Food Security in Ethiopia

Context:

The population of Ethiopia has exploded to 84.3 million in 2012, almost tripling since 1971 with the largest rate of increase between the 1980s-1990s and from 2000 to 2008. Currently its population growth rate is among one of the top 10 in the world, and is home to some 1352 000 refugees from areas such as Somalia and Eritrea since 2009. The population of Ethiopia is projected to grow to over 210 million by 2060. With such a large and expanding population food security and sustainability therefore becomes an issue that commands attention in Ethiopia.

Agricultural activities in Ethiopia make up 84% of the country’s labour force, this being because agriculture is Ethiopia’s most important export and largest contributor towards economic growth (arguably due to the labour factors of production available due to lack of education in rural areas). Furthermore, agriculture output is depended on by Ethiopia’s poverty-stricken population as a source of subsistence farming.

It is estimated that 5.2 million people in Ethiopia are either food insecure or have a real threat of becoming so. This has been worsened due to poor rainfall during the February-May and June-October seasons impacting on crop yields, and furthermore high fuel prices have exacerbated the problem of the distribution of food cheaply and therefore limited its accessibility. In 2010 Ethiopia was rated 171 out of 182 countries on the Global Hunger Index, which ranks developing countries on the proportion of undernourished people, underweight children under five and child mortality rate of its inhabitants. In terms of child growth, in 2005 the following statistics were recorded: 20% of babies were less than 2500g at birth (as opposed to an average of 3.4kg), 53.5% of children less than 5 years old and 30.6% of women that were pregnant were anaemic, 34.6% of all children were underweight, 50.7% suffered from growth retardation due to insufficient diets and 12.3% experienced severe under-nutrition which leads to permanent impairment of the immune system.

Deforestation:

In the beginning of the 1900s it is estimated that around 35% of Ethiopia’s land was covered by trees. This figure is believed to have now decreased to 11.9%; this equates to a loss of 1410 km² of natural forest each year. Deforestation undermines food security in Ethiopia because tree roots prevent soil erosion and nutrients in top-soil being washed or blown away because they actively bind the soil together. When this protection does not exist soil erosion reduces the nutrient levels in the soil and thus plant and crop yields, which means a) it is harder for rural communities to find and gather food, and b) it undermines farmers ability to produce enough food to keep up with rising food demand, as well as the efforts of subsistence farmers (which have been promoted through government land acts in the 1990’s) to provide for their families and communities. Deforestation is arguably driven by the demand for wood in Ethiopia and abroad, which provides jobs for many unskilled Ethiopians to acquire money to buy food, for example.

Urbanisation:

From 1967 to 1975 rural populations moved into urban areas at an increasing rate seeking work and better living conditions in Ethiopia. In 1975 government introduced land reform policies that provided incentives to try and lower the urbanisation rate. The Land Reform Program also encouraged agriculture in an attempt to increase the rate of produce output which was not keeping pace with the population growth rate between 1970 and 1983. Agricultural output did increase, but it is disputed whether this was caused by the Land Reform Program or more favourable weather conditions. What was seen was the creation of peasant associations of large villages based on agriculture, which arguably increased food security in those areas. Urban populations have grown by 8.1% from 1975 to 2000, partly due to urbanisation. This is a problem because Rural-Urban migration continues to be a threat to the food security in rural villages, because as members of those villages leave their communities there is less labour available to sustain agriculture, subsistence or otherwise, which therefore undermines the food security of those villages.

Exports and Cash Crops:

Ethiopian exports amounted to 1.4 billion US dollars between 2009 and 2010, and produces more coffee than any other country in Africa. Furthermore, livestock breeding is a major Ethiopian export industry, being the 10^th largest producer of livestock in the world and additionally exporting other related products such as leather based on the raw materials when the animals are slaughtered. Development of Ethiopia’s floriculture sector also means that Ethiopia is likely to become 1^st in the world for flower and plant exports.

The image above shows the respective ratios of various Ethiopian exports in relation to total export. Furthermore, since 95% of cross-border trade is estimated to be unofficial, exports such as livestock are expected to generate an income for Ethiopian’s of up to 100 times the official figure (up to 300 million USD). Focus in industries such as livestock are beneficial to food security because it lowers the price of livestock through increased supply of it. Furthermore increased trade in general stimulates demand for Ethiopian currency which means that Ethiopia can afford to import more food if it needs to. Ethiopia also has the potential to expand its gold industry and thus increase trade because it has untapped mineral resources, however political instability has prevented Ethiopia from utilizing these resources to their full potential (it was involved in a gold swindle in 2008, for example, which undermines importer confidence and hence import rates).

However there are also detrimental effects to food security because of Ethiopia’s focus on producing cash crops and livestock for export to attract foreign currency and promote wealth. The obvious objection is that this focuses the country’s factors of production towards growing non-staple foods such as coffee which can’t be consumed to alleviate hunger problems on a large scale. Secondly, while this trade does promote wealth, it often promotes wealth for the people who are already food secure because they have more control over factors of production than for the poorer members of Ethiopia who need food the most. Furthermore, arguably agriculture of staple foods is more important than that of cash crops for export given Ethiopia’s food crisis, however the market distorts the importance of production of these goods because there is a link between the members of society who are food insecure and who have low incomes, and therefore they do not have sufficient income to stipulate demand for staple foods in the market, meaning production in Ethiopia does not best satisfy the needs of its people, but rather the needs of the people who have money. Because of an increased shift in factors of production towards non-staple foods, the supply for staple foods is lowered and therefore the price of staple foods is raised, therefore making them less accessible to poorer members of the community.

