Ethiopia - Agricultural Production

Agricultural production

The effect of the PMAC's land reform program on food production and its marketing and distribution policies were among two of the major controversies surrounding the revolution. Available data on crop production show that land reform and the various government rural programs had a minimal impact on increasing the food supply, as production levels displayed considerable fluctuations and low growth rates at best.

Major Cash Crops

The most important cash crop in Ethiopia was coffee. During the l970s, coffee exports accounted for 50 to 60 percent of the total value of all exports, although coffee's share dropped to 25 percent as a result of the economic dislocation following the l974 revolution. By l976 coffee exports had recovered, and in the five years ending in l988/89, coffee accounted for about 63 percent of the value of exports. Domestically, coffee contributed about 20 percent of the government's revenue. Approximately 25 percent of Ethiopia's population depended directly or indirectly on coffee for its livelihood.

Ethiopia's coffee is almost exclusively of the arabica type, which grows best at altitudes between l,000 and 2,000 meters. Coffee grows wild in many parts of the country, although most Ethiopian coffee is produced in the southern and western regions of Kefa, Sidamo, Ilubabor, Gamo Gofa, Welega, and Harerge.

Reliable estimates of coffee production in Ethiopia were unavailable as of mid-1991. However, some observers indicated that Ethiopia produced between l40,000 and l80,000 tons annually. The Ethiopian government placed coffee production at l87,000 tons in l979/80, 233,000 tons in l983/84, and l72,000 tons in l985/86. Estimates for l986/87 and l987/88 were put at l86,000 and l89,000 tons, respectively. Preliminary figures from other sources indicated that coffee production continued to rise in 1988/89 and 1989/90 but registered a sharp decline of perhaps as much as one-third during 1990/91. About 44 percent of the coffee produced was exported. Although the potential for local coffee consumption was high, the government, eager to increase its hard-currency reserves, suppressed domestic consumption by controlling coffee sales. The government also restricted the transfer of coffee from coffee-producing areas to other parts of the country. This practice made the price of local coffee two to three times higher than the price of exported coffee.

About 98 percent of the coffee was produced by peasants on smallholdings of less than a hectare, and the remaining 2 percent was produced by state farms. Some estimates indicated that yields on peasant farms were higher than those on state farms. In the 1980s, as part of an effort to increase production and to improve the cultivation and harvesting of coffee, the government created the Ministry of Coffee and Tea Development, which was responsible for production and marketing. The ten-year plan called for an increase in the size of state farms producing coffee from l4,000-l5,000 hectares to 50,000 hectares by l994. However, given the strain on the government's financial resources and the consistently declining coffee price in the world market, this may have been an unrealistic goal.

The decline in world coffee prices, which began in 1987, reduced Ethiopia's foreign-exchange earnings. In early 1989, for example, the price of one kilogram/US$0.58; of coffee was by June it had dropped to US$0.32. Mengistu told the 1989 WPE party congress that at US$0.32 per kilogram, foreign-exchange earnings from coffee would have dropped by 240 million birr, and government revenue would have been reduced by l40 million birr by the end of l989. Such declines not only hampered the government's ability to implement its political, economic, and social programs but also reduced Addis Ababa's capacity to prosecute its war against various rebel groups in northern Ethiopia.

Before the revolution, pulses and oilseeds played an important role, second only to coffee, in Ethiopia's exports. In EFY l974/75, pulses and oilseeds accounted for 34 percent of export earnings (about l63 million birr), but this share declined to about 3 percent (about 30 million birr) in EFY l988/89. Three factors contributed to the decline in the relative importance of pulses and oilseeds. First, the recurring droughts had devastated the country's main areas where pulses and oilseeds were produced. Second, because peasants faced food shortages, they gave priority to cereal staples to sustain themselves. Finally, although the production cost of pulses and oilseeds continued to rise, the government's price control policy left virtually unchanged the official procurement price of these crops, thus substantially reducing net income from them. The Ethiopian Pulses and Oilseeds Corporation, the agency responsible for exporting two-thirds of these crops, reported losses in EFY l982/83 and EFY 1983/84. In EFY l983/84, the corporation received export subsidies of more than 9 million birr. Subsequently, production of both crops failed to improve; by 1988 the output index, whose base year was 1972 (100), was 85.3 for pulses and 15.8 for oilseeds. Given the country's economic and political problems and the ongoing war in the north, there was little prospect of improvement.

Cotton is grown throughout Ethiopia below elevations of about l,400 meters. Because most of the lowlands lack adequate rainfall, cotton cultivation depends largely on irrigation. Before the revolution, large-scale commercial cotton plantations were developed in the Awash Valley and the Humera areas. The Tendaho Cotton Plantation in the lower Awash Valley was one of Ethiopia's largest cotton plantations. Rain-fed cotton also grew in Humera, Bilate (in Sidamo), and Arba Minch (in Gamo Gofa).

Since the revolution, most commercial cotton has been grown on irrigated state farms, mostly in the Awash Valley area. Production jumped from 43,500 tons in l974/75 to 74,900 tons in l984/85. Similarly, the area of cultivation increased from 22,600 hectares in l974/75 to 33,900 hectares in l984/85.

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