obligations, the lack of human capital, the potential abundance of private standards on the market, and the wage levels and their implications. The results are obtained through semi-structured interviews with managers at different levels, operative at floriculture firms in Ethiopia. The findings indicate that the overall lack of human capital and the abundance of private standards probably have a negative effect upon the investment decision, in contrast to the two other aspects. The overall effect appears to be predominantly positive though