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.

Klaus Deininger Songqing Jin Mulat Demeke Berhanu Adenew Samuel Gebre-Selassie

Globalization and Marginalization in Africa

This paper uses inequality decomposition techniques in order to analyse the consequences of entrepreneurial activities to household income inequality in southern Ethiopia. A uniform increase in entrepreneurial income reduces per capita household income inequality. This implies that encouraging rural entrepreneurship may be favourable for both income growth and income distribution. Such policies could be particularly successful if directed at the low-income, low-wealth, and relatively uneducated segments of the society.