Country profile - Ethiopia
Divided by the East African Rift Valley into highland and lowland, Ethiopia has an extraordinarily diverse climate, from the cool and rainy Dega highlands to the Danakil Depression - one of the hottest, driest places on Earth. In 2004 the country ranked 170th out of 177 of the poorest countries in the UNDP human development index, and Ethiopia continues to have one of the highest rates of child malnutrition in sub-Saharan Africa. Over one million people are in need of some level of food assistance and twice in the last year the country has suffered flash foods, making almost 10,000 people homeless. To add to these natural disasters, human rights agencies recently voiced concerns for freedom of speech in the country, reporting the detention of human rights defenders, opposition leaders and journalists.
Apart from a brief five-year spell during the Second World War, Ethiopia is the only country on the continent never to have been colonised. Plagued by famine, the country has fought to recover its reputation since drought throughout the 1980s attracted negative media coverage. But despite being among the world's poorest countries, heavily dependent on agriculture, Ethiopia is one of Africa's leading coffee producers and is exploring other opportunities to improve its economy.
Agriculture accounts for roughly 47 per cent of Ethiopia's GDP; over 80 per cent of the population depending on it for their livelihood. The challenge is that virtually all of those involved are subsistence farmers and, although the land is fertile, most agriculture is rain fed. Only 1 per cent of cropland is irrigated and a period of drought can throw the whole country into crisis. Other reasons for famine include deforestation, soil erosion and unsustainable cultivation methods. Such problems are magnified, however, by the land tenure system. By law, land belongs to the state and farmers are therefore not allowed to sell it. As population increases, plots become smaller and the intensity of cultivation is increased.
The importance of livestock
With the largest reserves of livestock in Africa, animals sustain an estimated 80 per cent of the rural population of Ethiopia. Exports of live animals have increased from 3000 tonnes in 2003/04 to 33,000 tonnes in 2005/06, with meat exports also doubling over the same period. Cattle, sheep, chickens and camels play a vital role in the smallholder economy and culture of the people, especially the migratory pastoralists in the lowlands. Migratory, landless and particularly vulnerable to disease, including livestock diseases such as Trypanosomiasis, they are often unable to support themselves economically once their animals die.
Crops for cash
Despite the compelling challenges, food security is improving. According to the World Food Programme and the UN Food and Agriculture Organisation, emergency food needs have reached their lowest level for some years, thanks to favourable weather conditions and recent bumper harvests. While coffee accounts for roughly 60 per cent of exports, low international prices have encouraged the cultivation of alternative crops such as khat and sugar cane and, with high prices for commodities such as vegetable oils, spices and pulses, farmers grow these instead of cereals for immediate cash.
To meet subsistence needs, cereals such as maize and tef are grown. In the north, oilseeds - especially sesame and nuq - are important to both commercial and peasant farmers and sesame seed cultivation almost doubled in 2006 in response to rising prices. In the south, households rely on a greater range of crops and pulses. The root crop enset is the main carbohydrate staple in the region, contributing significantly to the diet of some 12 million people countrywide.
Oilseed is a popular export crop, in particular Vernonia, which is valued by the pharmaceutical and fuel industries. In the Tigray Regional State, flowers of wild cactus, cultivated traditionally for fencing, food and juices, have recently been used in the making of diabetes medicines, providing an important export opportunity.
On the scent
One of the biggest export opportunities has been the recent boom in floriculture. The country's diverse ecology provides ideal habitats for many plant and flower species. Local investors export cut flowers mostly to Holland, which absorbs 70 per cent of the country's floricultural produce. Ethiopia's Horticultural Producers and Exporters Association reported that the country earns roughly US$20 million each year from flowers, including roses, alliums, carnations, carthamus and statice.
Ethiopia's market for exportable horticultural produce is also expanding. An article by USAID notes that lack of irrigation and cultivation techniques and overall coordination are to blame for poor prices received by small-scale farmers working on individual plots. A programme introduced by the aid agency has linked farmers with the exporter Ethioflora Horticultural Farm, allowing them to form co-operatives and earn prices up to four times the local market value by selling high-quality green beans.
The government is encouraging international investment, selling land to set up flower farms, with attractive policies to generate growth, such as five-year tax breaks and duty free import of machinery. In a shift towards market-oriented agriculture, it has also introduced national business plans for specialised export crops. Working with government support, commercial banks are providing annual credit for the purchase of farming inputs to a quarter of the country's smallholders. Road networks are also being improved, although roughly 75 per cent of farmers still live more than half a day's walk from the nearest all-weather road.
- Country: Ethiopia
- Capital: Addis Ababa
- Area: 1,127,127 sq. km
- Population: 76,511,887 (July 2007 est.)
- Population growth rate: 2.272% (2007 est.)
- Life expectancy: 49.23 years
- Ethnic groups: Oromo 40%, Amhara and Tigre 32%, Sidamo 9%, Shankella 6%, Somali 6%, Afar 4%, Gurage 2%, other 1%
- Languages: Amharic, Tigrinya, Oromigna, Guaragigna, Somali, Arabic, other local languages, English
- Inflation: 13% (2006 est.)
- GDP: purchasing power parity $71.63 billion (2006 est.)
- GDP: per capita: $1,000 (2006 est.)
- GDP composition by sector: agriculture: 46.7% industry: 12.9% services: 40.4% (2006 est.)
- Land use: arable 10.1%, permanent crops 0.65%, other 89.34%
- Major industries: food processing, beverages, textiles, leather, chemicals, metals processing, cement
- Agricultural products: cereals, pulses, coffee, oilseed, cotton, sugarcane, potatoes, qat, cut flowers; hides, cattle, sheep, goats; fish
- Natural resources: small reserves of gold, platinum, copper, potash, natural gas, hydropower
- Export commodities: coffee, qat, gold, leather products, live animals, oilseeds
- Export partners: Germany 15.5%, China 10.5%, Japan 8.5%, Saudi Arabia 6.9%, Djibouti 6.8%, Switzerland 6.4%, Italy 5.9%, US 5.5%, Netherlands 4.2% (2005)
With contributions from: Obang Ojwok Jobi
Date published: May 2007
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