Ending the Cycle of Hunger and Poverty in Ethiopia

A staggering 12.5 million Ethiopians, or one-fifth of the population, currently face starvation. Yet, last year, Ethiopian farmers had produced more grain than they could sell locally, with a national surplus of more than half a million tons. What happened?

After two years of bumper crops, the rains failed in 2002, leading to a substantial drop in agricultural production. But the roots of the food crisis run much deeper. Millions of subsistence farmers are almost entirely dependent on the weather. Poverty is extreme and widespread, land and soils are severely degraded, markets don’t function, and the country’s communications and transportation infrastructure are among the least developed in the world. Despite these problems, IFPRI research on the environment, production technology, and markets suggests that future food crises can be avoided.

In the highlands of northern Ethiopia, studies show that investments in roads, technical assistance, credit, education and other services are improving conditions. Increasing people’s incomes is also crucial. This can be accomplished in part by investing in research and extension to assist farmers in producing a diversity of crops and livestock, including high-value products.
"To be effective, development investments must be tailored to local conditions," says John Pender, Senior Research Fellow, IFPRI. "Ethiopia is comprised of 18 distinct agro-ecological zones, and no one-size-fits-all strategy will work in all areas. In drought-prone regions, for example, it makes more sense to invest in water and soil conservation measures than fertilizer."

But even in areas where excellent harvests can be achieved using high-yielding seeds and fertilizers, farmers cannot sustain a livelihood if they are unable to get their grain to market. In the 2001–2002 season, some farmers recorded bumper maize crops. But with poor roads, lack of market information, and no access to credit, traders were sorely challenged to buy food from farmers and sell it where it was needed. A glut of grain concentrated in small areas caused prices to plunge by as much as 80 percent, even as other parts of the country experienced severe food shortages.

This tragic outcome was caused by Ethiopia’s weak marketing system. An IFPRI study shows that most grain traders operate small-scale businesses with very few assets, and trade only with people they know, over very short distances. According to Eleni Gabre-Madhin, IFPRI research fellow, two-thirds of Ethiopian traders cannot get bank loans, only 6 percent own a vehicle, and less than half have a telephone or permanent storage facilities.

When prices collapsed, traders did not have the financing to buy and store grain in large quantities. Lacking buyers, some farmers simply abandoned grain in the fields. Everybody lost, from bankrupt farmers to starving consumers.

To make markets work, IFPRI research indicates that the Ethiopian government and its donors should support the private sector, invest in roads and telecommunications, and create institutions to deliver financing, information, and legal enforcement.

With appropriate policies and wise investments that address both the supply and demand side of food security, Ethiopia can end its cycle of hunger and poverty.