Biofuels Development in Ethiopia


Start date: 31 August, 2011 End date: 30 December, 2014 Project type: Smaller projects: PhD Project code: 11-118DIIS Countries: Ethiopia Thematic areas: Energy, State building, governance and civil society, Lead institution: Danish Institute for International Studies (DIIS), Denmark Partner institutions: Ethiopian Institute of Agricultural Research (EIAR), Ethiopia Policy Brief: Policy Brief Project coordinator: Mengistu Assefa Wendimu Total grant: 2,673,933 DKK Project files:

Project summary

Rising oil prices, the need for energy independence, improving rural livelihoods, and concerns with climate change have led to a revived interest in investing in large-scale biofuel production in Africa. However, there are many inter-related concerns over the potential of biofuels in fulfilling these objectives. These concerns are related to: (1) the extent to which there has been local participation during planning and implementation of large-scale biofuel development; (2) the impacts of large-scale biofuel production on access to land and other resources, especially for women and rural poor; and (3) impacts on households-level economic welfare. These factors affect the outcome of biofuels investment depending on the type of biofuel feedstock production (large-scale, outgrowers, or combination of both).
Studies on biofuel that actually look at these impacts on the ground at the community level in Africa are rare, and in Ethiopia they are simply not available. The aim of this PhD is therefore to examine the involvements of local communities during planning and implementation of large-scale biofuels investments and to investigate the impacts of these investments on rural household economic welfare, land property rights, and access to land and water.


Completion Report - Summary:

The main objectives of this project are:

(i) to identify the key factors that contributed to the failure (lack of implementation) of large-scale biofuel projects;

(ii) to examine sugarcane productivity on a factory-operated plantation with the productivity of outgrower-operated plots;

(iii) to examine the effects of participation in sugarcane outgrower production on household income and asset stocks; and (iv) to investigates wage and working conditions in irrigated large-scale and small-scale agriculture in Ethiopia.

The study was conducted in four districts (Adama, Dodota, Bora and Dugda) in central part of Ethiopia. Both qualitative and quantitative data collection methods were used in the study. The quantitative data come from 377 plot level observations of sugarcane production, and survey data from 368 household and 317 laborers. In addition to the quantitative data, qualitative data were collected through more than 10 focus group discussions and more than 100 semi-structured interviews with key informants.

This study shows moisture stress was a key agronomic factor which resulted in a very disappointing agronomic performance of large-scale jatropha plantation in Ethiopia. A second relevant agronomic factor was the use of untested germplasm. In addition, conflict with local communities over the land acquired for jatropha plantation was another key factor that contributed to the termination of biofuel projects.

Productivity of outgrower-operated plots versus factory-operated plantation.

This study reveals that outgrowers achieve, on average, significantly higher productivity (13%) than the factory plantation. Furthermore, the gross margin on outgrowers’ plots is on average significantly higher (21.4%) than on the factory plantation.

Impacts of outgrower schemes on household income and asset stocks.

This study indicate that the effect of participation in outgrower schemes crucially depends on whether the land that was allocated to sugarcane outgrower scheme had access to irrigation prior to outgrowers joining the scheme. This research show that participation in outgrower scheme has significant negative effects on the income and asset stocks of outgrowers whose land had access to irrigation prior to participation in the sugarcane outgrower scheme. However, for outgrowers whose land had no access to irrigation prior to participation in the sugarcane outgrower scheme, participation has no statistically significant effect on their income or on their asset stocks.

Wages in the large-scale and small-scale irrigated agriculture.

Although the superiority of large-scale farming in generating wage employment (with higher wages) is used as a main argument in favor of large-scale agriculture over smallscale agriculture, irrigated small-scale (informal) commercial agriculture commands a significant wage premium over irrigated (formal) large-scale irrigated commercial agriculture. This study show that while observed human capital characteristics (education and experience) partly explain differences in wages within the formal sector, it play no significant role in the determination of wages in the informal sector.

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