Evaluation of rural development experiences in Africa: the case of Ethiopia

UNITED NATIONS

ECONOMIC COMMISSION F0R AFRICA

FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS

TE

PS* ¥fm, -*^ „

TED KA^f^^

EVALUATION OF RURAL DEVELOPMENT EXPERIENCES IN AFRICA

THE CASE OF ETHIOPIA

ESHETUDEBABU

Workshop on Planning and Implementation Techniques

~~ for Participatory Rural Development in Africa 19 - 24,

Hall, EGA

3^

ECA/FAO-eRDEA : ETHIOPIA STUDY

RURAL DEVELOPMENT EXPERIENCES IN ETHIOPIA1

1. INTRODUCTION

Ethiopia's rural development is basically equivalent to national development. It is predominantly based on the performance of the agricultural sector, and Ethiopian agriculture has been in crisis due to natural resource depletion, lack of technical innovations, population migration, etc. for most of this century. This came to be felt officially in the 1950s when the country turned from being a net exporter of grain to a net importer.

Commercialization of agriculture intensified the already pent-up social contradictions and "land-to-the-tiller" became a battle cry throughout the 1960s. The old ruling class, however, failed to introduce timely changes.

Capitalizing on these and other contradictions, new social classes sought in the 1960s and early 1970s for a revolution to revamp the whole old regime. A revolution unexpectedly occurred in 1974 through a military coup that removed and replaced the monarchy in September. The coup had to take many revolutionary measures.

Nationalization of the industrial means of production and financial and service institutions took place under the guise of socialism. Agrarian revolution became the principal achievement of the coup-turned-revolution. It distributed land to the tiller and peasant associations were organized. But these measures alone could not prove a panacea for agriculture and rural development.

Socialism was proclaimed the guiding principal of the revolution mainly to sooth the working class and intellectuals. The coup had earlier turned revolutionary: the revolution Iaterchanged. The manoeuvres of the new power classes over the years were basically strategies to control and use the working masses. Agrarian revolution, co-operative formation, villagization and settlement/resettlement programmes became the modalities of that control and use.

The Ethiopian experience of the last 16 years presents a typical illustration of a situation where development decisions made "for the people" from above, however appropriate, fail to take roof because they were not based on the interests, will, conviction and free choice of the people themselves.

1.2. Summary and Conclusions

Agrarian revolution: The Military Government opted to redress the ills of the country through revolutionary measures. The most important aspect of that revolution became the radical transformation brought about in agriculture, consisting of a land tenure reform and organization of the rural labour force.

The radical land reform abolished feudalism and commercialized agricultural tenure and distributed land among the farmers. Over seven million tenants in the sedentary population were freed from a condition of serfdom.

The rural population was also organized in Peasants' Association, Women's Associations, Youth Associations,

Agricultural Co-operatives, on the basis of democratic principles. A basis for mass democracy seemed founded.

1 Summary based on a report prepared for the ECA/FAO Joint Agriculture Division, Addis Ababa, entitled "Some Studies on Ethiopia" in three volumes. August, 1990.

But the roles of these grassroots institutions were changed to subserve the state of the new rulers. The old type of master-servant relationship which existed between the peasant and the landlords was re-established on a new basis between the peasant and the bureaucrats. A single, centralist party was organized to strictly control and bring the mass organizations under the bureaucracy. Finally, policies reversing the earlier revolution are now being introduced. The government is heading for where it took off in 1974.

Co-operative formation has been a very important and original policy of the government in peasant agriculture. Later it was extended to handicraft and artisan work, urban housing, and thrfft and credit fields.

Through co-operatives the government aimed at achieving an improved economy, better standards of living and status for the broad masses, an equitable distribution of resources and products It also wanted to establish a mass-based planning mechanism. It hoped to thereby accumulate capital, expand industries, and mobilize human resources for sustained development. In the rural areas the government's objectives of co-operatives formation aimed at making services available to the population and at collectivizing peasant agriculture.

Two forms of agricultural co-operatives, service giving and production, were established for this purpose in rural Ethiopia. Service co-operatives filled important needs of the rural population: marketing of agricultural inputs, members' products and consumer goods; provision of loan, storage and savings; flour mills, etc. They were expected, inappropriately, to undertake political tasks at the initial stage. They have also proved important means of capital accumulation and potential fields of employment.

Agricultural Producers Co-operatives were seen as the means to rural socialism (agricultural collectivization), poverty alleviation, increasing production, technical revolution and establishing social justice in rural Ethiopia. The objectives and operation of Agricultural Producers Co-operatives were alien to the experience of the peasant.

Besides, the numerous problems that these fledgling institutions are facing in Ethiopia today have put to doubt their viability and future. The progress of their proliferation was, therefore, very much retarded compared to that of socialist countries in the 1950s and also compared with the rate of growth of Ethiopia's own Agricultural Service Co-operatives.

The paucity and retarded progress of the Agricultural Producers Co-operatives was due to numerous problems: shortage of personnel (organizers, auditors, accountants) and lack of commitment of those in post;

cultural level and background of the peasants; misappropriation of co-operative resources (by their leaders, employees and government personnel), shortage of consumer goods and farm implements; exploitation of the co operatives through pricing, marketing, contributions (including labour) and hosting government and party officials;

poverty of the members of Agricultural Producers Co-operatives; forced co-operative formation; dictation and interference from outside in their internal affairs; lack of planning; political; etc. The problems that are killing the co-operatives in Ethiopia are mostly external to the co-operatives themselves.

Villagization in Ethiopia began as early as 1979 as a complement in the process of collectivisation: It became a major rural development strategy of the government in 1985. This programme helped to serve various purposes. The most important of these purposes were productivity, security and political control of the rural population. Each of them was meant to solve problems of the government. The need to increase productivity arose from the failures of the country's agricultural base to meet the increasing requirements of the ruling class and, its state, to support a fast growing population especially those in the towns and cities, to make raw materials available

for industries and as a means of earning foreign exchange. The government sought to overcome the problem of

productivity of agriculture by reorganizing the rural labour force into villages and:

1) improving the living conditions of the villagers through the providing economic and social services,

etc.;

2) introducing scientific methods of agriculture;

3) collectivizing the small holder agriculture of the peasants, and disciplining the farmers.

