Strengthening agribusiness associations and private-public dialogue (PPD) mechanisms - SRVC
Agriculture and a diversified rural economy play a key role in the Ethiopian economy. Currently, agriculture employs about two-thirds of the total population and contributes about one-third of the gross domestic product (manufacturing industries about 25%, service sector about 40%). As a result of difficult access to technical and entrepreneurial extension services, modern inputs, modern mechanization, and financing options, most smallholder men and women farmers in Ethiopia operate with outdated technologies and have low productivity. Although women are increasingly able to emancipate themselves in urban areas, gender roles are very static, especially in rural areas, and remain highly patriarchal. Women have poorer access to education (48% of women are illiterate compared to 30% of men), are more likely to enter informal and precarious employment due to lack of alternatives, and their average annual per capita income ($1,161) is 31% lower than that of men. Around 70% of Ethiopias poorest population are women.
Potential arises from the Ethiopian governments reform efforts. Prime Minister Abiy Ahmed, in office since April 2019, is focusing on public investment and private sector development as drivers of economic growth. The Second National Agricultural Growth and Transformation Plan (AGTP II), which focuses on smallholder farmers, launched a comprehensive modernization of the agricultural sector. Important elements include strengthening public and private extension services, increasing linkages with the private sector, and improving timely access to inputs and agricultural and financial services. As a result of the Corona crisis as well as the fight against the locust infestation, the current development of the upcoming "10 Years Perspective Plan" has been delayed.
Despite initial successes in the implementation of AGTP II, the national Ministry of Agriculture and the national organizations involved are not yet sufficiently capable of implementing private sector-oriented agricultural policies based on the value chain approach, nor of creating favorable conditions for the commercialization of smallholder farmers and for the growth of upstream and downstream agro-industries. In addition, the implementation of support measures at the regional level is not yet sufficiently focused on the needs and potentials of smallholder farmers and MSMEs in the agri-food sector. As a result, income and employment potentials along rural value chains remain untapped (core problem). The TC module aims to improve the income and employment situation of actors in agricultural value chains in selected rural regions (module objective).