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Agricultural Investment Potential of Ethiopia

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Agricultural Investment Potential of Ethiopia Agricultural Investment Potential of Ethiopia Ministry of Agriculture and Rural Development Addis Ababa, March 2009 Ç! .[9 h C /h b Ç9b Ç{ Ut L D / L t D L I / Ç { # t ! / L # t ! Ç L % t ! { 5 ' t h t C * + + L ' / L ' t ! h L t ! t L , w ** t . [ 0 L t t L ! a t L ! ! , t L ! I {0 , t L ! 5 t L ! t # , t L ! ! C # t L ! C . 2 !3 % # t L ! { ' Lb Çwh 5 Ü /ÇLh b Ethiopia has huge investment potentials for agricultural development. Currently investment in agriculture sector is found to be more attractive and profitable in diverse sub-sectors ranging from food products, industrial raw materials to bio-fuel. The agriculture sector accounts for 47% of the Gross Domestic Products of the country, provides 85% of employment and 90% of foreign currency earning Moreover, the country has huge market potential for crop and livestock produced with comparative advantage to the Middle East, Europe and Asia. For the past five consecutive years the agriculture sector was growing aster with more than 11% average annual growth. In addition of the contribution to the national growth, the growth has triggered to the increase in domestic market has for both livestock and food crops. This brief document presents the government policy, institutional arrangement for supporting the private sector in agricultural development and also brings a highlight to the major potential sector and sub-sector for the engagement of private sector. It also contains major areas of the country with potential and suitable land for investment. D h ë 9wb a 9b Ç th [L/ò ! b 5 Lb {ÇLÇÜ ÇLh b ! [ ! ww! b D 9a 9b Ç Agriculture is the corner stone of the development policy of the Government of Ethiopia. According to the Rural Development Policy and Strategy document, the basic ingredient and resource the country has for the agricultural development is the abundant land and labor. Most of the western lowlands are endowed with water resources and virgin and fertile. Up to recently the areas are not developed due to lack of capital and technology. Therefore, there is strong commitment from the government to make these fertile lands for investment that has the capital and technology to develop. The Ministry of Agriculture and Rural Development has given the responsibility of providing technical support for private sector in agriculture development to the Agricultural Extension Department through the Private Support Team. The support ranges from providing information, technical support, and facilitation of other public services as long as they are related to the success of the investment project. Depending on the extent of private sector engagement, the support team will also be established at regional and Woreda level. Similarly, the support service will ensure proper utilization of the natural resources and other responsibilities the investment has committed to. /wh t Lb ë 9{Ça 9b Ç th Ç9b ÇL! [ D • Out of the total land area /111.5millon ha/ of the country about 74.3 million hectare is suitable for annual and perennial crop production. • Of the total area of the country about 45 % (50.2 million hectares) is highland and the remaining is lowland. • Of the estimated arable land, around 18 million hectare is currently cultivated under rain fed crops. • The irrigation potential of the country is estimated to be around 4.3 million hectare. • Ethiopia produces mainly a variety of cereals, pulses, oilseeds, fruits, vegetable, fiber crops /cotton/, coffee, tea, spices, and other industrial crops. • Different types of farming system are practiced in the various agro ecologies mainly: V Mixed farming which is predominantly practiced by peasant farmers in the high land and mid high land V The large scale commercial farming system is mostly practiced by private investors. V The pastoral production system is rearing of livestock which is common in the low land areas. • Although Ethiopia lies within 15 degrees North of the Equator, owing to the moderating influence of high altitude, the country is endowed with moderate temperature and pleasant climate. • Altitude varies from –125 to 4620 m.a.s.l. • Annual rainfall varies from 200-2500 mm. The average annual rainfall for the whole country is considered to be moderate by global standards. In most of the highlands, rainfall occurs in two distinct seasons: the “small rains” during February and March and the “big rains” from June to September. • The average temperature rarely exceeds 20oC (68oF). The sparsely populated lowlands typically have sub–tropical and tropical climates. • On the bases of the above, the country has 32 major agro-ecological zones. • Due to the influence of various factors such as topography, climate, etc the country has many soil types, of which Nitosol, Vertisol, Fluvisol and Cambisol, are the most dominant ones. a 9. L ! "# $ #% & &#" • The major cereals grown in Ethiopia are maize, wheat, barley, teff, millet and sorghum. They are cultivated in highland and mid-highland areas with the exception of sorghum which also grows in lowlands. • Rice is recently being given emphasis in both research and development. 