Rural Development Policy And Strategy Of Ethiopia Pdf

rural development policy and strategy of ethiopia pdf

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Conceptual Issues 2.

Agricultural policies, agricultural production and rural households’ welfare in Ethiopia

Metrics details. The analysis is based on social accounting matrix SAM of Oromia region. This study develops two simulations based on economic assumptions and tests their effects on agricultural production, and social welfare. The first set of experiment focuses on the irrigation policies that change the factor intensities in the production of agricultural commodities, and the second one focuses on the precision agriculture that raises agricultural productivity in the use of technologies.

The analysis identifies that irrigation scaling up has a positive effect on agricultural production, and social welfare. This finding suggests that price support policy should be implemented simultaneously with suggested policies. A large body of literature suggests the various agricultural policies to raise agricultural productivity and improve rural social welfare.

Agricultural policies play a key role in the process of agricultural economic growth. Among them, technological change has been acknowledged as the principal driver of productivity growth OECD ; Morris et al.

The differences in aggregate agricultural productivity across countries are mainly attributed by modern technical inputs, human capital, agricultural research and infrastructure Hayami and Ruttan ; Mundlak and Hellinghausen ; Lau and Yotopolous Change in agricultural productivity is the fundamental policy to initiate agricultural transformation and raise the income of the rural people Ngai and Pissarides ; Urgessa The empirical literature documents the significant effects of agricultural productivity on rural people welfare Thirtle et al.

The magnitude of the effects of agricultural productivity growth on rural people welfare improvement varies largely across countries, depending on the way they developed and used new technologies de Janvry and Sadoulet The government in Ethiopia has implemented various agricultural policies such as market liberalization, structural adjustment, Agricultural-Led Industrialization, Sustainable Development and Poverty Reduction Program, Participatory and Accelerated Sustainable Development to Eradicate Poverty and successive Growth and Transformation Plans I and II to raise productivity in agriculture between and Since , the government abolished all subsidies and price support measures to agriculture.

A structural adjustment program reduces the role of the government and increases the role of demand and supply forces in the allocation of resources in the Ethiopian economy.

All these policy interventions have been implemented to increase agricultural productivity and production which, in turn, reduce poverty and food insecurity.

However, the agricultural sector in many developing countries has suffered from price distortions and low productivity, attempts to find solutions have often overlooked the interaction between these two problems Rakotoarisoa Agricultural research and development, irrigation, access to credit and price support policies have great impacts on agricultural transformation if they are implemented jointly and successfully Eicher ; Smale The need for the roles of information market on the status of macro and micro-nutrients in soil and rates of technology usages, and price support policies has neglected in Ethiopia.

As result, domestic supply shortages of agricultural and manufacturing commodities are the important causes of the current inflation in Ethiopia, particularly high food prices that are mostly affecting the welfare of households with fixed income. This paper makes a critical review of agricultural subsidization, price support, and stabilization policies, describes their significance with reference to the experience of the developed, and developing countries in the literature.

The study does describe the modeling methodology. The study provides base year data needed for policy simulation in a regional CGE model. A model for the economy of Oromia region is stated and calibrated employing as a benchmark equilibrium.

Assumptions are stated about some elasticity parameters, and closure rules. A policy shock applied to an exogenous variable is deemed in the experiments and the impacts of separate and combined policies are tested. Various studies have explored the Ethiopian agricultural policies and their implications for agricultural production and food security Alemu et al. Moreover, most studies on agricultural policies are largely based on literature reviews. There are no studies that have actually explored the effects of agricultural policies on production, employment and social welfare using CGE models.

CGE models provide a unique opportunity to measure the effects of proposed agricultural policies on agricultural production, employment and social welfare in Ethiopia. To my knowledge, these model simulations have not been explicitly used in earlier studies to suggest better agricultural policies for policy-makers in Ethiopia. An important innovation in this paper is the inclusion of combined policies simultaneously in the model.

Thus, the study fills the knowledge gap in the agricultural policy modeling literature. It also adds new knowledge to the existing empirical knowledge by analyzing the impacts of agricultural policies on agricultural production. The paper contributes to the scant literature on agricultural policies in Ethiopia. The rest of the paper is organized as follows. Finally, Sect. Agricultural policies in both developed and developing countries have been employed to increase agricultural productivity and production, social welfare and redistribute incomes Krueger et al.

Countries use agricultural policies to achieve self-sufficiency, transfer income among economic agents, and secure food supplies and low prices to consumers. Industrial countries adopt agricultural policies to raise agricultural product prices above market prices that transfer income from consumers to farmers while; developing countries employ agricultural policies to reduce agricultural product prices below market prices that provide cheap food for consumers Krueger et al.

