World Bank to finance expanded agriculture in Ethiopia

WASHINGTON, March  31, 2015– The World Bank Group’s Board of Executive Directors today approved US$350 million to help the government Ethiopian increase agricultural productivity and enhance market access for smallholder farmers in more than 150 of its rural districts.

The new financing, from the World Bank’s highly-concessional lending agency- the International Development Association, will further boost the development potential of Ethiopia’s agriculture industry which accounts for 45 percent of the country’s total output and occupies nearly 80 percent of the nation’s labor force. It is also a major contributor to export earnings.

According to the World Bank’s 2014 Poverty Assessment for Ethiopia, agricultural growth was a key driver of the impressive rate of poverty reduction over the past decade.

The Second Agricultural Growth Project (AGP2) will operate in 157 woredas (districts) in Amhara, Oromia, SNNPR, Tigray, Benishangul-Gumuz, Gambella and Harari regional states as well as Dire Dawa city administration. The project will directly benefit 1.6 million smallholder farmers, who live in areas with the highest potential for agricultural growth.

The project builds upon the impact of an on-going AGP1 project by increasing its geographical coverage and incorporating the lessons from the original project.  AGP1 has benefited communities in 96 woredas including through the construction of irrigation, feeder roads, footbridges and market centers, the establishment and support to farmer groups, strengthening public agricultural services, and improving smallholder farmers’ access to markets.

“We are encouraged by the positive results achieved under AGPI, which is helping to improve the livelihood of smallholder farmers and their communities. The new financing will further empower smallholder farmers, especially women and young people, to define the support they need to raise their productivity and get better access markets” said Guang Zhe Chen, World Bank Country Director for Ethiopia.

AGP2 will support the Government in increasing productivity and commercial opportunities for smallholder farmers by:

• increasing access to agricultural public support services;
• increasing the supply of agricultural technologies through support to agricultural research;
• increasing access to and efficient use of irrigated water;
• better connecting smallholder farmers to markets;
• improving project management, capacity building,  and monitoring and evaluation.

The World Bank Group’s support to AGP2 is expected to leverage additional support from other development partners to create well-coordinated donor support for Ethiopian agriculture.

“Achieving transformation in agriculture will further fortify Ethiopia’s ambition to become a middle income country by 2025. This latest project will support this vision through its special focus on smallholder farmers and providing them with the production and marketing services and infrastructure they will need to thrive.” said Andrew Goodland, World Bank Program Leader.

* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing loans (called “credits”) and grants for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 81 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change for 2.5 billion people living on less than $2 a day. Since 1960, IDA has supported development work in 108 countries. Annual commitments have increased steadily and averaged about $15 billion over the last three years, with about 50 percent of commitments going to Africa.

Source: worldbank.org