In 2024 more than 295 million people across 53 countries experienced acute food insecurity, the sixth consecutive yearly rise. Even in relatively stable markets, persistent food‑price inflation and conflict-driven disruption are stretching state budgets and private sector supply chains. At the same time, conventional project-based interventions are often limited in scope, duration, and geographic reach, which means they can struggle to achieve the necessary scale and level of detail required to truly tailor solutions to the specific context.
Ethiopia’s Agricultural Transformation Agency (ATI) offers a compelling solution: a single, nationally mandated institution that tackles issues head-on and draws stakeholders behind a unified evidence based strategy. Over a period of 13 years, the agency has impacted 3.7 million smallholder farmers, generated USD 1.7 billion in additional GDP, and helped lift 286,000 Ethiopians out of poverty. Crucially, it has done so through a centralised mandate embedded at cabinet level, rather than through a patchwork of isolated projects. This article outlines how Ethiopia’s Agricultural Transformation Agency has delivered outsized results and provides what development finance institutions (DFIs) and policymakers can learn from Ethiopia’s experience.
Fragmented projects struggle to match systemic hunger
Traditional food security programmes remain heavily project-based. For instance, donors fund discreet activities, or non‑governmental organisations deliver specific interventions for a limited timeframe before moving on. Such initiatives certainly improve individual livelihoods, but their net impact has done little to halt the upward trend in global hunger. Two structural limitations explain why. First, most projects lack the authority necessary to address wider systemic issues, such as land tenure problems, infrastructural barriers, and regulatory challenges, and it is these issues that often constrain farm productivity at a national scale. Second, project timelines rarely align with the multi‑decade horizons required to build lasting change and resilience. Consequently, gains achieved often dissipate when funding ends or when external shocks occur.
A mandate with reach: How the Agricultural Transformation Agency was designed
Ethiopia’s government confronted those shortcomings directly in 2010 by establishing the Agricultural Transformation Agency. Chaired by the prime minister and supported by the Bill & Melinda Gates Foundation, the agency was built to diagnose systemic challenges, pilot solutions, and critically to coordinate delivery ministries around a single transformation agenda. By elevating the agency to a permanent ‘institute’ in 2022, officials signalled that they had decided to embed that coordinating function indefinitely rather than treat it as a one-off experiment.
Operationally, the agency works on two intertwined tracks. One involves nationwide, technology driven interventions such as EthioSIS, which creates a smarter, more scientific approach to farming – moving from generic fertiliser recommendations to precise, location-specific guidance. The second track clusters high potential districts into commercial corridors where farmers receive coordinated support and assured buyers for their crops at predetermined prices. By combining these two approaches, Ethiopia’s Agricultural Transformation Agency bridges the gap between macro-policy reform and farm-level adoption.
Tangible gains in yields, diets, and poverty reduction
Independent evaluations show that the transformation agency has produced measurable, scalable progress. Between 2011 and 2016, households participating in ATI programmes were over five times more likely to apply tailored NPS (nitrogen, phosphorus, and sulphur) fertiliser than non-participating farmers. For instance, wheat production has doubled in the highlands and pushed Ethiopia towards self-sufficiency. Dietary diversity scores have also improved; access to inputs has translated into higher household incomes and a broader mix of crops.
What’s more, the transformation agency’s improvements are reinforced by integration with Ethiopia’s Productive Safety Net Programme. This integration provides cash transfers during lean seasons, preventing farmers from having to sell crops at low prices or having to adopt other negative coping strategies when times are tough. The combined effect is visible at a macro level. According to an FAO report, these efforts have had a significant economic impact, with USD 1.7 billion added to GDP and a 10-to-1 return on public investment.
The advantages of a coordinated institutional strategy
Three design features explain why the centralised model has outperformed fragmented alternatives.
First, high level political anchoring accelerates cross ministry problem solving. When Ethiopia’s Agricultural Transformation Agency identified that fertiliser forecasts were mismatched, the Ministry of Agriculture reacted and saved the treasury roughly USD 200 million in one year. An improvement of this magnitude would be unattainable through isolated projects.