Moderate agricultural taxation or subsidization has a significant impact on aggregate agricultural productivity; but high or low rates of agricultural taxation or subsidization do not have a significant effect on agricultural productivity Hu and Antle Many Asian and Latin American countries have employed different price support and stabilization policies to increase crop production as well as social welfare.

In general, Asian countries used price support policies to address price fluctuation that affect production adversely since the s. These policies have accelerated the extensive utilization of Green Revolution innovations that increased crop production Hazell Many Asian countries stabilized grain prices at or above world price levels that made rural households to have better social welfare Cummings et al.

By contrast, many poor African countries used inadequate or no price support programs to manage agricultural price uncertainty that led to slow change in productivity and growing reliance on food imports. The absence of price support policies in Africa leads producers to have a low social welfare Demeke et al. Developing countries strongly oppose domestic and export subsidies by developed countries. Since developing countries cannot afford to support their producers at the levels of developed countries, subsidies tend to limit fair competition.

In general, both domestic and export subsidies distort production patterns. Some argue that subsidies given to producers in developed countries have resulted in overproduction and lower world prices of agricultural commodities, which have been harmful to agriculture in developing countries Koo and Kennedy Although subsidies distort trade flow, they influence the welfare of consumers in both exporting and importing countries Bhagwati because subsidies reduce world prices for agricultural commodities.

For instance, removing import tariffs on farming commodities benefit consumers from lower consumption costs, but leave agricultural producers vulnerable to competition from foreign agricultural producers that result in both lower profits and wages in developing countries. Government of Ethiopia has imposed restrictions on exports of cereal crops to stabilize domestic supply and encourage oilseed, pluses, and coffee exports that have either a positive or negative impact on social welfare.

The government has used agricultural export policies in the form of export taxes and export bans on different agricultural commodities. The tax on coffee export was abolished in following declining coffee prices in the international markets.

The government banned the export of major food grains to reduce the food price for urban consumers. The domestic grain prices were tried to reduce through banning the exportation of teff, wheat, maize and sorghum in December In June , banning is applied to the exportation of all cereals Admassie The oilseed and pulses have been freed from export taxes Rashid et al.

The Ethiopian government has used overvalued exchange rates to tax farmers and promote oilseed, pluses and coffee exports that increase costs of agricultural production. Agricultural markets have been liberalized in favor of market mechanisms for allocating resources. The fertilizer markets were liberalized to move the fertilizers from sources to the farmers or ultimate users. The government deregulated the prices of fertilizers at the wholesale and retail levels.

Input subsidies were abolished to reduce the government budget deficit. Private companies exited from the fertilizer markets in Like private companies, this enterprise has imported pesticides and herbicides and distributed these inputs to farmers through cooperatives. Some of the agricultural inputs, such as pesticides, herbicides, tractors and combine harvesters have been imported and distributed to farmers by private companies. These policies tend to underestimate the role of technology and information markets that can determine agricultural productivity.

For instance, government interventions in output markets, and input markets did not address the shortage of agricultural commodities, and stop upward trending of agricultural prices.

Because these policies have ignored the roles of information market on the status of macro and micro-nutrients in soil and rates of technology usages in accelerating agricultural productivity, as observed by Schneider et al. Rapid growth in agricultural productivity is strongly associated with well function of agricultural technology and information markets. Neoclassical theory suggests that well-functioning knowledge and information markets are necessary to increase productivity.

But, this theory does not work in developing countries assuming knowledge and technologies are freely available within countries, to all producers. As a result, the government of Ethiopia could not achieve intended targets using these policies.

Thus, precision agriculture policy is necessary to create information markets on the status of macro and micro-nutrients in soil and rates of technology usages in Ethiopia. These new markets provide both adequate flows of information to farmers regarding macro and micro-nutrients testing facilities and technology usage rating facilities. Incentives should be adequate to confirm that private sectors invest their capital in technological infrastructure.

It also supplies The agricultural sector is a means of livelihood for the majority of rural households. However, agriculture is the unproductive sector in Ethiopia because of outdated technologies Rahmeto and inappropriate agrarian policy Kibret Moreover, the Oromia region has 63 rivers and tributary streams. The total estimated irrigated land is about 85, hectares ha. The common irrigation types are traditional irrigation schemes i.

Irrigation policy has been established to increase irrigated area by This policy facilitates credit services for farmers and encourages them to use water pumps Wodon and Zaman However, there is a significant gap between the actual irrigated area and a land area equipped for irrigation Fig. Poor regulatory framework is the reason for the big gap between actual irrigated and planned areas for irrigation Awulachew et al. On the contrary, the researcher argues that price fluctuation is the main reason for irrigation policy failures.

