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In Ethiopia, average cereal production between the period 1990 and 2000 did not change significantly compared to the period between 1974 and 1990. However, cereal production between the period 1990 and 2000 was characterized by significant instability. This study reviews literature on factors with potential impact on instability in cereal production in Ethiopia and applies descriptive and variance decomposition procedures to determine the sources of increased instability in cereal production. It was found that production instability was caused more by increased yield instability than instability in an area. Yield instability could be the result of changes in technology, changes in policy and changes in weather conditions. It was concluded by this study that instability regarding yield was predominantly the result of weather variability. This is because, in Ethiopia, rainfall fluctuating from the long-term average is becoming more common, the use of high-powered inputs is limited to a small number of farmers, production is at subsistence level, and farmers' responsiveness to policy changes is constrained by infrastructural, institutional and the existing land policy.


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