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The gap between the Millennium Development Goals (MDGs) set for 2015 and the presentsituation in Ethiopia is not closing fast enough, on average each year more than 2 millionpeople deserved to be in need of food aid either from domestic or foreign supply, despite thepositive aggregate economic performance of the last six to seven years, favorable aggregateresults however unable to overcome worst poverty situation in the country. The Governmentrecognize the sector was the only means to reduce poverty and implemented differentstrategies to enhance the growth of agriculture, but because of different factors including weekpolicy and other external constraints, agriculture in Ethiopia has been hit by the seriousinternational market crises that befell the major export crops of the country: coffee, oil seed,live animals, recently flowers and so on. Setbacks in the agricultural sector have a severeimpact on poverty in Ethiopia, since 85 percent of the poor people draw their livelihood fromagriculturE.
The disappointing performance of agricultural production is attributed to a complex set ofstate and market failures that constrain the potential for development in rural areas and,subsequently, the chances of pour rural people to lift themselves out of poverty. Lack ofcoherence between different policy objectives, and between policy objectives and policyimplementation practices, enhances state and markets failures in the country.
The main objective of this paper was to look in to the role of and significant of Governmentagriculture oriented industrialization policy in avoiding or reducing long lasting poverty inEthiopia and by doing that to assess whether or not a nation could able to achieve millenniumdevelopment Goal seated by Nations early 1990s, this objectives could be realized throughanalyzing the specific objectives which are among other things: to assess the total publicexpense or investment made by Government to enhance or faster Growth in Agriculturesectors. And then verify its positive impact on the sectors.
Based on the study made using OLS technique using Data obtained for 12 years (1997-2008)from Central statistics Authority, the study find out the fund allotted to agriculture has significant and positive relationship with growth in agriculture, The amount of budget that theGovernment expends annually on agricultural sectors has a positive effect on the value ofGross agricultural output. And the result indicated that the value is correctly signed and itscoefficient is statistically significant at 10％ level. A one unit increment in the amounts ofexpense on agriculture by Government will be able to induce 0.127 unit increase in Y, at sametime, even though land is limited resource unable to extend more after certain period of time,the expansion of available land under cultivation has same result as of the abovE.
Moreover, the study wont limit itself only to the domestic factors, rather the role andimportant of external factors which has significant effect on the Growth of Ethiopian economyshouldnt been undermined and was stated in detail to last portion of the paper. Mainly Theissues regarding the governments of industrialized countries include: (Ⅰ) the role of OfficialDevelopment Assistance (ODA); (Ⅱ) the expected impact of trade liberalization on Africaneconomy; and (Ⅲ) the impact of the domestic protection of domestic agriculture inindustrialized countries and subsidy related issues; (Ⅳ) the rule and regulation, and thestructural adjustment policy imposed by IMF or WB, was stated in the paper, because theresearcher believes these external factors do have un measurable impacts on African economyspecifically to the Ethiopian casE.
Beside these, importance of International Trade, the role of Non-Governmental Organization,the coherence between the pace at which SSA governments pursue regional economicintegration objectives and the formulation of common regional agricultural developmentpolicies with the need to develop capacity for fast reactions to the challenges of globalizationof international markets were also examined in the paper.
Generally as conclusion, minimizing poverty and reaching the MDGs by 2015 for Ethiopiarequires urgent major corrections to policy incoherence, with a view to making a real impacton rural poverty by a significant acceleration of agricultural development. In addition to moreresources and non-contradictory policies, agricultural development requires expandingmarkets, remunerative prices for agricultural producers and competition among equal tradingpartners. Faster integration of the African regional economies, common regional agriculturaldevelopment policies focused on rural poverty reduction, and appropriate protection againstunfair wmpetition from outside the common markets would strengthen the technical andfinancial basis of Africa/Ethiopian agriculturE. The establishment of enabling institutions atgrassroots level would encourage the emergence of strong producers and community-basedorganizations, improve local governance and mobilize the energies and consensus required toreact positively to the incentives provided to increase agricultural production and productivity.
The paper ends with indicating possible options to how to reduce poverty in related to thepolitical, social and economic dimension of the agricultural and rural poverty reductionchallenges in Africa in general and particularly to Ethiopia.