A recent FAO/WFP Crop and Food Supply Assessment Mission forecast that the 1996/97 production of cereals and pulses will be some 12 million tons, comprising 11.7 million tons of Meher crops and 0.3 million tons of Belg crops. This represents: a) an increase of some 20 percent over the MoA’s final estimate of last year’s Meher harvest and b) an average Belg crop in 1997 harvested before July/August. Early, plentiful and well distributed rains throughout the year not only encouraged planting and supported crop development during the season in most zones but also provided optimal conditions for cultivation by a draught animal force in excellent condition, in all but tse-tse prone areas, due to an absence of serious disease challenges and good forage supply. Minimal infestations of migratory pests on growing crops, notably army-worm and Quelea-quelea, were effectively controlled. Non-migratory pests, particularly stalk borer and shoot fly, though ubiquitous, did not reach the level of economic significance necessary for MoA intervention in any zone. Expansion of the National Extension Programme (NEP) for the main cereal crops in all main production regions increased the area under such management from 20 000 hectares in 1995 to 200 000 hectares in 1996. Fertilizer use rose by almost 5 percent in parallel with the expanded programme. On the negative side, increased weed competition increased demands on labour and/or herbicides and reduced yields in the southern forest areas. Excess rain caused waterlogging in highland heavy clay areas, which delayed planting and stunted crop growth. Floods destroyed crops in a number of areas and significantly reduced production in Gambella. Storage losses are expected to be higher than last year as on-farm storage capacity is limited and crop protection chemicals are not available. Root, tuber and oilseed crops also benefited from the rains in their respective areas, but the coffee crop is reported to be lower than last year and suffering from coffee berry disease at a time when coffee prices are in decline. Cereal prices, which have been declining steadily in most markets throughout the year, fell abruptly with the onset of the harvest signalling the general anticipation of a bumper crop. Given that maize prices in particular are now near or below production costs in the main production areas, efforts need to be made to improve marketing possibilities to avoid surpluses becoming a disincentive to producers. The comfortable situation described above masks the existence of food deficient communities which extend throughout the country due to displacement, structural inadequacies and lack of access/entitlement to food supplies. Although overall food aid requirements are estimated at 186 000 tons, 64 percent of last year’s requirements, 1.9 million people will still require food assistance. Further, as there is a need to maintain food security against climatic vagaries that could reverse this year’s situation of surplus, 307 000 tons are required to sustain the food security reserve. Given the above considerations, all food aid should be met by local purchases and no food aid should be imported. In addition, donors should seriously consider financial support for the purchase and export of Ethiopian grains to neighbouring countries such as Kenya, Eritrea and Somalia, where similar FAO/WFP Missions have reported large deficits.