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THE POLITICAL ECONOMY of AGRICULTURAL COMMERCIALISATION in ETHIOPIA: DISCOURSES, ACTORS and STRUCTURAL IMPEDIMENTS Dawit Alemu and Kassahun Berhanu

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THE POLITICAL ECONOMY of AGRICULTURAL COMMERCIALISATION in ETHIOPIA: DISCOURSES, ACTORS and STRUCTURAL IMPEDIMENTS Dawit Alemu and Kassahun Berhanu THE POLITICAL ECONOMY OF AGRICULTURAL COMMERCIALISATION IN ETHIOPIA: DISCOURSES, ACTORS AND STRUCTURAL IMPEDIMENTS Dawit Alemu and Kassahun Berhanu WP 14 Working Paper June 2018 CONTENTS Acknowledgements ........................................................................................................................... 4 Acronyms ........................................................................................................................................... 5 1 Introduction 1.1 Purpose and objectives .................................................................................................... 8 1.2 Methodology/study method .............................................................................................. 8 2 The political importance of agriculture ........................................................................................ 9 2.1 Background ...................................................................................................................... 9 2.2 Changing political landscape ............................................................................................ 9 2.3 Importance of lending support to smallholder farmers ..................................................... 10 3 Public support for agricultural development ............................................................................. 15 3.1 Agricultural research ....................................................................................................... 15 3.2 Agricultural extension ...................................................................................................... 15 3.3 Agricultural input multiplication and supply ...................................................................... 16 3.4 Support to farmers’ cooperatives.................................................................................... 17 3.5 Famine, safety net and links to domestic agricultural production ..................................... 17 3.6 Agricultural commercialisation clusters and agro-industry parks ...................................... 18 3.7 Facilitating investment in commercial farming.................................................................. 18 3.8 Trends in earnings from export of agricultural products ................................................... 19 3.9 Summary ........................................................................................................................ 19 4 Discourses, actors and policies/directives for agricultural commercialisation ..................... 22 4.1 Small-scale vs commercial agriculture ............................................................................ 22 4.2 Role of government, private sector, cooperatives and donors ......................................... 24 4.3 Institutional arrangements in promoting agricultural commercialisation ............................ 25 5 Status of commercialisation of smallholder agricultural production ...................................... 28 5.1 Commercialisation of malt barley in West Arsi and Arsi Zones of Oromia ......................... 28 2 Working Paper 014 | June 2018 5.2 Commercialisation of teff produced on smallholder farms ............................................... 30 6 Structural impediments surrounding pathways in agricultural commercialisation ............... 31 6.1 Ensuring the production levels with marketable surplus at household levels .................... 31 6.2 Investment in required support services and infrastructure .............................................. 31 6.3 Product aggregation to enhance commercialisation of smallholders’ products ................ 31 6.4 Inclusiveness of agricultural commercialisation and the pull–push model ......................... 31 6.5 Institutional arrangements in facilitating commercialisation process ................................. 32 7 Conclusion and the way forward ................................................................................................ 33 Refrences List of tables Table 1 Key policies and relevance to commercialisation by regime Table 2 Public institutional arrangement in support of agricultural commercialisation in Ethiopia Table 3 Market seasons and engagement of cooperative member farmers in side-selling (2014/15 production season) Working Paper 014 | June 2018 3 ACKNOWLEDGEMENTS This research was conducted with funding from UK aid of the UK Government. The findings and conclusions contained are those of the authors and do not necessarily reflect the positions or policies of the UK Government or of the Department for International Development (DFID). 