Ethiopia: Agricultural Growth Program (AGP)

Report
from World Bank
Published on 13 Apr 2010 View Original
1. Country and Sector Background

1. Agriculture is Ethiopia's most important sector. Agriculture is crucial for the country's food security and the sector is the largest contributor to overall economic growth and poverty reduction. It accounts for about 47 percent of national GDP, almost 90 percent of the foreign exchange earnings, and 85 percent of employment. The livelihood of about 90 percent of the poor is fully or partly dependent on agriculture.

2. Agricultural growth is fundamental to Ethiopia's overall development. Agriculture in Ethiopia is dominated by small-holder and largely subsistence farming with low productivity on fragmented and highly degraded lands. Leading the sector to higher productivity and increased commercialization is not just fundamental to poverty reduction and food security, but can also contribute to meeting a number of other key development challenges that Ethiopia faces. For example, Ethiopia's high population growth requires increased agricultural production to ensure food security. If this is achieved with full involvement of and benefits for women, this can have significant impacts on household nutritional status and contribute to reduced birth rates. Increased agricultural productivity and commercialization - and in particular the increase in related upstream and downstream economic activities that are part of this development - can also provide some employment opportunities for the many "landless youth" in Ethiopia as well as creating export growth. Similarly, the big environmental challenges that Ethiopia faces due to degradation of productive land and increasing climate variability can only be addressed through higher productivity of crop and livestock production in those areas where it can be done sustainably.