Tiberio Chiari Istituto Agronomico per l’Oltremare Overseas Agronomic Institute ________________________________________________________________________________________
The Durum Wheat Value Chain in Ethiopia - Expo Milan 2015 - Auditorium, Cascina Triulza- 6 July 2015
The Agricultural Value Chains Project : concept, implementation and
prospects
Ethiopia Total population: about 90 millions Total surface: 1,1 millions Km2
GDP: 54,8 billions USD (2014 - WB) Agriculture: 42,3 % GDP Industry: 15,4 % Services: 42,3 Growth Population: 2,5% (2014) Growth GDP: 10,3 % (2014) Rural population : 81% Cultivated surface: 15 millions of ha Agricultural surface: 35,7 millions of ha (from World Bank , FAO, data 2014 )
Ethio-Italian Cooperation Framework
Growth and Transformation Plan 2010-2015
The PROJECT background
The PROJECT background
within the Arsi Bale Rural Development Project (ABRDP)
The PROJECT background
within the Arsi Bale Rural Development Project (ABRDP)
with some research and support
activities till the workshops on Durum Wheat at Adama in 2008
1-The Why
Huge consumption of pasta by Ethiopian citizens
1-The Why
Huge consumption of pasta by Ethiopian citizens
Strong demand of durum wheat
by pasta-making industries
Huge and expensive import of durum wheat
Data from Ethiopian Revenues and Customs Authority (www.erca.gov.et/)
-
50
100
150
200
250
300
-
100
200
300
400
500
600
700
800
900
1,000
2009 2010 2011 2012 2013 2014
Import of durum wheat in Ethiopia
Quantity (ton x 000) Value CIF (USD x million)
ton USD
Data from Ethiopian Revenues and Customs Authority (www.erca.gov.et/)
-
5
10
15
20
25
30
35
2009 2010 2011 2012 2013 2014
Import of pasta in Ethiopia
Quantity (ton x 000) Value CIF (USD x million)
2 -The Opportunities
a. Natural resources
b. Linkages among Research - Extension service - Farmers
c. Unions/cooperatives
• a -Natural resources
Wheat: Bale zone (Oromia Region)
• b - Linkages among Research - Extension service - Farmers
• Sinana Agricultural Research Center (SARC) mainly devoted to on farm research and operating in strict partnership with extension service and farmers’ communities
• c - Unions/ cooperatives
UNIONS MembersPrimary Persons
No Name coops Male Female Total1 Sikko mendo 75 19,082 1,157 20,239 2 Agarfa kejewa 14 3,558 351 3,909 3 Dire 20 2,897 356 3,253 4 Oda roba 33 6,167 404 6,571
Total 142 31,704 2,268 33,972
Primary Cooperatives MembersNo Name Woreda Type Male Female Total
1 Selka Sinana Multi P. 920 43 963 2 Sanbitu " " 600 38 638 3 Dureti Tulu " Seed M. 69 6 75 4 Shalo " Multi P. 231 14 245 5 Alage " " 402 8 410 6 Walte i Barisa " " 282 34 316 7 Ali Kejewa Agarfa " 432 77 509 8 Elebidu " " 451 100 551 9 Fenkel Goro " 803 18 821
10 Meliyu Burka " " 1,490 82 1,572 11 Ebisa Ginir " 625 28 653 12 Kebena " " 555 129 684 13 Elani doyo " " 460 34 494 14 Selam Gololcha " 529 144 673 15 Dire gudo " " 336 150 486
Total 8,185 905 9,090 From: Cooperative Promotion Office of Bale Zone (2014)
The Challenge
To substitute Durum Wheat Importation by local Durum Wheat production
with Bale zone leading the process toward an yearly production of about 500,000 quintals of DW
The Market
The Market
FINAL PRODUCT PASTA FINAL CLIENTS ETHIOPIAN CONSUMERS
RAW PRODUCT DURUM WHEAT GRAIN
- High protein content - Huge bulks - Homogeneus - The same over time BUYERS PASTA FACTORIES
DURUM WHEAT GRAIN
- High protein content - Huge bulks - Homogeneus - The same over time
Good seed of good varieties (Bakalcha and Ejersa) Suitable soils and crop management (Nitrogen: Urea) Huge amount of seed Rigorous grain bulking (no admisture at harvest and storing) Maintenance of seed purity
The Market…how?
