Challenges and prospects of agricultural production and productivity

TABLE OF CONTENTS

II. ACKNOWLEDGEMENT

III. LISTS OF ABBREVIATIONS

IV. LISTS OF TABLES

V. LIST OF FIGURES

VI. ABSTRACT

1. INTRODUCTION

2. OBJECTIVE OF THE SEMINAR

3. REVIEW OF LITERATURE
3.1. Agricultural Production and Productivity in Sub-Saharan Africa
3.2. Agricultural Production System in Ethiopia
3.3. Challenges of Agricultural Production and Productivity in Ethiopia
3.4. Prospects of Agricultural Production and Productivity

4. CONCLUSION AND RECCOMENDATION
4.1. Conclusion
4.2. Recommendation

5. REFERENCE

II. ACKNOWLEDGEMENT

This seminar would never be completed without the contribution of many people to whom I would like to express my thanks. I wish to thank my best friend Emiru Dirbaba and my former staffs of East Wollega Zone Finance and Economic Development Office. Above all, I would like to praise my God for his unspeakable gift in all my life in general and his help in the process of undertaking this study in particular.

III. LISTS OF ABBREVIATIONS

illustration not visible in this excerpt

IV. LISTS OF TABLES

Table 1 Sectoral Contribution to GDP and GDP growth (in millions of birr) and Share in GDP (in percent)

Table 2 Estimates of agricultural production and cultivated areas of major crops for private Peasant Holdings during Meher season

V. LIST OF FIGURES

Figure 1 Sectoral contribution to GDP in millions of birr

Figure 2 Share in GDP in percent

VI. ABSTRACT

Agricultural production in Ethiopia is characterized by subsistence orientation, low productivity, low level of technology and inputs, lack of infrastructures and market institutions, and extremely vulnerable to rainfall variability. Productivity performance in the agriculture sector is critical to improvement in overall economic well-being in Ethiopia. Low availability of improved or hybrid seed, lack of seed multiplication capacity, low profitability and efficiency of fertilizer, lack of irrigation development, lack of transport infrastructure, inaccessibility of market and prevalence of land degradation, unfertile soil, overgrazing, deforestation and desertification are among the constraints to agricultural productivity during last period. However, in 2011 the sector grew by 9% driven by cereal production which reached a record high of 19.10 million tons in Ethiopia.

1. INTRODUCTION

The history of agricultural and rural development since the end of World War II in 1945 is characterized by changing priorities and concerns. Immediately after this war and the widespread experience of serious malnutrition, there was a determined effort to increase food production in the developed world (Reimund et al., 2007).

Rural areas are home to 75 percent of Africa’s people, most of whom count agriculture as their major source of income. Fortunately, Africa has experienced continuous agricultural growth during the past few years. However, much of the growth has emanated from area expansion rather than increases in land productivity. In most countries, future sustainable agricultural growth will require a greater emphasis on productivity growth, as suitable area for new cultivation declines, particularly given growing concerns about deforestation and climate change (IFPRI, 2012).

Sub-Saharan Africa is one of the world’s poorest regions. Its population and land area are approximately three times that of the USA. The region’s economies are heavily dependent on agriculture, which accounts for two-thirds of the labour force, 35% of GNP and 40% of foreign exchange earnings. Productivity performance in the agricultural sector is thus critical to improvement in overall economic well-being in Sub-Saharan Africa (Lilyan et al., 2004).

According to Paul et al. (2012) agricultural production and proximity (as measured by travel time) to urban markets are highly correlated in Sub-Saharan Africa, even after taking agro ecology into account. According to IFPRI (2012) poor resource endowments, minimal use of inputs (fertilizer, improved seeds, and irrigation), and adverse policies that continued for a long period have been identified as the major causes of the low and declining performance of the agricultural sector in SSA. Continuing environmental degradation, high population growth, and low levels of investment in agricultural infrastructure also aggravate the resource limitations of agriculture in Africa.

Key constraints to agricultural productivity in Ethiopia include low availability of improved or hybrid seed, lack of seed multiplication capacity, low profitability and efficiency of fertilizer use due to the lack of complimentary improved practices and seed, and lack of irrigation and water constraints. In addition, lack of transport infrastructure and market access decreases the profitability of adopting improved practices (Kate & Leigh, 2010).

According to Mulat et al. (2004) the Ethiopian economy is among the most vulnerable in Sub-Saharan Africa. It is heavily dependent on agricultural sector (Berhanu, 2009), which has suffered from recurrent droughts and extreme fluctuations of output. As explained by Jordan et al. (2011) the opportunities and constraints facing Ethiopian agriculture are strongly influenced by conditions which vary across geographical space. These conditions include basic agricultural production potentials, access to input and output markets, and local population densities which represent both labor availability and local demand for food.

