Ethiopia Integrated Rural Development Project

dropped

The MPA supports the following pillars to achieve the Development Objectives and advance inclusive and sustainable growth and transformation of the rural economy: (i) planning, institutional strengthening, and policy reforms; (ii) transforming agriculture value chains and service delivery; (iii) enhancing non-farm opportunities and skill development; (iv) building cross-cutting infrastructure; and (v) enhancing rural households’ resilience to shocks. Pillar 1: Planning, Institutional Strengthening and Policy Reforms. This pillar aims to enable the identification of tailored interventions to meet the local development needs of diverse woreda’s, build capacity of relevant public institutions for effective delivery, and enhance the policy and enabling environment for the rural economy. The identification of needs will include systematic analysis of geographical, human, and socio-economic characteristics of the woredas to understand the underlying drivers of economic potential and then finance activities that optimize those opportunities. Key considerations will include orientation of agricultural production, availability of resources (e.g., land quality and size, water), access to markets, and exposure to shocks (e.g., climatic and fragility) – see annex 2. The analytics will be coordinated at the national level by the Agriculture Transformation Institute (ATI) and updated regularly. The ATI would draw from its various tools and resources to support this work, including agriculture investment mapping, soil fertility mapping (Ethiosis), surface and shallow ground water mapping, crops and livestock suitability mapping, etc. In addition, the ATI would play a consolidative role to ensure that relevant GoE strategies are integrated in the planning exercise, including the Ethiopia Food Systems and Nutrition Transformation Strategy (EFSNTS) and the resource mapping exercise under the industrial/manufacturing policy – so that the program could help farmers connect to industries as suppliers of raw materials. Institutional strengthening will focus on functions that are critical to enhancing effectiveness of delivery. Candidate functions to be supported include planning, monitoring processes and results, adaptive learning, and accountability mechanisms – including arrangements for rewarding performance (in addition to investment needs). The support will target not only government agencies but also the institutions of local communities – including building the capacity of the community to plan and actively participate in implementation of their own resilient development. At the program level there will be need to develop graduation model to phase out project support to enterprise groups, and program management system for better targeting and improved data management and coordination. Support for policy reforms will address selected thematic issues in the recently approved ARD policy and other emerging directions, for example the recent pronouncement to allow foreign direct investments in the retail sector. The support will focus on: (i) development of policy instruments such as proclamations (acts), directives, regulations, etc.; and (ii) piloting the reforms . Thematic areas of support include: (i) payment for ecosystem services and climate finance; (ii) land security and consolidation/clustering; (iii) modalities for private sector participation in development of agricultural infrastructure (e.g., warehouses); (iv) policy instruments to facilitate contract farming; etc. Pillar 2: Agricultural Value Chains and Innovative Service Delivery. The aim of this pillar is to enhance the competitiveness of agriculture value chains in the domestic and export markets, while building resilient production systems to sustainably improve food security. The key considerations for selecting crop and livestock value chains are: (i) suitability based on local agroecological conditions and resource endowments, and (ii) ranking on effectiveness in achieving national objectives such as jobs, poverty reduction, dietary diversity and provision of ecosystem services. The overall framework for value chain development will involve identification of constraints and investments across all segments of value chains, including cross-cutting infrastructure that will be supported through pillar 4. The approach will vary depending on the nature of commodity (high-value versus low-value), orientation of agriculture production (commercial versus subsistence), and opportunities for crowding-in climate finance to provide farmers with additional income from ecosystem services. It will include strong forms of value chain development such as productive alliances, contract farming, and outgrower schemes, where feasible. The program will coordinate with IFC and the commercial lending sector to deliver coordinated value chain financing, with support from the Program focusing on organized farmers and small enterprises, while partners such as IFC and commercial lending would potentially finance processors and exporters. The program will enhance resilience of value chains by promoting innovative climate-smart agricultural practices, including promoting improved seeds and breeds (high-yielding, fast maturing, high-feed conversion), integrated soil fertility management practices to enhance carbon sequestration, minimum tillage and conservation agriculture, soil testing to inform balanced fertilizer application, soil treatment to address acidity and enhance carbon retention, and manure management to reduce emissions. It will support small-scale irrigation sub-projects using approaches that enable farmers to transition from diesel powered equipment to clean sources of energy and strengthen irrigation water user associations for effective operations and maintenance of irrigation infrastructure. Innovative approaches for service delivery will be prioritized, including operationalizing the digital agriculture roadmap (DAR) and focusing on use cases around access to credit and insurance, inputs delivery, climate advisory, and access to markets. Pillar 3: Enhancing Non-Farm Opportunities and Skills Development. This pillar will aim to develop local area non-farm employment opportunities through supporting rural enterprises and enhancing the employability of working-age people, especially youth and women. The pillar will map out the demand that these enterprises can serve to assess their potential profitability and job creation prospects. The non-farm enterprises supported in this pillar will serve customers in the local rural economy, secondary towns and major urban areas. Similarly, the skills development activities will aim to connect youth and women to job opportunities in the rural economy, nearby secondary towns, and large urban areas. It will include skills required to innovate and transform agricultural value chains, entrepreneurship training, matching skills with labor demand, behavioral and job signaling training, and skills that improve food safety and put informal enterprises in food services on the path of formalization. The primary target enterprises include those supporting agricultural value chains, including agriculture services (e.g., agrovets in input supply); equipment fabrication for mechanization of farm operations, including leasing and rental; youth enterprises and cooperatives involved in lime micro-crushing and other soil treatments to build carbon sinks; agriculture marketing (storage and logistics); and value addition (e.g., agro-processing). The Program will also target enterprises linked to the urban economy by facilitating production of non-agricultural goods that use rural intermediate inputs, have potential to be produced at scale, and have low entry barriers for youth and women e.g., including handicrafts and artisanal merchandise. The pillar will support rural enterprise cooperatives to invest in post-production segments of value chains via three entry-points: (i) linkages to custome