Security problems led the state to use the villages for defense as well. Villagization, it was hoped, would offer a mechanism by which its internal and external enemies could be guarded and defeated, and keep the peasantry

itself under check.

Peasants were mobilized in mads to villagize quickly by pressures including compulsion, threat and deceit.

The designs of the villages were prepared centrally with urban biases, and did not take into account the conditions and life style of the farmer. The farmers were suffering from numerous problems: shortages of construction materials (like wood, nails, etc.) for their houses, scarcity of land and population pressures, inconvenience of the village structure and design for both animal husbandry and crop production and protection, the failure of the government to provide the promised services, lack of water, latrines, smallness and fragility of the new houses. The National Villagization Coordinating Committee stopped being functional from early 1990 onwards and the committees from the national level to the grassroots have stopped their activities and the peasants have been left alone without any guidance and help. The government is preoccupied with defence against guerrilla fighters that

are winning more and more territories.

Villagization can be a valuable rural development strategy for various reasons; but in order to be valid it must be based on the interests of the peasants themselves and must be founded on their knowledge, conviction and free will. They must be the ultimate decision-makers in villagization. The role of the government must be limited to persuasion, education, provision of technical services, co-ordination, advise, guidance and the like. Unless it is based on democracy, villagization can be a means to mass enslavement of the peasantry, and hence not a

development strategy.

Settlement/Resettlement: Most Ethiopians lived in the highlands because of better climatic and soil conditions as contrasted with the lowlands. The lowlands constitute about 60% of the country but are infested with human and animal diseases, have a harsh climate and poor vegetation. The highlands have become eroded and overcrowded from long habitation and misuse reaching the present stage where large parts are incapable of

sustaining people.

Settlement/Resettlement has been used since 1974 to:

1) Remove the urban unemployed from the cities and provide them with a means of livelihood;

2) Provide substitute land to people from overcrowded and disastrous (drought, etc.) regions;

3) Obtain more production by utilizing idle lands and surplus man-power;

4) Provide substitute lands to peasants expropriated by projects, particularly state farms;

5) Make nomadic populations sedentary;

6) Appease, control or depopulate rebellious areas;

7) Place loyal people to guard politically troublesome border areas like Gode, Kurmuk, etc.;

8) Integrate various national groups, and dilute national movements by changing the population mix;

9) Establish model agricultural collectives and to establish villages;

The programme is therefore, not only an economic strategy of development but also a political one.

Settlement/Resettlement used as compensation to expropriated or displaced persons on limited scale may

sometimes be understandable. But it is a very difficult and controversial programme for a country like Ethiopia. Its

effectiveness as a lasting solution to problems of overpopulated and degraded areas, in the conditions of Ethiopia,

is debatable. It cannot be a lasting solution to such problems like landlessness, unemployment, overcrowding, etc.

in the face of expanding population and archaic technology. It cannot, by itself, solve problems of land degradation

and resource depletion unless other measures supplement it.

Other lasting solutions need to be also considered, such as: regulation of population explosion, increasing the social division of labour, serious development of productivity, genuine and effective solution of the question of

nationalities and democratizing the political system, etc.

2. OVERVIEW OF THE ETHIOPIAN ECONOMY

With a GNP per capita of US$130 in 1987 and a growth rate of 0.1 per cent from 1965-1987, Ethiopia is one

of the least developed countries in the world. GDP grew by 2.7 per cent from 1965-80 and only by 0.9 per cent

from 1980-87.

The economic growth rate was very slow for the past many years and has been characterized by fluctuations, stagnation and deterioration. The causes of low economic growth are attributed to a multitude of complex and inter related factors ranging from natural factors to the system of socio-economic management and political turbulence.

The main natural factors that are considered to have hindered and disrupted economic growth are the

rugged topography of the country, high population growth rate, depletion and degradation of natural resources and.

the accompanying recurrent drought that has plagued the economy particularly in recent years.

2.1. Natural resource base

Agriculture: Despite the deterioration in the size and quality of natural resources, the country had a promising potential for agricultural production. Presently only seven million hectares of land was under cultivation with annual major crops while about 9.5 million hectares were under overall crop production which is only 8 per cent of the country's land area. So far, it is estimated that around 18.5 million hectares have been under crop cultivation at different times while under different degrees of sustainabilrty, an area twice the size of the present day

crop cover can be classified as suitable for crop production.

Livestock: Regarding livestock and other related resources, with 77 million heads of livestock and 52 million poultry, the country stands first in Africa and tenth in the world. The country had a grazing area of 64 million

hectares which was about 51 per cent of the country's total area.

Energy: In the area of energy resources, the country had not been able to exploit the various energy

resources potential. Most of the energy requirement depended on fuel wood and animal dung. It was estimated that about 60 billion Kilowatt-hours of electrical energy could be generated from the major rivers and tributaries of

the country while the total electrical energy produced in 1988/89 was estimated to be only 1.2 billion Kilowatt-hours.

Nevertheless, the development and production of hydroelectric energy had been possible in recent years in which newly commissioned capacity alone now contributed about 85 per cent of the electric power produced. Natural gas of economically viable size had been discovered and studies had been undertaken on the exploitation of it.

Minerals: For the generation offoreign exchange and creation of a strong industrial base, the country had

promising mineral resources' potential! albeit with current limited exploitation. Large scale gold mining had started

and other promising minerals such as platinum, copper, potash, soda ash, tantalum, marble and base metals were under different stages of exploitation and prospecting.

Human resources: Another resource of the country is its population. With an estimated population of 48 million in 1989, Ethiopia was the third most populous country in Africa. Currently, the growth rate of the population was 2.9 per cent a year. Although it was a potential resource, the growth rate of the population was considered a threat to further and sustained economic development, since It exerted pressure on fixed resources, food availability, social and other services.

2.2. Government policies and institutions

Until March/May 1990, the over-riding policy and guiding principle of the government was the creation of a socialist state by socializing the main means of production, re-organizing and restructuring the society and the economy and directing and managing it along socialist lines. To this end, various rural, public and government institutions were formed and established. In the countryside Peasants' Associations, Service Cooperatives and Producers Cooperatives were formed.

