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Ethiopia's Agricultural Growth on the Verge of Changing History

By Hailu Dagne
Tigrai Onlne - June 05, 2014

Last week at the concluding ceremony of the celebration of the 23rd anniversary of the Victory of May 28 at the Addis Ababa Stadium, His Excellency Prime Minister Hailemariam Desalgne delivered the big news that Ethiopians and friends of Ethiopia have been expecting for long.

The Prime Minister disclosed that Ethiopia reached food self-sufficiency at national level, after two decades of work to augment production and productivity. Ethiopia's annual crop production has reached over 25 million Metric tons (250 million quintals). Therefore, Ethiopian didn't face much difficulty when a major drought struck the Horn of Africa three ago.

Ethiopia's Agricultural Growth on the Verge of Changing History
Teff field ready to be harvested in the highlands of northern Ethiopia

The Prime Minister pointed out that the success was made possible as the programs designed to ensure food security at household level have been realized during the last two decades, as farmers have shifted towards producing high income generating products and effort would next be exerted to boost the manufacturing and industry sector by creating strong local investors.

The stereotypical description of the country as destitute and an example of famine in publications such as the Oxford English Dictionary is now erased through the unstinting efforts over the last two decades, the Prime Minister noted.

Indeed, Ethiopia have come a long way in the past 23 years by bringing major changes in the agricultural sector that has been on decline for decades.

It is well known that, in order to engage in any kind of economic activity, one brings together the four factors of production, namely capital, labor, land and entrepreneurship or management. In Ethiopia, we observe that there is an acute shortage of capital. This is expected to remain a constraining factor over the short and medium term. By contrast, labor is abundant as Ethiopia has a large working population. Also, there is an adequate supply of land.

Rapid economic growth can be realized only if we can adopt a strategy that promotes the economic uses of our limited capital resources and more extensive application of our labor and land resources particularly the former. If we pursue a development strategy that does not make much use of labor and land resources in economic activity, the contribution of such factors of production to Ethiopia's development will be forestalled, thereby causing a pace of development that is well below potential. If, on the other hand, we rely too heavily on capital as a basis of our development effort, then our efforts will be curtailed by the limited availability of this resource. Our development strategy that is centered on agriculture and rural development promotes a judicious use of factors of production.

Some eighty-five percent of Ethiopia's population lives in rural areas and is engaged in agricultural production. Although capital is especially scarce in rural Ethiopia, the bulk of the land is in the hands of the rural population. Thus, strategies that promote the use of the country's labor and land resources while relying less on capital should embrace rural development and agricultural production that provides the basic livelihood of most of Ethiopia's rural population. Such a focus will allow the extensive and/or intensive use of both labor and land without the need for much capital. Agriculture is a sector in which our resource potential can be used to a high degree for rapid and sustained economic growth.

As various researches and reports of scholars and international institutions show, a large part of the economy is characterized by semi-subsistence agriculture with exceedingly low incomes and hand-to-mouth livelihoods. Agriculture, although the dominant sector of the economy, is constrained by age-old production practices and structural problems. It has failed to provide moderate and sustained incomes for many who are engaged in the sector. Nor, has it provided a basis for the accelerated development of other sectors. Indeed, it has even failed to satisfy national food requirements.

Decades of neglect and absence of appropriate development policies and strategies was one of the main reasons for the situation. Previous policies did not address the major structural constraints of the economy and in fact there even were all too many cases where policies were detrimental to economic development introducing imbalances that tended to impede rather than promote economic well being. The agricultural sector fared particularly badly and policies tended to exhibit a bias against this important sector of the Ethiopian economy. Clearly, in the absence of proactive and well thought out policies, it is not possible to attain accelerated development or to improve the condition of the Ethiopian people almost half of which subsist in absolute poverty. Due to the tragedy resulting from decades of inappropriate economic policy, although an agrarian economy, Ethiopia has failed to attain food self-sufficiency; forcing millions to seek food assistance.

One of the major indications of the downward path of the agricultural sector before 1991 is the performance in cereal production.

Cereal production per person has dropped by an average of 4 kilogrammes per year since the 1960s. Despite the existence pockets areas with above average production, the overall trend of cereal production has been down across the country. Since food availability in Ethiopia is strongly determined by the country's own production of cereals (having little capacity to purchase food on international markets), cereal availability has been declining at an average of 3.3 kilogrammes per person per year.

