Agricultural Technology and Equipment Sector Profile - Ethiopia
Sector Overview
Ethiopia is one of the fastest growing non-oil dependent economies in Africa. The Ethiopia economy
is primarily based on agriculture accounting for 41% of gross domestic product (GDP). The combined
output of the sector is largely generated from the exports of coffee, sesame, vegetables, beans,
oilseeds and dry salted sheep skins. Within the Growth and Transformation plan[1], the agriculture
sector continues to be the major source of economic growth and is expected to grow on average by
8.6% per annum.[2]
To achieve this, strategies have been designed to increase agricultural production, improve nature
resource management, improve disaster prevention and preparedness capacity, and widen access to
agricultural markets to ensure food security. This includes the shift to produce high-valued crops to
support the development of large-scale commercial agriculture.[3] The government has identified
over 3 million hectares of land to transfer to investors to establish large-scale commercial farms,
through the Agricultural Investment Agency.[4]
Generally, Ethiopian agriculture is characterized by small-scale, rain-fed farming with limited use of
modern inputs. On average, 83% of rural households cultivate crops on less than 2ha per household
and 52% on less than 1 hectare.[5]
Background
There are 111.5 million hectares of land in Ethiopia, 74.5 million hectares of which is suitable for
agriculture, and 13.6 million hectares of which is currently under production.[6]
Farmers produce cereal crops (wheat, barley, corn, rice), oil seeds (sesame, Niger seeds, canola,
linseed, ground nuts and sunflower, lentils), pulses (soya beans, haricot beans, chickpeas, beans and
lentils), beverage crops (coffee and tea), cotton, horticulture and apiculture.
There are considerable opportunities for expanding the cultivation and export of cut flowers, dried
fruits, and canned vegetable products. Ethiopia is already the leading producer and exporter of honey
and beeswax in sub-Saharan Africa. With over five million beehives, Ethiopia produces about
54,000 tons of honey per year.
Coffee is the highest revenue earner with exports of $841.8 million in 2010/11; while the
flower/horticulture sector has recently become a high revenue export earner.Ethiopia's production of
cotton and sugar cane cannot keep up with local demand.
Large scale commercial agriculture has expanded partly due to foreign direct investment. The
Ethiopian government is seeking private sector investors to help modernise the agricultural sector
and help it produce more efficiently, particularly with large-scale commercial farming and agroindustrial activities. Ethiopia has created a more attractive investment climate in recent years by
providing potential investors with various tax breaks, access to affordable land, and a relatively
efficient investment process.[7]
The government plans to spend about USD 4.4 billion in agriculture during the GTP period 2010/11-
2014/15. Initiatives will be undertaken such as the importation and adaptation of existing and proven
technologies, including agricultural mechanization, research on crop, livestock and natural resources.
[8] The agricultural sector suffers from poor cultivation practices, overgrazing, deforestation,
underdeveloped water resources and drought. According to the Ministry of Agriculture, Ethiopia is
estimated as having one of the highest rates of soil nutrient depletion in Sub-Saharan Africa.
Opportunities and Challenges
Ethiopia has a wide-range of ecological and climatic zones suitable for agricultural investment. The
use of improved seeds combined with fertilizer and better agronomic practices have been identified to
be instrumental in attaining higher yield agricultural crops. However, problems with the quantity and
availability of seeds[9] and fertilizer are widespread.[10].
Several products show significant potential for investment. Downstream industries (processing
agricultural products such as dairy, edible oil processing, beverages, meat processing, coffee and tea
processing, textiles and garments, leather products, wood and wood processing, paper and paper
products, rubber products and biofuel products) offer business opportunities in the range of
$3.6 billion per year and upstream industries (supplying inputs to farmers such as fertilizer, seeds,
irrigation system, agricultural equipment, cold storage and pesticide) offer business opportunities in
the range of $0.5 billion per year.
