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How Coffee and Smallholder farmers Empowering the Ethiopian Economy

Ethiopia is one of the top performing economies in sub-Saharan Africa. This country has been able to register an average growth rate of 11 percent over the last seven years. The agricultural sector remains the main source of livelihoods for rural communities in Ethiopia, but faces the challenge of changing climate.In Ethiopia, a country with one of the fastest growing urban populations, smallholder farmers play a vital role in feeding the cities. Ethiopia has about 51.3 million hectares of arable land. However, just over 20% is currently cultivated, mainly by the smallholders. Over 50% of all smallholder farmers operate on one (1) hectare or less. A report by Research and Markets states that Ethiopia’s agriculture, forestry and fishing sectors, which contributed 31.1 per cent to the country’s GDP in 2018, are crucial sectors as they employ two thirds of its labour force.

Ethiopia has about 51.3 million hectares of arable land. However, just over 20% is currently cultivated, mainly by the smallholders. Over 50% of all smallholder farmers operate on one (1) hectare or less which could be compared with, for example, the average farm size in Sweden of 43 hectares. On top of that, many smallholder farmers have their land plots scattered out in such a way that it makes it difficult to invest in improved technologies and methods.

Smallholder farmers account for 95 per cent of the sector’s production and commercial farms account for the balance. Ethiopia’s main staple crop is maize, while the main cash crops are coffee and sesame seed. In recent years, maize has gained prominence as an important staple crop  in Ethiopia second only to teff in terms of acreage. Most of this is grown by semi-subsistence farm households whose livelihoods are tied to crop production and some livestock keeping.

Government Supporting Agriculture through Strategic Policies

Commercialization of smallholder farms is now viewed by the government as the focal point in the agricultural development of the country. The Ethiopian Government has formulated a series of policies, strategies and programs to promote agricultural development to achieve food and nutrition security and build resilience.

The government has developed second Growth and Transformation Plan (GTP II) for the period 2016-2020. The overarching objective GTP II is the realization of Ethiopia’s vision of becoming a middle income country by 2025. In GTP II, the agriculture sector is considered as one of the major sector driving growth.

The Coffee Production in Ethiopia

Coffee production in Ethiopia is a longstanding tradition. Ethiopia is where Coffea arabica, the coffee plant, originates. Ethiopia is the largest coffee producer in Africa and the fifth largest producer in the world and accounts for 4.2% of the global coffee production.

Ethiopia’s coffee production in MY17/18 (Oct-Sep) is forecast to remain steady at 6.545 million 60-kg bags (393,000 metric tons). Exports during this period are expected to be roughly half of production at 3.31 million bags (199,000 metric tons).
Production Coffee production is important to the Ethiopian economy with about 15 million people directly or indirectly deriving their livelihoods from coffee. Coffee is also a major Ethiopian export commodity generating about 25% of Ethiopia’s total export earnings. Ethiopians are among the largest coffee consumers in Africa and the coffee consumption trend in Ethiopia is growing at a steady pace.

In Ethiopia, coffee is produced in forest, semi-forest, garden and plantation production methods. Generally, Ethiopian coffee is grown in sustainable approach: environmentally friendly, shade grown and ecologically sound. The four production systems in Ethiopia are  forest coffee, semi- forest coffee, garden coffee and plantation coffee. 95% of the coffee production from these systems can be considered as organic.

Ethiopia’s Next Move

The agribusiness sector depends on traditional farming methods and a rain-fed farming system, and the cost of production inputs and transportation is high. To improve this problem either introduction of modern technologies or improving the efficiency of farmers is an important. Improving efficiency of the farmer has received the greatest attention as it is more cost effective than introducing new technologies.

While the government has invested in extension workers, rural roads and modern market-building, enabling cereal production to increase and increasing the number of calories its rural people consume by roughly 50 percent.

The government should also focus on improving agricultural production and productivity and commercialization; reduce degradation of natural resources and improve its productivity; reduce vulnerability to disaster and build disaster mitigation capacity via ensuring food security as stated in the country’s Growth and Transformation Plan (GTP II) for the period 2016-2020.


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