Repurposing Agricultures Public Budget To Align Healthy Diets Affordability And Agricultural Transformation Objectives In Ethiopia

Agricultural transformation has been ongoing for decades in Ethiopia where the agenda to improve nutrition has also gained momentum. This paper assesses ways in which the government could coherently pursue the objectives of reducing the cost of the least cost healthy diet for Ethiopians and achieving faster inclusive agricultural transformation (IAT), for example by increasing agrifood output, creating rural off-farm employment and reducing rural poverty. The main finding is that pursuing IAT objectives also allows reducing the cost of the least-cost healthy diet. Ethiopian policymakers may consider repurposing the budget for agriculture to pursue IAT objectives as suggested in this paper in order to increase value for public money, not only in terms of agrifood output growth, job creation and poverty reduction, but also in terms of increasing the affordability of healthy diets.

This year’s report should dispel any lingering doubts that the world is moving backwards in its efforts to end hunger, food insecurity and malnutrition in all its forms. We are now only eight years away from 2030, but the distance to reach many of the SDG 2 targets is growing wider each year. There are indeed efforts to make progress towards SDG 2, yet they are proving insufficient in the face of a more challenging and uncertain context. The intensification of the major drivers behind recent food insecurity and malnutrition trends (i.e. conflict, climate extremes and economic shocks) combined with the high cost of nutritious foods and growing inequalities will continue to challenge food security and nutrition. This will be the case until agrifood systems are transformed, become more resilient and are delivering lower cost nutritious foods and affordable healthy diets for all, sustainably and inclusively.

The report uses a nutritional water productivity (NWP) framework to interpret the relationship between nutrition and water in the context of water challenges. It argues that higher yields – of both staple and nutritious crops – are possible, even in water-stressed areas. This will require an agricultural transformation that ensures that efforts to enhance water productivity are linked to the promotion of healthy diets. Increasing water productivity and stabilizing yields at realistic levels will also be crucial to increasing the resilience of farmers. Better coordination and timing of water and other inputs, notably fertilizers and improved seeds, is likely to enhance productivity and to reduce the threats of a further encroachment of agriculture into other ecosystems. A diversified production system is required for food security, nutrition and poverty alleviation. There is an opportunity to provide strategic support for crops and other farm produce with high economic and nutritional value. A range of crops and other produce can be included in farming systems ranging from rainfed to irrigated agriculture. For the farmers to be stimulated and able to capitalize on the increasing need and demand for such produce, the development of markets, and associated investments in cold storage, roads/transport and food procurement programmes that prioritize nutritious produce will be key.

Updates for many countries have made it possible to estimate hunger in the world with greater accuracy this year. In particular, newly accessible data enabled the revision of the entire series of undernourishment estimates for China back to 2000, resulting in a substantial downward shift of the series of the number of undernourished in the world. Nevertheless, the revision confirms the trend reported in past editions: the number of people affected by hunger globally has been slowly on the rise since 2014. The report also shows that the burden of malnutrition in all its forms continues to be a challenge. There has been some progress for child stunting, low birthweight and exclusive breastfeeding, but at a pace that is still too slow. Childhood overweight is not improving and adult obesity is on the rise in all regions. The report complements the usual assessment of food security and nutrition with projections of what the world may look like in 2030, if trends of the last decade continue. Projections show that the world is not on track to achieve Zero Hunger by 2030 and, despite some progress, most indicators are also not on track to meet global nutrition targets. The food security and nutritional status of the most vulnerable population groups is likely to deteriorate further due to the health and socio economic impacts of the COVID-19 pandemic. The report puts a spotlight on diet quality as a critical link between food security and nutrition. Meeting SDG 2 targets will only be possible if people have enough food to eat and if what they are eating is nutritious and affordable. The report also introduces new analysis of the cost and affordability of healthy diets around the world, by region and in different development contexts. It presents valuations of the health and climate-change costs associated with current food consumption patterns, as well as the potential cost savings if food consumption patterns were to shift towards healthy diets that include sustainability considerations. The report then concludes with a discussion of the policies and strategies to transform food systems to ensure affordable healthy diets, as part of the required efforts to end both hunger and all forms of malnutrition.

This paper explores these issues for Ethiopia utilizing an economy-wide computable general equilibrium (CGE) model based on a detailed social accounting matrix (SAM). We present the results of four alternative investment scenarios -- faster investment in i) cities; ii) crop agriculture; iii) the rural non-farm sector and agro-industry; and iv) livestock. The simulations suggest that investments in cities generate faster economic growth and structural transformation. However, given the large share of the population with incomes linked to agriculture and the rural economy, investments in the rural economy are likely to continue to be more pro-poor than urban public investments through the mid-2020s. After the mid-2020s, investments in cities become more pro-poor. In short, though rapid economic growth and structural transformation have diminished the relative importance of the agricultural sector in Ethiopia’s economy, continued public investments in agriculture and the broader agri-food system remain crucial for equity and poverty alleviation in Ethiopia, as well as for reducing food import dependency.