1.2.1 Rice Rice could suitably grow in many parts of the country. The predominant potential areas are:- o West central highlands of Amhara Region (Fogera, Gonder Zuria, Dembia, Takusa and Achefer); o North West lowland areas of Amhara and Benshangul Regions (Jawi, Pawi, Metema and Dangur); o Gameblla regional state (Abobo, Etang woredas by utilizing rain forest and irrigation) o South and south west Lowlands of SNNPR (Beralee, Weyito, Omorate, Gura Ferda, Menit); o Somale Region (Gode); o South Western Highlands of Oromia Region (Illuababora, East & West Wellega and Jimma Zones). 1.2.2. Wheat and Barley o Wheat and Barley are mostly growing in the highlands and mid highland area of the country, which are found in the Oromia Region, specifically in Bale and Arsi Zones and also in some parts of Amhara Region, North Gondar and North Shewa. o The land being cultivated for barley and wheat in the country is estimated to be 1095436 and 1398215 hectares respectively. o Though the lands suitable for these crops are occupied and cultivated by small holder farmers, there is a big opportunity for the private sector to be involved in the Agro-industry sector and promote the out growers scheme of development. o Moreover irrigated wheat development is possible in the Afar, Gambella, SNNPR and Somali Regions. Table 1. Estimated potential area of Rice No. Regions Area (ha) Remark 1 SNNP 75000 Rain fed and Irrigation 2 Oromiya 25000 Rain fed 3 Amhara 30000 Rainfed and irrigation 4 Benshangul Gumz 50000 Rainfed and irrigation 5 Gambella NA Rainfed and irrigation 6 Soamli 100000 Irrigation Total 280000 NB: These are do not include areas already used by farmers. , 1.2.3. Corn o Corn is growing in the mid highland area of the country, which are found in all the regional government. o The major corn producing areas are SNNP and Oromiya regions. o The land being cultivated for corn in the country is estimating to be1.77 million hectares. o In oromiya region corn is growing the same belt with coffee there fore the land is high comparative advantage for coffee rather than corn production. Table 2. Estimated potential area of Corn No. Regions Area (ha) Remark 1 SNNP 300000 Supplementary irrigation 2 Oromiya 150000 Rain fed 3 Amhara 300000 Rainfed and irrigation 4 Benshangul Gumz 200000 Rainfed and irrigation 5 Gambella 200000 Rainfed and irrigation 6 Soamli 250000 Irrigation Afar Tigray Total 1400000 ' I # $&) ) "#*)& $# • The total land under fruits and vegetables is estimated to be only about 0.45 million hectares, which is less than 5% of the total cultivated land. • Among the major fruit crops, the mango, banana, papaya, avocado, citrus spp, grape, and pineapple are the most common tropical and sub-tropical fruit crop cultivated, whereas apple, pear and plum are among the emerging temperate fruits in the country. • On average more than 2,419,449 tons of vegetables and fruits are produced by public and private commercial farms and small scale farmers, this is estimated to be less than 20 percent of the total crop production. Table 3. Estimated Potential Area for Horticultural Investment (ha). No. Regions Area Remark Rain fed and Irrigation (Gibe, Omo, Sala, Woito Rivers are sources of 1 SNNP 346300 Irrigation) 2 Oromiya 150000 Rain fed and Irrigation (Awash, Wabe, Dabus, Guder, Didessa) Grater than 200,000ha based on out growers. /Tana and Abay river are 3 Amhara 270,000 sources of irrigation/ 4 Dire Dawa 1000 Based on Ground water Total 767300 + /#%%, Ç * {"$& "#*)& $# + t# $ ! %# /#%% L ! • In Ethiopia coffee grows in almost all administrative regions, the climatic condition range from the semi-savanna climate of the Gambela plain (500 m.a.s.l) to the continuously wet highland forest zone of the south west (2200 m.a.s.s.l). • Dominantly coffee grows in highlands ranging from 1500 to 2100 meters above sea level, the ideal soil of the crop is slightly acidic with a PH of 4.5-6.5 and it requires a rain fall range of 1500-2500mm/year with balanced distribution. • At present about 600,000 hectares of land is under coffee cultivation and this is spread over different growing districts. The largest of these areas lie in south and western highlands of the country. • Ethiopia has more genetic diversity among its coffee varieties than any other country. Nine different bean varieties are cultivated in the four main growing areas • All varieties varies with its ecological factors such as rainfall, temperature, shade, altitude and soil give individual bean varieties their unique local character.
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