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Realizing Rural and Agricultural Transformation in Ethiopia – Some Reflections

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The document discusses agriculture and rural transformation in Ethiopia. It analyzes the current state, progress made, drivers of progress, remaining vulnerabilities and bottlenecks. Key bottlenecks include inadequate seeds, small farm sizes, land degradation, and challenges with policy implementation capability. Priorities for accelerating transformation include promoting land rental markets, transforming opportunities for small farms, expanding seed research, enhancing policy capabilities, and developing a long-term program to transform dryland and degraded areas.

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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 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 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 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 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 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 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 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 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 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 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 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 Some Bottlenecks climate change, population growth
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 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 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 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 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 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 Thank You
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

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Realizing Rural and Agricultural Transformation in Ethiopia – Some Reflections

  • 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
  • 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’;
  • 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