The impact of rainfall on crop production can be related to its total seasonal amount or its intra-seasonal distribution. In the extreme case of droughts, with very low total seasonal amounts, crop production suffers the most. But more subtle intra-seasonal variations in rainfall distribution during crop growing periods, without a change in total seasonal amount, can also cause substantial reductions in yields. This means that the number of rainy days during the growing period is as important, if not more, as that of the seasonal total. Generally, the effect of rainfall variability on crop production varies with types of crops cultivated, types and properties of soils and climatic conditions of a given area (Woldeamlak, 2009).

The agricultural sector, which accounts for 80% of employment, remains a key source of growth. In 2011 the sector grew by 9%, driven by cereal production which reached a record high of 19.1 million tons in 2011. Agricultural production has been boosted by favorable weather conditions in cereal-growing areas, enhanced government support services to smallholders, improvement in yields and expansion in the area under cultivation. Increases in productivity are mainly responsible for increased yields, rather than extension of the cultivated area. This is consistent with the government’s massive push to promote and deliver technology packages to smallholders (AfDB, 2012).

Increasing productivity in smallholder agriculture is the Government’s top priority. This recognizes that: (i) smallholder agriculture is the most important sub-sector of Ethiopia’s economy; (ii) there remains a high prevalence of poverty among smallholder farming communities; and (iii) there is a large potential to improve crop and livestock productivity using proven, affordable and sustainable technologies (MoARD, 2010).

2. OBJECTIVE OF THE SEMINAR

The objective of this paper was the following;

- to describe the prospects of agricultural production and productivity in Ethiopia
- to assess the challenges of agricultural production and productivity during implementation of different agricultural policies and strategies including the Growth and Transformation Plan (GTP) and
- to suggest policy measures that could minimize the challenges of agricultural production and productivity in order to attain the planned activities thereon Growth and Transformation Plan (GTP).

3. REVIEW OF LITERATURE

3.1. Agricultural Production and Productivity in Sub-Saharan Africa

As stated by Lilyan et al. (2004) the Sub-Saharan Africa countries showed some progress in the 1960s, suffered a regression in productivity during the 1970s, but after the mid-1980s recovered to achieve a reasonably robust rate of productivity improvement through the end of the century. The overall average rate of productivity growth for the four decades was estimated at 0.8% per year.

As stated by Paul et al. (2012) the impacts of investments in road infrastructure on agricultural output and productivity are particularly important in Sub-Saharan Africa for three reasons. First, the agricultural sector accounts for a large share of gross domestic product (GDP) in most Sub-Saharan countries. Second, poverty is concentrated in rural areas. Finally, the relatively low levels of road infrastructure and long average travel time result in high transaction costs for sales of agricultural inputs and outputs, and this limits agricultural productivity and growth. Thus, investments in road infrastructure and related transport services can have a significant impact on rural and national incomes through their effects on agriculture (Paul et al., 2012).

3.2. Agricultural Production System in Ethiopia

Agricultural production is dominated by smallholder households which produce more than 90% of agricultural output and cultivate more than 90% of the total cropped land. Smallholders drive their income either in cash or through own-consumption from agricultural production. According to the national accounts, the agricultural sector consists of crop, livestock, fishery and forestry sub-sectors. Crop production is the dominant sub-sector within agriculture, accounting for more than 60% of the agricultural GDP followed by livestock which contributes more than 20% of the agricultural GDP. The contributions of forestry, hunting and fishing do not exceed 10% (Mulat et al., 2004).

The viability of the agricultural production systems in Ethiopia, as in many areas in developing countries, is highly constrained by degraded soils and increasing lack of reliability in rainfall resulting from climate change (Menale et al., 2010). There are two main production systems in Ethiopia: the pastoral nomadic system, and the mixed crop production system. The pastoral livestock production system dominates the semi-arid and arid lowlands (usually below 1500 meters above sea level). These regions cover a vast area of lands with a small livestock production.

The crop production system can be classified into smallholders’ mixed farming, producers’ cooperative farms, state farms, and private commercial farms based on their organizational structure, size, and ownership. The major objectives of small holder farmers’ production are to secure food for home consumption and to generate cash to meet household needs such as clothing, farm inputs, taxes and others.

Ethiopia has a variety of fruits, leafy vegetables, roots and tubers adaptable to specific locations and altitudes. The major producers of horticultural crops are small scale farmers, production being mainly rain fed and few under irrigation. Shallot, garlic, potatoes and chillies are mainly produced under rain fed conditions. Tomatoes, carrots, lettuce, beetroot, cabbage, spinach and swiss chard are usually restricted to areas where irrigation water is available (Girma, 2003).