In the area of public institutions, industrial, service sector and agricultural enterprises were established based on the nationalized enterprises. In the field of agriculture, state farms were established and expanded. The expansion was aggressive in the early 1980s and subsequently declined in size to cover about 226,000 hectares in 1988/89.

Attempts were also made to socialize and regulate trade, both foreign and domestic. Foreign trade was highly socialized and domestic trade partly so. In the area of grain marketing, the Agricultural Marketing Corporation (AMC) was established in 1976 to purchase, store and market grain, pulses and oil seeds. The compulsory quota delivery system was imposed on the farmers and merchants at officially fixed prices. In some areas, the participation of private traders in grain marketing was forbidden while free movement of grain between regions was stifled until recently. This policy was considered to have created a disincentive on the part of the farmers to increase production on account of the big difference that existed between AMC's selling price and the free market price. In 1985/86, for example, AMC's selling price for tef in Addis Ababa was Birr 61 a quintal on the average while the free market price was around Birr 165 a quintal showing a difference of 170 per cent. At present, following the new economic directives of March 1990, the marketing and price policy for grain has been totally altered and the future function of AMC is being reconsidered.

On the other hand, the role of the private sector in all fields of the economy was subject to strict regulation and was forbidden by decree to operate in some areas. In the agricultural sector, individual peasants were disfavoured with respect to access to resources and development services in favour of producer cooperatives.

Small-scale industry and much of road transport, wholesale and retail trade in the private sector operated with strong official supervision, licensing and imposing limits on fixed assets. The greatest intervention on the role of the private sector took place in road haulage and foreign trade. Direct foreign investment was not allowed until 1983 when a joint venture code was issued. Even this did not attract foreign capital as expected. At present, however, most of the restrictions on the private sector have been abolished by the new economic directives and the private sector is expected to expand.

In addition to the formation of the three rural institutions, the rural society was also subject to two other forms of state intervention, namely, settlement/resettlement and viilagization. After the revolution, resettlement was undertaken on a moderate scale until 1984 in which about 46,000 families were resettled. Since 1984, which is the year of unprecedented drought in the country's history, about 207,000 families or 605,000 people were moved from the drought affected areas to others.

In addition to settlement/resettlement, the rural population was made to live together in designated village sites in which 12,013 Peasants' Associations formed 21,409 new villages. As of July 1988, the viilagized population was about 12.2 million which was about 38 per cent of the rural population. Presently, both resettlement and viilagization programmes had been halted and their future viability was very doubtful.

To restructure and manage a socialist economy, the need for central planning was quite obvious. On the basis of that, in 1984, the Office of the National Committee for Central Planning (ONCCP) was established. This office played an important role in policy analysis and in the preparation of policy reforms. Output targets for the public enterprises were set from above without giving due consideration to resource constraints. Scarce resources, such as foreign exchange and professional manpower were planned and allocated by this office. The private sector was not a full part of the planning exercise and was excluded sometimes from the allocation of scarce resources such as foreign exchange. All in all, the^ central plan did not effectively guide the economy and the economy in turn was not able to show meaningful progress.

In summary, after the revolution the government had a strong drive to socialize the economy at the expense of the private sector and economic growth as well. Many rural, public and government institutions were formed and established to implement the various socialist policies of which many of them failed to give the expected results including the system of centralised economic management. It was as a result of these failures that the government opted for a mixed economy since March 1990.

7

SOME MAJOR GOVERNMENT PROGRAMMES IN PEASANT AGRICULTURE 3. CASE STUDY 1 - AGRARIAN REVOLUTION

Before the 1974 Revolution, Ethiopian agriculture, the mainstay of the country was, fraught with very many difficult problems. Among these the major ones were as follows:

- A very skewed land tenure system based on tenancy and share cropping including excessive fragmentation of land;

- Archaic and, in some places, very primitive means of production, little infrastructures & services;

- A fast growing population

The interest of a predominantly feudal class, aspiring to become bourgeois, stood in the way of effectively tackling these problems sustaining the peasantry and the industrial working class in a wretched condition and harbouring a stagnant economy. This caused the 1974 Revolution. The Revolution attempted to tackle the more sociological or political aspects of the problems than the technical ones. One major content of this Revolution was an agrarian revolution.

Two aspects of this revolution are of particular interest in rural development: a radical land tenure reform and the organization of rural peoples. The land reform dealt with the problem of land ownership and the landlord-tenant relationship while the organization of rural peoples prepared the rural population for their participation in the political, economic and social life of their country.

Numerous and varied types of land tenure existed in Ethiopia until March 1975. The big differences then existing were between 1) the northern so called communal tenure, 2) the pastoral-nomadic type, and 3) the private land tenure type. The northern regions of Gojam, Gonder, Tigrai, Eritrea, and Wag & Lasta Awrajas of Wello Region and some parts of Menz, Tegulet and Bulga, Yifat and Temuga and Selale Awrajas in Shoa Region exercised the 'communal' type. Under this tenure land was not the exclusive property of a holder. It belonged to the first settler and the founding father of a family line or lines of descendants. Anybody who could trace his descent to the founding father had a right to a share of his father's land. While this system guarded against the monopoly of land in few hands it led to another problem - fragmentation into uneconomic sizes over generations.

The desert & semi-desert areas of the north-eastern, eastern and south-eastern lowlands including ail of the peripheral Awrajas (provinces) surrounding the highlands of Ethiopia have ever been inhabited by pastoral nomads.

The Revolution did little, if any, to alter this.

The bulk of the central highland regions of Shoa, Arssi, parts of Harargie, Bale, Sidamo, Gamo Gofa,

Illubabor and Wellega together with Keffa came under the private land tenure system generally operated under a

landlord and tenant relationship.

The biggest achievement of the Ethiopian radical land reform was probably in the private land tenure regions.

Some of the consequences of the concentration of land in fewer hands were tenancy for the bulk of the rural population, existence of large idle lands, tax eviction by the owners, absenteeism of landlords, eviction of the tenant

at the landlord's discretion, concentration of power & wealth in the hands of a small minority, etc. Tenancy in Ethiopia was based mainly on share-cropping. The farmer paid from 1/3 to 3/4 of his produce to the landlord.

