Connecting Ethiopias smallholder farmers with commercial supply - - PowerPoint PPT Presentation

Connecting Ethiopia’s smallholder farmers with commercial supply chains

Mirafe Gebriel Marcos

October 2015

Overview of Ethiopia‘s Agriculture Sector Investable Investment Opportunities Agenda

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Agriculture is the backbone of Ethiopia's economy

3 SOURCE: ATA analysis based on data from MOFED Ethiopia, National Economic Accounts Statistics of Ethiopia, 2013; Business landscape, Invest in Ethiopia, 2013; MIT Economic Observatory; World Bank, 4th Ethiopia Economic Update, 2015; and IMF Economic Database

Exports 2012 GDP 2014 Employment 2014

Agriculture Manufactured goods Agriculture Services Industry Agriculture Services Others

Share of Agriculture in GDP, Exports & Employment Ethiopia’s Progress Since CAADP (2004-2014)

Industry

ACC concept is a natural evolution of crop and other geographically oriented Transformation Agenda initiatives that ATA has been focused on during GTP-I

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Key features of the GTP-I Transformation Agenda Approach for the ACC initiative

Focused on market needs and clear linkages between inputs, production, processing, value addition, high-value export and domestic markets Market-orientation linked to production focus

• Interventions spread across

different regions in Ethiopia

• Limited geographical overlaps
• f various interventions

constraining the impact through synergies of interventions Geographical focus but weak coordination Integration of solutions to more efficiently solve for the commodities (cereals, livestock, horticulture) prioritized by smallholder farmer and GTPII targets Incorporates mixed cropping system used by smallholders Focus on individual crops Specific interventions designed for cereals – tef, maize, wheat without including horticulture and livestock Full set of interventions focused on the same high potential geographies bringing

• ut synergies

Geographic approach with focus on coordinated

• Production focused interventions

with emphasis on seeds, soil, research, extension, crop packages, and irrigation

• Key examples:
• Direct Seed Marketing
• Rural Financial Service
• Tef, Wheat and Maize

packages Production oriented approach

Rural financial Services

Prior to cluster approach, ATA has been implementing various crop initiatives as a part of the overall GTP-I Transformation Agenda

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Maize alliance Tef Initiative

• Assessment and

analysis of national and global production and market trends on selected commodities/crops

• Identify systemic

bottlenecks along the value chains

• Develop sector

strategies and design interventions to address systemic constraints along the Value Chains

• Support partners to

implement solutions

Overall approach…

• Attain national wheat self-

sufficiency and increased incomes

• f smallholder farmers (e.g.

interventions to increase production in 62 target woredas)

• Increased incomes for 500,000

maize smallholder farmers by effectively linking them to institutional buyers at scale (e.g. 29 Cooperative Unions delivering 30,000 MT to WFP P4P program)

• Sustainably increase 2 million tef

smallholder farmers’ productivity (e.g. yield increases of over 50% through application of TIRR package) Tef Maize Wheat Pulses and Oilseeds

• Improve smallholder incomes and

nutrition as well as soil health through a systematic integration of pulses into the cereal cropping system Livestock

• In early stages – support the MoA

to develop Livestock Mater Plan and identify targets as part of the next five year GTPII plan …translates into specific targets for each value chain

Maize Alliance Tef Initiative

Note: Zones specified are only an indication of potential areas. Woreda level Cluster definition will take place during Phase II

Southwest Amhara (Livestock/Maize/ Rapeseed,) Eastern Amhara (Chickpea/Tef, Sunflower, Honey) SNNP Maize Belt (Maize/ Fruits&Veg. /Livestock) Northern SNNP (Wheat/ Fruits&Veg.) Eastern SNNP (Coffee/ Fruits&Veg./ Honey) Western Tigray (Sesame/ Livestock) South Tigray (Barley/ Honey/ Livestock) 2 4 8 13 14 3 Central Oromia (Chickpea/ Tef, Livestock) Eastern Oromia II (Barley/Pot., Fruits&Veg., Honey) 12 Amhara Sesame Belt (Sesame/Chickpea) Amhara Barley Belt (Barley/ Potatoes/Livestock) 9 7 Western Oromia (Maize/ Tef, Fruits&Veg.) Oromia Coffee Belt (Coffee/ Fruits&Veg., Honey) Eastern Oromia I (Wheat/Pot., Fruits&Veg., Honey) 11 10 6 Northern Somali (Livestock/Maize, Shorgum) 15 Central Somali (Tef/Fruits&Veg., Sunflower) 16

Stage 2 ACC Stage 1 ACC

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Amhara Oromia SNNP Tigray Somali

ACCs are spread across Ethiopia’s major geographic regions

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Value Chain Component Priority Intervention Areas in Stage 1 Clusters

• Input credit vouchers
• Output finance initiatives
• Extension package on

production and post- harvest handling based on market needs

• FTC strengthening and

demonstration enhancement

• Livestock services
• ICT based extension

(IVT/SMS)

• Mechanization
• Market information
• Market linkage

initiatives

• Commission-based
• utput marketing by

cooperatives

• Cooperative storage

promotion

• Collection system for

cooperatives

• Scaling up post-

harvest technology

• Community Based

Seed Production

• Seed Multiplication
• Direct Seed Marketing
• EthioSIS based

fertilizer package

• Fertilizer supply and

distribution

• Crop protection supply

/ distribution

• Livestock input
• Input Tracking

Priority interventions for most of ACCs build on existing Transformation Agenda initiatives supported by ATA at national and regional level…

