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Invest in Ethiopia - Agriculture sector

This article will help you to understand about the agriculture sector of Ethiopia and we can assit you to invest in that sector in a pridominent and professional manner

Agriculture
Agriculture is the backbone of the Ethiopian economy. The sector contributes about 43% of the GDP and 86% of exports.  The export of Ethiopia is dominated by coffee and oil seeds, which together accounted to 50.6% in 2008/09. Other principal export commodities are ‘chat’, flowers, pulses, and live animals.
Ethiopia with 18 major agro-ecological zones and various agro-ecological sub-zones has a suitable climate for growing over 146 types of crops.

a) Food and beverage crops
Maize
Maize is an important crop in Ethiopia. It is grown in the mid highland areas of the country. There are huge tracts of land in all regions suitable for maize farming. Maize is mainly produced in SNNPR and Oromia regions where there are about 1.77 million hectares under cultivation.

Wheat and Barley Farming
Wheat and barley are mostly grown in the highlands and mid highland areas of the country mainly in Oromia (Bale and Arsi Zones) and some parts of Amhara (North Gondar and North Shewa) Regions. Wheat and barley are the main cereal crops in the country with about 1,095,436 and 1,398,215 hectares under cultivation, respectively. The potential for the private sector in agro-processing and out growers’ scheme of development is significant. It offers excellent opportunities for production of wheat under irrigation in the Afar, Gambella, SNNPR and Somali Regions.

Oil seeds and pulses
A variety of oil seeds (e.g. sesame, rapeseed, linseed, groundnut, sunflower, Niger seed, cotton seed, etc.) are grown in Ethiopia. The demand for sesame has been increasing in the global market making sesame an increasingly important export commodity in Ethiopia. In 2008/09, Ethiopia exported 287,000 tons of sesame valued at 356.1 million USD, accounting for 24.6% of the total export earnings. Rapeseed, linseed, groundnut, sunflower, Niger seed and cotton seed also serve as raw materials for the domestic edible oil industry.

Cultivation of pulses like beans, peas, chickpeas, lentils, soybeans, etc. is also common in Ethiopia. Cultivation is carried out in both the highland and lowland areas of the country mainly by peasant farmers. Currently, the country exports a large quantity of pulses to the international market. There are also a number of factories that process pulses in the country.

Rice Farming
Rice could suitably grow in many parts of the country. The predominant potential areas are:-

West central highlands of Amhara Region (Fogera, Gonder Zuria,Dembia, Takusa and Achefer);
North West lowland areas of Amhara and Benshangul Regions (Jawi, Pawi, Metema and Dangur);
Gameblla regional state (Abobo and Etang Woredas)
South and South West Lowlands of SNNPR (Beralee, Weyito, Omorate, Gura Ferda and Menit);
Somali Region (Gode);
South Western Highlands of Oromia Region (Illuababora, East and West Wellega and Jimma Zones).

Spices
The major spices cultivated in Ethiopia are ginger, hot pepper, fenugreek, turmeric, cummins, cardamoms, corianders and black pepper. Currently, there are nearly 122,700 ha under spice farming. Spice production reached 244,000 tonnes per year. The potential areas for the cultivation of spice are Amhara and Oromiya, SNNP and Gambella regions. The potential for low land spice farming is estimated to be 200,000ha.

Coffee
Ethiopia is one of Africa’s leading exporters of coffee generating most of its export earnings. Coffee is grown over 600,000 hectares, the largest of these areas lie in the south and south western highlands of the country.  More than 60% of Ethiopian coffee is produced as forest or semi-forest coffee. The four main coffee growing regions in Ethiopia are: Harrar, Ghimbi, Sidama /Yirgacheffe, and Jimma/Keffa.

The country has more genetic diversity among its coffee varieties than any other county.  Nine different varieties are cultivated in the four major growing areas.

Tea
Ethiopian tea is some of the best quality tea in the world. Ethiopia’s current annual tea production from three private estates is approximately 7000 tons of black tea per annum. The total area covered by tea plantation is 2700 ha and the country only produces black tea but has potential to grow all types of tea. Investment potential exists in large-scale commercial tea production and modern tea blending and packing industries. The tea industry in Ethiopia has been lacking investment. The Government has been proactive to increase private investment in tea plantations. As part of its privatization programme for state owned enterprises, in 2000, two estates covering 2,109ha for $27milliom USD were sold to private investors. Moreover, an Indian company that owns and runs the Tata Tea Estate has signed an agreement with a domestic owned private company to manage the tea estate. The company will transfer the latest technology of tea planting, growing, harvesting and manufacturing of black tea, assist in planting tea in 5,000 hectares of land and also have the option of investing in the equity of the company at a future date.

b) Horticultural crops
Fruits, vegetables and flowers
The climate, various soil types and access to water make Ethiopia favorable for the growing of fruits, vegetables and flowers. Major exportable fruits include citrus, banana, mango, papaya, avocado, guava, grapes, pineapple, passion fruit, apples and strawberries. Vegetables include potatoes, cabbage, cauliflower, okra, egg plant, tomato, celery, cucumber etc.

Currently a total of 1200 hectares of land is covered by more than 80 flower growers who came from the Netherlands, India and Israel as well as domestic investors.  The main cut flower exports include: statice, alliums, roses and carnations. The Ethiopian Horticulture Producer Exporters Association contains extensive information on the sector.

c) Livestock and Fishery
Ethiopia is first in Africa and tenth in the world for its livestock population. According to Central Statistics Agency (2008-2009), the country has 49 million heads of cattle, 17 million heads of sheep, 22 million heads of goats and 38 million chickens.

Ethiopia’s potential for fishery development is in its freshwater lakes, reservoirs and rivers. The total fish catch potential from these waters is estimated at 40,000 tons per year. There is also an opportunity for investment in the construction of aquaculture to produce fresh water fish for local and international markets.

This sector offers great investment opportunities. The potential for livestock and fisheries have not been fully exploited.

The investment opportunities in livestock and fishery are in:

    Meat processing;
    Dairy farming and milk processing;
    Raising and fattening of sheep, goat, cattle and camel; and
    Fish farming and processing.
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