Decade-long Agricultural Growth in Ethiopia Driven Partly by Use of Fertilizers, Improved Seeds

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Agricultural growth can stem from a multitude of factors, including increased investment in inputs and rural infrastructure, expanded land dedicated to cropping, a more productive workforce, and favorable prices on local and international markets. Over the past decade, Ethiopia has experienced strong agricultural growth due to a number of these factors, according to a new research note and related working paper from IFPRI’s Ethiopia Strategy Support Program; however, the country also faces a number of challenges to continued growth in the future.

Between 2004 and 2014, Ethiopia has been one of the fastest growing economies in the world. During this period, the country’s real GDP grew at an average rate of 10.7 percent per year, and real per capita GDP grew at an average of 7.9 percent per year. At the same time, the agricultural sector grew at 7.6 percent per year and accounted for 47 percent of real GDP, the largest contributor to GDP until 2010-2011.

The agricultural sector was also the largest employer during this period, employing 80 percent of all Ethiopian workers in 2005 and 77 percent in 2013. Agricultural exports contributed an average of 81 percent of total exports during the study period as well, with the real value of agricultural exports increasing at an average annual rate of 9.6 percent from 2004-2014. Coffee was the most import export crop, making up 29 percent of exports during the study period; exports of other crops, such as oilseeds, flowers, and meats, have also grown over the last decade.

Using data from the Ethiopian Government’s Central Statistical Agency, the study finds that over the study period, growth occurred in the area of land cultivated, in total agricultural output, and in agricultural yields. In 2013-2014, total cultivated area was 27 percent higher than in 2004-2005 and total agricultural output was 124 percent higher than in 2004-2005. Output growth was driven mainly by increases in cereals output, which grew at 9 percent per year during this period. Yields in cereal crops grew faster relative to other crops, and the number of smallholder farmers grew from 11 million in 2004-2005 to 15.3 million in 2013-2014. 

Regarding the drivers behind this growth, the study finds that approximately 31 percent of the agricultural growth came from increases in the amount of labor dedicated to farming; expansion in cultivated area accounted for about 13 percent of the growth in production. Twelve percent of growth came from increased use of improved seeds and 8 percent came from increased chemical fertilizer use. These findings highlight the importance of all three factors: labor, land, and input use.

The use of modern inputs such as improved seeds and chemical fertilizers doubled during the study period due to increased investment by the government. The majority of fertilizers used in the country are used on cereal crops; the area of cereals fertilized nearly doubled from 2.7 million hectares in 2004-2005 to 5.2 million hectares in 2013-2014. The last decade also saw a rapid increase in the number of improved seed varieties made available to farmers. Adoption rates of improved seeds remains low overall, but the proportion of farmers using improved seeds has grown from 10 percent of cereal producers in 2004-2005 to 21 percent at the end of the study period. Maize farmers in particular have adopted improved seed varieties in higher numbers. Finally, while little increase has taken place in access to irrigation, some increase has been seen in the use of pesticides (from 13 percent of crop area in 2004-2005 to 21 percent in 2013-2014).

What has driven this increased investment and uptake of modern agricultural inputs? First, according to the study, the government has invested heavily in agricultural extension, advisory, and training services over the past decade; the number of smallholders taking advantage of these services has also increased, from 3.6 million in 2004-2005 to 10.9 million in 2013-2014. This means that more farmers are being made aware of the benefits of modern inputs like fertilizers and being trained in how to properly use them to ramp up agricultural production.  A related factor is the increase in both universal primary education and adult education coverage during the study period. This has led to decreases in illiteracy rates in rural areas, meaning more farmers are able to access and understand written information regarding best agricultural practices.

The government has also increased investment in rural infrastructure, like roads, making it easier and less costly for farmers to bring their goods to market.  Access to input and output markets for rural smallholders has also been improved, which lowers the price of inputs like fertilizers and provides incentives for farmers to intensify their production.

Ethiopia also experienced generally favorable weather during the study period, with relatively stable rainfall and no major episode of drought. The country has also established a good early warning system for weather-related shocks and a strong social safety net, the Productive Safety Net Programme, to protect rural communities from the adverse impacts of weather shocks. Together, these systems make it less risky for farmers to increase production because they are more informed and protected.

The study points out, however, that in order to safeguard and sustain this recent agricultural growth, Ethiopia will need to address several challenges. First, the adoption of improved seed varieties and fertilizers will need to be ramped up; this can be done by increasing the supply of these inputs, improving marketing strategies, and making sure farmers have information regarding their proper use. In addition, private sector involvement in the input sector should be encouraged to stimulate competition and innovation.

Second, climate change will continue to have a strong impact on agricultural conditions in the country, as seen during the 2015-2016 El Nino cycle. Ensuring that future agricultural intensification is sustainable and climate-smart will be key to protecting smallholder farmers from potentially damaging climate effects.

Third, agricultural growth must take nutritional improvements into account. Ethiopia still has a high prevalence of child stunting; ensuring that future growth includes more dietary diversity will be key to lowering these rates. Increasing women’s empowerment in agriculture has been shown to have proven benefits for agricultural and nutrition outcomes and investing in female farmers could be one way to reach these nutrition goals.

Finally, mechanization of farm work means that more crops can be produced with less physical work; however, farmers need more access to affordable farm machinery.

By: Sara Gustafson, IFPRI

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