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Access to finance, Organizational support, and Value chain integration Input supply & distribution Processing & value addition Commodity production Marketing & Export Aggregation, storage & transport

1 2 3 4 5 9 10 11 14 15 17 18

• Capacity-building for cooperatives, unions and other links
• Contract farming and outgrower scheme promotion, with

commercial farms and downstream value chain actors 16 20 21 22 6 7 19 Areas of focus 12 13 23 8

…while for a prioritized set of Clusters, interventions will be tailored for processing & value addition, marketing, exports and enhanced value chain integration

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Value Chain Component Additional Priority Intervention Areas in Stage 2 Clusters

• Foreign exchange availability prioritization
• Guarantee and risk-sharing funds
• Innovation and other investment grants
• SME finance promotion
• Trade finance promotion
• Specialized extension

for high-value crops and precision farming

• Market information

systems and matching platforms

• Collective branding

and marketing support

• Product and

marketing development and export promotion related support

• Primary market

development

• Storage and

aggregation capacity- building

• Cold chain

development promotion

• Facilitation of

investment in processing, value addition, packaging and other supporting services

• Packaging materials

initiative

• Efficient system to

supply all necessary inputs for high-input / high output market

• riented commodity

production

Access to finance, Value chain integration and Business environment enhancement Input supply & distribution Processing & value addition Commodity production Marketing & Export

2 4 5 9 10

• Business environment enhancements
• SME development and technical support
• Professional association and value chain alliance promotion

12 13 17 18

Aggregation, storage & transport

7 8 11 15 1

• Food safety, quality and traceability standards, capacity-building, certification

support and quality assurance 3 15 16 19 Areas of focus 6

Overview of Ethiopia‘s Agriculture Sector Investable Investment Opportunities Agenda

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Ethiopian agriculture is gaining attention from investors around the world

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A variety of sub-sectors and agribusinesses are taking off, among them fruit & vegetable, poultry, soybean, wheat, cattle, dairy, malt barley, and tef

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FRUIT & VEGETABLE WHEAT DAIRY CATTLE SOYBEAN POULTRY TEF MALT BARLEY

Ethiopia has massive potential to serve local & global meat markets

37 41 77 91 148 207 16 18 15 24 34 63 79 27 125 2009/10 2010/11 211 101 2008/9 286 2011/12 2005/6 43 55 2006/7 56 2007/8 Live animal Meat

Meat & live animals export performance (2005/6-2011/12) Thousand USD Ethiopia has the largest livestock inventory in Africa and the 10th-largest in the world, but it has not yet realized its potential to serve domestic & export markets Domestic and international growth are growing, creating more opportunity for Ethiopian supply While Ethiopia currently has one of the lowest per capita consumptions of red meat in Africa, consumption is expected to grow by 58% by 2020 to over 2 million tonnes. Domestic market Demand for beef is rising globally, and specifically in high-potential export markets for Ethiopian products. Export market CATTLE

• Large-scale cattle ranching & fattening
• Meat abattoir
• Processed milk powder

Promising business models

Ethiopian Tef is the next superfood & producers are ready to export

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TEF Tef, a gluten-free whole grain, outperforms “superfoods” like quinoa on nutritional balance 13 2 11

Fat

6

Protein

14

Fiber

7

Potassium

16% 12%

Calcium

5% 18%

Iron

25% 64%

Vitamin C

0% 147%

B-complex

18% 21%

     

Tef Quinoa



Tef is superior

Productivity enhancement efforts have paid off, and Ethiopia will have ample tef surplus for export Projected tef surplus relative to current

Millions of MT 2019/20 2017/18 0.5 2015/16 0.1 0.4

Poultry is a fast-emerging sector in Ethiopia

POULTRY The Ethiopian Government has prioritized the poultry sector for increased investment With a population of nearly 95 million people, Ethiopia presents a large and growing consumption market

• The government wants to multiply current poultry production by over 5 times in the next 5 years
• Investment is the poultry sector has been identified as a priority for the Ethiopian Government, as described in GTPII

and the Livestock Master Plan (LMP)

• There is push to move away from the traditional backyard family system (TFP) and intervene towards vertically-

integrated and large-scale production

• There is huge potential for export of excess supply as

production with intervention (PW) is expected to outstrip consumption by approximately 6 fold for chicken meat and 15 fold for eggs

Rising local beer consumption is driving demand for brewing capacity

Source: Access Capital, Draft Barley strategy, AMF, ERCA Import Data; Barth REPORT

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5.00 4.40 3.60 3.00 2010 2012 2011 2013 +19%

111 GMF

52 (47%)

Imported

36 (32%) 59 (53%)

Total Malt barley Locally sourced

16 (14%)

AMF

Beer consumption is growing by 19% p.a.

Beer consumption (million hectoliters) 2014 Malt barley sourcing (‘000 MT) BGI 2.7 million Dashen 900,000 Heineken 2.5 million Raya 700,000

Ethiopia’s brewing capacity is 8.4 million hectoliters, with more breweries entering But Ethiopia imported ~53% of malt required for beer production in 2014

Diageo 1.6 million

MALT BARLEY

Innovations to help our country grow