Chapter 2

Overview of Agricultural and

Food policy In Ethiopia

Outline
• Introduction
• Principles and objectives of agricultural
Policy
• Food Security Policy in Ethiopia
• Agricultural Policy in Ethiopia
 2.1. Introduction

Rationale, Definition and Scope

• Agriculture is the art and science of

• Cultivating crops
• Raising livestock
• Provision of raw materials for industries and
• Agricultural products for man‟s use

• There are many branches of agriculture

 Agricultural economics
 Crop science
 Soil science
 Animal science fishery
 Forestry and agricultural engineering
 Human race depends more on farm products for their existence than
anything else

• Food
• Clothing
• Industrial prosperity (Provides inputs to the food industry)

Modern agriculture is an important component of the

demand for industrial products and other services
Rationale for Policy

Agricultural production of a country ☞ the sum of the

contributions of the individual farm units

The development of agriculture ☞ the development of

millions of individual farms

The prosperity of any country depends upon the prosperity of

farmers
The prosperity of farmers in turn depends upon the rational
allocation of resources among various uses
The relative weight of the agri. sector in the economy varies from country
to country

Between 3 and 40 % of the total value of production

May account for as much as 70% of total labor
weighs for more than 30 percent even in highly industrialized economies

 So when studying agricultural policies, it is very important to

understand the characteristics of the agricultural system
 How production is organized in terms of
 number and size of farms
 availability of infrastructures
 technology level
 institutional settings
 marketing arrangements
 availability of reliable outlets for farm‟s resources, etc

 Otherwise the same policy action can have very different effects
depending upon how the production sector is organized
 What is Policy?
• Policy is the course of action chosen by government towards an aspect of
the economy, including
• the goals that the government seeks to achieve
• and the choice of methods to pursue those goals (Ellis, 1991).
• Policy is typically described as a principle or rule to guide decisions
and achieve rational outcome(s)
• Public policy is an attempt by the government to address a public
issue in terms of
• Laws
• Regulations
• decisions, and
• Actions
• Policies are generally adopted by the senior governance body

• Government is the group of people in charge of running a

country, and who are responsible for making policy decisions

• Thus policy-making is a fundamental function of any government

• Policy differs from rules or law
• Law can compel or prohibit behaviors
• Policy merely guides actions toward those that are most likely to achieve a
desired outcome
Policy also refer to the process of making important decisions including

the identification of different alternatives such as programs or spending

priorities
and choosing among them on the basis of the impact they will have.

• Policies have Political, Management, Financial, and Administrative

Mechanisms/tools arranged to reach explicit goals

• Public Policies are developed by officials within institutions of

government to address public issues through the political process
 three parts to public policy-making:
1. Problems
2. Actors, and
3. the Policy.

• The problem is the issue that needs to be addressed

• The actors are the individual or group that is influential in forming a

plan to address the problem in question

• Policy is the finalized course of action decided upon by the

government
 Public Policy Process
Public Policy
Public policy refers to the actions of government and the intentions
that determine those actions

The sum of government activities, whether acting directly or

through agents, as it has an influence on the life of citizens

Political decisions for implementing programs to achieve societal goals

Is What the government intends to do

Public Policy-making
• The process to deliver 'outcomes' or desired change
• Translate Political vision into programs and actions.
Policy Formulation involves Eight Steps

 Policyanalysis (existing policies and strategies)

Policy instrument development
Consultation
Coordination
Decision and Actions
Implementation
Evaluation
Impact
• Content of Policy and Its Documents

• Policies are circulated through official written documents

• Policy documents often come with the endorsement or signature
of the executive powers within an organization
•
• Policy documents usually contain certain standard components
including:

a. A purpose statement
outlining why the organization is issuing the policy
and what its desired effect or outcome of the policy should be.
 b. An applicability and scope

who the policy affects

and which actions are impacted by the policy

• The applicability and scope may explicitly exclude certain

people, organizations, or actions from the policy requirements

c. An effective date:
This indicates when the policy comes into force
Retroactive policies are rare, but can be found
d. A responsibilities section