Good irrigation policy is necessary for securing high productivity and production, but good policy may not function well if there is no price incentive or price support policy.

The price support policy is necessary to secure stable productivity and supply of agricultural output. The historical fact is that both developed countries and developing countries used price stabilization and support policies to reduce variability in agricultural productivity and supply.

This study suggests government to use irrigation policy along with price support policy to address shortages of agricultural commodities, which are the main causes of the current inflation in Ethiopia, particularly high food prices that are mostly affecting the welfare of households with fixed income. CGE models are developed to measure the effects of policies on welfare at country and region levels Burfisher The CGE models are a useful tool in quantifying the impact of policy shocks on aggregate social welfare Gunning and Keyzer ; Dixon and Parmenter ; Devarajan and Robinson The agent behaviors determine demand and supply functions in the economy: producers want to maximize profits and consumers want to maximize utility subject to their budget constraint, agricultural technologies, migrant remittances, and a time constraint Dyer et al.

The choice of the CGE model is justified in the sense that it has certain features that make it suitable for such analysis.

First, the CGE models simulate the functioning of factors, and product markets.

A critical review of rural development policy of Ethiopia: access, utilization and coverage

The final section offers conclusion. Ethiopian policy makers should focus on a.. Industrial Policy in Ethiopia: An Introduction2 More than fifteen years into a period of sustained and rapid economic growth, Ethiopia has continued to attract international attention for its achievements and for pursuing a home-grown development strategy, with an active industrial policy at its center. State with an ambitious vision, commitment, and strong sense of policy ownership. The next section explains the methodology, followed by a section on development policies and strategies in Ethiopia. It has also enjoyed a considerable attention by the government. Agriculture is the mainstay of Ethiopian economy involving major source of employment and gross national product.

Metrics details. Agriculture is the mainstay of Ethiopian economy involving major source of employment and gross national product. By African, standard rural development programme has long history in Ethiopia. It has also enjoyed a considerable attention by the government. However, the expected level was not achieved. The main objective of this review is to indicate the policy gaps in terms of access, utilization and coverage of rural development policy programme packages by different segments of people in rural areas.

Ethiopia: National policy and strategy on disaster risk management. The National Employment Policy and Strategy N EPS of Ethiopia is prepared in response to the need for such a framework to guide interventions aimed at improving employment and its poverty outcomes in the country. Further, the policy outcomes and gaps are discussed and explained. Introduction:Youth in Development. In defiant to the neo-liberal advice the strategy In spite of its ancient civilizations and being the only other country in the continent that was not colonized as well as one of the oldest Consequently it is essential to immediately adapt development strategies, policy implementation methodologies and pertinent action plans to translate the policy into practice. The government of Ethiopia began large scale efforts to develop the pastoral areas and initiated different projects, but pastoral development policies and strategies seem to be state centrally-driven.

Rural Development Policy and Strategies.

From a war-torn and famine-plagued country at the beginning of the s, Ethiopia is today emerging as one of the fastest-growing economies in Africa. Growth in Ethiopia has surpassed that of every other sub-Saharan country over the past decade and the government has set its sights on transforming the country into a middle-income country by , and into a leading manufacturing hub in Africa. The major focus of this book, however, is the recent economic history, policies, and performance of the Ethiopian economy during a moment of ongoing and significant structural change.

In particular, the authors emphasize the importance of continued investments to increase agricultural productivity, market efficiency, and infrastructure roads, small-scale irrigation, and electricity generation to support both agriculture and the rural and small-town nonfarm economy. Without these investments substantial poverty increases and growing inequality are likely to result, even if there is rapid overall economic growth. Skip to main content.

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Agricultural policies, agricultural production and rural households’ welfare in Ethiopia

Introduction

Metrics details. The analysis is based on social accounting matrix SAM of Oromia region. This study develops two simulations based on economic assumptions and tests their effects on agricultural production, and social welfare. The first set of experiment focuses on the irrigation policies that change the factor intensities in the production of agricultural commodities, and the second one focuses on the precision agriculture that raises agricultural productivity in the use of technologies. The analysis identifies that irrigation scaling up has a positive effect on agricultural production, and social welfare.

The present Rural Development Policy and Strategies underscores one basic objective with regard to economic development, i. Given the dominance of agriculture in the Ethiopian economy, i. It is the development of the agricultural sector that will provide the basis for rural development.

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With this in mind, the following section will attempt to provide greater insight into our policies and strategies for rural and agricultural development in Ethiopia. Page.

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Some eighty-five percent of Ethiopia's population lives in rural areas and is engaged in agricultural production. Although capital is especially scarce in rural.

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