Muhammedamin (PhD) Wageningen University

1. Muhammedamin (PhD)
Wageningen University
1

2. Outline
2
 Are We ready for greenhouse farming?
 Role of agricultural sector in Ethiopia
 Why Agricultural sector has not been
successful as expected ?
 The Way forward
 Key Policy Dialogue Questions ?

3. Is it time for Agricultural
Transformation/Greenhouse farming/Technology
in Ethiopia ?
3
Video: https://youtu.be/5clOYWsNhhk
https://youtu.be/2MlrXExzenU
https://youtu.be/nM8Qz-fzJ6M
https://youtu.be/KikUVaPII34

4. Role of agricultural sector in economic
development of Ethiopia
 Agrarian and non-oil dependent developing country
 Agriculture is the backbone of its economy
 Main livelihood for > 85% of the population;
 Accounts for about 45 % of GDP;
 almost 90 % of exports/foreign exchange earnings
originate from agriculture sector;
 Main source of industrial raw materials for agro-
industries.
 Two major sectors of agriculture: Smallholder and
the large - scale farming sector
4

5. Smallholder sector
 Subsistence farmers constituted about 97% of Ethiopian
agricultural activities
 Engage in mixed crop and livestock subsistence
farming
 Low levels of modern inputs use and heavy dependence
on rainfall
 Vulnerable to the vagaries natural hazards (unpredictable
rainfall & recurrent drought)
 Low productivity, very limited market share and insignificant
saving and investment
5

6. Large -scale farming
6
 Ethiopia did not inherit colonial commercial farm
 Growth of the sector started with the establishment of farms
in the 1950s/60s
 The Derg/Military regime nationalized the farms to;
 Operate as state-owned enterprises after 1975:
 A ministry to manage & develop new state farms through the allocation of a
large budget,
 Socialist policy (forbid land ownership > 10 ha) retarded growth of large scale
private farm sector for 17 years
 Post1991 market and price liberalization which resulted in;
 The privatisation of many sate farms while the rest are still operating as
parastatal/public enterprises
 Stimulated private investment in large scale commercial farm development by
(domestic and foreign) and the steady growth of the sector over the past two
decades

7. Post 1991 Agricultural Sector policy
 Ethiopia is seriously committed to agricultural development
 Serious of reforms and development plans that aimed to create a conducive
environment for structural transformation.
 The backbone of these reforms is the Agricultural
Development-Led Industrialisation (ADLI) strategy.
 ADLI accounts for a number of different policies but overall its main objective
is to increase agricultural productivity
 Agriculture as the basis in the conceptualisation of growth, policy guidelines
and poverty reduction.
 Agriculture is the main source to generate primary surplus that fuel the
growth of other sectors notably, industry
 The ADLI is the policy framework guiding rural development actions since
the mid-1990s.
 It provided the basis for the following programmes (SDPRP, PASDEP, GTP I, and GTP II) and
set the foundation for Ethiopia’s successful growth path and two-digit average growth rate
since mid-2000.
7

8. Agricultural growth strategy
 ADLI strategy further refined during PASDEP with
Emphasis on commercialisation of agriculture, strong
private sector growth and intensification of marketable
farm products.
 The fundamentals of the GTP (I & II) strategy include:
 A shift to produce high value crops,
 a special focus on high-potential areas,
 facilitating supporting the development of large-
scale commercialization of agriculture
 PASDEP implementation as the main instrument for
delivering agricultural growth through strong push for
intensification to increase yield and productivity in the
smallholder sector.
8

9. 9
• Reviewed existing literature and policy
documents
• Gap in the literature: lack of Meta_Analysis
Review /Systematic Review in the literature
• Despite a good Agricultural Policy such as
ADLI, Why Agr sector is not performing well
as expected?

10. ...cont’dWhy???
 Public Expenditure Pattern/Agri sector
10
0
2
4
6
8
10
12
14
16
%of
total
expenditure
Fig: Trends in pro-poor expenditure (%of total gov.
expenditure)
Education
Health
Road
Water
Agriculture and Rural Development

11. Shortage and landlessness of arable farm land
11
 Arable land is an indispensable resource
 Population projection 2050: 171.8 miln / (2.5% rate)
annually
•Billion tons of cereal grains
•200 million tons of meat annually
Expected to increase production and productivity
•Pressure on the landholding size

12. Landholding size in Ethiopia
12
Percentage
(%)
38%
24%
24%
14%
0.5
0.51-1
2-Jan
>2
Mean
(Diriba, 2020)

13. Land fragmentation
The already small size farmland of a family is further
fragmented into very small pieces of land
Increased the amount of time spent moving from one parcel to
another
Difficult to implement mechanize farms, intensive technologies
Relationships between yield, and land fragmentation have
an inverse relationship (CSA)
13

14. …cont’d land fragmentation
14

15. •A huge challenge for Ethiopia
•Lost a cumulative level of over 13% output between 1991 and 2008
•Rainfall distributions are strongly inconsistent
•Change in temperatures, relative humidity, wind, and others.
•The lowlands are vulnerable to increased temperatures and prolonged
droughts,
•Highlands suffered from more intense and irregular rainfall.
•Aggravated soil erosion, low agricultural output, conflict, and food insecurity
in the country
• Drought, erratic rainfall and frost variables
• Reduces crop yield, nutrition, groundwater, soil organic matter, soil quality,
soil health, and incomes, and caused socio-economic problems in Ethiopia.
Climate change
15

16. …cont’d Climate
16
Situation is dire in Borana (Oromia), Somali, and SNNP regions
Absence of livestock Insurance

