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Ethiopia’s agriculture has shown remarkable resilience over many years but is now increasingly failing. In spite of national efforts, the number of poor and food insecure population has remained very high, with an estimated 25 million people at the threshold of survival. The numbers of people on emergency and safety net program assistance have been consistently increasing both in aggregate number and in spatial manifestations, now covering nearly all the Regional States. In addition, Ethiopia’s import of cereals, edible oil and lint cotton, has continues to rise dramatically, costing over a billion dollars every year. This is an underlying trend that should alarm policymakers and development practitioners alike.
The traditional factors of production, land, labor and capital, have now been merged with the knowledge system. The real difference between the rich and poor countries is no longer only endowment of the factors of production as they used to be; rather it is how effectively nations, and people, utilize knowledge. Knowledge, that is scientific invention, technology, innovation, and the internet are all growing at an accelerated rate leaving far behind countries such as Ethiopia.
Important incentives and reform priorities are suggested as a basis for enacting agricultural and rural transformation including supportive legal environment, facilitate and support agricultural mechanization and input distribution as well as encourage and support decisive private sector participation and leadership in agricultural and rural transformation.