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Ethiopia: Floriculture industry faces market shift

Ethiopia has been striving to diversify its export base, aiming to generate new sources of foreign currency and reduce its exposure to the price volatility characterizing international markets. Since 1982, ornamental and cut flower farming has emerged as a significant agricultural investment to meet the country's export needs. Over the past two decades, the floriculture industry in Ethiopia has become one of the fastest-growing export businesses, ranking as an important foreign trade subsector, second only to coffee.

The growth of this industry is mainly attributed to export incentive policies implemented by the government to promote and encourage private sector engagement in the flower export business. Among these incentives are easy access to rural and urban agricultural land at the lowest possible rental rates, income tax exemptions for up to five years, duty-free importation of equipment, vehicles, building materials, irrigation systems, and machinery, as well as easy access to loans and other public utilities. Consequently, around 120 investors have entered the floriculture subsector to produce flowers for export over the past three decades.

Despite considerable physical and non-physical incentives provided to the private sector to encourage flower exports, many flower exporting companies are now inclined to sell a substantial volume of their products to the domestic market.

Today, in many corners of Addis Ababa and other major towns across different regions, a large number of flower gift shops have become a vibrant market phenomenon, offering a great deal of flower bucketing services. The principal source of flowers for these gift shops are commercial farms from clusters such as Holta, Bishoftu, Sebeta, Ejera, Woliso, Welkite, Sendafa, and Bahir Dar. Some flower-producing and exporting farms have gradually shifted their focus from foreign markets to the domestic market, supplying fruit and vegetable seedlings like avocado, onion, garlic, and tomato seeds and seedlings.


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