How Red Hat Uses FDO in Device Lifecycle _ Costin and Vitaliy at Red Hat.pdf
Agricultural Growth and Poverty Reduction in Ethiopia: A General Equilibrium Analysis
1. Agricultural Growth and
Poverty Reduction in Ethiopia:
A General Equilibrium Analysis
Paul Dorosh
James Thurlow
International Food Policy Research Institute (IFPRI)
(Ethiopia Strategy Support Program, ESSP-2)
With the support of the EDRI/University of Sussex
Social Accounting Matrix team
CAADP Roundtable
Nazareth, Ethiopia
26 August 2009
2. Research Questions
• How much will poverty decline under the current
growth path?
• What is the growth and poverty impact of
increasing yields and productivity for different
crops and sub-sectors?
• Is the 6% CAADP agricultural growth target
achievable and can it halve poverty by 2015?
• Which crops and agricultural sub-sectors are best
at generating national growth and/or poverty
reduction?
3. Methodology
• Dynamic CGE model (2005-2015)
• Many agricultural sectors
– Based on district crop and livestock data
– Calibrated to replicate observed yields and harvested
land areas
• Links to upstream sectors (e.g. processing)
• Regionalized (based on agro-zones)
• Disaggregated households
– Rural farm (by land size, asset holding, etc)
– Rural non-farm and urban
• Micro-simulation poverty module
4. The Data Base
EDRI Social Accounting Matrix 2004/05
– Constructed as part of a project with the
University of Sussex (w/support of IFPRI-ESSP2)
– 65 production sectors (24 agricultural, 10
agricultural processing, 20 other industry, 11
services)
– Regional SAM based on the “3 Ethiopias”
• Rainfall sufficient, drought prone, pastoralist
• Rainfall sufficient AEZ disaggregated to humid lowlands,
enset-based systems, and other (highland) rainfall
sufficient areas
– Poor and non-poor groups in rural and urban
areas
6. Baseline Scenario Assumptions
• Agriculture
– Land cultivated for each crop follows medium-term trends:
total land cultivated increases 2.6% per year, 2009-2015
– Land growth varies across region (1.2% per year in rainfall
sufficient areas, 3.2% per year in drought-prone areas,
3.7% per year in pastoralist areas)
– Crop yield increases account for one-third of the crop
production growth
– Overall agricultural GDP growth: 4.0%/year
– Note: population growth rate is 3.0 percent/year
• Non-agricultural output growth based on historical
medium-term trends:
– Manufacturing: 6.5% per year
– Services: 6.7% per year
12. Caveats
– Revised simulations will use a new version of EDRI
SAM scheduled to be completed in early June 2009
– Sensitivity analysis regarding key assumptions and
parameters is required
– Further analysis is needed regarding the costs of
achieving the productivity increases simulated here
– Additional analysis of regional strategies is also
needed
13. Concluding Observations: ADLI
• The simulations indicate that agricultural growth
does have significant poverty-reducing effects.
– This indicates that the overall Agriculture
Development-Led Industrialization (ADLI) strategy, as
well as the basic CAADP and AGP programs, are sound
approaches
• Complementary non-agricultural growth (in
addition to agricultural growth linkages) can have
a marginal impact on poverty equal in size to that
of accelerated agricultural growth
14. Concluding Observations: Markets
– Although agricultural growth raises rural incomes
through production increases and growth linkages
with the non-agricultural sector, national average
real prices of some products (especially wheat, maize
and milk) may fall
– Moreover, if local marketing constraints are not
resolved, localized market gluts could occur, seriously
reducing incentives for production
– Nonetheless, reduced prices of major staples helps
reduce poverty of net food purchasers