Besides the tenant had to provide personal services to his landlord. The tenancy contract was generally unwritten

and the landlord could drive off the tenant from his fand at will.

Table 1 shows the number of tenants under the old regime. This table shows that the total member of tenants

in the seven private land tenure regions was 57% of the rural population. In Illubabor Region the percentage was

as high as 75% followed by 63%, 62%, & 59% for Shewa, Keffa and Wellega Regions, respectively.

TENHNIS:NUMBfc"RNDPEPCENTOFRUPRL

P0PULRTI0N

:province'

IRR5SI

:grmui:,.~R!HRRRRPGEJILLUBRHQR

IKEFFR

ISHOR

ISIORMO

IWELLEGR

IWOLLO

TCHRL

BEGEMO{R

GOJJRMTIGRE

HRG&LRSTRCuolo)

TOTRL

GRRNDrOTRL PURRLPOPULR7ION

690600

583300

1435570

515375

969100

35850001987590

1064100

1627200

12457835

1087200

13445001410800474600

4277100

16734935 TENRNTS

.

No.:

307764i

249412!

703429I

376224!

371709!

1828350!

735408!

5747381341586i

5488620!

97848!

172785!98756!18966!

388355!

5876975! ■■

y.:

45:

43:

49:

73:59:

5i:37!

54;

21:

44:

io:

13:7;4:

91

35: PRRTLYNo.5072421633717781030729073575600

39751

49715

330396

1176977

65232

95024

257218143818

561292

1738269 TENRNT5!

y.!

7:

4:

51

2:

3:

ib:

2;

5:

20!

3:

i

4:

7:

18:

33!

13:

io: TOTRLNo.^{358489271.045775207386531400782}

2401950775159

624453677982

6665597

163080

267809355974162784

494647

7615244 TENRNTS

:x

:52

:4?

:54:75

!62

!63

:39

:59:4i

:53

■:14

!20:25!37

122

!45

1.Thosewithverysm-al1holdings(Tigre,Wollo)2.Thosewithsma11ho1dings(..richpeasantsO

3.Tho™ewhoownverysmallholdingsundercoffeeart?foread*ndrent:

in3andsforcoffeecultivation(MeIIeg-a,Keffa>Source:CentralStatistical.Office.

3.1. CHANGE OF THE LAND TENURE SYSTEM

tn March 1975 the government converted, all rural lands into public ownership ending the centuries-old private ownership of land. No compensation for rurai lands, forests and tree crops was paid to the previous owners.

The proclamation provided for the distribution of Sand with use rights to farmers, with a ceiling of 10 hectares per family, without prejudice to sex, creed, nationality or even class. It thus ended the tenancy and share cropping system. Even previous landlords who were willing to work the land by themselves thus obtained some land to iive by. The use of hired labour to cultivate ones holding & the transfer of !and by sale, exchange, succession, mortgage, antichresis, lease or otherwise was prohibited. Large-scale farms that had began mushrooming In pre- revolution Ethiopia were transformed into state or co-operative farms allotted to cultivators.

The objectives of the land tenure revolution included the liberation of the masses from a condition of serfdom under an insignificant number of feudal lords and their families and to lay the basis upon which all Ethiopians may henceforth live in equality, freedom, and fraternity; to promote development through cooperation;

to increase production and to make the tiller the owner of the fruits of his labour; to provide work for at! rurai people; to lay down the basis for the expansion of industry and the growth of the economy; and to narrow the gap

in rural wealth and income.

The immediate effect of the Proclamation was naturally landlord reaction which arose sporadically in different parts of the country. That was quelled down very easily by the overwhelming peasantry supported by the armed forces. Another effect however became very damaging. Forests which had been protected by the private owners before the Proclamation now suddenly became no one's property and people cut & burnt them at will killing &

chasing away the wildlife sheltered in the forests. Besides, no significant change (except possessory right over customary grazing lands and termination of payments to baiabats) was introduced for nomadic groups which to date remain without much benefit from the Revolution. Usufructuary right was given to those on the land in 'communal' tenure regions. The problem of fragmentation was to be tackled through formation of co-operatives.

3.2. RURAL PEOPLES' ORGANIZATIONS & PARTICIPATORY DEVELOPMENT,

The other remarkable achievement of the Revolution was the organization of rural peoples from the grass roots to the national level. Farmers are organized in every village on 800 hectares under the rubric Peasant Associations (PAs). Similar structures for women and youth are set-up to cater for the interests of the members

In the national life.

The creation of the mass organizations initially opened the way for a participatory development strategy hitherto unknown in autocratic and authoritarian Ethiopia. The functions of the peasant associations, for example, included administration and conservation of public property within their areas, distribution of land and adjudication of land disputes arising among the members, creation of co-operatives' villages, women's associations, defence squads, judiciary tribunals, etc, building schools, ciinics, bridges, feeder roads, etc, improvement of the rural means

of production and productivity, self-administration and safeguard of the rights of peasants.

By 1977, the All Ethiopia Peasant Association (AEPA) was established by the government amplifying the role of the peasantry, though wfth some qualifications, in the political life of the country. Among the functions stipulated for the AEPA the following three in particular made it appear an institution of political participation:

1. To enable the peasantry to establish a united anti-feudal, anti-imperialist and anti-bureaucratic capitalist

front with the working class;

2. To enable the peasantry to safeguard and consolidate its political, economic and social rights in

accordance with the National Democratic Revolution Program;

10

3. To coordinate and supervise other peasant associations organized pursuant to Peasant Associations

Organization and Consolidation Proclamation...

The peasants were organized in the various regions in 1975,1976 & 1977, and from the very beginning they were made to work hand in gloves with the government apparatus at each tevel of the administrative tier. They were meant to fill the local power vacuum created after the dissolution of feudal rule and former bureaucratic officials.

Later, however , all this changed gradually and peasant institutions did not develop independently and autonomously of the government bureaucracy & could not safeguard and promote peasant interests. Instead they

were made to subserve the bureaucracy and the state.

As previous and later events also showed the peasantry played a major role in fighting any opposition to

those in state power.

The incapacity of the peasants to protect their own interests is seen specially in the marketing and pricing system of agricultural products, in their employment as fodder to the endless civil wars, in forced re/setttement, viliagization, their inability to control their own organizations (PAs, Co-operatives, etc.). These will be seen from the

following parts.

