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Economy, agriculture and food security

The Ethiopian economy is mostly based on agriculture, with industry and services slightly increasing recently. The country’s Gross Domestic Product (GDP) is US$54 798 million in 2014 with an annual growth of around 10 percent since 2004, placing Ethiopia among the fastest growing non-oil producing economies in Africa. Agriculture accounts for 42 percent of GDP in 2014 and about 85 percent of exports earnings in 2010. It also employs 83 percent of the active population (MoA, 2011). Agriculture is primarily rainfed and thus highly dependent on rainfall. Smallholders dominate the sector and the land holding is increasingly fragmented. In 2015, there were 15.6 million agricultural households with an average farm size of 0.95 ha (CSA, 2015). It however benefits from a liberalized economy since the 1990s. The Ethiopian livestock is also significant with over 50 million cattle, 50 million poultry, 20 million sheep and 20 million goats in 2015 (CSA, 2015).

The main agricultural exports are coffee, oil seeds, cereals, cotton, sugarcane, khat, spices, natural gum, incense and cut flowers among others. Coffee is the largest export commodity responsible for a third of the agricultural exports earnings. Ethiopia is the largest African coffee producer and the country where coffee is believed to have been discovered in the eponym Kaffa region. Wheat, palm oil and raw sugar are the main agricultural imports of the country.

The following five main agricultural production systems can be distinguished in the country:

  • The highland mixed farming system (1 500 m above sea level) is practiced in most regions of the south and southwest with prolonged humid periods
  • The lowland mixed agricultural production system (below 1 500 m) is practiced in low-lying plains, valleys and mountain foothills, which include the northern parts of the Awash and the rift valley
  • The pastoral complex supports the livelihood of only 10 percent of the total population living in the Afar and Somali regions and the Borena zone
  • Shifting cultivation is practiced in the southern and western part of the country
  • Commercial agriculture is a farming system that has only emerged very recently

Food insecurity, as a result of frequent drought among other reasons, is very high. The prevalence of undernourishment is still significant with 35 percent in 2014, but improved a lot falling from 55 percent in 2002 (FAO, 2015). About 10 percent of the households are considered food insecure and partly rely on food aid even without dry spell (ODI, 2015).


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