Second, permanence fosters institutional memory and continuous improvement. Interventions have evolved and matured, moving from field studies and pilot programmes, to influencing national agricultural strategies and directly impacting policies and systems. This ensures that interventions are sustainable in the long term and throughout the value chain. It also allows the agency to build on past successes and learn from failures, ensuring that interventions can evolve with emerging climate and market realities.
Lastly, scale. Reaching 3.7 million farmers in a country of Ethiopia’s size equates to national coverage. This creates network effects that amplify impact. When improved seed varieties or climate-smart practices prove effective, they don’t remain confined to select districts. Instead, they spread across the entire country, transforming production patterns nationwide while also generating the data and feedback loops necessary for better policymaking.
Addressing concerns about local adaptation and long‑term sustainability
Critics of top-down models argue that national frameworks risk overlooking local factors such as heterogeneity in soils, regional differences, and market access. Ethiopia’s experience shows that the risk is real but manageable. EthioSIS generated detailed soil maps precisely so they could pivot from generic to location-specific agri-inputs, meaning that centralisation does not equate to uniformity.
Long-term sustainability is another concern, especially after external funding dries up, but Ethiopia’s Agricultural Transformation Agency offers important lessons here too. Because the ATI is funded from the national budget and located within government, core functions continue even after donor support ends. That said, Ethiopia still faces structural vulnerabilities. Conflict, drought, and currency pressures could threaten agricultural progress, and policymakers will have to remain vigilant to protect hard-won gains. Ultimately, risk planning and contingency financing will need to be carefully considered when developing implementation strategies and budgets, especially if the model is to endure over the long term.
Implications for policymakers, DFIs and agribusinesses
For governments, Ethiopia’s Agricultural Transformation Agency provides a clear illustration of how national food security can be improved via institutions as opposed to projects. Establishing an agricultural transformation agency (or upgrading an existing department to fulfil that role) creates a focal point for developing strategy, accumulating data and building accountability.
However, such an agency needs authority at a cabinet level as well as multi‑year funding if it is to coordinate ministries and attract private capital. DFIs can help consolidate fragmented funding by channelling streams through the agency. The key lesson here for DFIs is to pivot away from numerous individual grants and towards building institutional capacity. This may appear less tangible than one-off projects, but agricultural transformation agencies can help standardise and simplify administrative and reporting processes. This reduces time wasted on paperwork and frees ministries to implement rather than administer. The results speak for themselves, and Ethiopia’s 10-to-1 economic return clearly demonstrates the value of enabling infrastructural change.
Downstream, the effects are far-ranging. When a government agency clearly defines and consistently enforces agricultural standards and regulations, private companies feel more secure making long-term investments in that region. In Ethiopia, the development of integrated agro-industrial parks, heavily shaped by the ATI, has attracted private investment of USD 1.5 billion. Without the agricultural transformation agency’s coordinating role and the confidence it instils in investors, this level of private capital commitment may have remained out of reach.
Areas where more evidence is still required
Food insecurity is rising precisely because the challenges presented by it are systemic, interconnected, and intensifying. Ethiopia’s Agricultural Transformation Agency shows that it is possible to respond effectively, provided the response is institutionally anchored and sustained over time. Looking forward, countries that build and empower transformation agencies to tackle root causes at scale are likely to thrive, while those that continue to rely on disconnected projects and piecemeal solutions may fall even further behind.
At Farrelly Mitchell, our food security specialists provide strategic, technical, and commercial expertise that helps governments and DFIs evaluate institutional models and design scalable solutions. Drawing on deep experience across policy advisory, programme design, and value chain analysis, we enable clients to build durable institutions that deliver measurable impact. Our approach combines on-the-ground insights with global best practices, enabling our organisations to optimise operations, build capacity and address complex challenges. Contact our experts today to discuss how we can support your organisation’s continued growth and resilience.
