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Strengthening Ethiopia's bean trade

ACOS has established a state-of-the-art processing plant (© ACOS)
ACOS has established a state-of-the-art processing plant

"Ethiopia remains one of the world's last frontiers for agriculture: it uses 36 per cent of the land for agriculture and less than 20 per cent of its water resources," says Remo Pedon, managing director of Pedon Group, an Italian-based pulse processor that has established a state-of-the-art processing plant in Nazreth, Ethiopia. "But farmers have limited capacity to export their produce because of the severe lack of infrastructure and poor market coordination."

Whilst Ethiopian beans have been exported for many years, the Group's industrial division - ACOS - began looking into the possibility of opening up new markets to higher value, high volume European destinations, such as the UK, Netherlands and Germany, and in the early 2000s supported the development of Ethiopian 'Navy' bean, or 'white pea' bean, a cash crop grown by subsistence farmers. In collaboration with NGOs - Sustainable Food Lab (SFL) and Catholic Relief Services (CRS) - ACOS set out to find ways of working with farmers and traders. New state of the art crop processing technologies to clean, sort and bulk produce were introduced to help build the market, which was also supported by the in-depth marketing knowledge and network of the ACOS team to upgrade the value chain.

Linking smallholders to markets

One significant step was the development of a new 'business model', that focused on six key issues in linking smallholder farmers to markets, explains Katia Sambin, ACOS assistant managing director. The model includes: fostering collaboration along the entire value chain; working with farmer organisations and traders to build improved links with smallholders; providing transparent and measurable quality checks for beans and providing a consistent price based on quality and volume; finding ways to ensure farmers get equitable access to services and inputs; and ensuring that innovation is inclusive.

Bean breeders provided new varieties of improved basic seed (© ACOS)
Bean breeders provided new varieties of improved basic seed

ACOS began working directly with farmers in 2007, focusing on the central rift valley, but also reaching farmers in Haraghe to the east and in the south western areas below Lake Ziway. The company found that very few farmers used good agricultural practices, and that training materials to improve quality and yields were scarce. To address these issues, training materials were written in partnership with CRS and the Ethiopian Institute of Agricultural Research (EIAR) and disseminated in local languages to farmers' cooperatives. This enabled government extension teams to train farmers in improved production methods leading to increased yields of up to 50 per cent.

In the absence of Ethiopian-based bean seed companies, farmers generally planted low quality seed of old varieties. CRS and ACOS worked with bean breeders from EIAR, the International Center for Tropical Agriculture (CIAT) and the Ethiopian Seed Enterprise, with funding from the Bill & Melinda Gates Foundation, to provide new varieties of improved basic seed. During the project, 70 metric tons of improved varieties were distributed to more than 15,000 small farmers. Most farmers received 20 kg of seed, enabling them to plant one acre, which often more than doubled their income in one season.

Strengthening the value chain

Training was provided to strengthen farmers' groups as well as to use a package of good agricultural practices, including the right planting density, planting in rows, timely cultivation and weeding, and harvesting before the pods shattered. Additional support was also given to improve farmers' threshing methods and, in some cases, to improve warehouses. ACOS and CRS also worked on linkages between farmers and traders so that larger volumes of higher quality grain could be bulked for sale. "ACOS worked with larger traders to improve their warehouse methods and supported some traders through downstream financing to accelerate the delivery of beans through the value chain, which improved grain quality and also reduced losses caused by weevils and moulds," explains Sambin.

Training was provided to strengthen farmers' groups (© ACOS)
Training was provided to strengthen farmers' groups

With the support of agencies, such as Save the Children, Oxfam and the International Food Policy Research Institute (IFPRI), ACOS has continued to expand its links to work with larger farmer networks and find ways of helping more farmers access improved inputs and use improved farming practices. "We have also worked with these NGOs as intermediaries in discussions with international buyers and processors in developed countries who have concerns about working with smallholder farmers," Sambin reveals. "These discussions helped the buyers to appreciate the ambitions of Ethiopian farmers, and that their support through trade is improving the lives of poor families."

ACOS was also involved, from the beginning, in the creation of the Ethiopian Commodity Exchange (ECX) in 2008, which significantly upgraded Ethiopia's marketing system. All navy beans are now sold through ECX. This modern market has further strengthened market demand, increased price discovery ('true' market price) and introduced more stringent quality standards.

According to ACOS, improved navy beans have raised the incomes of close to 40,000 families. Yields have risen through the use of improved inputs, better farming systems and modern marketing mechanisms. Quality also has improved and prices have risen from US$6 per quintile in 2005 to US$42 in 2012. "Much of this was made possible because new markets, opened by ACOS in the UK, provided Ethiopian farmers with confidence in the market, which encouraged many more to invest in the crop and increase production," Sambin adds.

With contributions from: Shaun Ferris, Senior Technical Advisor for Agriculture, CRS

Date published: July 2013


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Thank you WRENmedia for all the articles on smallholder syst... (posted by: Rabiu Auwalu Yakasai)


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