In the late 1980s, the country was producing less than 150 kilo-grammes of cereal per person. The level required for a minimum subsistence diet is approximately 240 kilogrammes per person per year (FAO 1990). For the sake of comparison, let's take Niger: Only 20 percent of Niger's land area receives enough rain for un-irrigated farming to take place, yet it produced an average of 330 kilogrammes per person per year between 1960 and 1990-at least double Ethiopia's output in the early 1990s.

Of course, cereals are not all that matters. The cultivation of other kinds of food, such as pulses (varieties of beans) and root crops (such as cassava), serves to supplement cereal production. Unfortunately, these crops have fared little better than their cereal counterparts. Although few data exist on root crop production, pulse and oilseed production in 1989 stood at less than 75 percent of its 1979 level. As a result, the availability of cereals plus pulses and oilseeds still declined by an average of 2.7 kilogrammes per person per year up to the early 1990s.

Indeed, since 1977 there has generally been more cereals available than were domestically produced. But that was because of imports, both commercial and food aid. However, even that option was difficult, given chronic foreign exchange constraints, commercial imports only reached 215,000 tons during 1985. Food aid, on the other hand, increased significantly after 1984 and made an important contribution to food availability in the critical years of 1985,1988, and 1991. In each of those years aid deliveries reached roughly 1 million tons of cereal, representing more than 20 percent of national production.

However, it should be remembered that with a total population of over 45 million people, food aid contributed during crisis years cannot meet all need. Assuming that all of the 1.2 million tons delivered in 1985 reached the mouths of the 6.9 million most vulnerable people, then aid represented 175 kilograms of cereal per starving person. This would have been sufficient to keep each vulnerable person alive (albeit at a suboptimal level of food consumption) for almost 1 year.

That downward spiral started to change after May 28, 1991. The EPRDF-led Transitional government observed the level of foreign aid dependency and the root factors for the low level of growth in the agriculture sector.

In order to change this grim picture, the Transitional Government of Ethiopia (TGE) embarked upon the Economic Reform Program at the beginning of the transition period, recognizing the heavy dependence of the economy on agricultural production which has resulted in erratic GDP growth rates.

The Agricultural Development-Led-Industrialization (ADLI) strategy was a strategy based on broadening the agricultural production base through improved productivity and increased land utilization over the medium and long-term periods particularly in the lowlands.

Accordingly, several policies of adjustment were implemented based on the new policy framework. One of the major ones was Agricultural Reform.

The Government gave the highest priority to agricultural development. Measures were taken to improve ways of providing agricultural services, notably through extension and provision of modern inputs to the farmers. In the past, farmers were discouraged from increasing their output due to policies of forcible extraction of marketable surplus at fixed producer prices. That policy has been removed and a decentralized grain marketing system, has been introduced, where by farmers can sell their products in a competitive market.

The Transitional government economic direction have been successfully completed, signifying that the policy measures taken were suitable. According to the Ministry of Economic Development and Cooperation, Gross Domestic Product (GDP) growth, which in the year 1990/91 and 1991/92 fell to an even low level of -5.5 and -3.2 percents respectively, rose in 1992/93 to 12.3 percent and grew by 1.3 percent in 1993/94 in real terms in relation to the previous year.

The growth trajectory continued for most of the next decade. However, it didn't bring about the needed level of change due to several factors. One of the major reasons was that the growth rate fluctuated highly. Moreover, the growth strategies and interventions were not sufficiently articulated, therefore there effectiveness was undermined. Therefore, after the renewal movement of the EPRDF in 2001, an elaborate scientific policy framework of Rural and Agricultural development was designed.

The policy laid down the fundamentals of the direction in a very clear manner. It has underlined that:

The world today is one where nations are economically interconnected. Whether it be through international trade, foreign aid or other resource flows, there is no country that is not economically linked with the world at large. Foreign aid, is the most dependent form of this global connection. Such nations as rely on foreign aid, can reduce this dependence. But the economic independence that this implies will remain within the context of global interconnectedness, not outside of it.

Different countries play varying roles in this integrated global economy. Some forge their economic relations with other countries on the basis of well-developed and self-reinforcing domestic markets, progressively improving technology and growing capital. Such countries tend to enjoy a prominent position and reap maximum benefits from being part of the global economy. Others, lacking large and self-reinforcing domestic markets, are vulnerable to external shocks. Still others lag behind their global partners, with neither a developed human and financial capital base nor a diversified economy, and limited if any technological developments. The result is that they are in a dependent position within the global economy relying on foreign aid for their very survival.