Indicating which parties and organizations are responsible for

carrying out individual policy statements

Many policies may require the establishment of some ongoing

function or action

e. Policy statements … this is the intention and the goal

 this section indicates

the specific regulations

requirements, or
modifications to organizational behavior that the policy is creating
Policy statements are diverse depending on

the organization and intent

and may take almost any form
Some policies may contain additional sections, including
f. Background
 Indicating any reasons, history, and intent that led to the
creation of the policy
g. Motivating factors

h. Definitions
Providing clear and unambiguous definitions for terms and
concepts found in the policy document.
Objectives/Goals of Agricultural Policy
 2.3. Agricultural Policy in Ethiopia

1. Agricultural Production
 Agriculture is an important economic sector in Ethiopia

• Employs 66% of Ethiopia's 112 million people

• Its contribution to the GDP in 2019 is 33.9% (World Bank, 2020b)
• Continues to be the engine for reducing poverty and improving food security

 Production is subsistence
 On average the rate of food production is lagging behind consumption
 Large sections of the population do not produce enough for their
families
 Since 1980, Ethiopia has been struggling to feed its growing population
 • Ethiopia imports cereals
• There should always be a flow of food grains to ensure demand and
supply of food balance

2. Agricultural-policy initiatives
The process of designing and implementing agricultural devt policies
major challenge in Ethiopia
Agricultural sector is constrained by many interrelated problems.
 In the late 1950s, agricultural policies relied on the adoption of a series of five-
year plans

 Focusing on investment in the industrial sector

 The 1st and 2nd Five-year Plans (1957–1962 and 1962–1967) emphasized as the
basis for economic growth …

the expansion of primary processing industries

and the formation of large-scale commercial farms that produced export
crops

The underlying reason …

 increasing demand for raw materials by local industries was dependent upon the
supply of raw materials from agriculture (demand/pull economic growth)
A number of local industries and commercial farms were established
Agriculture could not produce enough materials to meet the demand
 Ethiopia imported 45,000 tonnes of cereals in 1960 in order to cover its
food deficiency (Gosh, 1994; Molla et al , 1995)

• In 1976, the Ethiopian government established the Agricultural

Marketing Corporation (AMC)

• The aim is managing domestic grain markets

• by controlling the volume of crop production
• consumption and
• grain prices
• The AMC imposed
• Production quotas on producers
• Fixed the grain prices that producers received
• And engaged in marketing

• This provided farmers with less incentive to produce

• The total volume of grain production declined
• Leading to a renewed call for market liberalization
Since the early 1990s
A number of government initiatives have been
implemented
Aimed at
Raising food production
And ensuring national food security
The market-liberalization policy
• promoted privatization
• devalued the Ethiopian currency (Birr)
• and eased marketing constraints
as a result of declining market margins (Negassa, 1998)

The competitive grain market raised farm-gate prices

and lowered consumer prices

Yet a concern as to whether the market-liberalization

strategy helps to achieve the desired objective of
economic growth …. because
(i) Ethiopian agricultural production is subsistence
• there is little surplus production available to markets
that generates enough saving to be invested
(ii) agri production is dictated by the quality and quantity of
rainfall rather than market prices
• irrigated agriculture only 2% of the total

(iii) the poor marketing infrastructures and localized seasonal

markets do not allow the flow of goods and services

(iv) there are no effective price-stabilization mechanisms in

place to buffer volatile market prices

Large volumes of cereal imports depress wholesale prices

of wheat and teff
Quiz … 4.5%
Write the goals of agricultural policy.
 Topic Three
Food and Nutrition Security and Measurement