Ethiopia has got an immense potential to develop intensive horticulture on small scale as well as on commercial scale. According to Girma (2003), some of the favorable factors that contribute to an overall investment are:

- Proximity to lucrative markets,
- Agro-climatic suitability and rich water resources for diversified irrigated agriculture,
- Growth/rise of demand for horticultural crops, particularly in urban areas,
- Diversified agro-climatic conditions that facilitate the diversification of the crops,
- The high productivity of horticultural crops as compared to cereals,
- Export possibilities of these crops are very encouraging and
- If fully exploited, these crops are highly remunerative and would be undoubtedly help to improve the standard of living of small scale resources poor farmers.

3.3. Challenges of Agricultural Production and Productivity in Ethiopia

The agricultural production trends throughout the 1980’s up to mid-1990’s were characterized by wide fluctuations in total output and weak growth, with grain production increasing at rate of 1.37% annually compared to population growth of 2.9 % (World Bank, 2004).

Despite large scale extension efforts since mid-1990s, agricultural performance over the past decade has continued to be weak, with production gains mainly driven by weather and area expansion, and weak yield gains limited to maize. There are multiplicity of factors explaining this poor performance; high rainfall variability, the lack of irrigation investment, weak rural institution limited modern varieties, the lack of animal traction, the lack of mechanization, under investment in agricultural research, weak rural infrastructure and skills on the demand side, poor market linkages, high transaction costs, and weak purchasing power leading to thin and volatile markets, make agriculture more risky and reduce production incentives (World Bank, 2004).

Investments in productivity increases higher up the food value chain, such as through marketing and transportation infrastructure, would increase prices farmers receive for output while also putting downward pressure on urban food prices. Higher producer prices would create incentives for farmers to invest in productivity increasing technologies since output increases would offer substantial gains (Kate & Leigh, 2010).

Because of the diverse agro-ecological zones, topography and natural vegetations, Ethiopian small farmers have developed complex farming methods and cropping patterns. Accordingly, seven different cereal crops, six pulse crops, seven oilseed crops, and a number of different other and tree crops are grown. Diversification has allowed farmers to cope with the drought or erratic rains but identifying the right technological package for the various ecologies and crops has been of considerable challenge to researchers and extension systems (Mulat et al., 2004).

According to Mulat et al., (2004), Ethiopia is said to possess the largest livestock population in Africa. Livestock is considered as a security during crop failure, investment and additional income for farmers in Ethiopia. Livestock serve as source of traction for crop production, raw material input for industry (e.g. hides and skins, wool, etc.) and manure for fertilization. Equines are the major source of transport services in rural areas. The role of livestock as a source of food is critical for both highland and lowland inhabitants.

The main food contributions of livestock include, among other things, meat and meat products, milk and milk products, eggs, and honey. In mixed farming systems of the highlands, 26% of the livestock output is used as food, while in the pastoral areas, where livestock forms the main sources of livelihood, this proportion increases to 61%.

Despite its potential, the livestock sub-sector has remained undeveloped in Ethiopia. On average it contributes up to 30 percent of agricultural GDP. The main constraints (Mulat et al., 2004) include the following:

Diseases: Diseases have been identified one of the main factor for low productivity of the livestock sub-sector. About 30-50% of the total value of livestock products is lost every year due to diseases such as rinderpest, trypanosomiasis, foot and mouth disease, and liver fluke.

Feed shortage: under-nutrition and malnutrition are among the major constraints of livestock production in Ethiopia. Nutritional stress has caused low growth rates, poor fertility and high mortality. High population growth and increasing density have led to expansion of cultivated area at the cost of grazing land on which smallholder livestock production depends. Permanent pastureland is believed to have declined by close to 60% over the last three decades. It should be note that in areas where there is intensive cultivation, crop residues have become the main source of animal feed.

Demand constraint: underdevelopment of roads and other infrastructure has hindered livestock take-off. It has been indicated that as income declines for a variety of reasons, livestock products are the first to be selected or removed from the menu by the majority of consumers. Also, during fasting seasons (which are many) of Christians, livestock products are not part of the daily menu, i.e. they are not entirely consumed which influences the demand for products negatively.

Institutional and policy constraints: there are also institutional and policy related problems such as lack of institutional stability that could promote the sub-sector, lack of appropriate policies to promote and increase production and productivity of the sub-sector. Inadequate capital and recurrent budget allocations to the livestock sub-sector have also contributed to its low productivity.

[...]