The major agricultural imports in Ethiopia are agricultural and industrial chemicals, hybrid seeds,
fertilizers, irrigation equipment and agricultural machinery.[11] As shown below, in 2008, Ethiopia
imported almost $175 million worth of agricultural machinery, of which the two largest components
were tractors ($138.7 million) and harvesters and threshers ($23.3 million).
Top Ethiopian Agricultural Machinery Imports
2006
Tractors
Harvester and Threshers
Soil Machinery
Milking Machinery
Total
2007
2008
$172,900,000
$188,800,000
$138,700,000
$36,100,000
$33,900,000
$23,300,000
$1,600,000
$3,800,000
$7,100,000
$200,000
$600,000
$300,000
$216,700,000
$230,700,000
$175,000,000
Source: Food and Agricultural Organization
Other types of agricultural machinery and equipment imported into Ethiopia include machinery for
cleaning and sorting eggs, forestry and bee keeping equipment, machinery for cleaning, sorting and
grading seeds, implements (ploughs, harrows, mowers, fertilizer spreaders) and straw balers. There
are also imports of spare parts for various agricultural machinery and equipment. There are no import
duties levied on agricultural machinery.
According to the World Bank Development Indicators, there were 3,000 tractors in Ethiopia in 2008, a
relatively low number compared to Kenya and Tanzania with 14,000 and 21,500 tractors,
respectively. Ethiopia had 2.1 tractors per 100 km² of arable land compared to 26.9 and
23.9 tractors per 100 km² of arable land for Kenya and Tanzania, respectively.
Ethiopia’s agriculture is characterized by its low level of mechanization and makes the sector ripe for
technological adaptation and attractive to investors, both foreign and domestic. There were no
exports of Canadian agricultural machinery to Ethiopia during 2009-2011. There are opportunities for
agricultural equipment and technology in view of the need to replace old agricultural machinery and
new requirements arising from the establishment of commercial farms and expansion of state-owned
sugar plantations. Opportunities exist for agricultural tractors, combine ploughs, planters, seeders,
fertilizers, pesticides, agribusiness consulting and value chain services.
Most procurement by government organizations and state-owned enterprises is done through tenders
that are open to foreign participation. Traders or input dealers and local/regional bureaus of
Agriculture and Primary cooperatives are the primary interlocutors to access the market.
Ethiopia ranks 127th out of 185 countries in the World Bank’s Ease of Doing Business Report 2013.
[12] The government has put in place a regulatory framework for biosafety in Ethiopia.[13] The law
places regulatory procedures on the import of food commodities containing modified organisms. These regulations
could pose barriers to trade in both processed and raw food products, as well as a variety of agricultural products.
C orn, soy and cotton derivative products are among the potentially affected products.
There are also product specification requirements. Currently, the imports that require product
certification are food stuffs, construction materials, chemicals, textiles, and pharmaceuticals. The
Ethiopian Standards Authority[14] and Ethiopian Conformity Assessment Enterprise[15] should be
contacted for updates regarding product standards and certification of additional products.
Key Participants
The government, including state-owned enterprises, is a major buyer of goods and services.
Government procurement is mostly conducted through tenders. The tender announcements are made
public to all interested potential bidders, regardless of nationality of supplier or origin of the
products/services. Both Ethiopian and foreign suppliers, especially those from Italy, Israel, the
Netherlands, the United Kingdom, and China, who have local representatives, participate aggressively
and tend to compete successfully. North American companies with the most significant presence and
participation in Ethiopia's agricultural machinery market includes Caterpillar and John Deere.
To conduct business effectively and participate in local tenders, it is advisable for Canadian firms to
appoint local agents to represent their products in Ethiopia. The government of Ethiopia requires that
all imports (except for LPG, Bitumen, unless approved by the council of ministers) are channeled
through Ethiopian nationals registered as official import or distribution agents with the Ministry of
Trade. Primary cooperatives, traders or input dealers and local bureau of agriculture have been
identified as key focal points in gaining market entry. Foreign companies with prospects of
participating in such bids should keep a close eye on information flows in government media and the
United Nations Development Business.
