Growth trends and potential for crop and livestock productivity

Fantu Bachewe; Guush Berhane; and Bart MintenIFPRI

The Future of Ethiopia’s Agriculture: Towards a Resilient System to End

Hunger and Undernutrition

Addis Ababa HiltonDecember 15, 2017Addis Ababa

1

Presentation plan

Overview: role of agriculture in the overall economy

Livestock production and productivity in the last decade

(Fantu)

Crop production, productivity and drivers (Guush)

Looking into the future: Ethiopia’s agriculture in the context

of selected countries

CSA data is used unless otherwise mentioned

ETHIOPIAN DEVELOPMENT RESEARCH INSTITUTE

Crop productivity in Ethiopia: Growth trends, drivers, and potentials

Presenter: Guush Berhane

3

4

Growth rates: GDP, Agriculture, Crop

-4

0

4

8

12

16

20

24

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

Perc

ent

Growth rate in real agriculture output & GDP, 2004/5 -2015/16; (%)

Crop Livestock Agriculture GDP

Substantial growth in agricultural production; from a low base Growth rate in real agricultural output and GDP mirror growth rate in

crop output

5

Growth in area cultivated and yield

3.7

1.2

-2

0

2

4

6

8

10

12

Perc

ent

Area Yield

Growth in crop output driven by cultivated area expansion and yield.

6

Cereal yield (quintals/ha)

14.2

19.4

34.3

8.511.5

15.8

0

5

10

15

20

25

30

35

40Q

t/h

a

Maize Wheat Barley Teff

Yield growth rate varied by crop type Annual average growth rate (levels, Qt/ha): Maize: 23.4; Wheat:17.5; Barely: 13.9; Teff: 11.6

7

What contributes to output growth?

Contribution to crop output growth (2004/05 – 2013/14) (Solow decomposition model - %)

Labor31%

Land13%

Fertilizer 8%

Improved seeds12%

Returns to scale8%

Rural roads3%

∆ TFP22%

Others3%

8

1. Public Extension: Share of farmers that received advisory services has increased

33

50 52 53

6468

7977 78

0

10

20

30

40

50

60

70

80

90

2004-05 2005-06 2006-07 2007-08 2009-10 2010-11 2012-13 2013-14 2015-16

Pe

rce

nt

9

2. Chemical Fertilizers:

Proportion of farmers using fertilizers & cereal area applied increased

46.3 47.9

75.6

36.029.5

53.1

0

10

20

30

40

50

60

70

802

00

4/0

5

20

05

/06

20

06

/07

20

07

/08

20

08

/09

20

09

/10

20

10

/11

20

11

/12

20

12

/13

20

13

/14

%

Holders (%) Area applied (%)

10

3. Improved Seeds: Proportion of cropland under improved seed (slightly) increased

15.9 15.9

11.8

33.5

41.9

0

5

10

15

20

25

30

35

40

45

2004/05 2006/07 2009/10 2012/13 2015/16

Teff Barely Wheat Maize Sorghum

Improved maize seed relatively widely used; wheat is next. Data is reported, not based on DNA finger printing, likely to be underestimated

-

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

Teff Wheat

Barley Sorghum

Maize

4. Incentives:Output/fertilizer price ratio

Adoption of modern inputs further incentivized by relative price increases

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

20

03

/04

20

04

/05

20

05

/06

20

06

/07

20

07

/08

20

08

/09

20

09

/10

20

10

/11

20

11

/12

20

12

/13

Coffee Oilseeds Pulses Chat

4. Incentives: Export price indices

Productivity of export crops further incentivized by increased export prices

Ethiopia’s crop production in context – the potential

15

Maize and wheat yield levels (mt/ha) and growth rates,

selected countries, 2004-2013

Period China Egypt Ethiopia Kenya USA

Maize

2004 5.1 7.9 1.6 1.9 10.1

2013 6.2 7.2 3.2 1.6 10.0

Annual average growth (%) 2.3 -1.0 6.2 -1.8 -0.1

Wheat

2004 4.3 6.6 1.5 2.5 2.9

2013 5.1 6.7 2.4 3.0 3.2

Annual average growth (%) 2.1 0.2 5.4 2.5 1.0

Substantial growth rate in maize and wheat yield but started from a low base; Yield-level still one of lowest, … way to go!

16

Proportion of cropland under irrigation

37.2

18.4

3731.8

0

10

20

30

40

China India

1970 1995

1.1 0.8 0.5 0.2

5.96.8

1.30.7 0.4 0.1

6.3

11.4

0

2

4

6

8

10

12

14

All crops Cereals Pulses Oilseeds Vegetables Root crops

2004/05 2015/16

Land under irrigation has slightly increased for some crops (Data for Meher season only) But still very low compared to, for example, China and India

17

18

29

2

9

26

37

118

16

0

5

10

15

20

25

30

35

40

Ethiopia Malawi Nigeria Tanzania SSA

2009 2014

Fertilizer intensification (kg/ha)

Comparable growth in land intensification (fertilizer, Kg/ha), comparable to some SSA countries; but way to go compared to Asian countries in 2014

18

4314 24

565

165 152

212

26

0

100

200

300

400

500

600

China India Thailand Indonesia Asia Ethiopia

1970 2014

Fertilizer intensification (kg/ha)

Substantial growth in land intensification (fertilizer, Kg/ha), comparable to some SSA countries; but way to go compared to Asian countries in 2014

19

Summary & way forward

Ethiopia has seen substantial growth in crop production, mostly driven by area expansion, yield, and TFP;

Yield growth further driven by several factors, including more and better use of modern inputs – fertilizer, improved seeds, extension, improved infrastructure, price incentives, and so on;

But growth has been from a low base and, as the evidence from other countries suggest, there is a lot of potential for improvement.

Some of the growth drivers so far (like area expansion) seem to be quickly dwindling, and others (like international price incentives) are not always reliable.

As growth opportunities from a low base get fully exploited, further growth (from a higher base) becomes challenging and requires more than business as usual.

The evidence seems to suggest more and more needs to be done to sustain growth, …, investing towards a more knowledge-based production system and unlocking other constraints of land intensification.