EIAR Presentation

1. Realizing Rural and Agricultural Transformation in
Ethiopia – Some Reflections
Alemayehu Seyoum Taffesse
International Food Policy Research Institute
EIAR
May 28, 2018
Addis Ababa
1
Disclaimer – The views expressed in the following do not necessarily
reflect those of IFPRI.

2. 2
Introduction
Questions
 What do we mean by agriculture and rural transformation in the context of
Ethiopia?
 What are the bottlenecks to agriculture and rural transformation in
Ethiopia?
 What are the priorities of what needs to be done to bring about agriculture
and rural transformation in Ethiopia?
Approach
 Really hard questions with multiple dimensions;
 Objective – reflect on some key dimensions;
 Focus - small-holder agriculture;

3. 3
Agriculture and rural transformation in Ethiopia
Approach – empirical, based on current key features;
Current State (selected)
 The bulk of the rural population depends on agriculture with limited
integration with the market;
 Low, albeit growing, productivity (particularly labour productivity);
 A significant fraction of the rural population is income poor, despite large
reductions in recent years;
 Considerable food and nutrition insecurity persist;
 Access to health and education expanding and outcomes improving from a
low base;
 Access to safe water, electricity, and transport/communications rising from
poor initial levels;
Rural transformation
 Radical change in all these for the better

4. 4
Agriculture and rural transformation in Ethiopia
How does transformation come about?
 A cumulative historical process
 Core: sustained increase in productivity
 Determinants
 Capital – size and depth of the capital stock (physical, human,
infrastructural, natural capital - including technology);
 Institutions – diversity and effectiveness institutions (norms,
government policy, markets, property rights, agencies of public service
delivery, farmers’ organizations, and early-warning systems); and
 Shocks - incidence and magnitude of shocks (climatic, market, and
other non-market shocks).
 What to do to improve these determinants, and how are hard questions –
context key

5. 5
Progress - Outcomes
 Progress - rapid agricultural growth and poverty reduction;
Smallholder Grain Production (2003-2016)
Source: Authors’ computation using CSA’s AgSS data (CSA (various years)).
0.00
0.20
0.40
0.60
0.80
1.00
1.20
0.0
5.0
10.0
15.0
20.0
25.0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Hectares
Quintals
Year
Production (quintals per hectare) Production (quintals per holder) Area per holder (hectares)
2003 2007 2011 2016
Total Grain Production (million quintals) 104 185 219 290

6. 6
Progress - Outcomes
Source: UNDP at https://www.un.org/development/desa/dspd/wp-
content/uploads/sites/22/2018/04/Ethiopia%E2%80%99s-Progress-Towards-Eradicating-Poverty.pdf

7. 7
Progress - Drivers
 expansion of the agricultural extension system and the resultant
considerable increase in farmers’ access to information on new and
improved farming practices;
 deepening of input and output markets, with the concomitant decline in
transaction costs, driven by large public investments in roads and
telecommunication;
 accelerated human capital accumulation with education levels and life
expectancy rising, strongly linked to public investments in education and
health systems;
 reduced exposure to shocks and their negative consequences through the
implementation of the large Productivity Safety Net Programme (PSNP)
and a widespread land certification programme;
 Still, agriculture’s transformation into a modern, highly productive, and
commercialised sector closely integrated with the rest of the economy
is work in progress.

8. 8
Vulnerabilities remain
Source: Authors’ calculation using DHS (2005-2016) data.
Stunting Incidence among Children Under 5
(%)
2005 2016
AEZ zone Non-PSNP PSNP Non-PSNP PSNP
Drought prone 46 47 37 33
Pastoralist 50 60 35 34
Humid moisture reliable – Lowland 49 61 34 38
Moisture reliable – Cereal 50 55 38 25
Moisture reliable – Enset 55 42 38 40
Two examples:
 Cereal Yields (2014/15):
o Ethiopia: 23.3 quintals per hectare (Teff = 15.7, Maize = 34.3)
o Egypt: 72.3 quintals per hectare
 Child Stunting;

9. 9
Some Bottlenecks
 Inadequate availability of improved seeds;
 Ten per cent of the grain area was planted with improved seeds.
 “not enough high yielding seed varieties available, adapted to local
circumstances.”

10. 10
Some Bottlenecks
 Smallness of farm size – a third of grain farmers cultivate less than 0.2
hectares
Source: Author’s calculation using CSA‘s AgSS Data (CSA (various years)).
2003 2016
All Bottom Middle High All Bottom Middle High
Grain area per holder 0.87 0.15 0.60 1.73 0.84 0.20 0.66 1.79
Grain output per holder (kg) 1064 192 760 2077 1950 464 1551 4099
Grain output per hectare or
yield (kg)
1240 1293 1271 1169 2135 2072 2197 2138
Household Size (number) 5.3 4.7 5.3 5.9 5.2 4.6 5.1 5.7
 Note: The ‘Bottom’ group use of chemical fertilizers, improved seeds, irrigation, and
extension services was not lower than the other groups.