17. Land degradation and deforestation
17
Poor natural resource Conservation/Deforestation
•More than 85% of the Ethiopian land is degraded.
• In the past 3 decades, 23% of the land area (54 USD billion)
•Annual cost is estimated (4.3 USD billion)
•Estimated 1.5 billion tons of soil per year are lost by erosion and
flooding (1.5 million tons of grains).
 Eroded soil resulted in infertile soil, low moisture-holding
capacity, and a low amount of yield per hectare
• Declines the levels of arable land availability

18. Unevenly distributed constructions and
urbanizations
Building of houses, industries or fabrics, urban
establishments, and other infrastructures
•Land grabbing especially arable land
Reducing the farmland, landlessness and increasing
displacement
18

19. ...cont’d Unevenly distributed
19

20. Pests
20
Common problems
• Crop and animal diseases such as fungi, bacteria, viruses, and nematodes; insect pests,
rodents, and birds are common

21. Age structure of rural populations
21
More than 40% is below the age of 15 (CSA).
• Highly dependent on their family
Has major implications on agricultural production, land
tenure, the social organization within communities, and
socioeconomic development .
•The density affects agricultural intensification and
productivity.
• As the farm sizes declining from time to time

22. Lack of integration
•The farming system in Ethiopia is disintegrated among
stakeholders; namely: agricultural researchers, development
experts, and farmers
•Disintegrated practices cost more budget and even may not meet their
purpose due to mismanagement along the multiple channels.
• The allocation and utilization of resources
•Hence, integration of all the concerned bodies including market channels, and
reviewing the poor and weakest strategic development.
•Participation of investors in the agricultural sector
•Vertically coordinated, more organized food systems offer
standardized food for urban areas and formal employment
opportunities
•Integration may improve food supply chains hurdles
22

23. The political unrest affected agricultural productivity and
production in the past and at present.
 Resulted losses of resources, the rising tide of hunger, and poverty.
 Frequent unrest resulted in the loss of the existing
resources of both private and public investment
Foreign and internal investors- loss confidence
Political unrest
23

24. The way forward: Integrated Approach
24

25. Encouraging Large – scale commercial farm
25
Attract investors/Incecentive Package;
•Tax incentives/exemption from custom duties
•Infrastructure development (access road, power, other utilities, etc)
•Small land tax and grace period for payment
Growth Performance of the large – scale sector
•FDI inflow into agric. fluctuated between US$545mn &
US$265mn/year from 2004-2007,
•From 2000 - 2005, floriculture/horticulture sector was the main focus
of FDI
•Ethiopia is the 2nd largest flower exporter in Africa, (next to Kenya)
•Agricultural investment was about 15% in 2010.

26. Impacts of large – scale farm growth
26
Environmental concern and ‘land grab’
Critics on the motives of FDI inflow, lack of long term growth
impact;
•Primary aim to secure the food demand in the investors’ countries
•Financial returns instead of the traditional motives of efficiency and market-
seeking
•Lack of technology transfer and spill-over effect on domestic/smallholder
farmers (Out-growers?)
•Least impact on domestic market growth
 Evidence unavailable to justify government support (e.g.,
tax incentives) to sector growth
 Promote corporate social responsibility /Social contract
especially on environment areas

27. Agricultural Finance
•Needs to improve access to finance for farmers and
agribusinesses.
•This includes mobile money solutions and the improvement of the digital
infrastructure through telecoms privatization
•Less than 20%of smallholder farmers (Bank usage?)
•Only 4.9% of the total outstanding credit went to the agri sector in 2018.
•Introduce agricultural insurance
27

28. Expenditure on Agricultural sector
0
2
4
6
8
10
12
14
16
1996/97
2002/03
2003/04
2004/05
2005/06
2006/07
2007/08
2008/09
%of
total
expenditure
Fig: Trends in pro-poor
expenditure (%of total gov.
expenditure)
Education
Health
Road
Water
Agriculture and
Rural
Development
28

29. Adopting small machineries for smallholder farmers
29

30. •Weaknesses of successive strategic development policies
Stability of policies /Incremental ?
30

31. Manure/Compost policies
31

32. Greenhouse farming/Technology
32

33. Agricultural supply chain
•Supply chain/ logistics hurdles
•improve storage, quality, marketing, and linkage with the food industry.
•Focus on cold supply chains for the commercialization of perishable
horticulture and meat and dairy products complemented by investments in
fast growing cereals and oil seeds processing industries.
33

34. Urban Farming policies
34

35. Environmental Sustainability/Recycling
35

36. Underground water use/Irrigation
36
Groundwater provides more than 90% of the water used for
domestic and industrial supply in Ethiopia, but a very small
proportion of water used for irrigation, which mostly comes from
surface water
Multiple rivers , cannels, drip irrigation

37. Key Policy Dialogue Questions
37
1. Should the lead sector for economic development be agriculture
or industry, given that Ethiopia is a non oil-dependent developing
country?
2. ADLI ? Who’s going to link Agri to Industry ? By fragmented
supply chains holders/brokers? Poor logistics
3. Does the policy pave way large scale farm investors ? Credit
incentives
4. Is agriculture a career/passion? Role of higher edu
5. Is there loan arrangement for agri? Agricultural insurance?
6. Should more priority be given to smallholder farms or private
commercial farms, given the context of the agriculture sector of
Ethiopia?
7. Is Ethiopian Agr sector ready for greenhouse farming ?

38. THE END
Link:https://www.wur.nl/nl/nieuws/Saad-Muhammedamins-fourth-
Ph.D.-dissertation-paper-was-recognized-as-the-best-paper.htm
38