Private Sector in Agriculture
Why is transformation needed in this program area?
Ethiopia has set ambitious goals for the transformation of the agriculture sector, with private sector partners expected to play an increasing role in the Transformation Agenda. This private sector participation will become even more critical in the years to come, as Ethiopian agriculture strives to move from subsistence based, low-input/low-output farming, to one that is more market-oriented and integrated into the global food system. This will ensure that interventions are more efficiently executed and ultimately financially sustainable.
Today, many of the Transformation Agenda’s interventions have resulted in improved yields and productivity. However, further improvements are needed to make Ethiopia a world-class market. The private sector can bring added innovation, experience, and capital to improve productivity outcomes, via such programs as the agribusiness incubator which helps new and existing agribusinesses by providing varied business experience, proven methodologies, and access to resources.
In addition, private sector investment in agribusiness helps to form demand markets for smallholder farmers. Building the capacity of the private sector is critical to sustaining the transformation process, particularly as it relates to catalyzing a virtuous cycle for long-term financial viability. Enhanced capacity at private organizations – such as rural SMEs, cooperatives, agribusinesses, and value addition partners – will be crucial to the growth of industries that create the demand for agricultural raw materials produced by smallholder farmers.
What are the objectives and focus areas of this program area during GTP II?
The Private Sector in Agriculture program aims to effectively engage private investors and corporations in the Ethiopian agriculture sector, with the ultimate aim of connecting smallholder farmers with commercial, market-focused supply chains to increase incomes and improve livelihoods.
The program will take a highly consultative approach, working with key stakeholders in the government, private sector, and development sector to engage serious investors early and in a meaningful way. The aim will be to understand their interests and concerns, work alongside these organizations to identify promising opportunities for investment, clarify the nature of these opportunities (i.e., expected requirements, and financial and social returns), and help to navigate the local agricultural environment. As an example, the Private Sector in Agriculture program is currently working on developing detailed investment cases on opportunities in the poultry and soybean, cattle, fruit and vegetables, and wheat value chains. Other investment opportunities analyzed include malt barley, chickpea, sesame, maize, and tef, among others.