In less than three years since the establishment of the government, the Revolution, sociaiism, etc. are cast

off. Policies meant to hatch a bourgeois class, encourage foreign capital and measures reactivating the role of religious institutions, etc are now being taken. Privatization of rural land is being introduced. Again peasants and workers have not had a say in all this. As national and international experiences confirm a revolution not controlled by the people (without proxy) is not theirs. A revolution without democracy is ultimately a reaction. What the future brings to the peasants, once privatization of land & agriculture sets in, is not hard to know. The conditions before

the Revolution of bureaucrats in the last 16 years is hard to forget.

3.3. CONCLUSION

The main substance of the Ethiopian Revolution of 1974 lies in its agrarian revolution and organization of rural labour force. In this area the changes brought about are in the sociological aspect of agricultural tenure: the

landlord/tenant relationship was done away with. The new class created a power base for itself by distributing land to the farmers (thereby perpetuating a predominantly small holder agriculture) and organizing the latter into new

political and production structures. It extracted surplus product from the peasants through marketing and pricing, contributions, taxation, etc.

The Revolution has not solved the problems in agricultural development. First it has not really emancipated the peasants from servitude. It only replaced feudal and commercial exploitation and rule over individual peasants by that of bureaucrats over organized peasants. The sociological revolution ended up in failure as concerns the broad masses ; land distribution alone could not effect real freedom. The peasant institutions did not become channels of mass democracy or mechanisms of defending and promoting peasant rights either; they rather turned out as means of the new dictatorship. Despite their organization, peasants have not had decision-making rights even in issues that directly concern them: such as marketing and pricing of their own products, villagizing their own homesteads, re/settlement and even forming their own co-operatives, choosing their own leaders and direction of their organizations, etc. Consequently, the chance of establishing a mass-based development strategy is missed.

The Revolution is now revealing its true nature - that of a petty-bourgeois class aspiring to become national bourgeoisie with the use of state power - through legal, financial, etc. means as the recent policies show.

With the pursuit of the new economic policies (privatization & free enterprise) the future of the mass organization

does not seem to be bright. Already co-operatives are disintegrategrating.

11

With the pursuit of the new economic policies (privatization & free enterprise) the future of the mass organization

does not seem to be bright. Already the government has induced co-operatives to disintegrate.

Number of Peasant Assocations bytheNew^dm.Regions (Junj,_1989)

Membership

Regions

Wellega Gambella

No. of PAs

214 10941094

Male

Southern Omo Northen Omo

SidamO

!°"na

Ills 240 486 1034 Western Harargie

Eastern Harargie Ogaden

Dire Dawa Eastern Sheva

Aseb

Northern - Southern Western Addis Ababa Eastern Gojam Western

Metekel Southern Northern Southern

1038

103 31

549 1474 1251

747 734

Gender

Wello

316

728

461 Tegray

17025

30398 165893

144852 8682 26463

50016 98805 216511 47015

nntAnn

201407

9489

5726

?02235 202235

319

75565

4284951

Famale

511086

Total

634 L6191

9084 3530 3285 19234 4600 19230 3499 26713 1860 13538

—

890 7846 8127 4 S8 4 5 4 b J U o 33083 11921 16506 27680 3656 16439 14650 59711 61634 34278

31032 182034 17831 153936 102212 2974 372975 117860 69246 102304 243224 4 8 8 7 5 214945 1186G 10379 .32685 97774 391571 416098 406445 75196 236651 286267 54655 218674 13483C 379128 259569 109843

4807897

Source

MOA, CPD7 1988/89 Annual Report

12

4. CASE STUDY 2-RURAL CO-OPERATIVES

4.1. CO-OPERATIVES IN GENERAL

„„., .,

1) Agricultural, 2) Artisan,

3) housing, and

4) thrift & credit.

Mill 13 •» J

economic and political ends:

in development.

:

and producers' co-operatNes.

■- i

better standards of living

A co-operas Board was

—— - - ■— »*

, m neoessary

ip

^

13

4.2. AGRICULTURAL CO-OPERATIVES

The urge for co-operatives arose from the earlier socialistic policy of the government. In the rural areas collectivisation of agriculture and the need to provide services to the population entailed the organization of producers' co-operatives and services co-operatives.

4.2.1. Principles & Stages of Socialist Co-operatives

The core of rural development strategy under a socialist policy is creation of agricultural producers' co operatives (APCs). Ethiopian APCs are established on the basis of the following principles and stages of transformation.

1) Membership is voluntary & founded on the collective interest of the members;

2) Established co-operatives operate on the basis of the principle of democratic centralism; no discrimination of gender, ethnicity or creed, etc, is to be exercised;

3) Tasks and benefits within the co-operatives are to be distributed among the members according to the principle, from each according to his ability to each according to his work;

4) Education in socialist consciousness and anti- reactionary ideologies & cultures including literacy

programmes;

5) Central planning of national development is a prerequisite for socialist construction;

6) Socialisation of peasant agriculture by degrees.

Depending upon the level of consciousness of the peasantry and the degree of collectivisation of their resources co-operatives are developed from within the existing PAs and at settlement sites. The main landmarks in the co-operative formation of peasant agriculture in Ethiopia are: 1) services co-operatives, 2) Malba (i.e primary level producers' co-operative), 3) Welba (i.e advanced level PCs), 4) Wetland (amalgamation of PCs). These stages only indicate the general, conceptual path of their development.

This, in bare outline, indicates the general pattern of rural socialism as stipulated by the government in 1979.

The influence of the Chinese experience is evident.

