FILE COPY AE9 Vol

RESTRICTED FILE COPY AE9 Vol. 2 This Public Disclosure Authorized report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accurocy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Public Disclosure Authorized ECONOMIC GROWTH AND PROSPECTS IN ETHIOPLA (in five volumes) Public Disclosure Authorized VOLUME II Annex 1: The Agricultural Development of Ethiopia Annex 2: Manufacturing Industry Annex 3: Mining September 22, 1970 Public Disclosure Authorized Eastern Africa Department BQUIVALENTS CURRENCY Unit Ethiopian dollar (Eth.$) U.S.$1.00 Eth.$2.50 ETH.$1.00 u.s .$o04o WEIGHTS Unless otherwise stated, tons in this report refers to long tons. 1 metric 2,205 lb. 1,000 kg. 0.9844 long tons 1 long ton 2,24.0 lb. 1,016 kg. MEASURS 1 meter (m) 39.37 inches 1 kilometer (km) - 0.62 miles 1 hectare (ha) 2.471 acres 1 square kilometer = 0.386 square miles TIME The Ethiopian calendar year (EC) runs from September 11 to September 10. There is a difference of about 7-3/4 years between the Gregorian and the Ethiopian era. For example 1963 EC runs from September 11, 1970 to September 10, 1971. Most of the Ethiopian statistics are converted to the Gregorian calendar. Throughout the report the Gregorian calendar is used. The Ethiopian budget year runs from July 8 to July 7. For example, Ethiopian budget year 1963 runs from July 8, 1970 to July 7, 1971. In the report this year is referred to as budget year 1970/71. THE NISSION This report is based on the findings of a mission in January - February, 1970 to Ethiopia composed of : Lyle M. Hansen Chief of Mission R. H. Khandker Chief Economi.st C. P. Cacho General Economist S. Please Fiscal Economist L. Hewes * Agricultural Economist I. Abu Sharr * Agronomist (FAO) B. Decaux * Industrial Economist D. H. F. Bickers Transport Economist J. Bonnett ) ) Tourism Specialists A. El Maaroufi ) * Consultants The 1-ssion received assistance from the UNDP Resident Representative in Ethiopia (M. R. Gachot) on pre-investment studies, Mr. George Mahoney on Transport and Mr 0. J. Markgren and Mr. G. Pennisi cn Education. CONTENTS OF THE VOLUKES VOLUME I Main Report Statistical Appendix Appendix A - Illustrative Growth and Investment Projection Appendix B - Pre-Investment Studies VOLUME II Annex 1 - Agriculture Annex 2 - Manufacturing Industry Annex 3 - Mining VOLUME III Annex 4 - Transport Annex 5 - Power Annex 6 - Telecommnications VOLUME IV Annex 7 - Education Annex 8 - Tourism VOLUME V Annex 9 - Domestic Resources THE AGRICULTURAL DEVELOPMENT OF ETHIOPIA TABLE OF CONTENTS Page No. SUMMARY ANiD CONCLUSIONS................... i I. AGRICULTURAL DEVELOPMENT STRATEGY.............. 1 II. CONDITIONS OF AGRICULTURAL PRODUCTION............ 5 Physical Characteristics................ 5 The Agricultural Economy................ 7 Scope for Increased Production............. 8 Agricultural Planning...................13 Private Investment....................15 Land Tenure ....................... 19 Ill. THE DEVELO.PMENT EFFORT .................... 21 Plan Projects.......................21 Minimum Package Programs.................26 The Marketing of Grains, Pulses and Oilseeds.......27 Agric-Iultural Credit .................... 28 Agricultural Research...................29 Agric-ultural Extension..................30 Veterinary Services ................... 32 Supply of Seeds, Fertilizer and Machinery.........32 Organtization.......................33 Responding to Shor-t-Term Constraints. .......... 34 IV. _CoMMODITY PROSPECTS ...................... 38 Coffee .......................... 38 Cotton..........................40 Trobacco ......................... 42 Sugar-cane ........................ 44 Cereals, Pulses and Oil Seeds .............. 45 Fruits and Vegetables .................. 48 Livestock and Livestock Products.............50 Fisheries ........................ 54 Forestry.........................55 APPENDICES 1. Land Use and Crops by Province 2. Estimated Area; Yield and Production of Major Crops in 1967/68 3. Estimated Livestock Population by Kind, 1967/68 4. Estimated Financial Requirements for Agriculture, 1970-1975 5. Estimated Staff Requirements for Agriculture, 1970-75 6. Prospects for Cultivation of Government Lands 7. Estimated Output from Principal Agricultural Training Institutions 8. Minimum Package Programs 9i. The Veterinary Services AGRICULTURE SUMMARY AND CONCLUSION Characteristic of Agriculture 1. Ethiopia is divided into a dissected mountainous highland central plateau at over 1500 meter elevation and hot semiarid lowlands. Differences in temperature, precipitation and elevation provide for a variety of climatic subregions with specific crop adaptability. Also soils vary widely in physical characteristics, but generally they are nitrogen and phospherous defi- cint; there is very little potassium deficiency. 