Understanding the Hunger, food and nutritional insecurity and poverty

Types of Food Insecurity
Food Security Indictors
Aggregate level food security indicators
Micro level food security indicators
Methods of measuring food security
• Calorie intake
• Coping strategy index
• Hunger scale
• Consumption preference score
• Dietary diversity index
• Cost of basic needs approach
3.1. Definition and Concepts
1. Poverty (Meaning of Poverty)
 Poverty can be understood in many senses
 Description of social relationships and needs including
• social exclusion,
• dependency,
• problem to participate in society
• information and education exclusion
 Described as a persistent lack of income and wealth
 Disparity in income and wealth
 World Bank indicator for poverty (1 or 2 dollar daily income
poverty)
• Extreme poverty is living with less than dollar and
• Moderate poverty is living with less than 2 dollar per day,
• Write at least 2 pages note on the economic status of world countries
and identify them as poor (low income) , middle income, rich (high
income) countries.
• The conditions of poverty are linked with a question of resource scarcity,
distribution, and power

Types of poverty
 The UN general classifications:
Income poverty and human poverty.
a. Income Poverty:
 is an understanding of poverty that is solely based on levels
of monetary income
 It is used by both the WB and the UN
 According to the World Bank
 people living on less than US$1 per day are living in extreme poverty
 and people who earn less than US$2 a day are in moderate poverty (WB,
2008)
• Income poverty is also used to determine a poverty threshold or
poverty line
• This is the boundary between poverty and non-poverty as
determined by governments
• It is based on the cost of subsistence needs in a given country
so, while US$1 a day is the international poverty line,
• For countries where the cost of living is higher, the poverty line is
higher
• In the United States, for example, the poverty line is at about US$28 a
day (UN, 2008)
b. Human Poverty:

• Income poverty is based on only one indicator

• But human poverty encompasses the multiplicity of dimensions
associated with poverty

• It includes deprivation on a material level, e.g. lack of proper diet,

clothing, shelter, and work

• It also includes social deprivation, such as denial of employment,

participation in social institutions, and education
The UN utilizes the human poverty framework as well as income poverty

The UN‟s Economic and Social Council has described human poverty as:

“… a denial of choices and opportunities, a violation of human dignity.

It means lack of basic capacity to participate effectively in society

It means not having enough to feed and clothe a family, not having a
school or clinic to go to, not having the land on which to grow one’s food or
a job to earn one’s living, not having access to credit
It means insecurity, powerlessness and exclusion of individuals,
households and communities

It means susceptibility to violence, and

it often implies living on marginal or fragile environments,

without access to clean water or sanitation”( (ECOSOC, 2008).
Other classification
• Teo types of poverty are also commonly referred
1. Relative poverty and
2. Absolute/Subsistence poverty
3.
4. Absolute poverty
Refers to deprivation of basic necessities of life in order to maintain a
minimum level of living
It is based on an estimate of the level of income to buy food, cloth, house
rent for adults and children in the family

.i.e. when the cost of food, clothing, housing rent added and if the sum total
income is below this added cost and unable to cover the costs of basic needs
the family is found in poverty of subsistence or absolute poverty
2. Relative deprivation poverty

Is concerned with the positions of different groups of individuals in

terms of their income and consumption level

Defined by comparing the circumstances of one group of people or

an entire economy with another one

When people are unable to do the normal customized experiences

• .e.g. unable to celebrate Easter, Edialfetir
• America having a car is a normal custom
Dimensions of poverty
•
• Socio cultural dimensions:
It can be expressed in terms of lack of self – confidence
Having low self –esteem
Dependence proneness and alienate (isolate/separate from) of
people from mainstream of social development and the like
 Intellectual dimension of poverty:
when people perceive a sense of worthlessness
and believe that they know nothing.
When the majority is dominated by elites and upper class people.
 Institutional dimensions:

Unorganized or no solidarity among people for their betterment and well-being

 Economic deprivations:

Economic limitations to satisfy the needs and wants of the household

 Ecological dimensions:

According to ecologists the cause for poverty are population growth and
population pressure on natural resources

The ecologists for this type of problem proposed solutions are controlling
population growth and wise utilization of resources
 Political economics of poverty:

According to political economists the cause for poverty is

unequal resources, wealth and power distribution

or unfair/injustice resource, wealth, prestige, privilege

concentration

i.e. resources used to satisfy few minorities but disregard

majorities

Solutions proposed by political economists are redistribution

of wealth and power justice resource and power distribution
 Causes of rural poverty
• Many factors arte explained and
• No single explanation for the causes of poverty

• Some of the factors can be explained as:

• Natural and environmental factors …
• access to fertile land
• Irrigation
• the climate determine the type of crop livestock to be produced

• Inadequate nutrition in child hood in poor nations lead to mental and

physical stunt/limit
• Diseases
• Unemployment, under employment, poor infrastructure
• Lack of education, lack of democracy, lack of well-paying jobs
• Lack of free trade etc
• Unplanned population growth
• lack of freedom , lack of social integration; and
• The impact of colonization
• Monarchy /domination of socialism and communism-
Effects of Poverty

• Poverty may have enormous effect such as

• Increase vulnerability
• Hunger and starvation
• Increase different violence (social, political, war, etc)
• Lack of different opportunities and
• Increase discrimination and the like
 The Vicious Circle of Poverty
• There are both internal and external factors which affect a country's
development

• One internal factor affecting a country's development is its economy

• By economic factors … factors that are essential for production, labor,
and land resources and capital

• In the model "The vicious circle of poverty" the link between lack of
capital and underdevelopment is emphasized

• The theory can be used both at the national and individual levels
• On the individual level, the vicious circle of poverty starts with the
statement that a poor person

 (A) cannot pay for an adequate supply of food, and

 (B) thus is physically weak
(C) and cannot work efficiently
(D), and unable to earn much money
(E), and thus is poor

(A) The circle starts all over again with a situation where the person
does not have money to get nutritious food (B)
This process goes on and on.
• There have been some criticisms raised against this model which state
that
• The circle is inadequate as a total explanation of poverty and
underdevelopment.
• The model does not explain why the person is poor or what the cause of
their poverty is. Another thing is that the model does not consider the
difference between LDC‟s

• It assumes that all countries are on the same level of Poverty

• Social conditions are not taken into account either; the model implies that these
societies are static and unchanging

• The vicious circle of poverty does not tell you anything about how an individual
or a country can break out of the circle. are static and unchanging

• The vicious circle of poverty does not tell you anything about how an individual
or a country can break out of the circle.
Figure 3.1: The vicious circle of poverty - Individual level.
 Poverty Reduction
• The anti-poverty strategy depends heavily on reducing poverty
through :
1. The Promotion of economic growth:-
 Studies show that Growth is fundamental for poverty reduction
 Poverty itself is also likely to be a barrier for poverty reduction
2. Reduction of barriers to new businesses
the creation of, or reducing barriers for existing business
3. Improving the social environment and abilities of the poor
• Subsidized education
• Subsidized health care
• Assistance in finding employment.
• Encouragement of political participation
 3.2. Basic Concepts of Food Security
• Food security as a concept originated only in the mid-1970s, a time of
global food crisis.
• Attention was primarily on food supply problems -
• Assuring the availability and
• Price stability of basic foodstuffs at the international and national level

• But that alone didn’t solve the problem

• Policy issues were more important
• The behaviour of potentially vulnerable and affected people was a
critical
• The issues of famine, hunger and food crisis were being extensively
examined
Definitions of Food Security
• Over time a large number of definitions proposed
• Approximately 200 definitions and 450 indicators of food security
In general four similar definitions used by international Organizations:
• "Access by all people at all times to enough food for an active, healthy
life." (World Bank)
• "All people at all times have both physical and economic access to the
basic food they need." (FAO Committee on World Food Security
• Access by all people at all times to sufficient food and nutrition for a
healthy and productive life." (The Agricultural Trade Development and
Assistance Act of 1990)
• "When all people at all times have access to sufficient food to
meet their dietary needs for a productive and healthy life." (USAID,
1986)
3.3. Pillars of food security
• The WHO states that there are three pillars that determine food
security:
 food availability
 food access, and
 food use
• FAO adds a fourth pillar: the stability of the first three
dimensions of food security over time
• Hence In 2009, the World Summit on Food Security stated that the
“four pillars of food security are availability, access, utilization, and
stability”.
 3.3.1. Availability
• Food availability relates to the food supplied through Production,
Distribution Exchange
• Food production is determined by a variety of factors including
land ownership and use
soil management
crop selection, breeding, and management
livestock breeding and management;
and harvesting
Crop production can be impacted by changes in rainfall and temperatures