Government tenders for projects are mostly financed by the World Bank through the International
Development Association or the African Development Bank.
The Ethiopia Investment Authority (EIA) is responsible for coordinating new investments from foreign
and domestic sources, although each of the nation's eleven administrative regions (nine autonomous
states and two special administrative regions) has its own investment bureau, with growing
capacities for promoting localized investment.
The Ministry of Agriculture has recently established an Agricultural Investment Agency to administer
the allocation of rural land for investment purposes above 5,000 hectares. The regions can authorize
land allocation below 5,000 hectares.
Public and Private Sector Customers
Public
The Agricultural Equipment and Technical Service
Agricultural Mechanization Service Corporation was established to render agricultural mechanization
(land preparation, ploughing, fertilizer and seed application, harvesting and transport); and related
services such as agricultural machinery maintenance services; training of agricultural machinery
operators and purchasing and selling agricultural machinery. Its clients consist of small holder
farmers, state agricultural enterprises and commercial farms.
State-Owned Large-scale Farms
The Bale Agricultural Development Enterprise and Arsi Agricultural Development Enterprises, both
state-owned, are involved in the growing of crops (wheat, barley, canola, linseed,) and operate large
farms with an area of 23,000 hectares. They use various types of agricultural machinery (tractors,
combine harvester and implements).
Hiwot Agricultural Mechanization Plc. is an endowment enterprise operating on an area of
9,500 hectares and grows sesame, sorghum and cotton.
Sugar Corporation: The existing Wonji, Metahara and Finchaa sugar factories are users of various
types of agricultural machinery. In additions to these, the government has plans to establish 10 new
sugar factories including large-scale irrigated sugar cane farms.
Commercial Farms
Karaturi Global Ltd. owns a farm of 100,000 hectares and plans to grow maize, rice, palm oil and
sugar cane. It has acquired its first fleet of John Deere tractors in the range of 425-475 horse power
each and expects to acquire more. The estimated cost of Karaturi’s project is $1.4 billion.
Saudi Star Agricultural Development has acquired land with an area of 129,000 hectares and plans to
invest $2.5 billion. So far the company has spent $121 million on purchasing equipment and some
$32 million on the procurement of other necessary materials. The company plans to grow grain, oil
seeds, sugar cane and eventually rice.
There are over 30 companies[16] who have recently secured land for commercial large scale farming.
In addition, there are over 73 companies[17]engaged in horticulture production.
Importers of Agricultural Machinery and Equipment
Ries Engineering S.C.
P.O. Box 1116, Addis Ababa, Ethiopia
Tel.: +251-11-442-1133
Fax: +251-11-442-0667
E-mail:
resco@ethionet.et
Motor Engineering Co. of Ethiopia
P.O. Box 5727, Addis Ababa, Ethiopia
Tel.: +251-11-661-3688
Fax: +251-11- 661-1766
E-mail:
moenco@ethionet.et
Nyala Motors
P.O. Box 1194, Addis Ababa, Ethiopia
Tel.: +251-11-661-3114
Fax: +251-11-661-1888
E-mail:
nyala.motors@ethionet.et
Gaky Engineering & Automotive Plc.
P.O. Box , 8524 Addis Ababa, Ethiopia
Tel.: +251-11-465-4000
Fax: +251-11-465-3763
E-mail:
gaky@ethionet.et
MGK Plc.
P.O. Box 746 , Addis Ababa, Ethiopia
Tel.: +251-11-662-8134
Fax: +251-11-662-8135
E-mail:
mgk@ethionet.et
Elfora Agro Industries Plc.
P.O. Box 2500, Addis Ababa, Ethiopia
Tel.: +251-11-320-6596
Fax: +251-11-320-6562
E-mail:
elfora@ethionet.et
Agricultural Mechanization Service Corporation
P.O. Box 62306, Addis Ababa, Ethiopia
Tel.: +251-11-552-6511
Fax: +251-11-553-5799
Sugar Corporation
P.O. Box 20034/1000, Addis Ababa, Ethiopia
Tel.: +251-11-552-7475
Fax: +251-11-515-1283
E-mail:
esisew@ethionet.et or
info@etsugar.gov.et
Hagbes Plc.
