Food insecurity in Ethiopia derives directly from dependence on undiversified livelihoods based on low-input, low-output rainfed agriculture. Ethiopian farmers do not produce enough food even in good rainfall years to meet consumption requirements. Given the fragile natural resource base and climatic uncertainty, current policy emphases on agricultural intensification are misguided, while institutional constraints such as inflexible land tenure and ethnic federalism perpetuate this unviable livelihood system. Inappropriate food aid interventions by donors add another layer of dependence, at both household and national levels. This paper concludes by proposing a range of options for consideration by donors and government to redress chronic and transitory food insecurity. Recommendations for immediate action include improved food aid targeting and safety nets programming. Medium-term interventions focus on recapitalisation of assetless households, plus agricultural yield stabilisation. Long-term strategies must involve diversification away from rainfall-dependent livelihoods.