Page 1 of 20

Journal for Studies in Management and Planning

Available at http://internationaljournalofresearch.org/index.php/JSMaP

e-ISSN: 2395-0463

Volume 01 Issue 11

December 2015

Available online: http://internationaljournalofresearch.org/ P a g e | 201

Analyses of Agricultural Development led Industrialization

(ADLI) Policy’s Effectiveness in Ethiopia

Belayneh Bogale Zewdie (BA, MPMP)

Lecturer, Department of Public Administration and Development Management, College of Business and

Economics, Dilla University, P.O. Box 419, Dilla, SNNPRS, Ethiopia:

E-mail: belaybog@yahoo.com

Abstract

To increase efficiency and effectiveness of

agricultural sector in Ethiopia and to create

conducive environment for investment and

industrialization, the Ethiopian government

has gone through a series of reform

processes including the Agricultural

Development Led Industrialization (ADLI)

policy. This study attempts to assess the

effectiveness of ADLI policy. Particularly

the rational and objectives, the measures and

instrument, the achievements and

impediments and the overall effectiveness

were investigated in the study. This is done

based on secondary data obtained from

different sources and key informant

interview. Accordingly, the ADLI policy

has outstanding objectives, instruments and

measures. Despite the pessimistic accounts

of agriculture as a leader of an Economy,

this paper reveals that there are some

positive findings. Considerable

achievements and improvements in the

agricultural sector were recorded as a result

of the introduction of the policy and

corresponding programs related to the

policy. Although the changes are not to the

expected level; these improvements appear

to be promising within the context of the

countries chronic poverty. However, several

practical and policy impediments like low

implementation capacity at Wereda level,

less attention for pastoral development, low

and ineffective technology generation and

dissemination, lees coordination among

stakeholders, and poor land management are

faced. In addition, the policy’s effectiveness

is found to be quite limited-analyzed from

two perspectives (share of the industrial

sector in the national GDP and Poverty

reduction).

Page 2 of 20

Journal for Studies in Management and Planning

Available at http://internationaljournalofresearch.org/index.php/JSMaP

e-ISSN: 2395-0463

Volume 01 Issue 11

December 2015

Available online: http://internationaljournalofresearch.org/ P a g e | 202

Key words: Industrialization, structural

change, Agricultural sector, development,

effectiveness Introduction

Ethiopia is one of the poorest economies in

the world where 45 percent of its rural

population and 37 percent of its urban

population resides below the absolute

poverty line (MOFED, 2002). The

prevalence of such grinding poverty is

structurally linked to the low growth and

productivity of Ethiopia’s subsistence

agriculture, the mainstay of 85% of its

population (UNDP, 2003). The farming

practice is traditional, inefficient and

vulnerable to the vagaries of nature as it is

primarily rain-fed. Productivity therefore

plummets once the rains shortfall and

famine strikes. The problem of food

insecurity has now become chronic where an

average of 4 million people needs food

assistance every year.

Fostering agricultural development, with a

view to attend domestic consumption and

foreign exchange earning crops to export,

has been a policy imperative articulated in

all drafted and endorsed development

policies of the country (Dires, 2005).

However, in deferent regimes the policies

and strategies have quite different

perspective up on the problem. This may be

caused due to differences in ideology and

economic philosophy.

According to Dires (2005), a central and

nationwide development plan was first

drafted in Imperial Ethiopia for a five years

period spanning 1957-1961. This document

referred to the subsistence agriculture and

cattle breeding of the peasantry as “obsolete

forms of economy” whose “degree of

integration into then various branches of the

economy has been relatively low”. It then

posits that the growth of Ethiopian

agriculture should be geared in manner

where the contribution of the sector could be

augmented through the establishment and

consolidation of an urban and industrialized

economy. This urbanization and

industrialization in turn “creates a higher

monetary demand and a strong incentive to

agricultural production.” In short,

industrialization became an overarching

development agendum in the Imperial

Ethiopia

The Derg, on its part, advocated

industrialization and the transformation of

agriculture along socialist lines to pump

drive industrialization. While the rural land

Page 3 of 20

Journal for Studies in Management and Planning

Available at http://internationaljournalofresearch.org/index.php/JSMaP

e-ISSN: 2395-0463

Volume 01 Issue 11

December 2015

Available online: http://internationaljournalofresearch.org/ P a g e | 203

reform that abolished feudal serfdom in

Ethiopia and redistributed land to the tillers

was highly commended by the peasantry,

subsequent coercive drives to collectivize

agriculture were met with skepticism and

defiance. The military junta that dressed

itself in socialist garb pursued its efforts

quite aggressively for other economic and

political reasons as well. Cooperatives and

Peasant Associations served as repositories

for surplus extraction by the government.

They functioned more as instruments of

state control and regimentation than as the

lowest tiers of local administration. Efforts

to consolidate and expand mechanized state

farms also faced a number of technical,

financial and managerial difficulties. Famine

and the insidious civil war also ravaged the

country’s economy (Hansson, 1995).

After the downfall of the Derg regime in

1991, the Transitional Government of

Ethiopia declared that a major part of the

budget and work force would be allocated to

rehabilitate and develop peasant agriculture.

However, ADLI as a policy of Ethiopian

government was developed in 1995.

Accordingly, the policy emphasizes

modernizing smallholder agriculture and

intensifying yield productivity through the

supply of appropriate technology, certified

seeds, fertilizers, rural credit facilities and

technical assistance. Hence, this research

critically analyzes the ADLI policies

effectiveness and come up with certain

conclusions and recommendations.

1. Statement of the Problem

The Agricultural development led

industrialization policy of Ethiopia (ADLI)

was developed in 1995. Despite the efforts

to intensify small holder agriculture for

more than one and half decade, ADLI with

its green revolution packages has not yet

realized its basic objective i.e. food self

sufficiency. The problem of food insecurity

has now become chronic where an average

of 4 million up to 5 million people needs

food assistance every year. Increases in

yield productivity were not consistent but

followed by abrupt and sharp declines. The

problem is further intensified by the

exponential growth of the Ethiopian

population at an annual rate of 2.7-2.9

percent.

Others set out to criticize the ADLI practice

as one that has not essentially helped in the

reduction of absolute poverty both in the

rural and urban areas. There is an excessive