By late 1976 insurgencies existed in all of the country's fourteen administrative regions. The Red Terror (1976–1978) marked the beginning of a steady deterioration in the economic state of the nation, coupled with extractive policies targeting rural areas. The reforms of 1975 were revoked and the Agricultural Marketing Corporation (AMC) was tasked with extracting food from rural peasantry at low rates to placate the urban populations. The very low fixed price of grain served as a disincentive to production, and some peasants had to buy grain on the open market in order to meet their AMC quota. Citizens in Wollo, which continued to be stricken with drought, were required to provide a "famine relief tax" to the AMC until 1984. The Derg also imposed a system of travel permits to restrict peasants from engaging in non-agricultural activities, such as petty trading and migrant labor, a major form of income supplementation. However, the collapse of the system of State Farms, a large employer of seasonal laborers, resulted in an estimated 500,000 farmers in northern Ethiopia losing a component of their income. Grain wholesaling was declared illegal in much of the country, resulting in the number of grain dealers falling from between 20,000 and 30,000 to 4,942 in the decade after the revolution.
By late 1976 insurgencies existed in all of the country's fourteen administrative regions. The Red Terror (1976–1978) marked the beginning of a steady deterioration in the economic state of the nation, coupled with extractive policies targeting rural areas. The reforms of 1975 were revoked and the Agricultural Marketing Corporation (AMC) was tasked with extr:acting food from rural peasantry at low rates to placate the urban populations. The very low fixed price of grain served as a disincentive to production, and some peasants had to buy grain on the open market in order to meet their AMC quota. Citizens in Wollo, which continued to be stricken with drought, were required to provide a "famine relief tax" to the AMC until 1984. The Derg also imposed a system of travel permits to restrict peasants from engaging in non-agricultural activities, such as petty trading and migrant labor, a major form of income supplementation. However, the collapse of the system of State Farms, a large employer of seasonal laborers, resulted in an estimated 500,000 farmers in northern Ethiopia losing a component of their income. Grain wholesaling was declared illegal in much of the country, resulting in the number of grain dealers falling from between 20,000 and 30,000 to 4,942 in the decade after the revolution.