The perception of Ethiopia projected in the media is often one of chronic poverty and hunger, but this bleak assessment does not accurately reflect most of the country today. Ethiopia encompasses a wide variety of agroecologies and peoples. Its agriculture sector, economy, and food security status are equally complex. In fact, since 2001 the per capita income in certain rural areas has risen by more than 50 percent, and crop yields and availability have also increased. Higher investments in roads and mobile phone technology have led to improved infrastructure and thereby greater access to markets, commodities, services, and information. In Food and Agriculture in Ethiopia: Progress and Policy Challenges, Paul Dorosh and Shahidur Rashid, along with other experts, tell the story of Ethiopia's political, economic, and agricultural transformation. The book is designed to provide empirical evidence to shed light on the complexities of agricultural and food policy in today's Ethiopia, highlight major policies and interventions of the past decade, and provide insights into building resilience to natural disasters and food crises. It examines the key issues, constraints, and opportunities that are likely to shape a food-secure future in Ethiopia, focusing on land quality, crop production, adoption of high-quality seed and fertilizer, and household income. Students, researchers, policy analysts, and decisionmakers will find this book a useful overview of Ethiopia's political, economic, and agricultural transformation as well as a resource for major food policy issues in Ethiopia. Contributors: Dawit Alemu, Guush Berhane, Jordan Chamberlin, Sarah Coll-Black, Paul Dorosh, Berhanu Gebremedhin, Sinafikeh Asrat Gemessa, Daniel O. Gilligan, John Graham, Kibrom Tafere Hirfrfot, John Hoddinott, Adam Kennedy, Neha Kumar, Mehrab Malek, Linden McBride, Dawit Kelemework Mekonnen, Asfaw Negassa, Shahidur Rashid, Emily Schmidt, David Spielman, Alemayehu Seyoum Taffesse, Seneshaw Tamiru, James Thurlow, William Wiseman.

Due to the rapid growth of cities in Africa, many more farmers are now living in rural hinterlands in relatively close proximity to cities where many provide food to urban residents. However, empirical evidence on how urbanization affects these farmers is scarce. To fill this gap, this paper explores the relationship between proximity to a city and the production behavior of rural staple crop producers. In particular, we analyze data from teff producing farmers in major producing areas around Addis Ababa, the Ethiopian capital. We find that farmers located closer to Addis Ababa face higher wages and land rental prices, and because they receive higher teff prices they have better incentives to intensify production. Moreover, we observe that modern input use, land and labor productivity, and profitability in teff production improve with urban proximity. This urban proximity has a strong and significant effect on these aspects of teff production, possibly related to the use of more formal factor markets, lower transaction costs in crop production and marketing, and better access to information. In contrast, we do not find a strong and positive relationship between rural population density increases and agricultural transformation – increased population density seems to lead to immiserizing effects in these settings. Our results show that urban proximity should be considered as an important determinant of the process of agricultural intensification and transformation in developing countries.

For thousands of years, Ethiopia has depended on its smallholding farmers to provide the bulk of its food needs. But now, such farmers find themselves under threat from environmental degradation, climate change and declining productivity. As a result, smallholder agriculture has increasingly become subsistence-oriented, with many of these farmers trapped in a cycle of poverty. Smallholders have long been marginalised by mainstream development policies, and only more recently has their crucial importance been recognised for addressing rural poverty through agricultural reform. This collection, written by leading Ethiopian scholars, explores the scope and impact of Ethiopia's policy reforms over the past two decades on the smallholder sector. Focusing on the Lake Tana basin in northwestern Ethiopia, an area with untapped potential for growth, the contributors argue that any effective policy will need to go beyond agriculture to consider the role of health, nutrition and local food customs, as well as including increased safeguards for smallholder's land rights. They in turn show that smallholders represent a vitally overlooked component of development strategy, not only in Ethiopia but across the global South.

"Overcoming agricultural and food crises in Ethiopia is a sobering presentation of the crises of smallholder agriculture, food and nutrition, the environment and the impending threats to the survival and well-being of millions of Ethiopians and the nation. The combination of the obsolete systems on the one hand, with a growing young population, sustained decline of agricultural land per capita, unstructured urbanization and absence of rural industrialization on the other, presents a grim prospect for the contemporary Ethiopian state builders. The book seeks to call on political leaders, policymakers, scholars, business people, religious and moral authorities, farmers, and the general public to urgently mobilize bold vision and action to redress the crises."--back of book.