The result is not just higher poverty, but poverty volatility, which is far more corrosive to social cohesion. The Circular Shock: How Urban Income Loss Hits Farmers? Ethiopia’s rural economy depends heavily on urban demand for agricultural surplus. POLICY WARNING & DECISION NOTE (For Ministry of Finance, MoLS, PMO, Development Partners)The 2025 collapse of federally registered enterprises has triggered a compound crisis affecting employment, poverty, rural livelihoods, tax revenue, and social stability. Protect the Urban–Rural Demand LinkSupport urban food demand (cash transfers, food vouchers)Prevent collapse of farm-gate prices5.

Source: Ethiopian News January 18, 2026 11:13 UTC