11. 11
Some Bottlenecks
 Degradation:
 Loss of top soil – over 14 million hectares of top soil have less than 50 cm
depth, making it susceptible to drought.
 Soil nutrient depletion – equivalent of 30 kg/ha of Nitrogen (N), and 15 to 20
kg/ha of phosphorous (P) are lost annually through erosion on cultivated
lands.
 ‘the average annual on-site cost of soil erosion has been estimated between 2
and 6.7 % of AGDP’ (see Yusef et al. (2005) )

12. 12
Some Bottlenecks
 Policy implementation capability;
 articulating a good policy is different from actually implementing it
successfully.
 A lot has been done in this regard (see next slide);
 Emphasis – the challenge gets harder as the economy develops
o The challenge goes beyond capacity of individuals, perverse
incentives, and, lack of political will;
o It is an organizational capability
o It is about “building institutions able to implement increasingly
complex and contentious tasks, under pressure and at scale”
The discussion on this slide and Slide 15 uses concepts and ideas from: Matt
Andrews, Lant Pritchett, and Michael Woolcock (2017). Building State
Capability - Evidence, Analysis, Action, OUP

13. 13
Some Bottlenecks
climate change, population growth

14. 14
Towards accelerating agricultural transformation
 Small farm size:
 Promote land rental markets, in part to address the small farm size
problem through consolidation in production (not ownership);
 Focused effort to radically change what, where, and how the land-
constrained produce and/or earn a livelihood
 Seeds - significant advances in technology and distribution
 the current research and development system should:
o expand its capacity to generate improved seeds adapted to local
conditions;
o strengthen its collaboration with the international R&D system
strengthened;
o deepen its links to the private sector, both domestically and
internationally
 “a massive effort to expand seed multiplication, including via stronger
private sector involvement, and to further reform the regulatory and
support system.”

15. 15
Towards accelerating agricultural transformation
 Enhance policy implementation capability
 should be viewed as a key ingredient of home-grown
development strategies;
 ‘local problem identification, learning, experimentations,
and organizational capability defined by characteristics
of tasks - rather than importing solutions’;
 invest in the study of how implementation capability can
be built;
“the contextually workable wheel has to be reinvented
by those who will use it.”

16. 16
Towards accelerating agricultural transformation
 Radical system-wide innovations necessary;
 A 20-25 year programme to transform and integrate the drylands
including the drought-prone and ‘degraded’ areas in the ‘highlands’;
 Food and nutrition security as an outcome of an integrated economy
 Accommodate compounding factors - climate change, population
growth
 An idea:
 Degraded highlands – encourage a shift into tree crops and semi-
modern dairy farming (with fodder production as a new and growing
activity);
 Lowlands – encourage expansion of cereal production, mobile
livestock rearing;

17. 17
Towards accelerating agricultural transformation
 Some implications:
 Invest on human capital – mobile schools and clinics;
 Invest on water management in all areas – irrigation, better water use
arrangements;
 Invest on disease (human and animal) control and in less moisture
reliable low lands;
 Enhance the role of the private sector in agricultural input provision;
 Promote well-defined and focused cooperatives, particularly in dairy
production and development;
 Potential - there appear to be considerable potential yet to be deployed
productively in parts of the country;
 Land – (next slide)
 Water – renewable internal freshwater resources

18. 18
Cropped Land by AEZ (2004-2016)
Source: Authors’ calculation using CSA’s AgSS (2004-2016) data.
AEZ
share in
total
surface
area
(%)
AEZ
cropped area
in total
cropped area
(%)
Cropped area
share in total
AEZ surface
area (%)
Number of
woredas
Drought prone, Highland 11.4 23.2 23.5 146
Drought prone, lowland - Pastoralist 50.9 3.5 0.8 139
Humid moisture reliable, lowland 11.9 4.4 4.3 52
Moisture reliable, highland - Cereal 20.1 57.5 32.9 264
Moisture reliable, highland - Enset 5.8 11.4 22.7 126

19. 19
Broad Priorities
 Promote, with reasonable regulation, land rental markets, in part to
address the small farm size problem through consolidation in production
(not ownership);
 Articulate and implement a medium- to long-term plan to transform the
opportunities for farmers with very small farm-size that cannot escape from
subsistence without radical change in what, where, and how they
produce/earn livelihood;
 Expand the capacity of the national research and development system to
generate improved seed varieties adapted to heterogeneous local
conditions;
 Enhance policy implementation capability based on local problem
identification, learning, experimentations, and organizational structure
defined by characteristics of tasks;
 Develop a 20 to 25-year programme to transform and integrate the
drylands and the ‘degraded’ areas in the ‘highlands’;

20. 20
Thank You

21. Ethiopia: Agro-ecological Zones
21
Zone Classification
Parameters
Elevation:
Highlands: >1500
meters above sea level
Moisture Reliability:
Annual rainfall
(mean/std) >= 7.5
Cropping System:
Cereal or enset based
(moisture reliable
highlands only)
Drought Prone Lowland /
Pastoralist:
Mean annual rainfall <
500mm