Agriculture In Ethiopia - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Agriculture In Ethiopia - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The market for agriculture in Ethiopia is projected to register a CAGR of 5.6% during the forecast period (2022-2027).

Due to the COVID-19 outbreak, the Ethiopian agriculture sector faced major challenges, including the harvesting process, labor scarcity, which affected the supporting infrastructure around the agricultural sector, heavily restricted movement across state borders, which blocked the movement of agri-produces and consequently affected the sales of the produced agri-commodities, lockdowns in major economies causing delays and backlogs in supply chains, exports facing transport and logistics problems, and more stringent customs restrictions.

The favorable government policies encouraging the private sector and the favorable agro-climatic conditions are the two major drivers of the market’s growth. Agriculture in Ethiopia is the largest component of its economy and employs most of the Ethiopian population, accounting for 40% of GDP. The majority of these are smallholder farmers practicing subsistence farming on less than one hectare of land. These farmers, whose output is predominantly cereal crops, account for 95.0% of the agricultural production in Ethiopia.

Ethiopia Agriculture Market TrendsFavorable Government Policies are Encouraging the Private Sector

The key component of Ethiopia’s Agriculture Policy is expanding the primary and processed agricultural products. As a result, the government of Ethiopia has identified two of its crucial areas, which are increasing the productivity of small-holder farms and expanding the large-scale commercial farms. To spur the economic growth of Ethiopia in the future, the government has initiated the Second Growth and Transformation Plan (GTP II) to make the agro-processing sector a single entity by encouraging private sector investments within the country. The government of Ethiopia has started working with international partners to enhance agriculture productivity by collaborating with different private sectors in many possible ways. The government of Ethiopia has established the Agricultural Transformation Agency (ATA) to address the problems of the agricultural sector in Ethiopia. The establishment of the society is meant to enhance the capability of the Ministry of Agriculture and Livestock Resources (MoALR) and its public, private, and non-governmental implementing partners. In 2021, the government of Ethiopia (GOE) embarked on a 10-year economic development plan (2021-2030) where agriculture is the top priority sector, and enhancing agricultural production and productivity is one of the major strategic pillars. The 10-year development plan also aims at boosting agricultural export revenues and substituting imports by reducing production costs. To achieve this, the GOE seeks to leverage developing huge unutilized arable land, modernizing production systems, and improving technology uptake.

Production of Cereals in Ethiopia

Production of cereals accounts for the second-largest share of the economy from the agricultural sector in Ethiopia. More than 80.0% of agricultural land is used to produce cereals, which makes use of 60.0% of the rural workforce. Despite the huge availability of fertile land for agriculture, the country fails to produce high yields of cereals due to low infrastructure, backward technology implementations, and lack of machinery and irrigation facilities. According to FAOSTAT, the area under cereals cultivation was 10,390,466 ha in 2018, which increased by 0.8% and reached 10,571,534.0 ha in 2020. Cereals are an essential part of the Ethiopian diet. As per the International Trade Administration report, over 50% of the daily caloric intake of an average household is from wheat, sorghum, and corn. Households spend an average of 40% of their total food budget on cereals. The government has allocated USD 5.98 million to establish agricultural machinery rental service centers in grain-producing regions to capacitate and increase the efficiency of farmers.

Ethiopia Agriculture Market Competitive AnalysisAdditional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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