Poverty and Food Production

Poverty in rural Ethiopia is mainly caused by a fall in agricultural production as a result of land degradation. An insecure income and lack of resources often force Ethiopian farmers to prioritise their short-term needs over long-term environmental sustainability. Excessive exploitation, particularly over-grazing by cattle and goats and cutting down trees for firewood and housing construction, leads to soil erosion.

Rapid population growth (3% annually), the AIDS pandemic, high inflation (18.7% in September 2009) and transport costs, and unemployment also cause hardship for farming communities.

Encouraging investment and job creation is a fundamental part of Ethiopia's strategy for poverty reduction. With predications of high import costs for food and oil for ten years to come, there is a strong incentive to improve the country's agricultural incentive.

High food prices in Ethiopia make the local production of food a desirable and profitable activity. Unlike others, food producers generally benefit from high food prices despite being affected by domestic pricing policies and high transport costs.


The World Development Report 2008 refers to 'a smallholder-based productivity revolution' in African agriculture. By 2015 food demand in Africa is expected to be worth about 100 billion dollars, double the amount in 2000.

Investment and trade can bring resources that help generate the economic growth needed to establish sustainable livelihoods and the wealth needed for environmental improvement, the spread of cleaner technology, and for environmental goods and services.