About a third of rural households in Ethiopia farm less than 0.5 hectare which, under rain-fed agriculture, is inadequate to produce enough food to meet the intake requirements of the average household.  Most agricultural production is used to meet household consumption needs and for a very large number of households there is a prolonged hunger season during the pre-harvest period.  When there are marketable surpluses, smallholder farmers are often constrained by lack of access to markets.  In all farming systems, livestock provides the single most important sign and status of wealth and there is a strong correlation between lack of livestock ownership and poverty, particularly among woman-headed households.

During the late 1980s, 52% of Ethiopia's population consumed less than the recommended daily allowance of 2,100 kcal, but in the record harvest year of 1995/96 this proportion fell only to 43% (Clay et al. 1999:407).  This figure approximates the 40% of rural households who farm on so-called ‘starvation plots' of less than 0.5 hectares, which is inadequate to meet subsistence food needs even in good rainfall years.

Low agricultural productivity can be attributed to limited by smallholder farmers to financial services, improved production technologies, irrigation and agricultural markets; and more importantly, to poor land management practices that have led to severe land degradation.

Crop development, erosion control and animal husbandry are fundamental to survival for many in an agrarian society such as exists in Ethiopia.

One of the most serious impediments to sustainable poverty reduction in rural Ethiopia is the strong link between land degradation, low agricultural productivity and rural poverty.  The lack of improved agricultural production technologies and land use planning has combined with deforestation, perceived land tenure insecurity, soil erosion, overgrazing, drought and population pressure to contribute to severe environmental deterioration.  To break this vicious cycle, there is an urgent need to integrate sustainable agricultural and land management practices into farming systems.

The persistent lack of rainfall is a major factor in rural poverty.  Recurring droughts leave poor farming families without food crops, causing periodic famines.  People lack coping mechanisms for facing drought-induced famines, and contingency planning is inadequate.  The situation worsened recently because of sharp increases in the prices of food and fertilizers on world markets, which made it more difficult for poor households in Ethiopia, as elsewhere, to secure adequate food supplies.

Major historical shifts in the political climate, as well as upheavals and migrations caused by civil conflict, have had a strong impact on Ethiopia's rural poor people.  The onset of drought and its increasing recurrence has dramatically narrowed the horizons of the country's rural households.

Among the more specific causes of rural poverty in Ethiopia are:

•  wide fluctuations in agricultural production as a result of drought

•  an ineffective and inefficient agricultural marketing system

•  underdeveloped transport and communication networks

•  underdeveloped production technologies

•  limited access of rural households to support services

•  environmental degradation

•  lack of participation by rural poor people in decisions that affect their livelihoods

In remote uplands, poor farmers till steep slopes and precious topsoil is washed away with the rains.  Subsistence farmers live year-to-year with great risks from highly variable rains, without the benefit of supplementary irrigation. 

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