WASHINGTON, September 30, 2010 – The World Bank Board of Executive Directors today approved funding of US$150 million (US$108.4 million as credit and the remaining US$41.6 million as grant) to the Government of Ethiopia to support increased agricultural productivity, enhanced market access for key crop and livestock products, and improved food security.
Using funds from the International Development Association (IDA) – the World Bank’s fund for the world’s poorest countries – and in collaboration with other donors, the Agricultural Growth Program (AGP) will initially target 83 high-potential woredas (districts) with increased participation of farmers, particularly women and youth, in defining the support they need to raise productivity and access markets.
Agriculture in Ethiopia is the largest contributor to overall economic growth and poverty reduction. Accounting for about 45 percent of national GDP, almost 90 percent of the goods exports and 84 percent of the labor force, agriculture remains the economy's most important sector. The livelihood of most of the rural population, of which about 39.3 percent live below poverty line, is fully or partially dependent on agriculture. Ethiopia has significant agricultural potential because of its water resources, its fertile land areas, and its large labor pool but the potential remains underdeveloped.
“This project will bring much-needed attention to a critical sector that can help the Government of Ethiopia address food security, increase its resilience to climate variability, and promote jobs and small business development,” said Karen Brooks, World Bank Sector Manager for the Africa Region Agriculture Department.
Developing the agricultural sector is central to the Government’s development strategy and an important element of the current World Bank Country Assistance Strategy (CAS) for Ethiopia. In many countries in Africa, the World Bank is working with development partners to advance responsible agricultural investments that respect rights, livelihoods, and resources. Other development partners are expected to complement this World Bank-financed project in Ethiopia to create a harmonized and comprehensive program of donor support for agriculture.
The AGP will support the Government in reducing food insecurity, vulnerability and environmental degradation by:
- providing farmers with improved access to knowledge and information, market, finance and other services through support from key public and private institutions, including farmer organizations and public advisory services;
- increasing agricultural productivity and household income by scaling up best practices among farmers and rural businesses as well as in public sector institutions;
- strengthening value chains to increase the value and volume of sales of key selected agricultural commodities;
- supporting small-scale agricultural water development and management that would strengthen the management of micro-watersheds and thereby increase agricultural production and income, reduce environmental degradation, and mitigate weather-induced risks including those related to climate change; and
- supporting the establishment or upgrading of rural roads and physical markets to improve market access for agricultural produce and, thereby, farmers’ income.
“We are encouraged by the engagement of so many stakeholders: farmers, their organizations, the private sector, as well as other government and non-government institutions. We expect significant results for millions of farmers and their communities. The AGP will also contribute to Ethiopia’s goals to reduce poverty and reverse environmental degradation,” said Achim Fock, Senior Economist in the World Bank Africa Region Agriculture Department.
The project will be implemented by the Ministry of Agriculture and Rural Development.
