Connecting Ethiopia’s smallholder farmers with commercial supply chains Mirafe Gebriel Marcos October 2015
Agenda Overview of Ethiopia‘s Agriculture Sector Investable Investment Opportunities 2
Agriculture is the backbone of Ethiopia's economy Share of Agriculture in GDP, Exports & Employment Ethiopia’s Progress Since CAADP (2004 -2014) GDP Exports Employment 2014 2012 2014 Others Industry Industry Manufactured goods Services Services Agriculture Agriculture Agriculture 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, 4 th Ethiopia Economic Update, 2015; and IMF Economic Database 3
ACC concept is a natural evolution of crop and other geographically oriented Transformation Agenda initiatives that ATA has been focused on during GTP-I Key features of the GTP-I Transformation Agenda Approach for the ACC initiative Production oriented approach Market-orientation linked to production focus • Production focused interventions Focused on market with emphasis on seeds, soil, needs and clear research, extension, crop packages, linkages between and irrigation inputs, production, • Key examples: processing, value - Direct Seed Marketing addition, high-value - Rural Financial Service export and domestic - Tef, Wheat and Maize markets Rural financial Services packages Geographical focus but weak coordination Geographic approach with focus on coordinated • Interventions spread across Full set of interventions different regions in Ethiopia focused on the same high • Limited geographical overlaps potential geographies bringing of various interventions out synergies constraining the impact through synergies of interventions Focus on individual crops Incorporates mixed cropping system used by smallholders Specific interventions designed Integration of solutions to more efficiently solve for cereals – tef, maize, wheat for the commodities (cereals, livestock, without including horticulture horticulture) prioritized by smallholder farmer and livestock and GTPII targets 4
Prior to cluster approach, ATA has been implementing various crop initiatives as a part of the overall GTP-I Transformation Agenda Maize Alliance …translates into specific targets for each value chain Sustainably increase 2 million tef s mallholder farmers’ productivity Maize alliance Tef (e.g. yield increases of over 50% Overall approach… through application of TIRR package) Assessment and analysis of national and I ncreased incomes for 500,000 global production and maize smallholder farmers by market trends on effectively linking them to Maize selected institutional buyers at scale (e.g. 29 Cooperative Unions delivering commodities/crops 30,000 MT to WFP P4P program) Identify systemic bottlenecks along the Attain national wheat self- value chains Tef Initiative sufficiency and increased incomes Develop sector Wheat of smallholder farmers (e.g. strategies and interventions to increase production design intervention s to in 62 target woredas) address systemic Tef Initiative constraints along the Improve smallholder incomes and Value Chains nutrition as well as soil health Support partners to Pulses and through a systematic integration of Oilseeds implement solutions pulses into the cereal cropping system In early stages – support the MoA to develop Livestock Mater Plan Livestock and identify targets as part of the next five year GTPII plan 5
ACCs are spread across Ethiopia’s major geographic regions South Tigray Stage 1 ACC (Barley/ Honey/ Western Tigray Livestock) (Sesame/ Livestock) Stage 2 ACC Eastern Amhara Amhara Sesame Belt 3 Amhara (Chickpea/Tef, (Sesame/Chickpea) 2 Sunflower, Honey) Oromia 4 Amhara Barley Belt Central Oromia (Chickpea/ SNNP (Barley/ Tef, Livestock) Potatoes/Livestock) Tigray Eastern Oromia I Southwest Amhara Somali 5 (Wheat/Pot., Fruits&Veg., (Livestock/Maize/ Rapeseed,) 6 Honey) Northern Somali Western Oromia (Maize/ (Livestock/Maize, Shorgum) 15 Tef, Fruits&Veg.) 7 Eastern Oromia II (Barley/Pot., 9 Fruits&Veg., Honey) 10 11 8 Oromia Coffee Belt (Coffee/ Fruits&Veg., 12 Honey) 13 SNNP Maize Belt (Maize/ 16 Fruits&Veg. 14 Central Somali /Livestock) Northern SNNP (Wheat/ (Tef/Fruits&Veg., Sunflower) Fruits&Veg.) Eastern SNNP (Coffee/ Fruits&Veg./ Honey) 6 Note: Zones specified are only an indication of potential areas. Woreda level Cluster definition will take place during Phase II
