Agricultural Business Challenges in Ethiopia

Business challenges in Agriculture The following points highlight the major Agriculture business challenges

1. Population Pressure: Land is limited, and has almost reached the level where more expansion in cultivated area is not possible. The growth in population creates immense pressure on land.

2. Addressing Climate Change Challenges Climate change is very likely to affect food security at the global and Ethiopia, regional, and local level. Climate change can disrupt food availability, reduce access to food, and affect food quality. For example, projected increases in temperatures, changes in precipitation patterns, changes in extreme weather events, and reductions in water availability may all result in reduced agricultural productivity. Increases in the frequency and severity extreme weather events can also interrupt food delivery, and resulting spikes in food prices after extreme events are expected to be more frequent in the future. Increasing temperatures can contribute to spoilage and contamination. Any climate-related disturbance to food distribution and transport, internationally or domestically, may have significant impacts not only on safety and quality but also on food access

3. Technology Infrastructure Most of developing countries including Ethiopia, have a poor internet and telecom infrastructure. This issue is big obstacle to digitalize agriculture products. In contrast, a digital agriculture system gathers data more frequently and accurately, often combined with external sources (such as weather information). The resulting combined data is analysed and interpreted so the farmer can make more informed and appropriate decisions.

4. Broker (Middlemen) Involvement Broker (Middlemen) hike the cost of the product, which is reflected in the selling price. The cost of distribution increases in view of the presence of middlemen in the market. The entire burden finally falls on the consumer and the farmer will not get enough profit. Over the years the system of intermediaries has ensured that the prices are kept down for farmers and up for consumers, with middlemen making the profit. Experts say that removing fruit and vegetables from the control of middlemen would allow the produce to find its true market value and damp down inflation.

5. Low Productivity of Agriculture The main causes for low productivity of agriculture are broadly of several types;

A) Traditional methods of cultivation like manual ploughing, two crop pattern and old system of irrigation are mainly responsible for low productivity of agriculture.

B) Plant diseases like rust and smut and rats, insects and pests destroy large portion of crops.

C) Credit facilities are inadequate in rural areas. Farmers can not be able to raise credit from rural banks easily.These money lenders charge heavy rate of interest. Farmers have to sell their produce at low price to these money lenders. So farmers have low Income and thus low productivity.

D) Improper marketing is a significant factor for low productivity of agriculture. Farmers fail to get suitable price for their produce. Inadequate means of transport forces the farmers to sell their produce to local brokers (middlemen) at low prices. Due to lack of warehousing facilities, farmers can not able to store their produce when prices are low. So these attribute a lot for low productivity of agriculture.

E) Land holdings in Ethiopia are of very small size. These holdings are fragmented. Due to these small holdings, mechanized cultivation is difficult. Implements and irrigation facilities are not properly utilized. It affects Ethiopian agriculture .

6. Decline in Soil Fertility For an agricultural country like Ethiopia, soil is a precious resource, and degradation- of soil is a serious problem, which leads to depletion of soil fertility. Soil erosion is the main form of degradation which occurs because of deforestation and unscientific agricultural practices like shifting cultivation. Increasing salinity, alkalinity and aridity because of mismanagement and repeated use are other reasons for loss of soil fertility.

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