4.2.2. Objectives of Agricultural Co-operatives

Agricultural Service Co-operatives have been assigned numerous tasks:

1. To procure crop expansion services;

2. To market the produce of members at fair prices;

3. To give loans at fair prices;

4. To give storage & saving services;

5. To supply consumer goods to the members according to their needs;

6. To supply improved agricultural implements and provide tractor services;

7. To collect contributions;

8. To give flour mills services;

Agricultural Producers Co-operatives are the nucleus of Ethiopia's programme of rural collectivisation, poverty

alleviation, increasing production, technical revolution in agriculture and establishment of social justice. The

objectives and tasks stipulated for them are: i

1. Gradual socialisation of the main instruments of production;

1 14

2. Organization of members into collective working groups;

3. Raising the status of poor & middle peasants on a priority basis;

4. Improvement of the means of production & raising production levels;

5. Effecting payments to members according to the quality & quantity of their work;

6. Establishment of special fund for the welfare & security of the members;

7. Struggle for continuous improvement, democratic rights & unity;

8. Abolition of exploitation from rural areas;

9. Enhancing the political consciousness of the members;

10. Legalization of their institution.

Again, these objectives contain economic & political elements. Economically they aim, fundamentally at establishing, in short, rural socialism. The political aims reflect the early thinking of the government in which It wanted to show its commitment to the poor & middle class, to democracy and to the need for the political education of the oppressed masses.

4.2.3. Organization of Agricultural Co-operatives: Processes & Progress

The Guideline of Farmers' Producers' Co-operative stipulates four ways of forming APCs. First, only one producers' co-operative can be formed in a Peasants' Association (PA). A minimum of any three farmers in the PA can initiate an Agricultural Producers' Co-operative. These should be willing to pull together their lands, oxen & farm implements in order to create the producers' co-operative. A site convenient for a PLC is selected for them in the PA to assemble themselves on and begin the co-pic. Farmers on sucli sites are made to give way for them or join the new organization. Other farmers can then after gradually join the group until all the members of the PA are included thereby converting the whole PA into an PM. The second way is when all the members of a PA realize the objectives & benefits of a PLC and democratically discuss and decide in a general assembly, to combine all their lands, oxen and implements to form one. The third way, envisages the creation of PCs in an already existing, government-initiated settlement site where members are persuaded to create them. Fourthly, a PLC is established on the common farms (Ye maheber ersha) by selecting poor farmers and organizing them as PLC.

Once a PLC is thus established it follows the stages of development listed earlier. At the malba stage members pool in all lands (except 2000m2 of garden plot), their oxen & implements and work together. The land is automatically collective property; but for his oxen and implements a member receives remuneration until the co- pic, pays him all the values. The primary purpose of the malba is, therefore to convert all the means of production

into co-operative property. At the welba stage everything, except 1000m2 of garden plot, is collectivized and each

member is remunerated only for his labour contribution according to the principle from each according to his ability to each according to his work -measured on the basis of work points accumulated during the labour process of production. The main purpose of the welba is to establish this system effectively.

i

The process of socialization continues through welland to include greater tasks like total administration of the whole district, etc. '

Thus, through self-reliance and a gradual process of socialization peasant communities are directed,

theoretically, to shoulder the complicated tasks of rural development themselves and come out of their abject

poverty. An appropriate form of organization of production, technical innovation & rural industrialization and social justice seems discovered.

A Service Co-operative is created when two or more PAs assemble willingly. Service Co-operatives (SCs) have been very popular in Ethiopia since their inception in 1976. Despite numerous problems of guidance and management, they have proved extremely useful for the rural population in the conditions of Ethiopia. This can be gauged by the speed at which they kept on mushrooming from the very beginning .

-15- COMPARISONOFAHC'SFARK-GATEGRAINPRICESPRODUCTIONINPUTS PRICESOFSOME

PRICESOFITEMS

A]AMC'SpricesofTeff(average)WheatSorghus"Barley"B]Inputs:-FertilizerDA?UREA-ImprovedSeedsTef£SheatSorghumBarley 1979/80*S1980/81

u.oo34.0033.0028.00

55.0085,00

- 3631222711684

69554755 81/82

36312227

8969

73.2570.2562.9070,10 YE}

82/83183/84

ii

i3913931!3125!2527!27

!31.40131,4063.65163.65

87.50187.5079.50179.5062.90162.9079.35179.35 R^84/853931252781.4063.6587.5079.5062.90 85/86

39312527

81.4063.65

87.5079.5071.70

_ 86!87

i

i39!4231!3325!2721129

ii81.40131.4063.65163.65

i

i 8842332729SI.4063.65

-

-

-

-

Sourse:AISCO,MOArandAMCquotedinPDRE,MOA,CountryProgressReportonWCARRDFollow-up:Ethiopia,August,1990,AddisAbaba,p.29,*ThiscolumnistakenfromtheDecember1936versionoftheReport,

16

The Dopularity of Agricultural Service Co-operatives stems from certain facts. First, unlike APCs, do not require the members to surrender ail they have to them. They only require membership fees and some contributions But the benefits are big. ASCs provide- important services in marketing, provision of credit, social services some employment opportunities. Besides they take part in conservation and construction worksjn the

proven of drinking water & electricity to the rural population; they assist in the conduct of 1W andtrtung

programmes. Moreover they are convenient means of capital accumulation which could and should be geared to Investment. The following sections elaborate on the services ASCs provide to their members.

Marketing- Before the organization of ASCs marketing of both agricultural and industrial products was the occupation of private merchants. One of the avoid aims of the Revolution being the abolition of exploitation of man by man, the government tried to eiiminate private dealers and middle men by organizing SCs amongI the termers

andTban Development Associations in urban centres. In marketing, ASCs engage in the transaction of three

categories of products:

1) Buying agricultural products (mainly grain, coffee & animal products) from peasants and selling

them to parastatals and to consumers;

2} Distributing industrial goods among the rural population;

3) Distributing production inputs for agriculture among farmers.

The mo parastatais, Agricultural Marketing Corporation (AMC) & Coffee Marketing Corporation (CMC), have been the maior receivers of grain & coffee from the farmers. And these parastatals decided the pnces themselves These prices have always been much lower than the open market prices. They were lower than even the cost of

production ( specially with regards to grain) of the farmer.

When earlier the farmers showed reluctance to comply to sei! at the dictated prices the government put obligatory quotas of grain to be surrendered by the farmers each year. This was harshly implemented. Cases are reported where farmers are forced to sell their belongings to buy grain to meet the quotas imposed on them.

Grain Procured by AMC from ASCs (1973 - 1981 E.C)

YEAR (E.G.)

1973 1974 1975 1976 1977 1978 :1979 1980 , 1981

Uutntais

252,245 870,318 2,054,843 1,528,825

n.a.