P.O. Box 1044, Addis Ababa, Ethiopia
Tel.: +251-11-552-233
Fax: +251-11- 551-113
E-mail:
hagbes@ethionet.et
Angereb Plc.
P.O. Box 90505, Addis Ababa, Ethiopia
Tel.: +251-11-646-1801
Fax: +251-11-646-1798
E-mail:
agent@ethionet.et
Gedeb Engineering Plc.
P.O. Box 1502/1110,Addis Ababa, Ethiopia
Tel.: +251-11-466-4261
Fax: +251-11-416-7939
E-mail:
ukieew@ethionet.et
Kaleb Service Farmers House Plc.
P.O. Box 9594,Addis Ababa, Ethiopia
Tel.: +251-11-439-1459 / +251-11-439-3675
Fax: +251-11-439-3674
E-mail:
skaleb@ethionet.et
Farmatech International Plc.
P.O. Box 24021/1000, Addis Ababa, Ethiopia
Tel.: +251-11-662-4696 / +251-11-662-6794 / +251-11-651-9475
Fax: +251-11-663-6338
E-mail:
frehiwot@ethionet.et
Abeba Giday Trading House Plc.
P.O. Box 7512,Addis Ababa, Ethiopia
Tel.: +251-11-646-3498 / +251-11-646-3501 / +251-11-646-3500
Fax: +251-11-646-3499
E-mail:
abebapvt@ethionet.et
Adeb Trading Plc.
P.O. Box 3104, Addis Ababa, Ethiopia
Tel.: +251-11-442-6721
Fax: +251-11-442-4871
E-mail:
adebeng@ethionet.et
Agricultural Equipment & Technical Services S.C
P.O. Box 5575, Addis Ababa, Ethiopia
Tel.: +251-11-442-4177
Fax: +251-11-442-3613
E-mail:
aetse@ethionet.et
Disclaimer: This list is not comprehensive and inclusion does not constitute an endorsement or
recommendation by the Government of Canada
Agriculture Related Laws and Regulations
Biosafety proclamation no 655/2009
Seed Proclamations No: 206/2000
The proclamation introduces rules and measures to ensure production and availability of high quality
seeds for agricultural and horticultural purposes of Ethiopia. It creates a legal framework for the
protection and control of the interests of users of seeds, originators, processors and traders of seeds
Plant Breeders’ Right Proclamation No: 481/2006 available at Legislation Ethiopia (Lexadin)
Animal Diseases Prevention and Control Proclamation No: 267/2002available at Legislation
Ethiopia (Lexadin)
This proclamation provides for the prevention and control of diseases affective animals.
Forest Development, Conservation and Utilization Proclamation No: 542/2007
The proclamation provides for the conservation, development and sustainable utilization of forest
resources in Ethiopia. It defines various measures for the promotion of forest development including
the granting of rural land to private individuals and organizations, and the development of state
production forests on a concession basis.
