Agricultural development in Ethiopia

ADDIS ABABA UNIVERSITY DEPARTMENT OF

POLITICAL SCIENCE AND INTERNATIONAL RELATIONS

A
SSI
GN
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Analysis Based on Dependency Theory of Development By Esayas Girmay

 Agricultural development in Ethiopia

NT PAPER FOR THE PARTIAL FULFILMENT OF THE

COURSE:

Political Dynamics of Development in Ethiopia- PSIR

The post 1991 Agricultural development

strategy and practice of Ethiopia:
As evaluated in relation with the
Dependency theory of development

By: Esayas Girmay et al. (BSc, BA (prospective))

E_girmay@yahoo.com

31st DECEMBER, 2008

Analysis Based on Dependency Theory of Development By Esayas Girmay

 Agricultural development in Ethiopia

1. INTRODUCTORY REMARKS
1.1.Background
This paper is prepared for the partial fulfillment of the course “Political
Dynamics of development in Ethiopia-PSIR 441”.
The goal of this research paper is to conduct a group assessment on the title
"The post 1991 Agricultural development strategy and practice of
Ethiopia-as evaluated in relation with the Dependency theory of
development" – where the current agricultural development experience of
Ethiopia is examined within the framework of Dependency theory of
development.

1.2.Rationale
The rationales behind choosing the aforementioned title for our term paper are
the following:
1.2.1.The fact that Ethiopia is a country categorized under the least
developed countries and the similarity of its economical situation to
that of the unfortunate poor countries.
1.2.2.The relevance of the application of Dependency theory to Ethiopia’s
economic development in terms of agricultural development.

1.3.Methodology and Organization of the Paper

Our team has gone through some books and printed materials as well as
browsed number of relevant articles on the Internet. Furthermore, a series of
thorough discussion sessions have been held to further develop the ideas
gathered through the process and organize our ideas to come up with term
paper that is expected at this level.

Analysis Based on Dependency Theory of Development By Esayas Girmay

 Agricultural development in Ethiopia

With regard to the organization of the paper, this document is organized in 5

different sections. We will present the introductory part of the paper in section
1. This section will contain the background of the paper, the rationales behind
choosing the aforementioned title and the methodology of the paper. Then
section 2 will be the beginning of the body of the paper. In this section, we will
present a brief explanation of the theory of dependency along with its basic
prescriptions for the underdeveloped countries. Section 3 is dedicated to the
precise explanation agricultural development in Ethiopia. Section 4 will be the
major section of this paper as it holds the analysis of the application of the
theory of dependency in Ethiopia’s agricultural development. The analysis
conducted within the framework of Ethiopian agricultural practices and
outcomes in relation to the prescriptions of the dependency theory. Finally, we
will conclude in section 5 followed by a list of reference materials which we
used for this paper.

2. DEPENDENCY THEORY OF DEVELOPMENT

In this section, we will first present the background information about the
theory of dependency along with its major arguments, development
prescriptions as well as criticisms to provide the foundations on which we can
base our analysis of the Ethiopian agricultural development vis-a-vis the
dependency theory of development.
Theotonio Dos Santos as quoted in Vincent Ferraro’s article defines dependency
theory as “a historical condition which shapes a certain structure of the world
economy such that it favors some countries to the detriment of others and
limits the development possibilities of the subordinate economics...a situation
in which the economy of a certain group of countries is conditioned by the
development and expansion of another economy, to which their own is
subjected”.
The famous online dictionary Answers.com in its turn defines dependency
theory as “a group of hypotheses which assert that low levels of development in

Analysis Based on Dependency Theory of Development By Esayas Girmay

 Agricultural development in Ethiopia

less developed countries spring from their dependence on the advanced

economies”.
The other internationally used online encyclopedia- Wikipedia defines the
concept as “a body of social science theories, both from developed and
developing nations, which are predicated on the notion that resources flow
from a "periphery" of poor and underdeveloped states to a "core" of wealthy
states, enriching the latter at the expense of the former”.
According to Vincent Ferraro, Dependency Theory was developed in the late
1950s under the guidance of the Director of the United Nations Economic
Commission for Latin America, Raul Prebisch. Prebisch and his colleagues
were troubled by the fact that economic growth in the advanced industrialized
countries did not necessarily lead to growth in the poorer countries. Indeed,
their studies suggested that economic activity in the richer countries often led
to serious economic problems in the poorer countries. Such a possibility was
not predicted by neoclassical theory, which had assumed that economic growth
was beneficial to all (Pareto optimal) even if the benefits were not always
equally shared.
In this way the says that the only effective growth strategy for the less
developed countries is to cut ties with the more economically developed
countries, and follow self-reliant and socialist, systems.
Having outlined the major arguments of Dependency theory, we will now see
the two most important prescriptions of the theory to help the dominant,
satellite and periphery states withstand this structural problem and achieve
self-sustenance.

