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BusinessEthiopia sees surge in farm machinery use after tax exemptions: gov’t

Ethiopia sees surge in farm machinery use after tax exemptions: gov’t

Irrigation pumps lead the way, exceeding targets by 58 percent

Four years after exempting hundreds of agricultural imports and technologies from taxes and duties, Ethiopia has seen a surge in farm machinery use, a new government data reveals.

The decision removed import taxes and tariffs on about 600 types of farm inputs as well as machineries including tractors, combine harvesters, pumps and their accessories.

Presenting the first three years’ performance of the country’s 10-year development plan, Planning and Development Minister Fitsum Assefa (PhD) said import of three key farm machinery categories have grown significantly.

Irrigation pump numbers in Ethiopia were around 15,000 before the exemption but have since jumped to 206,985, exceeding targets by 58 percent, Fitsum said in a cabinet meeting led by Prime Minister Abiy Ahmed (PhD).

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Tractor tallies in the country were 5,962 four years ago but have risen to 34,630 currently, according to Fitsum. However, the goal was to reach 38,008 tractors by this point. Combine harvester counts also increased from 800 previously to 10,686 now, though the target was 14,500 machines.

“In the first phase of implementing the homegrown economic reform agenda, quite many agricultural modernizing machineries and inputs were given tax exemptions,” Fitsum said while presenting about the growth of agricultural mechanization. “This played a huge role in modernizing agriculture and increasing productivity.”

Fitsum explained that widespread imports of water pumps enabled even small-scale farmers to begin irrigating their land. As a result, the area farmed using irrigation expanded from 670,000 hectares four years ago to 1.75 million hectares in the current year.

One of the key sectors targeted in the nation’s 10-year development plan was agriculture, which Fitsum highlighted as the standout performer in her recent presentation to the Council.

Crops, which account for around 65.5 percent of agricultural production, generally surpassed expectations over the past three years under review, with the sole exception of the first year when COVID-19 was severely impacting the country.

Over the past two harvest seasons of last year, a total of 639 million quintals of crops were yielded, exceeding the previous year’s harvest by 37 million quintals and exceeding projections for the current year by 12 million quintals.

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