Overview

Although Ethiopia is diversifying its economic base, agriculture still accounts for more than three-quarters of employment, 36 per cent of production and more than one- third of total exports. The significant role of agriculture in the economy underscores its continued importance as a key factor in economic growth and poverty reduction. Agricultural productivity has increased rapidly over the past decade, largely due to the intensification of modern seed usage, increased use of fertilisers and improved farming techniques.

Challenges

Productivity improvements in the past few years have been limited in key crops, with inadequate investments and insufficient advancements across various subsectors. Additionally, the growth in yields remains inadequate to meet both domestic food security needs and industrial demands, while underdeveloped markets continue to hinder farmers from realizing returns on their input investments. The agriculture sector faces significant constraints related to land use and administration systems, limited access to high-quality inputs and finance, inefficient market systems, and inadequate research and extension services.

In order to advance sectoral reforms, the specific problems that are prioritized under each of the main constraints need to be addressed. It is critical to increase market-oriented agricultural production and productivity, increase agricultural value addition and improve access to domestic and international markets. These steps are crucial for agriculture to contribute effectively to the structural transformation of the economy. In line with the Homegrown Economic Reform Agenda, the use of new and emerging technologies to modernize Ethiopia's agricultural sector is paramount for optimal utilization and progress.

Digital Solutions

Ethiopia has used various information and communication technologies throughout the 2000s and 2010s, from digitally-enabled extension services and other productivity-enhancing services to market information services for farmers (e.g. Minten et al. 20126). Internet penetration among rural Ethiopian farmers stands at 4%, which is lower than the sub-Saharan Africa average. Similarly, the rural literacy rate in Ethiopia also falls below the regional average.

Key initiatives currently being led by the Agriculture Transformation Agency (ATA) and its partners, including the Ministry of Agriculture (MoA) are the Ethiopian Soil Information System (EthioSIS) project, the Shallow Ground Water mapping, ATA's National Market Information System, the 8028-farmer hotline, ATA's flagship project and ATA Rural Financial Services. These initiatives have had a crucial impact on driving farmer incomes and productivity by aligning central and local agricultural strategies; creating capacity for performance tracking and enhancing the consultation process across government, the private sector and foreign donors. However, these initiatives are hampered by several challenges, especially connectivity, the lack of enabling regulations, appropriate finance, and skilled human capital.

The Digital Agriculture and Innovation Hub in Ethiopia was established with the aim of mainstreaming digital agriculture and innovation while promoting the digital transformation of agrifood systems. The hub is designed considering the national strategic priorities, digital maturity in the country, and local needs and interconnected to various national and international Digital Agriculture and Innovation Hubs to share knowledge, experience, and expertise. The hub will play a key instrumental role towards achieving the Digital 2025 strategy of the country though enhancing the capacities of farmers and value chain actors, with a focus on youth and women.

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