In the transformation of agri-food systems in developing countries, we usually see rapid changes in the livestock sector. However, good data for clearly understanding this transformation are often lacking, especially so in Africa. Relying on a combination of diverse large-scale datasets and methods, we analyze transformation patterns in the dairy value chain supplying Addis Ababa, the capital and biggest city of Ethiopia. Over the last decade, we note a rapid increase in expenditures on dairy products by urban consumers, especially among the better-off. Relatedly, the number of dairy processing firms in Ethiopia tripled over the same period, supplying a significant part of these dairy products, especially pasteurized milk, to the city’s residents. The number of dairy traders increased rapidly as well, with competition between them becoming more intense over time. Upstream at the production level, we find improved access to livestock services, higher adoption of cross-bred cows, a shift from grazing to commercial feeds, an increase in milk yields, expanding liquid milk markets, a sizable urban farm sector supplying almost one-third of all liquid milk consumed in the city, and an upscaling process with larger commercial dairy farms becoming more prevalent. However, average milk yields are still low and not all dairy farmers are included in this transformation process. Small farms with dairy animals as well as those in more remote areas benefit less from access to services and adopt less these modern practices. For these more disadvantaged farmers, stagnation in milk yields and even declines – depending on the data source used – are observed.

Ethiopia has experienced impressive agricultural growth and poverty reduction, stemming in part from substantial public investments in agriculture. Yet, the agriculture sector now faces increasing land and water constraints along with other challenges to growth. Ethiopia’s Agrifood System: Past Trends, Present Challenges, and Future Scenarios presents a forward-looking analysis of Ethiopia’s agrifood system in the context of a rapidly changing economy. Growth in the agriculture sector remains essential to continued poverty reduction in Ethiopia and will depend on sustained investment in the agrifood system, especially private sector investment. Many of the policies for a successful agricultural and rural development strategy for Ethiopia are relevant for other African countries, as well. Ethiopia’s Agrifood System should be a valuable resource for policymakers, development specialists, and others concerned with economic development in Africa south of the Sahara.

Ethiopia stands out as one of the fastest growing African countries between 2009 and 2019, with an average annual GDP growth rate close to 10 percent (ESS 2020). The global COVID-19 pandemic coupled with an armed civil conflict that started in November 2020 and continued for two years caused a significant slowdown in economic growth during the 2020–2022 period. Ethiopia’s GDP growth is now projected to recover to 5.3 percent in 2023 and 6.1 percent in 2024 (World Bank 2023), remaining well below the growth rates achieved in the pre-pandemic era. Agriculture remains an important sector in Ethiopia, accounting for one-third of GDP and two-thirds of jobs. The agriculture sector, like the broader economy, performed well prior to the pandemic and civil conflict, averaging 5.5 percent growth from 2009 to 2019 (ESS 2020), and played an important role in weathering the global commodity market shocks during 2022–2023 (Diao and Thurlow 2023). In this brief, we look beyond primary agriculture to understand how Ethiopia’s broader agrifood system (AFS) is contributing to growth and transformation in the country.

Ethiopia has experienced impressive agricultural growth and poverty reduction, stemming in part from substantial public investments in agriculture. Yet, the agriculture sector now faces increasing land and water constraints along with other challenges to growth. Ethiopia’s Agrifood System: Past Trends, Present Challenges, and Future Scenarios presents a forward-looking analysis of Ethiopia’s agrifood system in the context of a rapidly changing economy. Growth in the agriculture sector remains essential to continued poverty reduction in Ethiopia and will depend on sustained investment in the agrifood system, especially private sector investment. Many of the policies for a successful agricultural and rural development strategy for Ethiopia are relevant for other African countries, as well. Ethiopia’s Agrifood System should be a valuable resource for policymakers, development specialists, and others concerned with economic development in Africa south of the Sahara.

Ethiopia’s food systems are rapidly evolving, being driven by major contextual changes including high population growth, rapid urbanization, infrastructure investments, and income growth. These changes are illustrated by dietary, agricultural, and supply chain transformations. These transformations in Ethiopia’s food systems are expected to continue at a rapid pace given similar even more pronounced changes going forward. We expect to see especially rapid growth in commercial food markets. This will have enormous implications on farming and on the required development of efficient private-led agricultural input supply, logistics, trading, and distribution sectors.

The perception of Ethiopia projected in the media is often one of chronic poverty and hunger, but this bleak assessment does not accurately reflect most of the country today. Ethiopia encompasses a wide variety of agroecologies and peoples. Its agriculture sector, economy, and food security status are equally complex. In fact, since 2001 the per capita income in certain rural areas has risen by more than 50 percent, and crop yields and availability have also increased. Higher investments in roads and mobile phone technology have led to improved infrastructure and thereby greater access to markets, commodities, services, and information. In Food and Agriculture in Ethiopia: Progress and Policy Challenges, Paul Dorosh and Shahidur Rashid, along with other experts, tell the story of Ethiopia's political, economic, and agricultural transformation. The book is designed to provide empirical evidence to shed light on the complexities of agricultural and food policy in today's Ethiopia, highlight major policies and interventions of the past decade, and provide insights into building resilience to natural disasters and food crises. It examines the key issues, constraints, and opportunities that are likely to shape a food-secure future in Ethiopia, focusing on land quality, crop production, adoption of high-quality seed and fertilizer, and household income. Students, researchers, policy analysts, and decisionmakers will find this book a useful overview of Ethiopia's political, economic, and agricultural transformation as well as a resource for major food policy issues in Ethiopia. Contributors: Dawit Alemu, Guush Berhane, Jordan Chamberlin, Sarah Coll-Black, Paul Dorosh, Berhanu Gebremedhin, Sinafikeh Asrat Gemessa, Daniel O. Gilligan, John Graham, Kibrom Tafere Hirfrfot, John Hoddinott, Adam Kennedy, Neha Kumar, Mehrab Malek, Linden McBride, Dawit Kelemework Mekonnen, Asfaw Negassa, Shahidur Rashid, Emily Schmidt, David Spielman, Alemayehu Seyoum Taffesse, Seneshaw Tamiru, James Thurlow, William Wiseman.

The impact of food taboos – often because of religion – is understudied. In Ethiopia, religious fasting by Orthodox Christians is assumed to be an important impediment for the sustainable development of a competitive dairy sector and desired higher milk consumption, especially by children. However, evidence is limited. Relying on unique data, we shed light on three major issues. First, we observe that the average annual number of fasting days that Orthodox adults are effectively adhering to is 140, less than commonly cited averages. Using this as an estimate for extrapolation, fasting is estimated to reduce annual dairy consumption by approximately 12 percent nationally. Second, farms adapt to declining milk demand during fasting by increased processing of milk into storable products – fasting contributes to larger price swings for these products. We further note continued sales of milk by non-remote farmers and reduced production – by adjusting lactation times for dairy animals – for remote farmers. Third, fasting is mostly associated with increased milk consumption by the children of dairy farmers, seemingly because of excess milk availability during fasting periods. Our results suggest that fasting habits are not a major explanation for the observed poor performance of Ethiopia’s dairy sector nor low milk consumption by children. To reduce the impact of fasting on the dairy sector in Ethiopia further, investment is called for in improved milk processing, storage, and infrastructure facilities.