Therefore, it was pint out that in the current global environment; our country is one that depends on foreign aid. In order to improve our position within the global economy, eliminate dependency and more readily partake of the gains from global economic growth, we must ensure rapid and sustainable national growth; constantly improving the level of technology and capital formation within the country. Furthermore, in the process of national economic growth, the domestic economy should be consolidated and a large domestic market created. This would allow us to withstand external shocks that occur due to variable conditions in the international economy that are outside of our control. The rural and agriculture-centered development strategy will help us attain this.

The policy also explained that:

The rural and agriculture-centered development strategy is our best option for ensuring rapid and sustainable economic growth. It is a strategy that will continuously promote technological development and application as well as greater capital accumulation. Thus it will directly improve our position in the global economy and increase the gains we derive from the integrated world economy. It is a unique strategy that will extricate the country from reliance on external assistance for the most basic commodity; i.e., food, transforming our role from recipients of aid to participants in global economic development. As such it will strengthen our economic independence.

Our aim, through the rural and agriculture-centered development strategy, is to increase agricultural production rapidly and on a sustainable basis. Since some 85 percent of the population are engaged in agricultural production, the income of (output from) the vast majority of the population will increase.

The policy was immediately accompanied by detailed manuals and implementing agencies. To implement the Rural and Agricultural Development policy, 25 agricultural vocational training colleges (ATVT's) have already been established all over the country and gradated more than 71,000 agricultural development agents are graduated in animal science, plant science and natural resource. Moreover, 8,780 farmers training centers (FTCs) have been built and many farmers are getting trained in various agricultural practices, extension services and on how to adapt new agricultural technologies that enhances agricultural productivity.

As a result, for the first time in centuries, the agricultural sector embarked on a virtuous circle of growth bringing dramatic changes in the lives of Ethiopian farmers.

The next seven years saw, the agriculture sector registered an 8 per cent average growth consecutively and the number of farmers who used agricultural extension packages reached more than 8 million. That was a direct result of the government's strong commitment to agriculture and rural development as demonstrating by allocating more than 10 per cent of the county's total budget.

Therefore, in 2009/2010, the total land covered by the main crops rose several folds to 11.25 million hectare, while agricultural productivity reached to 200 million Quintals.

The average productivity of the main crops has increased from 12.1 to 17 Quintals per hectare. The foreign currency required from both agricultural and industrial products reached $1.45 billon US dollar.

In 2011, the first year of the GTP, the overall growth rate of agricultural value added was 9 %. The total volume of production of major food crops (cereals, pulses and oilseeds) registered in 2010/11 was 221.8 million quintals. This exceeded the production level of the previous year by 19.36 million quintals. The average productivity of major food crops during the same period was 16.5 quintal per hectare, which is 1.12 quintal/ha higher than the productivity in 2009/10 and 1.0 quintal/ha less than the target for the same year. The land covered by these major food crops was 13.45 mln ha.

A total of 818,050 tons of chemical fertilizer and 1028.4 thousands improved seed have been distributed in 2010/11. In addition, 3034 thousands of hectares of land were covered with organic manure in the same period. Efforts were also made to improve the genetic potential of livestock through crossbreeding.

The recent report of the GTP confirmed that the progress is on track. In the last fiscal year, Ethiopia registered a 10 percent increase in crop. The Central Statistical Agency (CSA) report also stated that 254 million quintal yield is expected this fiscal year from 12 million hectares of land. That is another 23 million quintal increase from previous year's produce on almost the same amount of land.

However, as the Africa Economic Outlook pointed out last year:

Despite all the progress in the past decade, the sector's potential remains enormous. While the Agriculture sector's share of the GDP is about 44%, accounts for about 80% of employment and 70% of export earnings; Ethiopia has only cultivated 15% of its arable land potential so far. And, the increased productivity in the past decade has not still reached the top in sub-Saharan Africa.

This indicates that there are still enormous untapped opportunities to increase both production and productivity of farmers by promoting labor-intensive modern farming practices. It also indicates the potential to put more land under cultivation both through re-settlement programs and large private commercial farms.

The report underlined that: Ethiopia's double digit economic growth over the past eight years has defied standard thinking that it should significantly reduce reliance on agriculture.

Indeed, researches indicate that, with this trajectory of growth, the Agricultural crop production is projected to more than 71 million tons in 2030.

At that time, Ethiopia will truly be the bread basket of Africa!

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