References
Chanyalew et al (2010), Ethiopia's Agriculture Sector Policy and Investment Framework: Ten Year
Road Map (2010-2020)
Central Statistical Agency, Bulletin Volume 1; May 2012
Ethiopian Investment Agency
Ethiopian Standard Authority
Ethiopian Conformity Assessment Enterprise
Ethiopian Agriculture Portal
Ethiopian Agriculture Transformation Agency
Ethiopian Horticulture Producers and Exporters Association
Food and Agriculture Organization: Investment Policy Support: Foreign Agricultural Investment
Country Profile: Ethiopia 2011
International Food Policy Research Institute: Input Use in Ethiopia:
Results of the 2012 ATA
Baseline Survey: 19th April 2013
Ministry of Finance and Economic Development (MOFED) 2010,
Growth and Transformation Plan
Ministry of Agriculture
National Bank of Ethiopia, Quaterly Bulletin First Quarter 2012/13, Volume 29 No. 1
World Bank Ease of Doing Business Ethiopia
Contacts
Embassy of Canada
Nefas Silk Lafto K.K., Kebele 04, House#122
Addis Ababa, Ethiopia
Contact: Baharnesh Mesfin Teshome, Trade Commissioner
Tel.: (251-11) 371-3350
Fax: (251-11) 371-3040
Email:
baharneshmesfin.teshome@international.gc.ca
Agriculture and Agri-Food Canada
Sir John Carling Building
930 Carling Ave
Ottawa, ON K1A 0C5
Contact: Arab Sekhi, Senior International Market Development Officer
Tel.: (613) 759-1000
Fax: (613) 759-6726
E-mail:
sekhia@agr.gc.ca
Agricultural Manufacturers of Canada (AMC)
Stockman's Arena
Regina Exhibition Park
P.O. Box 636 Stn. Main
Regina, SK S4P 3A3
Tel: (306) 522-2710
Fax: (306) 781-7293
E-mail:
amc@a-m-c.ca
Association of Equipment Manufacturers
1398 Treeland Street
Burlington, ON L7R 4S1
Tel: (905) 632-8483
Fax: (905) 632-7138
Canadian Federation of Agriculture
75 Albert Street, Suite 1101
Ottawa, ON K1P 5E7
Tel: (613) 236-3633
Fax: (613) 236-5749
E-mail:
info@cfafca.ca
Canadian Food Exporters Association (CFEA)
885 Don Mills Road, Suite 301
Don Mills, ON M3C 1V9
Tel: (1-888) 227-8848
Fax: (416) 510-8044 / (416) 510-8043
E-mail:
info@cfea.com
Foreign Affairs, Trade and Development Canada (DFATD)
125 Sussex Drive
Ottawa, ON K1A 0G2
Tel: 613-944-4000
Fax: 613-996-9709
Industry Canada
Manufacturing and Processing Technologies Branch (Prairie and Northern Division)
123 2nd Ave. S, 7th Floor
Saskatoon, SK S7K 7E6
Contact: Bob McKenzie, Regional Manager and Co-ordinator
Tel.: (603) 975-4391
Fax: (603) 975-5334
E-mail:
mckenzie.bob@ic.gc.ca
[1] The Growth and Transformation plan (GTP) is the national planning document of Ethiopia for the
period 2010/11-2014/15.The overall objective of the GTP is to sustain broad based, fast and
equitable economic growth.
[2] Ministry of Finance and Economic Development (MOFED) 2010,
Plan
Growth and Transformation
[3] Ministry of Finance and Economic Development (MOFED) 2010,
Plan
Growth and Transformation
[4] The government has established a “land bank” to facilitate the process through which investors
acquire land. Investors are required to prove their financial capacity to undertake their proposed
investment plans. There are land lease fees which differ from region to region and from one type of
investment to another. The Agricultural Investment Agency has been formed to administer this task.
[5] FAOSTAT
[6] Central Statistical Agency, Bulletin Volume 1; May 2012
[7] Ethiopian Investment Agency
[8] To overcome these issues, the government has established the Ethiopian Agriculture
Transformation Agency - to increase yield and productivity of the agricultural sector
[9] With a special focus on the availability of hybrid seeds
[10] Chanyalew et al (2010), Ethiopia's Agriculture Sector Policy and Investment Framework: Ten
Year Road Map (2010-2020)
[11] FAO: Foreign Agricultural Investment Country Profile Ethiopia
[12] World Bank Ease of Doing Business Ethiopia
[13] Ethiopia Biosafety Proclamation
[14] Ethiopian Standard Authority
[15] Ethiopian Conformity Assessment Enterprise
[16] Ethiopian Agriculture Portal
[17] Ethiopian Horticulture Producers and Exporters Association