SIDAMA ECONOMY

Dr. Wolassa L. Kumo

The Sidama economy is based primarily on the subsistence agriculture characterized by archaic production techniques. However, a substantial area of the Sidama land produces coffee , which is the major cash crop in the region. Coffee has been the major source of income for the rural households in the coffee producing regions of the Sidama land. However,the recent plunge in international coffee price drew most of these households back into the subsistence production and absolute poverty(coffee prices fell dramatically even during the commodity price boom of 2001 to mid 2008). Sidama is one of the major coffee producing regions in Ethiopia. It supplies over 40% of washed coffee to the central market. Coffee is the single major export earner for the country.Export earnings from coffee ranges from 60-67% although the country's share in the world market is less than 3%. 

The Sidama people have never faced major hunger and famine until very recently. Due to reliable rainfall and evergreen land area, they were always able to produce enough to ensure food security.The society has been characterized by what one may call a low level economic equilibrium. Even the 1984 great famine that hit all other parts of the country did not have a major impact on the Sidama land. However, a continued dependence on subsistence agriculture, which relies on archaic technology and vagaries of nature coupled with massive growth of rural population, and limited rural development, made the Sidama land prone to frequent hunger and famine since recently. Thus, it is not surprising to see that , today,about one-fourth of the total population in Sidama is directly or indirectly dependent on food aid from the international community.

Other major crops produced in Sidama include Enset (also called false banana or weese in Sidaamuaffo,Sidama language), wheat, oat, maize, barley, sorghum, millets, sugar cane, potatoes, and other cereal crops and vegtables.Enset is the main staple food in Sidama.Apart from being the main source of food, parts of the Enset tree can be used in other economic activities like construction of houses, production of containers such as sacks, and for handling food items during and after preparation of traditional food.The pattern of Enset and coffee production and consumption over the years has substantially shaped the nature of the Sidama culture and hence the name, the Enset culture.

The role of livestock was highly significant in medieval and early 20th century Sidama society. However, recently the size of livestock has been dwindling because of two factors, First, a rapid increase in population reduced the size of grazing land for large stocks, and second, a severe "tse-tse" fly disease in low land areas had virtually wiped out most of the livestock population during the last quarter of the 20th century. However, livestock is still the most important source of livelihood for people living in the peripheral areas of the Sidama land.

Although agriculture is a key to the development of the counrty, successive regimes failed to  successfully transform the traditional agriculture in Ethiopia. The transformation of traditional agriculture as an engine of growth and developoment was emphasized by a famous American economist, Theodore Schultz(1964), who stated that all resources of the  traditional type are efficiently allocated, and hence the rate of return to increased investment with the existing states of the art is too low to induce further saving and investment. According to Schultz, therefore, the development of traditional agriculture depends on breaking the established equilibrium. Based on a theory of the price of income streams, he suggests that breaking such established equilibrium requires the introduction of modern inputs in the form of human and material capital.The author is certain that when Schultz talks about the modern inputs (human and material) he does not dumping fertilizers to the poor who have no clue as to how to use them and have no capacity to repay the credit.

Access to markets is another essential component of transforming the traditional agriculture. When the poor manages to produce surplus in one bumper season, they will not be able to sell the produce due to lack of access to markets.Consequently, during the next season the farmers are bankrupt and unable to sustain the previous level of production. This perpetuates an endless cycle of poverty in the Sidama land.

The recent Ethiopian commodity Exchange is expected to alleviate such problems. However, its effectiveness depends on the ability of the rural poor to tap into such markets which are based primarily in major cities.