Quality & Quantity or
Quantity & Quality
… over time!
The Strategy
¾Embracing ALL interested aspects (seed multiplication, grain production, harvesting, bulking, etc.)
¾Involvement and strenghtening of ALL key actors
¾Rigorous control of inputs and methodologies (only good seed stocks, suitable soils, good practices, etc.) and of final products (multiplied seed and grain)
(…as in any Process Innovation)
The Strategy
Durum Wheat: PROJECT STRATEGY (2)
¾ Starting from a small-but-complete Value Chain
¾ Fast and progressive scaling up of activities, and involvement of new farmers
…..HOW?
Pull-Push Relationships and Roles
The Supply Contract
The Supply Contract
Minimum unit for marketing
PRICE SCALING ACCORDING TO QUALITY (protein content)priceETB
↑ 830Protein % MAXIMUM 12.5 830
12.4 820. .. .. .. .
10.8 66010.7 650
10.6 640Protein % MINIMUM 10.5 630
↓ prevailing bread wheat price
The Supply Contract
The check-analysis by the buyer
The check-analysis by SARC as a Third party
NIT instrument to SARC…25 seconds for full analysis from grain (about half million ETB).
…solving the delay in payment by purchasing of
SN Cooperative/Union ETB/qt
Dire Dawa Kaliti1 Agarfa Kajewa Union 600 660 514,800 7802 Selka 1600 820 586,300 7153 Sambitu+Alage 775 101 78,780 7804 Dureti Tulu 400 320 242,240 7575 Meliyu Burka 2400 890 2,215 2,314,255 7456 Dire Union 11,200 3,901 1,485 4,244,700 7887 Oda Roba Union 4,000 2,134 1,616,942 758
20,975 5,552 6,974 9,598,017 766↙
By contract 11,635 9,340 16,072,043 ca. 890,000 USD
Total
Grain agreed to
be supplied
by contract
Grain supplied till Aug 2013 (qt)
Total money paid (birr)
Some selling through contract on 2012/13
New infrastructures and equipments
Instruments
15 stores for cooperatives 3 stores and 1 shelter for Unions 1 store for SARC
cost: 370,000 ETB
3 seed graders for Unions
Training and technical assistance
Instruments
Conical helical spring model
Smart- tornado model
-extremely weak at its start: it needs a “push” -at each new rotation there is an increase of energy
- till a “pulling” effect is activated
Smart- tornado model
The first rotations
DUR.Wh. (q) A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A50.000
45.000
40.000
35.000
30.000
25.000
20.000
15.000
10.000
5.000
2.500
A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A
"Meher season" "Grain" of Durum Wheat (for industries) "Seed" of Durum Wheat
Value of "grain"(ca 30 € /q)
400 q2.300 q
5.000 q5.000 q
20.000 q
50.000 q
2011 2012 2013 2014
PROJECT
DURUM WHEATVALUE CHAIN
10.000 q
ca 150.000 q
2015
150.000 € 600.000 € 1.500.000 € 4.500.000 €
1.150 q
The Scaling-up
The Scaling-up
The Project’s Governance
PROJECT MANAGING BODIES PROJECT STEERING COMMITTEE (governing body)
¾BoFED ¾BoA ¾Italian Development Cooperation Office
IMPLEMENTING AGENCIES ¾OARI/SARC ¾OTMDB – Oromia Trade & Marketing Development Bureau ¾OCPA- Oromia Cooperative Promotion Agency ¾6 Woreda administrations
AGRICULTURAL TEAM (techn. guidance and assistance) ¾OARI/SARC ¾OTMDB ¾OCPA ¾BoA ¾IAO
Cooperatives/Unions
Cooperatives/Unions
Industries
PROJECT MANAGING BODIES
money
grain
Public institutions framework - Enabling environment
The key relationships within the project
Contract
Cooperatives/Unions
Industries
Producers & Buyers joint platform
(“Borsa”)
money
grain
Standard Contract
Public institutions framework- Enabling environment
….which the relationships for the future?
The “magic” concepts
•Market- /Demand- driven approach
•Product and Process innovations
•A to Z Traceability along the Value Chain
• Transformation of Roles and of Relationships among Public and Private Actors
Thank you !
Amasagenallo !
Grazie!
Tiberio Chiari Istituto Agronomico per l’Oltremare Overseas Agronomic Institute