The Agri-Business Sector in Ethiopia
Ethiopia’s agriculture, forestry and fishing sectors, which contributed 31.1% to the country’s GDP in 2018, are crucial sectors as they employ two thirds of its labour force. Smallholder farmers account for 95% of the sector’s production and commercial farms account for the balance. The agri-business sector depends on traditional farming methods and a rain-fed farming system, and the cost of production inputs and transportation is high. Ethiopia’s main staple crop is maize, while the main cash crops are coffee and sesame seed.
Ethiopia is the birthplace of Arabica coffee and is the biggest coffee drinking country in Africa. Coffee is Ethiopia’s largest export product and a high-value cash crop, and is considered of strategic national importance as it employs many of the country’s people. One of the challenges faced by the coffee sector is that many coffee farmers, especially in the eastern parts of Ethiopia, are replacing the cultivation of coffee with other crops. Coffee production is decreasing due to rising temperatures and decreasing rainfall, caused by climate change. The government is advising farmers to move their coffee plantations to higher altitudes where temperatures are lower and rainfall higher.
Low Crop Yields
Despite favourable conditions for the production of a variety of crops, crop yields are low because there is limited use of improved seeds, fertilisers and pesticides, and irrigation is not widely used.
This report on the Agri-Business Sector in Ethiopia examines the sector and its subsectors involved in the more than 140 different types of crops that are grown in the country. The report describes the size and state of the industry and the factors that influence it. There are profiles of 19 companies. These include the state-owned Ethiopian Sugar Corporation, the country’s only sugar producer and National Tobacco Enterprise, which has an out-grower scheme with more than 10,300 smallholder farmers. Other profiles include AQ Roses, which produces 15 rose varieties and Horizon Plantations, which owns the Bebeka coffee estate, one of the largest coffee plantations in the world.