Implications of accelerated agricultural growth on household incomes and poverty in Ethiopia: A general equilibrium analysis

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cg.authorship.typesCGIAR single centreen_US
cg.coverage.countryEthiopiaen_US
cg.coverage.regionEastern Africaen_US
cg.coverage.regionSub-Saharan Africaen_US
cg.coverage.regionAfricaen_US
cg.creator.identifierPaul Dorosh: 0000-0001-6049-6018en_US
cg.creator.identifierJames Thurlow: 0000-0003-3414-374Xen_US
cg.identifier.projectIFPRI - Ethiopia Strategy Support Programen_US
cg.identifier.projectIFPRI - Development Strategy and Governance Divisionen_US
cg.number2en_US
cg.placeAddis Ababa, Ethiopiaen_US
cg.reviewStatusInternal Reviewen_US
dc.contributor.authorDorosh, Paul A.en_US
dc.contributor.authorThurlow, Jamesen_US
dc.date.accessioned2024-11-21T10:00:54Zen_US
dc.date.available2024-11-21T10:00:54Zen_US
dc.identifier.urihttps://hdl.handle.net/10568/162059en_US
dc.titleImplications of accelerated agricultural growth on household incomes and poverty in Ethiopia: A general equilibrium analysisen_US
dcterms.abstractEthiopia’s national development strategy, A Plan for Accelerated and Sustained Development to End Poverty for 2005/06 to 2009/10 (PASDEP) places a major emphasis on achieving high rates of agricultural and overall economic growth. Consistent with the PASDEP, Ethiopia is also in the process of implementing the Comprehensive Africa Agriculture Development Programme (CAADP) together with other African governments. As part of CAADP, the country has committed itself to meeting targets of devoting at least 10 percent of public expenditures to agriculture and to achieving a 6 percent growth rate in agricultural GDP. Ethiopia has already met these targets in recent years. The challenge remains, however, to continue to devote these public resources and to achieve high growth rates through 2015. This paper analyzes agricultural growth options that can support high levels of agricultural development using a new computable general equilibrium (CGE) model for Ethiopia based on data from the EDRI 2005/06 Ethiopia SAM (Ahmed et al. 2009). The CGE model results indicated that if Ethiopia can meet its targets for crop yields and livestock productivity, then it should be possible to reach and sustain the six percent agricultural growth target during 2006-2015. Even though these yield targets are below the maximum potential yields identified by agricultural field trials, they are still ambitious given the short timeframe of the CAADP initiative (i.e., seven years). Achieving agricultural growth of six percent per year would reduce national poverty to 18.4 percent by 2015, lifting an additional 3.7 million people out of poverty compared to a base simulation using medium term growth rates. Most households are expected to benefit from faster agricultural growth. However, some agro-ecological zones that grow higher value cereals and export-oriented crops and which are better situated to larger urban markets (e.g., the rainfall sufficient highlands) stand to gain more than other parts of the country. Both rural and urban households benefit from faster agricultural growth (and thereby overall economic growth), as rural producers benefit from increased agricultural productivity and incomes, while net purchasers of food in both rural and urban areas benefit from moderate declines in real food prices. Composition of agricultural growth matters, though. Additional growth driven by cereals has larger impacts on poverty reduction, because these crops already constitute a large share of rural incomes and so can contribute substantially to achieving broad-based agricultural growth. Yield improvements in these crops not only benefit farm households directly, by increasing incomes from agricultural production, but also by allowing farmers to diversify their land allocation towards other higher-value crops. Increased productivity of cereals that reduces real cereal prices is also effective at raising rural real incomes and reducing poverty, especially amongst the poorest households. Thus, high priority should be afforded to improving cereals yields and opening market opportunities for upstream processing to reduce demand constraints.en_US
dcterms.accessRightsOpen Accessen_US
dcterms.bibliographicCitationDorosh, Paul A.; Thurlow, James. 2009. Implications of accelerated agricultural growth on household incomes and poverty in Ethiopia. ESSP II Discussion Paper 2. https://hdl.handle.net/10568/162059en_US
dcterms.extent37 p.en_US
dcterms.isPartOfESSP II Discussion Paperen_US
dcterms.issued2009en_US
dcterms.languageenen_US
dcterms.publisherInternational Food Policy Research Instituteen_US
dcterms.publisherEthiopian Development Research Instituteen_US
dcterms.relationhttp://ebrary.ifpri.org/cdm/ref/collection/p15738coll2/id/130947 http://ebrary.ifpri.org/cdm/ref/collection/p15738coll2/id/127355en_US
dcterms.replaceshttps://ebrary.ifpri.org/digital/collection/p15738coll2/id/130942en_US
dcterms.subjecteconomic growthen_US
dcterms.subjectproductivityen_US
dcterms.subjectcomputable general equilibrium modelsen_US
dcterms.subjectagricultural developmenten_US
dcterms.subjectcrop yielden_US
dcterms.subjectlivestocken_US
dcterms.subjectpoverty alleviationen_US
dcterms.subjectmarket opportunitiesen_US
dcterms.subjectgrowthen_US
dcterms.subjectcaadpen_US
dcterms.subjectdevelopment policiesen_US
dcterms.subjecthouseholdsen_US
dcterms.typeWorking Paperen_US

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