4 Working Paper 014 | June 2018 ABBREVIATIONS AND ACRONYMS ACC Agricultural commercialisation cluster ADDP Ada District Development Project ADLI Agricultural Development-Led Industrialisation AGP Agricultural Growth Programme AISCO Agricultural Input Supply Corporation AMC Agricultural Marketing Corporation APARI Afar Pastoral and Agro-Pastoral Research Institute ARARI Amhara Regional Agricultural Research Institute ATA Agricultural Transformation Agency ATVET Agricultural Technical Vocational Education and Training CAADP Comprehensive Africa Agriculture Development Programme CADU Chilalo Agricultural Development Unit CSA Central Statistical Agency CSO Civil society organisation DFID Department for International Development ECX Ethiopia Commodity Exchange EEA Ethiopian Economic Association EEPRI Ethiopian Economic Policy Research Institute EHDA Ethiopian Horticulture Development Agency EIAR Ethiopian Institute of Agricultural Research EIC Ethiopian Investment Commission EPLF Eritrean People’s Liberation Front EPRDF Ethiopian People’s Revolutionary Democratic Front Working Paper 014 | June 2018 5 ERCA Ethiopian Revenues and Customs Authority ESC Ethiopian Seed Corporation ESE Ethiopian Seed Enterprise FAO Food and Agriculture Organization of the United Nations FDI Foreign direct investment FDRE Federal Democratic Republic of Ethiopia FTC Farmer training centre GARI Gambella Agricultural Research Institute GDP Gross domestic product GTP Growth and Transformation Plan IAIP Integrated agro-industry parks IFI International financial institution JATS Jimma Agricultural Technical School MoFED Ministry of Finance and Economic Development NAEIP National Agricultural Extension Intervention Programme NARC National Agricultural Research Council OARI Oromia Agricultural Research Institute OAU Organization of African Unity PADETES Participatory Demonstration and Training Extension System PASDEP Plan for Accelerated and Sustained Development to End Poverty PMAC Provisional Military Administrative Council PSNP Productive Safety Net Programme RARI Regional Agricultural Research Institute SARI Southern Agricultural Research Institute SDPRP Sustainable Development and Poverty Reduction Programme SoPARI Somali Pastoral and Agro-Pastoral Research Institute TARI Tigray Agricultural Research Institute TGE Transitional Government of Ethiopia 6 Working Paper 014 | June 2018 UN United Nations UNECA United Nations Economic Commission for Africa UNIDO United Nations Industrial Development Organization WADU Wolaita Agricultural Development Unit WFP World Food Programme Working Paper 014 | June 2018 7 1.INTRODUCTION This country review aims to identify the key dynamics, commercialisation during the past few decades and actors and associated discourses of agricultural the ramifications of large-scale agricultural investment commercialisation in Ethiopia. To this end, we aim and cooperativisation are described and analysed. In to shed light on the forces and factors that influence due course, the key actors and pertinent legislation and policy processes and the contexts in which the political policies that embody these are identified. The review and bureaucratic establishments operate. Moreover, also sheds light on current debates and interests linked we examine the incentives generated by the mode to agricultural commercialisation and the processes of operation of existing working systems by inducing and actors involved in decision making. The roles involved actors to expedite the venture of agricultural of (and the links between) national and sub-national commercialisation. governments, donors, farmers’ organisations, political parties/dominant party, and the private sector are The review is organised as follows. This introduction taken into account in this regard. Looking at the state sets out the purpose and objectives of the study and of domestic agricultural production and importation of the methods used. Section 2 discusses the political agricultural commodities – and their ramifications, both importance of agriculture, while section 3 reviews public for official rhetoric and the reality on the ground – is thus support to agricultural development during the imperial, deemed essential to examine the situation surrounding military and current Ethiopian People’s Revolutionary agricultural commercialisation in Ethiopia. Democratic Front (EPRDF) regimes. Section 4 reviews discourses and actors related to agricultural 1.2 Methodology/study method commercialisation, focusing on the post-1991 period. In order to address the study objectives, we used Section 5 explores the status of smallholder agricultural a qualitative research approach to elicit data/ commercialisation, taking malt barley and teff as case information from secondary sources on agricultural studies. Finally, we present a synthesis of structural commercialisation in Ethiopia, comprising research
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