2. Fifty four percent of the land area is used as pasture, mostly situated on the 500,000 sq km government-owned land in the lowland region; cultivated and fallow lands comprise 10.4 percent of the area; 21 percent is barren desert or swamp land and forests constitute over 4 percent of the total. Agricultural land including the fallow averages about 3 ha per family, though many holdings are much smaller. There are also some large commercial and mechanical farming enterprises which operate under Government concession. 3. The small scale farms of the highland regions produce crops valued at about Eth$ 1.0 billion, or about half of the national crop output; more than half of the cattle population is in the highlands. The lowlands produce mainly cotton, sorghum, sesame, and cattle; and support large nomadic livestock herds. 4. The all important coffee crop is a highland product. Long run agricultural improvement prospects favor highland agriculture. Opportuni- ties for lowland agriculture are in cotton - an important substitution crop, export crops of oilseeds particularly sesame, and livestock. There are good short: run prospects for relatively large scale mechanized agriculture in the lowlands. 5. Generally the technology of Ethiopian agriculture is still rudi- mentary. Income, skill, and literacy levels are low. Most farmers are at a subsistence level. In subsistence agriculture the planned economic growth rate, 1.8 percent annually, about equals the population increase. Technical inputs are scarce and land tenure is insecure and complex, and occupancy rights are cloudy. Lack of market facilities and credit, as well as remoteness and isolation, are major handicaps. Nevertheless, farmers produce 60 percent of the GDP. Agriculture is obviously the touchstone of Ethiopian economic development. Ninety percent of the national labor force is in rural areas. Agricultural products constitute almost the entire export trade, led by coffee which accounted for 59 percent in 1968. In time Ethiopian agriculture could substitute for almost all food imports. The Regional Pattern 6. Central Highlands. This large intensively cultivated subsistence farm area has perhaps the country's best long range agricultural potential. Portions are remote with difficult access. Soils are relatively stable and rainfall is favorable. 7. Northern Highlands. This densely populated region will be difficult to develop. Erosion is widespread, rainfall is erratic, and holdings are very small. The communal land tenure system is a barrier to modern agricultural technology. Extensive out-migration occurs as farm labor to Tessenei, Setit Humera and the Awash Valley. 8. The Eastern and Southern Highlands. In the Chercher highlands of Harrarge Province farm standards are high but rainfall limits development prospects to a narrow area. Coffee is the most important crop followed by sorghum, maize, and chat. Prospects in the Arussi highlands lie in extension of the so called Chilado (CADU) "package program" to a larger area. The area has above average highland production potential, good soils, and ade- quate rainfall. Prospects in the Bale highlands are poor. Northwest areas may be adaptable for sheep and cereals. Information about this area is poor. 9. Southern and Southwestern Highlands. These are the least developed highlands in Ethiopia but with favorable rainfall have a good agricultural potential. Many areas are remote and small grain farming is on the subsistence level. There are good prospects for washed coffee, maize, spices, and large dairy herds. 10. The Lowlands. Lack of knowledge of rainfall -- its amount and distribution -- limits the immediate development prospects. At present only about 200,000 ha out of a potential of 5 million ha is under cultivation. Half of this cultivated area is in the Humera development area, where a Bank financed project is underway, and the cultivated area may increase to 300,000 ha in six years. Commercial mechanized dryland agriculture is the prime mode of development. Some areas are uneconomic because of drought, remoteness and disease. Livestock production in the southern lowlands should have priority; a National Range Development Project has been initiated. 11. Some of the river valleys, e.g. Awash, Aboy, Wabi Shelele, Takeze and Omo, have distinct irrigation potentials. Over the next two decades 150,000 ha of irrigated land in the Awash Valley may develop. Agricultural Development Strategy 12. The TFYP agricultural strategy concentrates inputs in areas of high potential response.

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