THE AGRICULTURAL SECTOR IN THE ETHIOPIAN ECONOMY

Question 1

Agriculture is the backbone of Ethiopia’s economy. (T/F)

Answer 1

T

Question 2

Share in GDP

Answer 2

33% (2019/20)….
down from 40% (2014/15)

Question 3

Employment

Answer 3

85%

Question 4

Exports

Answer 4

80% (mainly through coffee, oilseeds, livestock)

Question 5

Industrial linkage

Answer 5

Supplies 70% of raw materials for agro-processing and light industries

Question 6

Structure of the Agricultural Sector

Answer 6

1. Smallholder Farming System (Traditional/Subsistence Farming)
2. Pastoral and Nomadic Farming System
3. Modern Commercial Farming System

Question 7

1. Smallholder Farming System (Traditional/Subsistence Farming)

Answer 7

> 90% of total agricultural production
~95% of cropland area
86% of smallholders cultivate less than 2 hectares
Mixed farming is dominant
o Labor-intensive
o Traditional tools (e.g., oxen plowing)
o Rain-fed dependency
o Low productivity
Household Size: Averages 5 persons per household

Question 8

Challenges of Smallholder Farming System (Traditional/Subsistence Farming)

Answer 8

 Fragmentation of land
 Limited access to credit and improved inputs
 Vulnerability to drought and climate change
 Poor market access and infrastructure

Question 9

2. Pastoral and Nomadic Farming System

Answer 9

lowland arid/semi-arid areas (<1500m altitude) like Somali, Afar, Borena, Gambella, Omo regions
Supports ~5.5 million people
Home to:
o 20% of national cattle
o 25% of sheep
o 73% of goats
o Over 1 million camels
Nomadic or semi-nomadic; seasonal migration for pasture and water
Livestock > crop; very low crop cultivation due to unreliable
rainfall
19% of domestic supply (esp. in live animal exports)

Question 10

Challenges of Pastoral and Nomadic Farming System

Answer 10

 Food insecurity
 Limited infrastructure
 Disease outbreaks
 Environmental degradation
 Limited government support historically

Question 11

3. Modern Commercial Farming System

Answer 11

Introduction: During Ethiopia’s 3rd Five-Year Plan (1968–73)
Initial Development Areas: Awash Valley, Rift Valley, etc.
Grew through large-scale state farms after the 1974 revolution
Features:
o Mechanized farming (tractors, irrigation)
o Focused on export crops (cotton, sugar, tea, fruits, vegetables)
o Irrigated (intensive) and rain-fed (extensive) farming
 After 1991:
o Many state farms privatized or given to local investors
o Only 13 state farms remain (156,040 ha producing wheat, maize, cotton, etc.)
 Comprises 5% of cropland, contributes <10% of total production.
 Government encourages private investors—both domestic and foreign—
offering land leases, tax incentives, and duty-free import of machinery.

Question 12

Criticisms of Modern Commercial Farming System:

Answer 12

 Mismanagement
 Corruption
 Environmental risks (land grabbing, displacement)
 Underperformance despite heavy investment

Question 13

Contribution of Agriculture to the Economy

Answer 13

1. Source of Food & Raw Materials
2. Employment
3. Contribution to GDP
4. Exports
5. Forward Linkages
   o Supplies industrial inputs → promotes agro-industries
   o Low food prices → lowers industrial wage pressures
6. Backward Linkages
   o Demand for fertilizers, improved seeds, tools → stimulates input
   industries.
7. Source of Capital
   o Through:
    Taxation
    Compulsory delivery (historically)
    Terms of trade control

Question 14

Challenges of the Agricultural Sector

Answer 14

 Recurrent droughts
 Land degradation and overpopulation
 Traditional techniques and tools
 Inadequate extension services
 Poor roads and market access
 Increasing input costs (especially fertilizer)
 Weak land tenure security (land is state-owned)