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Agriculture in Ethiopia

  • 30 min read
  • 7 chapters

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Through Gross domestic product, Export and Agriculture

Ethiopia's agriculture is plagued by periodic drought, soil degradation caused by overgrazing, deforestation, high levels of taxation and poor infrastructure (making it difficult and expensive to get goods to market). As 85% of Ethiopians rely primarily on land (agricultural and pastoralism) for their livelihoods and a quarter of the population lives below the national poverty line, land degradation is a major concern. Yet agriculture is the country's most promising resource. A potential exists for self-sufficiency in grains and for export development in livestock, grains, vegetables, and fruits. As many as 4.6 million people need food assistance annually.

Agriculture accounts for 36% percent of the nation's Gross domestic Product (GDP) as of 2020. Many other economic activities depend on agriculture, including marketing, processing, and export of agricultural produce. Production is overwhelmingly of a subsistence nature, and a large part of commodity exports are provided by the small agricultural cash-crop sector. Principal crops include coffee, pulses (e.g., beans), oilseeds, cereals, potatoes, sugarcane, and vegetables. Exports are almost entirely agricultural commercial products, and coffee is the largest foreign exchange earner. Ethiopia is also Africa's second biggest maize producer. Ethiopia's livestock population is believed to be the largest in Africa, and in 2006–2007 livestock accounted for 10.6% of Ethiopia's export income, with leather and leather products making up 7.5% and live animals 3.1%.

Overview

Agriculture accounted for 50% of GDP, 83.9% of exports, and 80% of the labor force in 2006 and 2007, compared to 44.9%, 76.9% and 80% in 2002–2003, and agriculture remains the Ethiopian economy's most important sector. Ethiopia has great agricultural potential because of its vast areas of fertile land, diverse climate, generally adequate rainfall, and large labor pool. Despite this potential, however, Ethiopian agriculture has remained underdeveloped. Because of drought, which has repeatedly affected the country since the early 1970s, a poor economic base (low productivity, weak infrastructure, and low level of technology), and overpopulation, the agricultural sector has performed poorly. For instance, according to the World Bank between 1980 and 1987 agricultural production dropped at an annual rate of 2.1 percent, while the population grew at an annual rate of 2.4 percent. Consequently, the country faced a famine that resulted in the death of nearly 1 million people from 1984 to 1986. An additional challenge that contributes to lowered agricultural productivity is woody plant encroachment.

Historically, Ethiopia was a rare exception in Sub-Saharan Africa, because of its special environmental circumstances, that enabled Ethiopian farmers to increase their productivity, for example by using ploughs. The beneficial climate in the Highlands of Ethiopia also enabled irrigation and other advanced agricultural technology. Regular and reliable harvests helped generate stable tax income that led to relatively strong governmental structures that were ultimately the reason that Ethiopia was the only country not to be colonized in the late-nineteenth century ‘Scramble for Africa’ apart from Liberia.

During the imperial period, the development of the agricultural sector was retarded by a number of factors, including tenancy and land reform problems, the government's neglect of the agricultural sector (agriculture received less than 2 percent of budget allocations even though the vast majority of the population depended on agriculture), low productivity, and lack of technological development. Moreover, the emperor's inability to implement meaningful land reform perpetuated a system in which aristocrats and the church owned most of the farmland and in which most farmers were tenants who had to provide as much as 50% of their crops as rent. To make matters worse, during the 1972-74 drought and famine the imperial government refused to assist rural Ethiopians and tried to cover up the crisis by refusing international aid. As a result, up to 200,000 Ethiopians perished.

Although the issue of land reform was not addressed until the Ethiopian Revolution in 1974, the government had tried to introduce programs to improve the condition of farmers. In 1971 the Ministry of Agriculture introduced the Minimum Package Program (MPP) to bring about economic and social changes. The MPP included credit for the purchase of items such as fertilizers, improved seeds, and pesticides; innovative extension services; the establishment of cooperatives; and the provision of infrastructure, mainly water supply and all-weather roads. The program, designed for rural development, was first introduced in a project called the Chilalo Agricultural Development Union. The program later facilitated the establishment of similar internationally supported and financed projects at Ada'a Chukala (just south of Addis Ababa), Welamo, and Humera. By 1974 the Ministry of Agriculture's Extension and Project Implementation Department had more than twenty-eight areas with more than 200 extension and marketing centers. Although the MPPs improved the agricultural productivity of farmers, particularly in the project areas, there were many problems associated with discrimination against small farmers (because of a restrictive credit system that favored big landowners) and tenant eviction.

Imperial government policy permitting investors to import fertilizers, pesticides, tractors and combines, and (until 1973) fuel free of import duties encouraged the rapid expansion of large-scale commercial farming. As a result, agriculture continued to grow, albeit below the population growth rate. According to the World Bank, agricultural production increased at an average annual rate of 2.1 percent between 1965 and 1973, while population increased at an average annual rate of 2.6 percent during the same period.

Agricultural productivity under the Derg continued to decline. According to the World Bank, agricultural production increased at an average annual rate of 0.6 percent between 1973 and 1980 but then decreased at an average annual rate of 2.1 percent between 1980 and 1987. During the same period (1973–87), population increased at an average annual rate of 2.6 percent (2.4 percent for 1980–87). The poor performance of agriculture was related to several factors, including drought; a government policy of controlling prices and the free movement of agricultural products from surplus to deficit areas; the unstable political climate; the dislocation of the rural community caused by resettlement, villagization, and conscription of young farmers to meet military obligations; land tenure difficulties and the problem of land fragmentation; the lack of resources such as farm equipment, better seeds, and fertilizers; and the overall low level of technology.

President Mengistu's 1990 decision to allow free movement of goods, to lift price controls, and to provide farmers with security of tenure was designed to reverse the decline in Ethiopia's agricultural sector. There was much debate as to whether or not these reforms were genuine and how effectively they could be implemented. Nonetheless, agricultural output rose by an estimated 3 percent in 1990–91, almost certainly in response to the relaxation of government regulation. This modest increase, however, was not enough to offset a general decrease in GDP during the same period.

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