Foreign direct investment is one of the most significant characteristics of modern global economy. Bearing in mind the importance of foreign direct investment for national economies, developing country governments have started with structural reforms and trade liberalization programs to attract foreign investment. For the agricultural production that is facing new challenges and criteria of the world market, development policies of a particular country are very important. For the realization of development policy, foreign direct investment is needed. The aim of the paper is to review the trends and structure of foreign direct investment in the agricultural sector, as well as to analyze the impact on the export of agricultural products. In developing countries, the issue of modernization of the agricultural sector is posed as an imperative, and this can be achieved by adopting appropriate legislation, providing infrastructure prerequisites, and conditions for a greater inflow of foreign direct investment. This paper presents an example of Ethiopia as a typical agricultural country, where the main challenges for the realization of foreign direct investment in agriculture are small percentage of realization of investment projects in the agricultural sector, poor coordination of activities, and lack of special forms of incentives for agricultural production.

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