The coherence of Ethiopia’s agricultural and rural development policies can be evaluated against the four pillars of the Policy and Investment Framework (PIF): 2010-2020. These are: (1) sustainable productivity and production increase; (2) commercialization and agro-industrial development; (3) improved productivity and conservation of natural resources; and (4) universal food security and resilience to natural disasters.

1) During 2005–2012, producers have been implicitly taxed, receiving an average 36 percent less than the international or regional reference price for their commodities, discouraging investments in on-farm infrastructure and productivity-enhancing technology. Staple crops have been hardest hit owing to export restrictions and subsidized imports of wheat. By contrast, producers of cash crops such as coffee, haricot beans, and sesame, received slightly higher prices than the international equivalent (12 percent), leading to output growth of 9 percent per year. The passing of the Livestock Trading Bill in January 2014, as part of an “enhanced livestock subsector strategy” (PIF), is expected to mitigate the disincentives to cattle pastoralists witnessed during 2005–2012.

2) Policy measures have had mixed effects on agro-industrial development and commercialization. The Ethiopian Commodity Exchange (ECX) has boosted exports of coffee, haricot beans, and sesame.  Growing domestic demand for bread, pasta, injera and alcoholic beverages presents an opportunity to accelerate agricultural commercialization and agro-processing, yet barley, lentil, wheat and teff farmers have suffered under export restrictions, subsidized imports, and under-developed value chains. Opportunity likewise awaits in live cattle and meat exports if investments in market infrastructure, training, and inspection services can be made.

3) Although environmental policy analysis is not a MAFAP focus, Public Expenditure analysis indicators show that substantial resources were allocated to land improvement and sustainable irrigation programmes. While the number and scale of these programmes indicate a strong coherence with pillar 3, the outcomes are beyond the scope of MAFAP analysis.

4) In order to attain Food Security objectives, the government has implemented short, medium, and long-term policies aimed at supporting vulnerable households, the largest and arguably most successful being the Productive Safety Net Programme (PSNP) and Household Asset Building Programme (HABP), offering cash or in-kind transfers, access to credit and infrastructure development. However, consumer-targeted policies such as grain export bans and subsidized imports contribute to low domestic grain prices that discourage domestic production to the detriment of food security.  

** Public expenditure figures for Ethiopia are provisional and partial. Updated indicators qill be available in July 2018.

Download the report: Analysis of public expenditure in support of food and agriculture in Ethiopia, 2006-2012.

For additional information on the indicators shown in the graphs and the terminology used, please refer to MAFAP’s Glossary on Public Expenditure and Methodological Guidelines - Volume II - Public Expenditure. For detailed information on the data provided, please go to the MAFAP database.