The economy of Ethiopia is based on agriculture, employing almost 80% of its workforce. Agricultural commodities make up about 75% of the country’s exports. However, poverty is still common in rural Ethiopia, as farmers are not getting the full pay-off from their hard work due to inefficiencies in farming methods, marketing, and trading.
To help farmers and other agricultural value chain actors in the Amhara Regional State tap into the sector’s huge potential, the Finnish Ministry for Foreign Affairs and the Government of Ethiopia launched the Agro-Business Induced Growth Programme (AgroBIG). NIRAS has been providing technical assistance since 2013.
The first phase of the programme focused on developing value addition in certain profitable value chains, for instance by introducing higher-quality seeds, appropriate post-harvest handling, and improved farming techniques such as using lime to reduce soil acidity.
Developing Market Linkages
AgroBIG Phase II, which began in 2017, will continue to support farmers to improve productivity within the onion, potato, rice, maize, tomato, small ruminant rearing, milk, and poultry value chains.
At the same time, entrepreneurs, processors, wholesalers, retailers, and consumer cooperatives are assisted in the creation of sustainable linkages with suppliers, value addition to the produce they deal with, and the discovery of new market segments to boost competitiveness and profitability.
On-farm demonstration of improved vs. local potato varieties in Koga irrigation command area, North Mecha.
To attain these goals, AgroBIG provides funding like matching grants and loans, and supports capacity building through training and business coaching.
Entrepreneurs, companies, and individual farmers can apply for AgroBIG matching grants to alleviate their financial risks when developing new business ideas, testing innovative techniques, and implementing new business models such as contract farming.
AgroBIG also has a specific revolving loan fund for women and youth. Local savings and credit cooperatives are harnessed to manage this loan fund.
My clients trust me. Now, I sell 11 tonnes of seed potatoes to farmers in Koga on a weekly basis during the season and, after attending a market linkage forum supported by AgroBIG, I was able to sign a contract buying agreement with the Koga Irrigation Cooperative Union to buy 22 tonnes of ware potatoes from Koga farmers that I can take to the major markets.
Contracts Provide Stable Incomes
AgroBIG further supports farmer cooperatives and unions to develop their member services and particularly to facilitate contract-based supply to institutional and other buyers.
In addition to providing cooperative and union leaders and staff with training and infrastructure, AgroBIG supports cooperatives through a loan fund that improves their capacity to establish contracts and procure produce from farmers.
Contract-based farming stabilizes the earnings of farmers and encourages them to plan ahead, which can lead to more investments.