The natural resources of Ethiopia's rural communities are the basis for their development. To improve standards of living, which must be the major aim of rural development, increased production from the natural resources is required. This is necessary both to raise consumption levels, and also to permit capital accumulation. However, in many parts of Ethiopia, the natural resource base is currently being degraded. This is leading to lower levels of production and a deterioration in standards of living which threatens the survival of some rural dwellers.
Over the last two decades increased awareness has developed of the serious environmental situation in rural Ethiopia. A number of studies have shown that present trends in natural resource use pose serious constraints to rural development (FAO/UNDP 1984; FAO 1986; FAO/UNDP 1988).
The highlands, which occupy 43% of the country and support 88% of the population, produce the majority of the national product. Originally 87% of the highlands were covered with forests. Over the last three to four millennia cultivation has expanded and the livestock population grown causing the forested area to decrease considerably. Deforestation has accelerated during the last 80 years: 40 % of the highlands was forested at the turn of the century but only 5.6 % by 1988 (FAO 1986; FAO 1988).
A major consequence of devegetation is increased runoff which leads to erosion and reduced infiltration. Erosion is especially severe where slopes have been cleared and when the removal of permanent vegetation from arable land creates longer uninterrupted slopes across which water flows build up. Increased runoff and reduced infiltration cause streams to become more intermittent and lower water tables, both of which increase the time required to collect water in the dry season.
Another consequence of deforestation is shortage of fuel wood. This is especially severe in the northern and eastern highlands of Ethiopia. Fuel wood has increasingly been replaced by dung and crop residues which together provide up to 55 per cent of domestic energy and are the dominant fuel source for one third of the population (World Bank 1984). The burning of these sources of soil humus and fertility has led to a progressive deterioration in soil structure, infiltration capacity, moisture storage, and fertility. Burning dung reduces the nation's crop production by an estimated 10 to 20 percent below its potential. The decline in the humus content of the soil causes a further cumulative fall in crop production estimated at one percent per annum (Hurni 1988).
The present use of wood exceeds the rate of sustainable production from the existing forest areas by between 50 percent and 150 percent depending on the estimates used. Every year some 100, 000 ha of forest are lost. At this rate, by 2020 the last highland forests will have disappeared. To meet rural fuel wood needs in 2010, and replace the use of dung as fuel, some 16 million ha of rural fuel wood plantations will be required, with another 1.2 million ha of forest to provide timber needs (Davidson 1988). The prospects for this are poor. Over the last decade only 300, 000 ha of rural fuel wood and community forest have been panted (Hurni 1988).
Table 1- Distribution of Shallow soils and High Forest by Region
| Shallow Soil | High Forest |
| Region | Sq km 000s | % of Region | % of country Total | Sq km 000s | % of Region | % of country Total |
| Northern | 83.3 | 62.8 | 48.0 | 1.8 | 0.5 | 4.1 |
| Eastern | 21.4 | 61.0 | 12.2 | 0.3 | 0.1 | 0.6 |
| Central | 21.7 | 30.9 | 12.4 | 1.3 | 1.6 | 3.1 |
| Southern | 25.9 | 25.7 | 14.9 | 16.9 | 5.5 | 38.4 |
| Western | 22.0 | 12.6 | 12.6 | 23.7 | 10.1 | 53.9 |
| Ethiopia | 174.9 | 35.4 | 100.0 | 44.0 | 3.6 | 3.6 |
Note: Shallow soils are within Highland above 1500 m. only.
Northern: Tigray, Welo, Godar
Southern: Arsi, Bale, Sidamo, Gamo Gofa
Western: Gojam, Welega, Illubabor, Kefa
Eastern: Harerge
Central: Shoa
Source: FAO/UNDP, 1984; Hurni, 1986.