Priority interventions for most of ACCs build on existing Transformation Agenda initiatives supported by ATA at national and regional level… Areas of focus Value Chain Component Input supply Commodity Aggregation, Processing & value Marketing & distribution production storage & transport addition & Export • Community Based • Extension package on • Cooperative storage • Market information 1 9 14 17 Priority Intervention Areas in Stage 1 Clusters Seed Production production and post- promotion • Market linkage harvest handling • Seed Multiplication • Collection system for 2 15 18 initiatives based on market cooperatives • Direct Seed Marketing • Commission-based needs 3 • Scaling up post- 16 19 output marketing by • EthioSIS based 10 • FTC strengthening and harvest technology cooperatives fertilizer package 4 demonstration enhancement • Fertilizer supply and 5 distribution • Livestock services 11 • Crop protection supply • ICT based extension 12 6 / distribution (IVT/SMS) • Livestock input 13 • Mechanization 7 • Input Tracking 8 Access to finance, Organizational support, and Value chain integration • Input credit vouchers • Capacity-building for cooperatives, unions and other links 20 22 • Output finance initiatives • Contract farming and outgrower scheme promotion, with 21 23 commercial farms and downstream value chain actors 7
…while for a prioritized set of Clusters, interventions will be tailored for processing & value addition, marketing, exports and enhanced value chain integration Areas of focus Value Chain Component Input supply Commodity Aggregation, Processing & value Marketing Additional Priority Intervention Areas in Stage 2 Clusters & distribution production storage & transport addition & Export • Efficient system to • Specialized extension • Primary market • Facilitation of • Market information 1 2 4 7 9 supply all necessary for high-value crops development investment in systems and inputs for high-input and precision processing, value matching platforms • Storage and 5 / high output market farming addition, packaging • Collective branding aggregation capacity- oriented commodity and other supporting building and marketing production services support 10 6 • Cold chain 8 • Packaging materials • Product and development initiative promotion marketing 11 development and export promotion related support • Food safety, quality and traceability standards, capacity-building, certification 3 support and quality assurance Access to finance, Value chain integration and Business environment enhancement • Foreign exchange availability prioritization • Business environment enhancements 12 17 • Guarantee and risk-sharing funds • SME development and technical support 13 18 • Innovation and other investment grants • Professional association and value chain alliance promotion 15 19 • SME finance promotion 15 8 • Trade finance promotion 16
Agenda Overview of Ethiopia‘s Agriculture Sector Investable Investment Opportunities 9
Ethiopian agriculture is gaining attention from investors around the world 10
A variety of sub-sectors and agribusinesses are taking off, among them fruit & vegetable, poultry, soybean, wheat, cattle, dairy, malt barley, and tef FRUIT & VEGETABLE POULTRY SOYBEAN WHEAT CATTLE DAIRY MALT BARLEY TEF 11
CATTLE Ethiopia has massive potential to serve local & global meat markets Ethiopia has the largest livestock inventory in Africa and Domestic and international growth are growing, creating the 10 th -largest in the world, but it has not yet realized more opportunity for Ethiopian supply its potential to serve domestic & export markets Meat & live animals export performance (2005/6-2011/12) While Ethiopia currently has one of the Domestic Thousand USD lowest per capita consumptions of red meat 286 market in Africa, consumption is expected to grow Meat by 58% by 2020 to over 2 million tonnes. Live animal 79 211 Demand for beef is rising globally, and Export 63 specifically in high-potential export markets market for Ethiopian products. 125 101 34 207 24 • Large-scale cattle ranching & fattening 148 Promising 56 55 43 • Meat abattoir 15 business 18 91 77 16 models • 41 Processed milk powder 37 27 2005/6 2006/7 2007/8 2008/9 2009/10 2010/11 2011/12
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