Climate-smart agriculture investment plan for Ethiopia

Agriculture is the backbone of Ethiopia’s economy, accounting for 36 percent of GDP, 79 percent of employment opportunities, and 80 percent of exports.1 The country has diverse agro-ecological zones, forming a favorable climate for producing various crops and raising livestock. Cereals, legumes, coffee, pulses, oilseeds, fruits, and vegetables are the main agricultural products. In mixed and lowland pastoral farming systems, livestock farming also contributes significantly to agricultural GDP and livelihoods. Despite having such a wealth of natural resources, agriculture yield remains low. This under-performance is mainly due to the predominance of subsistence farming, where smallholder farmers produce most agricultural products for domestic and international markets. The sector also faces many challenges, including climate change and socio-economic instability. While the agricultural private sector has enormous potential to support adaptation, this remains underdeveloped. There is strong evidence that Ethiopia has experienced a change in climate during the past 50 years. Since the 1960s, national temperatures have risen by an average of about 1°C, with surges in every region. There is significant variation in rainfall at the national level, both across different years, seasons, and geographical areas. On average, there is a 25 percent annual fluctuation in rainfall levels, but in certain locations, this variation can be as high as 50 percent. Evidence also suggests that the south-central part of the country has seen a 20 percent decrease in rainfall. Extreme weather events such as droughts and floods are particularly common, and there are indications that their frequency may have risen in the past decade compared to the previous ten years. Floods and droughts have severely damaged crops and cattle, affecting food security in the agriculture and forestry sectors. Droughts alone can affect overall GDP by 1 percent to 4 percent, while soil erosion is estimated to reduce agricultural GDP by 2 percent to 3 percent, or about 1 percent of total GDP.3 The economic impact depends on
the variability and occurrence of extreme events. Agricultural output is highly sensitive to weather variability, resulting in significant negative effects even without major extremes. Given the impact of extreme events, the agricultural development component of the national ten-year plan focuses on upgrading the agricultural sector and ensuring food security by reducing reliance on rainfed agriculture. This involves promoting climate-resilient practices and technologies, expanding irrigation capacity, improving input and financial support, enhancing mechanization services, strengthening animal husbandry, fostering fodder development and animal health, and attracting private investors to generate rural job opportunities. These
initiatives will positively impact job creation, income growth, food security, and nutrition and steer the country toward middle-income growth. Introduced in 2011, the Climate Resilient and Green Economy (CRGE) Strategy has established a strong policy framework that connects economic growth with the fight against climate change. Ethiopia prioritizes adaptation and resilience; its ambitious climate goals revolve around ensuring low-carbon energy development,
preserving vast forest reserves and promoting climate-smart agriculture. Ethiopia has vast CSA investment potential, worth US$26.4 million5. Generating evidence is crucial for developing a pipeline of viable investments and comprehensive climate-smart agriculture (CSA) programs that align with national food security and climate targets to attract the necessary investments. A stakeholder-informed process is essential for identifying, assessing, and evaluating concrete actions that the country can undertake to enhance CSA. This includes identifying investment opportunities and designing and implementing effective policies. Ethiopia’s Climate Smart Agriculture Investment Plan (CSAIP) provides a strategic and comprehensive
rationale for investing in agricultural development amidst climate change and variability challenges.
Extensive stakeholder engagement helped develop the CSAIP, and the plan identifies, assesses, and prioritizes various CSA investments in Ethiopia. It aims to create a nationally supported and scientifically evaluated investment portfolio,
attracting financial support from private sector actors, public institutions, international donors, and other stakeholders committed to transforming the agriculture sector. The CSAIP follows an established framework and process, leveraging Ethiopia’s programs, policies, and strategic plans (such as Ethiopia’s Nationally Determined Contribution (NDC)) and collaborating with various local, national, regional, and international institutions. The Alliance of Bioversity International and CIAT, in collaboration with the Government of Ethiopia, the Ministry of Agriculture (MoA), and other stakeholders such as the Ethiopian Institute of Agricultural
Research (EIAR) and the Ethiopian Agricultural Transformation Institute (ATI), jointly developed this CSAIP. The World Bank Group provided financial support for the CSAIP through the Accelerating Impact of CGIAR Climate Research for Africa (AICCRA) program. Ethiopia’s CSAIP prioritized seven investments encompassing cutting-edge and proven CSA technologies and practices to enhance resilience and increase yields for smallholder farmers. These investments were identified by thoroughly analyzing Ethiopia’s plans, policies, and agricultural landscape. The analysis also involved scenario development to assess the impact of climate change on different crops and livestock, considering various warming scenarios up to 2050. Stakeholders, including experts from government ministries, academic institutions, research organizations, farmer groups, the private sector, and international development organizations, played a pivotal rolein analyzing and prioritizing these investments. Additionally, the CSAIP includes program design and implementation elements, incorporating economic analysis, priority setting, and an assessment of barriers and opportunities. The prioritized investments consist of two national-scale activities and five others targeting specific agro-ecological zones in Ethiopia. Within the portfolio, three investments concentrate on specific value chains: livestock, cereal, and animal feed. The remaining investments address specific agricultural development challenges through
targeted interventions. The two national-scale investments are as follows:
● Digital knowledge and advisory services: Involves developing and upscaling bundled digital agricultural
services to support information and content dissemination. This includes early warning, agro-climate advisory and market information, and financial services, including credit and insurance. By offering them as bundled services, the platforms will tie together various actors delivering CSA technologies, innovations, and management practices to Ethiopia’s smallholders at the end of the last mile.
● Improved animal breeding and health management system: Involves expanding the adoption of improved and resilient dairy cattle and poultry breeding resources for high production and reduction of methane emissions. This investment also involves strengthening the existing animal health system by improving livestock reproductive and health data recording. The five regional-scale investments are as follows:
● Dairy and poultry value chain efficiency (highland and midland agro-ecological zones): Involves promoting
CSA technologies and practices to enhance value addition and processing while reducing food loss and waste (FLW) in the dairy and poultry value chain. It also involves establishing commercially viable market linkages between producers and agro-processors in dairy and poultry supply chains.
● Improved forage production, management, and utilization (highland, lowland, and midland agro-
ecological zones): Involves integrating improved forage production, management, and utilization in dairy, cattle
fattening, and poultry value chains to ensure year-round access to quality feed and reduce methane emissions.
This investment will also support rangeland management practices in pastoral regions, ensuring the availability of adequate feed during dry seasons. Additionally, it will create employment opportunities for youth by facilitating the establishment of small and medium-sized enterprises for feed processing. Small-scale irrigation (highland, lowland, and midland agro-ecological zones): Involves promoting the adoption of water lifting technologies, including solar-powered irrigation pumps, treadle pumps, and R&W systems. It also incentivizes smallholder farmers and agro-pastoralists to utilize efficient and water-saving irrigation technologies such as drip, furrow, overhead, pivot, and gravity systems.
● Integrated soil fertility management (highland, lowland, and midland agro-ecological zones): Involves
promoting agronomic practices that enhance soil biomass and water retention capacity. It involves facilitating the
restoration of degraded soils through fertility management and conservation measures, minimizing environmental pollution through proper soil management, increasing the production of nutritious legumes, such as high-iron beans, and boosting farm revenues through improved soil productivity.
● Climate-resilient wheat varieties (highland, lowland, and midland agro-ecological zones): Involves
promoting heat and drought-tolerant, early maturing, and disease-resistant wheat varieties to boost production
and productivity.