The State of Subsistence Agriculture in Ethiopia

Agriculture dominates the Ethiopian
economy, accounting for about 50 percent of its GDP and 82
percent of its employment. However, the sector has always
performed poorly. The largest proportion of farmers live
below the poverty line and few and poorly provided social
amenities are available in rural areas. Sectoral-level data
shows that the farmers in Ethiopia use little modern
inputs, output per hectare is low, and land holdings have
been increasingly fragmented. Although fertilizer is the
most widely used modern input, application rates are
abysmally low. Use of improved seeds and pesticides is
almost nonexistent. Among a group of comparable countries
Ethiopian farmers performed the poorest. If Ethiopian
farmers were to achieve the average yield levels reported
in these countries it would at least be self-sufficient in
cereals production. This study used panel data to analyze
the sources of output growth and technical efficiency among
subsistence farmers in Ethiopia. A stochastic frontier
analysis (SFA) was used to assess the variation in
technical efficiency in addition to accounting for the
sources of growth in agricultural output.