2,355,864 2,981,257 3,196,790 1,900,366

Source: CPD, MOA, Annual Reports.

Similarly ASCs supply the CMC of Ethiopia with coffee, the major export crop & foreign exchange earner of

the country.

17

Coffee Marketing by ASCs : 1974/75 -1981

Year (E.G.) Amount (q)

1974/75 1975/76 1977 1978 1979 1980 1981

9,993 10,652 88,099 383,800 231,790 225,804

433,727 -106,869,068 Birr

Source : MOA, Annual Reports of the Co-pic. Promotion Dept.

The second major marketing activity of the ASCs is the procurement of industrial goods for the rural

population. During the early years of the Revolution agents of the ASCs came to A.A from the different corners of

the country to procure industrial goods from the Ethiopian Domestic Distribution Company (EDDC) and transport

them to their localities. In the process they encountered various problems. Later these problems were somehow

alleviated when the EDDC established its branches in different parts of the country.

The advantages of ASCs to the rural population is that they bring their goods nearer home thereby saving

farmers time and the trouble of travelling long distances to obtain them. Their prices are also much better than those of the private dealers.

Distribution of Production Inputs: ASCs are also increasingly becoming important channels of distribution

of agricultural production inputs - especially chemical fertilizers (UREA & DAP), pesticides, improved seeds, etc.

Fertilizers Distributed by ASCs : 1976 -1981

Year (E.C.)

1976 1977 1978 1979 1980 1981

Participating Co-operatives Amount (q) 150

NA

1885 2118*

1198

76,838 105,235.22

68,975.1 884,623 804,753.13 634,635.5

Source : MOA Annual Report of the Co-pic. Production Dept.

*Excluding coffee producing co-operatives.

Besides the ASCs distributed 765 kg & 275 litres of pesticides in 1976. Two years later they distributed 5950 kg and 6090 litres. In addition they distributed improved seeds they obtained from the Ethiopian Seeds Corporation:

4,442 quintals in 1976 & 21,596.32 quintals in 1977.

Provision of Credit: ASCs provide various supports to encourage the collectivization drive of the

government. They provide interest-free loans and other material assistance at very nominal charges to APCs.

Credit

Year (E.G.) 1978 1979 1980 1981

18

Provided to APCs

Amount in Birr

2,058,365 2,489,792 1,732,746.38

NA

Beneficiaries (b

N.A.

485 137 855

Source: MOA, Annual Reports of the CPD

Related to this ASCs obtain loan from the Agricultural and Industrial Development Bank (AIDB) & the Commercial Bank of Ethiopia (CBE) to use it for investment, purchase of grain, oxen fertilizers, etc.

Provision of Employment Opportunity: Though this role of ASCs is not their assigned function it is worth mentioning that they provide a small opportunity for employment. It is expected that with the growth of their capital ASCs would venture more and more into agro-industries, irrigation schemes, etc. which would expand their possibilities of widening employment.

Availing Social Services: Another important area where ASCs are of invaluable service to the rural population is availing social services. The significance of this service lies in the fact that the rural areas were very much neglected in the past in the distribution of schools, mills, stores, clinics, etc. Since their upsurge ASCs have tried to establish these for the benefit of their members. By June 1989 they had constructed 2605 grain stores, established 240 clinics, 435 elementary schools, 1895 flour mills, 347 pulping plants, and 93 kindergartens.

4.2.4. Agricultural Producers' Co-operatives (APCs)

The following table shows the growth of APCs in Ethiopia from 1979 to June 1989. As can be seen from the table their growth is, both quantitatively and qualitatively, steady. From this table it is readily visible that APCs have come growing in numbers. In the decade shown their number grew by 3657 and their membership reached 302,653. By 1978 nearly 80 PAs had been completely transformed into PCs. The evolution of the co-operatives also shows progress. Of the 3723 APCs in 1988,1148 reached the 'welba' stage, i.e. complete socialization of the means of production. It was also known that in some regions some of the APCs had matured to form the 'welland'. The total capital has also increased steadily despite problems in this area.

APCs in Ethiopia are not as they stand now rich institutions. They are poor structures with very little assets at their disposal as the above table shows. The resources under their command are mainly agricultural land, scarce oxen, their own labour, some pack animals and very scarce number of tractors. Though they are combining their land and labour they still use (mostly) traditional means to work. The cultivated land per PLC is only 136 hectares on the average; the average per farmer is above 1.6 hectares which is not different form many an individual farmer.

One big problem is lack of oxen. Between 1982 and 1989 the average number of oxen per farmer was only 0.87;

and there were only 232 tractors for 3316 PCs in 1989 (0.069 tractor/PLC). Thus, Ethiopian APCs are to be seen as very poor institutions with which the poor struggle to survive and in the long run hope to pull themselves out of abject conditions. And they are struggling in an environment that is not wholly favourable.

Co-operative formation in Ethiopia is a slow process. Compared to the size of the population and the country what is done so far is very small. In 1988 only 5.16% of members of the PAs were formed into co-operatives. Of the total population they constituted oniy 3.2%.

It must be indicated also that important lessons can be derived from the Ethiopian experiments so far. Co

operatives are valuable means of helping the poor, tackling problems of land fragmentation, capital accumulation

and establishing as much rural equality as possible, etc. But they require a lot of guidance & public support. With

proper guidance their capital could be used for agro-industrial investment.

3.2.3.3RgriculturalProducers'Co-operatives<RPCs>

Th« following tflhle shous the growth of RPCs in Ethiopia from 1979 to June 1909. Rs can j be seen from the table their growth is, both quantitively and qualitatively, steady. -,

TableShowingGrowthofRPr.:*inRuralEthiopia(1979-1989) Year (K.C.) 1976/79 1979/00 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1986/87 1987/98 1988/89

No. 66 l.".!3 545 1006 1267 1489 18156 23.'3 2922 3723 3316*

Members 17221 12298 34533 60058 87364 94360 132872 190372 239450 302653 290009

'5taa.esc 'Maiha'J - 405 744 797 992 n„.9. 1497 1953 2575 1489

t ' 139 262 397 ■497 601 826 969 1148 873**

'Holland'ReqistereCapital(birr) 31 32 S? 129 179 191 n.a. 317 433 458

- 17222149 30505297 45768604 591Q1858 83459515 115805440 162776076 192324344**?*

(O Source:CPD,M0H,RnnualReports-

* Doesn't include coffee producing co-ops. 817 of the above are- engaged in animal

husbandly:151ofthemfollowmodernhusbandrypractices. *-*954RPCsarenotclassified. **Ouetothecivilwarmanyco-ops,inthenorthernregionsweredestroyedintheyear.