The use of land, water, and energy to grow food often

competes compete with other uses, which can effect food
production
 B. Food Availability:

• Indicates that
• Sufficient quantities of food is available to individuals
from
domestic production
commercial imports or
donors are consistently available to the
• Or are within reasonable proximity to them or are within their reach
• Constraints to food availability include:
Inappropriate agricultural knowledge, Technologies and practices
Inappropriate economic policies, including
 pricing, marketing
 tax and tariff policies;
 lack of foreign exchange
 inadequate agricultural inputs
Non existent or ineffective private sector
Population growth rates that offset increased production or imports
Marketing and transportation systems which inhibit movement of food
from source to where needed
Inability to predict, assess and cope with emergency situations
which interrupt food supplies

Natural resource, climatic, and disease constraints

Donor disinterest or fatigue
And political choice on the part of the government at any level
 3.3.2. Access
Food access refers to

The affordability and allocation of food

As well as the preferences of individuals and households

Food Access:
Individuals have adequate incomes to purchase food or maintain consumption
Individuals have resources to trade to obtain appropriate foods

 The UN Committee on Economic, Social, and Cultural Rights noted that

… the causes of hunger and malnutrition are often not a scarcity of
food but an inability to access available food, usually due to poverty. ..
Accessibility to Food:
Food security can be attained only when physical and economic access to
food is secured
• Poverty can limit access to food
• And also increase the vulnerability of an individual or household to
food price spikes

• Access depends on

• Whether the household has enough income to purchase food at prevailing prices
• Or has sufficient land and other resources to grow its own food

• Households with enough resources can overcome unstable harvests and local
food shortages and maintain their access to food
• Constraints to individual food access include:

 inadequate economic growth that in general, leading to a lack of job

opportunities or lack of incentives to become a productive participant in the
economy
 Inadequate training and/or job skill

 Lack of credit or other means to exchange assets

 Food losses associated with ineffective and inefficient harvesting, storage,

processing and handling

• Political decisions favoring one group over another

• Physical accessibility to food will be affected by unforeseen events such as
wars, export embargoes/restrictions

• Economic accessibility will be hindered by factors such as lack of

purchasing power – poverty

• Factors that determine the physical accessibility to food are

common to both developed and developing countries

• The factors hampering economic access are especially serious in

developing countries.
3.3.3. Utilization
• The final pillar of food security is food utilization
• Which refers to the metabolism of food by individuals
• Once food is obtained by a household, a variety of factors impact
the quantity and quality of food that reaches members of the
household.
• In order to achieve food security, the food ingested must be safe and
must be enough to meet the physiological requirements of each
• Individual Food safety impacts food utilization
• And can by impacted by the preparation, processing, and cooking
of food in the community and household
• Nutritional values of the household determine food choice
 3.3.4. Stability
• Food stability refers to the ability to obtain food over time
• Food security can be transitory, seasonal, or chronic
• In transitory food insecurity, food may be unavailable during certain
periods of time
• At the food production level, natural disasters and drought result in
crop failure and decreased food availability

• Civil conflicts can also decrease access to food

• Instability in markets resulting in food-price spikes can cause transitory

food insecurity
• Other factors that can temporarily cause food insecurity are
• loss of employment or productivity, which can be caused by illness

• Seasonal food insecurity can result from the regular pattern of

growing seasons in food production

• Stability of Food Supply: Food should be supplied at reasonable prices in

a stable manner

• Food price tends to be unstable by nature due to the price inelasticity of

supply and demand for major agricultural commodities