Eighty percent of Ethiopians live in rural areas and subsist mainly on agriculture. Ethiopian women provide most of the labour on small farms, yet their access to resources and control of the same is mediated through men, either their fathers or husbands.
The main crops grown include coffee, cereals, maize, sorghum, wheat, barley and millet. Most farmers are smallholders with over half cultivating plots of 1 hectare or less and struggling to produce enough food to feed their families. During the pre-harvest period, a large number of poor households face a long hunger season. Smallholder farmers are highly vulnerable to external shocks such as market fluctuations and climate variability like droughts. Over 12 million people depend upon some food aid assistance throughout the year in order to meet basic needs.
Persistent lack of rainfall impacts on rural poverty. Vulnerable households living in the pastoral areas of the lowlands and the high-density parts of the highlands are most at risk. Over the past decade, drought has become more frequent and severe and this is predicted to worsen in the future. Very few farms are irrigated and agriculture is dependent on rainfall. Farms also suffer from low levels of inputs and poor productivity as well as poor land management practices which have resulted in degraded lands.
The limited access to microfinance services in rural areas partly explains the low agricultural investment and productivity. Women particularly suffer from the lack of access to credit which lowers their ability to purchase inputs and invest in farms.
There are weak market linkages on both the input and output side. Farmers don't know about or can’t access improved inputs. Poor linkages between agricultural outputs and processors (ie, insufficient packaging and storage, inability of Ethiopian products to meet international market standards, and restrictive trade regulations) are among the major constraints.
However, Ethiopia has high potential for agricultural development given that only about 25% of its arable land is currently being cultivated. IFPRI’s General Equilibrium Model indicates that a 6% annual agriculture growth rate could help 3.7 million Ethiopians escape poverty by 2015, if population growth rates remain stagnant.