&is^^

20

4.2.5. Problems of Agricultural Co-operatives in Ethiopia

Co-operative formation of peasant agriculture has been going on in Ethiopia under numerous constraints - political, economic, cultural, etc. The following problems have been recorded over the years (1983/84 -1989) by

the CPD of the MOA.

1. Shortage of personnel. The rate of co-operative formation of the peasantry has always outpaced the number of organizers trained abroad and locally. Accountants and auditors are also in dire need. In 1985/86 when the number of Agricultural Co-operatives (ACs) reached 6375, the MOA could avail only 586 accountants for the entire country and the co-operatives on their part couid hire only 2880. Besides the qualification & discipline of even these was far from desirable. This problem has had far reaching

consequences on the development of co-operatives in the country.

2. Low Cultural Background for Co-operatives Development: Besides the centuries-old institution of private property inculcated in peoples' minds and the lack of experience in running collective affairs, the illiteracy of the peasantry posed an immediate problem to the movement. Many co-operative leaders lacked the knowledge to read and write and hence to keep proper records of co-operatives. Such leaders rely on their memories to run the affairs of their groups. When some poorly trained accountant or clerk is found the co-operative leadership finds itself unable to guide or check him. On top of this the prevalence of authoritarian tradition and general ignorance discourages the membership from prevailing on its own elected leadership. It has been reported that the co-pic leaders in many places do not even present an account of the financial situation of their organizations to the general assembly of the members.

3. Improper Accounting and Misappropriation of Co-operative Money: Many co-operative leaders, co-operative employees and sadly even government personnel have been appropriating money from co operatives over the last many years. The reports of the CPD of the MOA indicate that co-operative money is spent on useless works and used for individual and personal purposes by co-operative leaders. It is also loaned to or also illegally taken by government employees. This goes against existing directive which prohibit

a non-member from obtaining loan or service from the organizations.

The reports reiterate that no measure is take against the embezzlers or misappropriators which encourages further misappropriation thereby dwindling co-operatives' savings & resources and ultimately killing the co operatives themselves. Thus, the co-operatives cannot escape turning into means of enriching a very few

elites.

4. Shortage of Consumer Goods and Farm Implements: In the last 11 years the share of consumer goods of ASCs from the EDDC has been constantly declining despite the fact that the EDDC has been expanding its branches in the regions. According to the CPD the average share of a farmer's family from the

distribution of the goods was only worth Birr 15.60 in 1985/86.

The shortage exists even more concerning farm implements-sickles, plough shares, spades, etc. Peripheral

farmers do not get their supplies from the EDDC.

5. Low Price of Agricultural Products: A mockery of the Ethiopian agrarian revolution has been the

pricing of agricultural products, especially of grain, in the last one and a half decade. The prices of industrial goods have been escalating four & five folds since 1974 affecting also farmers' cost of production and living

conditions. [

But in Ethiopia the farmers' price has been dictated by the government which has also been forcing

farmers to sell quotas of grain to itself. Farmers have had therefore to sell their products to the AMC of the

government at much reduced prices - compared to free/open market ones and their cost of production.

21

Price Difference of AMC & the Open Market for Grain in Arssi Region in 1987/88 (Birr/Quintal)

AMC Price Open market Grain (Average) Price

Teff Wheat Barley Maize Horse Bean Field Peas Chick Peas

42 33 29 22 27 37 30

90 65 52 37 70 85 80

Differ ence

48 32 23 15 43 48 50

%

114 96.9 79 68 159 129 166.6

Source : AMC, Quoted by the CPD, MOA.

It is also noted that the grain quotas have been very harshly enforced. For example, a service co operative in Northern Shewa was forced to close-down its co-operative shop simply because it could not meet its quota to the AMC.

6. Dictation from Outside: Its is also reported (1988/89) that both government and non - government organizations take the liberty to indulge themselves in the internal affairs of co-operatives and affect their smooth operations. It was indicated that co-operative members were made to perform tasks outside their own plans and before completing their own tasks (weeding, harvesting.threshing, etc.) These obligations included, in 1987/88, working (helping) on state farms.

7. Lack of Planning: Though planning is an essential mode of operation of co-operatives according to the Directive the lack of knowledge among the members and shortage of personnel from the MOA has made it impossible to prepare plans for co-operatives each year. In 1988/89 for example only 59.2% of them had plans. The implementation of the plans is also another problem-- inexperience, external pressure to do something else & expend co-operative fund.etc.

8. Poverty of APCs: This is indicated in the earlier discussion. Unfortunately without considering the wretched state of the poor farmers that assembled themselves into most of the APCs the little preferential treatment that the government could accord them before 1988 has now been interrupted. Their consumption of fertilizers & improved seeds, therefore, showed a decline in 1988/89.

9. Pressure to form Co-operatives: The 1988/89 report admits also that co-operative formation has not actually been a totally free or completely voluntary process in Ethiopia. All sorts of pressure have been employed to induce co-operative formation.

10. Political: Mass Organizations and Professional Associations as well as government organizations and private citizens of Ethiopia come under the control and leadership of the single, ruling, centralist party, the Workers Party of Ethiopia (WPE). The Party is, according to the Ethiopian Constitution, the leading force of the government and the entire society including its formally highest decision-making body, the National Shengo. Without it no one takes the liberty to do anything. Even co-operative members cannot remove their elected co-pic, leaders who happen to mismanage their organization partly because they have to have the Party's permission to do so; and partly because their leaders have become Party members. Consequently, co-pic, leaders do not work but they share a lot of the products of the members; they embezzle the

organizations' fund and property; they have become dictators; they practice favouritism among members;

and yet they can not be removed from office. This was reported to the government by the MOA in May 1989 but no action has been taken.