Because the situation of food security has large negative externalities for the state of Ethiopia, such as increased state support for the hungry, more money needing to be spent on state medicine as people become sicker more easily and largely negative effects to the development of human capital there is arguably economic justification for the intervention of government in the market with regards to agricultural production through pricing incentives such as subsidies on staple foods. Furthermore, inflation caused by rising food prices (because more production is focused on exports rather than domestic use and therefore decreases domestic supply, raising domestic prices) threatens economic stability in Ethiopia, which is another justification for government intervention in this sector, especially since we see inflation rates of as high as 40% in August of 2011, for example. A focus on livestock in Ethiopia for export is also one that undermines food security in Ethiopia further, since it takes much more effort, time investment and water (which Ethiopia does not use efficiently) per unit energy of food compared to agricultural crops, and other more efficient provisions for protein intake can be made; however we still think a change in livestock output (especially since it is also used as an export and therefore only a portion is consumed in the domestic market) will only create a marginal decline in the protein intake received by food insecure individuals, but would drastically  increase the amount of food from crop yields to these consumers for the reasons mentioned above.

Utilization of resources:

Ethiopia is known as the “water tower” of Eastern Africa because it has 14 major rivers flowing into it from the high tableland. It therefore also has the highest water reserves in Africa; even so, it only uses 1% for power production and 1.5% for agriculture. Given that Ethiopia suffers from lack of rainfall in agriculture, under-use of Ethiopia’s water reserves is a serious issue to food security. This is largely because there is insufficient infrastructure such as irrigation to effectively use these reserves.

Land policy:

The Ethiopian constitution states that land belongs to the state and the people; citizens may lease land for up to 99 years, however they are unable to mortgage or sell it. Entities may only rent land for up to 20 years; the intended effect for land to continually be redistributed and go to the most productive user. Every few years when land is redistributed it is shared between more people (land is also distributed by the amount of people living together who need it), therefore giving less land to farmers. Even though they may be more farmers, this may be problematic because large farming businesses are needed to realize economies of scale and therefore make production more efficient; however as a result of these policies the majority of agricultural production comes from small farming sectors, arguably producing agricultural products in a less efficient way than could be done by a small number of mass-producers. Because land is redistributed every few years this also leads to less long-term sustainable investment by firms in their land to become more efficient producers in the long run, because the incentives are removed because they would not receive those benefits themselves in the long run if the land is redistributed when their investment has taken effect, and also lowers the long term returns for them on their investment as a result. It also removes the disincentives of land degradation for similar reasons. This is problematic because it means measures that take time to implement to increase the efficiency of agricultural production in relation to land investment are not realised, therefore lowering production levels and meaning there is less food to go around in the economy, also raising food prices.

Economic policy with regards to agriculture:

The government of Ethiopia practices price-fixing for agricultural goods; they buy crops from farmers at a minimum-price and distribute it accordingly. While this policy lowers the price of consumption, it also lowers the output of farmers since they have less incentive to produce more crops because they are forced to sell them at a lower price. This policy also creates a deadweight loss to society, which can be seen as the lost efficiency created by government by not allowing the market to allocate its own price dependent on demand. Because the majority of people who are food insecure are poor, a balance between lower prices and increased production must be found: solutions to this can be through price discrimination (perhaps through food-tokens), direct government provision of food and momentary benefits on a means-tested basis. Subsidies on agricultural production are also arguably a more favourable policy for government to in-act, because it lowers price as well as increasing supply of agricultural production.

Political instability and interference in food provision:

In the early 1990’s government spent up to 60% of its GDP on war related activities to resolve conflict in Ethiopia. This has undermined their ability to fund policies and projects to provide for their people who do not have access to food and reduce their problem of food security. Approximately 7 million Ethiopians receive food aid each year; however food aid given internationally is also influenced on political grounds. Because Ethiopia is a socialist country western countries are reluctant to support it through international aid, preferring to distribute aid to democracies and only if socialist countries make a more towards a more free-market orientated democracy (other reasons for this include the believe by western countries that a free market is the solution to an economically efficient market, and feel their aid is going to waste by giving it to countries that have socialist economic practices). This reduces the potential food aid Ethiopia receives from the rest of the world. In 1985 when Ethiopia was suffering from famine it received no food aid because the USSR who used to give them aid (partly because it too, was a socialist country) was no longer in a position to do so.

Furthermore, when food aid arrived at a later stage to address this famine the Ethiopian government distributed this food on a political basis – they did not distribute food to rebel areas in the country (during a period of political instability). This is harmful because people who need food aid do then not receive it, and secondly because when governments practice this form of political discrimination it gives international organisations and countries more reasons not to give food aid to these countries, because it would not be distributed in the most efficient way to the people who need it and would arguably be wasted.

Lack of transport infrastructure:

In many areas of Ethiopia there is sometimes a surplus of food, however because of lack of infrastructure and transport costs the extent to which these surpluses are transported to regions where food is scarce is limited.

Proposed solutions to the food crisis in Ethiopia:

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