Agricultural activities have been and remain key for sustained growth and pro-poor development in
Ethiopia. However, the sector under utilizes its irrigation capacities as well as its abundant human
resources. This paper aims at measuring the impact of public investment in small-scale irrigation and
training for farmers on growth in the agricultural sector and the overall economy, on food security, and
poverty in Ethiopia. It is line with the current five year development strategy of the government and will
give insights on the attainability of selected targeted indicators. We use a dynamic Computable General
Equilibrium (CGE) model to capture the outcomes of public investment shocks. Public investment is
modeled in such a way that it increases the supply of skilled agricultural labor and the supply of irrigated
land by transforming unskilled labor and non irrigated land. Two types of technologies are utilized in
agriculture to produce the same crop: a more productive technology that is intensive in skilled labor and
irrigated land and a less productive technology that is intensive in unskilled labor and non irrigated land.
Households have the ability to increase their endowments in labor and land. Hence, the increase in
skilled labor due to public investment in the form of short term training enables households to increase
the share of skilled labor they detain while reducing the share of unskilled labor. The same applies for
land. Finally, the model has a poverty module using a top-down approach where changes in the CGE
model are imported in the household data. The CGE model is a PEP type model and is calibrated to a
SAM of Ethiopia for the fiscal year 2005/06. The poverty module uses the 2005 Household Income and
Expenditure Survey.