Commercialisation Of Farming In Ethiopia: Which Pathways?

Abstract

The paper considers the various and potential meanings of commercialisation (or market-oriented agriculture) for Ethiopia. Much attention has been paid recently to high-tech, large-scale, export-oriented enterprises such as floriculture: but international evidence and Ethiopian realities demonstrate that this is only one of many complementary pathways to commercialisation. Most of Ethiopia\'s small farm households are already engaged with markets to varying degrees: improving the terms of that engagement is likely to have a greater and more widespread impact on poverty than a few large ventures, and should be given equal policy attention.

Policy debates on commercialisation of agriculture are not new in Ethiopia: various approaches and strategies have been dominant in different periods of history. While improving productivity, increasing foreign currency earnings through export and developing a strong agro-industrial sector were the focus of policy attention in the 1950s and 1960s; accelerating growth and poverty reduction have been much more the focus of recent attempts to increase the commercial orientation of farm households.

We suggest that four types of commercial farms can currently be discerned in Ethiopia:
- Farming households in marginal or remote areas who have had relatively little interaction with markets until now, but who have the potential and interest to benefit from greater commercialisation or more advantageous interactions;
- Farming households living in more productive and market-linked areas, and/ or growing highly commercialised crops (such as coffee and tea), who have a long experience of production for the market;
- Small investor-farmers, mostly educated and town-based, some of them agricultural professionals, who have begun to establish farming businesses in the last few years in response to the freeing up of land regulations; and
- Large capital-intensive business ventures.

Different policy support is likely to be needed for different agro-ecological and socio-economic environments and for different groups of farming households, but all can benefit from (and contribute to) enhanced market oriented agricultural growth. Whichever pathways are followed, the destination should be increased income and improved quality of life for rural Ethiopians.


Ethiopian Journal of Economics Vol. 16 (1) 2007: pp. 43-56