Trends and decomposition of crop output growth in Ethiopia

Abstract

Ethiopia has achieved impressive agricultural growth over the past two decades and is seen as one of the fastest-growing economies in Africa. Most of the impressive growth was registered in the crop sub-sector. This study employed agricultural sample national-level survey data from 2004/05 to 2019/20 period corresponding to successive five-year development plan periods. Descriptive analysis using the crop cut data used to show crop productivity growth for crop categories. Growth accounting analysis was applied by computing Total Factor Productivity (TFP) change with four scenarios -using primary and intermediate longitudinal input data. Results showed total crop output grew by 2.6-fold with an average rate of 9.0% per annum. Crop output increases were mainly driven by strong yield growth and increases in labour use, chemical fertilizer, TFP, and area under improved seed. Together these factors accounted for 74% of the growth in total real crop output and 21% for cultivated land, rural roads, and return to scale (RTS) together. The key drivers were labour (26%), chemical fertilizer and TFP each accounting for 17%, improved seed (14%) and expansion in cultivated land (9%). Estimates of average annual TFP growth for the period 2004/05-2009/10 depicted the highest annual average growth (0.54-6.64%) but declined during GTP-I (0.58 to 5.3%) and more in GTP-II (-0.1%-3.4%). The results reflect a need for a strong investment push for expanding the use of inputs such as improved seed, fertilizer, pesticide and irrigation through intensive extension to curb the recent crop productivity decline.