It has been estimated that nearly 70% of Ethiopia's land mass is cultivable, yet only 11% of the land is under cultivation and permanent crops. Agricultural and pastoral pursuits supported over 80% of the population and formed 52% of the GDP in 2001. Subsistence farming and livestock grazing, both inefficient, are the rule. Field crops account for 40% of gross agricultural output, cash crops for 20%, and livestock for the rest.
The coffee variety known as arabica may have originated in Ethiopia, and the word coffee is derived from Kaffa (Kefa), the region in the southwest that is still the largest coffee-producing area of the country. Coffee is the most valuable cash export crop, accounting for 10% of foreign exchange earnings. Coffee production was an estimated at 226,000 tons in 2001–2002, the highest in Africa. Qat, the leaves from a shrub that are used to make tea and which have a mild narcotic effect, is another important cash export crop.
The most commonly produced cereal is teff (Eragrostis abyssinica), which is used to make the Ethiopian unleavened bread called injera. Corn and barley are the next most important grains, with an annual gross production of at least one million tons each. Sorghum, wheat, millet, peas, beans, lentils, and oilseeds are produced in substantial quantities; sugarcane and cotton are also grown. Production in 1999 included corn, 2,840,000 tons; wheat, 1,150,000 tons; sorghum, 1,340,000 tons; barley, 970,000 tons; dry beans, 102,000 tons; potatoes, 370,000 tons; yams, 267,000 tons; millet, 381,000 tons; and raw sugar, 275,000 tons.
The agricultural sector suffered severe damage from the civil war and its aftermath. Forced recruitment into the military led to a shortage of farm labor. Reforms aimed at introducing market-based incentives have been implemented, including freeing agricultural marketing and farm labor hiring practices. Emergency provisions of seeds, fertilizer, and other inputs have also been vital in rebuilding Ethiopia's agriculture. Since 1999, however, the border war with Eritrea and reduced harvests have caused Ethiopia to rely heavily on food donations from international organizations in order to ward off starvation.