Forestry and fishery are underdeveloped in the Sidama area. Fishing activities are limited to the most prominent lakes in Sidama: Lake Awassa and lake Abaya. Although Sidama has several perennial rivers, they have never been exploited. Commercial forestry is underdeveloped in the area, but Sidama is well known for its traditional agro forestry system which saved the land from erosion and desertification for centuries.Every household in Sidama practices agroforestry. However, this tendency has also brought a negative impact in recent times. Farmers began to practice planting Eucalyptus trees alongside other crops.Because the later plant has a poisonous effect, it destroys other crops planted under it. Most farmers are aware of the problem. However, the economic benefits of the eucalyptus tree outweigh the cost of losing small crops near it for the individual farmers. However, it is generally recognized at present that this trend is danderous for the overall enviromental sustainability of the Sidama land.

Sidama is characterized by a very low level of industrial development. There are very few manufacturing industries in the land. A very few factories available in the area are all located in Awassa town and its environs. The government owned textile and ceramic factories are the only notable manufacturing activities in Sidama. A chip wood factory built in recent years and a meat processing factory in Melga Wondo are the only major private manufacturing activities in the entire Sidama land. Small scale manufacturing activities are highly underdeveloped. Agro processing, a natural system of industrialization in an agrarian economy, is totally absent in Sidama land except for some coffee processing plants.

The conventional agriculture development led industrialization involves the building of agro processing indusrties that process the local agricultural inputs that can be sold in domestic or export markets thereby adding value to the primary products. This plays a crucial role in reducing rural poverty.The poverty reducing impact of such projects is twofold: first, the market for the agricultural products is readily available at the door steps of the producers. Second, processed products fetch better price both in domestic and foreign markets than primary products.

Mining is virtually non existent. Although Sidama is said to have a good potential of mineral resources particularly in the Great East African Rift valley and the eastern highlands of the Sidama land, these resources are not yet exploited.An absolute lack of industrial development in the area characterized  by massive rural over population, perpetuates the current higher unemployment, lingering poverty and overall under development.

The development of both economic and social services is very low. Economic infrastructure is severely underdeveloped. The supply of electricity, water and telephone services has recently inproved. However, the over all social and economic infrastructure is still severely underdeveloped. All whether roads are not more than 400 kms. Asphalted roads are non existent except for the 90kms stretch of the Cairo-Addis Ababa-Gaborone road that dissects the land.The private financial services are beginning to operate in the area but are still insignificant. Trade and transport services are severely underdeveloped and limited mainly to very few urban areas. Trade activities in rural Sidama heavily depend on purchase and sell of coffee. The coffee slum of the past 7 years has severely affected these activities.

There is a great tourism potential in in Sidama land. The rift valley lakes like Awassa and Abaya are already some major tourist attractions in the area. However, the access to lake Abaya through Sidama land has been opened only recently and is not well developed and not open for potential tourists.The agro forestry and the mountain ranges of eastern highlands are other potential tourist attractions in Sidama. However, they have not been exploited so far.

Unemployment and underemployment are rampant. Out of an estimated total population of 5 million in major Sidama area, an estimated 3 million people are in the active labour force of which 70% are estimated to be underemployed or unemployed. Employment in modern sector is very much limited. The total estimated number of the labour forces employed in modern sector in Sidama is less than 1%. If properly utilized huge supply of labour can make positive contribution to economic development. As early as the middle of 20th century, development economists such as William Arthur Lewis, the first economist of African Origin to win Nobel Prize in economics, have emphasized the potential of economic development with unlimited supply of rural labour.Lewis's (1954) paper on " Economic development with unlimited supplies of labour", elaborates how the dual sector model can be successfully used in promoting economic development in poor countries with unlimited supply of labour.

The Sidama region is highly overpopulated. Land holdings have dwindled to less than 0.3 hectares per household due to population explosion. As a result extensive farming is not a viable option. To reduce the current massive rural underemployment, urban unemployment, and excruciating poverty, the region must implement a rapid and massive alternative income and employment generation schemes. This requires the formulation and implementation of a clear and comprehensive rural development as well as small and medium enterprise development strategy, changes in education and training policies, and an overhaul of the over all industrialization strategy in the region in particular and in the country at large.

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