2.1.Export promotion
Although dependency theorists never suggest a complete integration to the
world economy, yet they advice dependent states to pursue the policy of export
promotion for the purpose of foreign currency accumulation and
counterbalance trade deficits.

Analysis Based on Dependency Theory of Development By Esayas Girmay

 Agricultural development in Ethiopia

2.2.Import substitution
As we have discussed it above, dependency theorists see the import-export
cycle among the rich and poor countries as unjust kind of relationship. They
even claim that the more number of times this cycle is carried out, the more
the economy of the poor countries will be damaged.
However, the above two major prescriptions have been criticized by none other
than the dependency theorists themselves.
They argue that neither export promotion nor import substitution can yield
successful results because of unreliability of export which is attributed to
quality issues and countless preconditions of the IMF, the WB and WTO; and
the problem of economies of scale due to lack of strong domestic market that
effectively absorbs local production.
We will clearly see the applications of the above arguments and counter
arguments in the Ethiopian experience in section 4 of this term paper.
On top of the above prescriptions however, Dependency theorists has also
suggested more policy directions for poor countries so that they can get out of
poverty. We will discuss a few of them below and see their application in the
Ethiopian context in the section 4.

2.3.Government Intervention
Dependency theorists discount the neo-classical model of growth as it leaves
wealth distribution completely to the market alone. They forward their strong
opposition towards this point of view by claiming that the market of the poor
countries is far from perfect and can not in any way serve as medium through
which the majority of the population could benefit.

2.4. Self Reliance

Self-reliance is one among the policy prescriptions of the Dependency theory.

And contrary to the policies of the IMF and the WB which call for an even more
integration of the poor countries economy into the global one, dependency
theorists suggest for self-reliance in the form of either Autarky (total economic

Analysis Based on Dependency Theory of Development By Esayas Girmay

 Agricultural development in Ethiopia

independence from the global economy) or controlled integration (PSIR 441

Class Lecture- 8th, November 2008).
The self-reliance scheme of the current Ethiopian government is discussed in
the section 4 sub section4.4.

2.5.Product Diversification
Yet another policy prescription of the dependency theory is product
diversification. The theorists claim that many Latin American nations were
engaged in monoculture—the growing of a single crop for export, on which
economic growth heavily depended. The Ethiopian experience with this regard
will be seen in section 4 sub section 4.5

3. AGRICULTURAL DEVELOPMENT IN ETHIOPIA

Generally, the Ethiopian economy is an agrarian based economy; where,
according to some researches, agriculture contributes to 80% of employment,
60% of export and 47% to GDP (Hiwot G/Michael, Bahir Dar University). Other
scholars claim that agriculture’s contribution to the Ethiopian economy is even
more intense as half of the GDP 85% of exports and 80% of employment come
from this sector.
The current Ethiopia government has also shown and is still showing its strong
support to agricultural development in its policies.
The theoretical and historical analysis presented has shown that the
engine of development in its initial phases is and has to be agriculture,
and that this is so not only because growth in the relatively massive
agricultural sector will have bigger impacts on total growth of the
economy directly but also because agricultural growth accelerates non-
agricultural growth and structural transformation even more (Meles,
2005:7).

Despite its importance for the country’s economy, agriculture is still based on
subsistence farm households and traditional and backward modes of
production. Agricultural productivity had been deteriorating from the early

Analysis Based on Dependency Theory of Development By Esayas Girmay

 Agricultural development in Ethiopia

seventies until 1991, rendering a good proportion of the farm households

unable to feed their families and frequently dependant on food aid.
Prior to 1974, the oppressive tenant-landlord relationship was a deterrent to
agricultural development in general and to small-holder and pastoral farming
in particular. From 1974 to 1991, the Derg imposed policies that were inimical
to agricultural development. Its socio-economic policies degraded or destroyed
the manpower and ecology of rural Ethiopia. According to various government
and international sources, agricultural production had been sluggish for the 20
years before 1991, with an average annual growth rate of only 0.6 percent for
major food grains. Compared to the high population growth rate of about 2.9
percent per annum there was an annual decline of 2.3 per capita in food grain
availability from domestic production. This suggests that the country was not
self-sufficient in food.
When we focus to the post 1991 period, it is generally agreed that the current
EPRDF government has made agricultural development as a top government
priority. To this effect, the government has introduced the Sasakawa Global
2000 initiative as early as 1993. And later on ADLI (Agricultural Development
Led industrialization) took over.

For the full version of this paper, please contact E_girmay@yahoo.com

Analysis Based on Dependency Theory of Development By Esayas Girmay