promoting agro-enterprises in the highlands of ethiopia through improved institutional support...
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Presentation by Berhanu Gebremedhin, Dirk Hoekstra and Azage Tegegne at the 28th triennial conference of the International association of Agricultural Economists (IAAE), Foz do Iguaçu, Brazil, 18-24 August 2012.TRANSCRIPT
Promoting agro-enterprises in the highlands
of Ethiopia through improved institutional
support services: Experiences of market
oriented dairy and fattening development
Berhanu Gebremedhin, Dirk Hoekstra and Azage Tegegne,
International Livestock Research Institute (ILRI)
Presented at the 28th triennial conference of the International Association of
Agricultural Economists (IAAE), Foz do Iguaçu, Brazil, 18-24 August 2012
Background
Smallholder-led commercial transformation
of agriculture underlying strategy in Ethiopia
Improving Productivity and Market Success
(IPMS) of Ethiopian farmers project :
intended to demonstrate, on a pilot basis,
market-oriented transformation of
smallholders in Ethiopia (2005 – 2012).
Commercial transformation of smallholders
Commercial transformation of smallholders
entails market orientation and market
participation.
Long transformation process from subsistence to
semi-commercial and then to fully
commercialized agriculture.
Need for multi-pronged approach, and an all
inclusive, context specific, target group(s)
oriented options and programs which are
sustainable.
The five prime movers towards commercial
transformation
Technology
Improved human capital at all levels
Sustainable growth in physical capital (markets, roads,
dams, irrigation systems, energy etc.)
Effective organizations, and
Enabling political and institutional environment.
An integrated approach to promote
smallholder commercialization Technologies to enhance innovations
Human capacity development at all levels (especially the
key change agents and farmers)
Connecting smallholders to markets
Increasing access to assets and services
Reducing the risk and vulnerability in smallholder
production systems
Sustainable management of natural resources
Environment for enhanced participation of public, private
and the third sector (NGOs).
IPMS Project Components
The IPMS project is an action research project
aimed at demonstrating market-oriented
transformation.
Five major project components:
improved knowledge management,
capacity building of value chain actors and
service providers,
participatory commodity development,
research, and promotion of lessons and
experiences for scaling out and up.
Project principles/concepts
Participatory commodity value chain
development
Innovation systems perspective
Market oriented extension, and
Mainstreaming gender, HIV/AIDS and the
environment.
Market oriented developmental changes in
improved dairy 2005/06 2009/10 %∆
Number of households
producing
682 2, 156 216
Number of female-headed
households
104 352 238
Number of improved dairy
cows producing milk
532 1879 253
Milk produced (liters) 726, 924 3, 320, 000 356
Milk yield (liter/day) 4.48 5.79 29
Real revenue (million Birr) 2.2 6.5 200
Proportion of milk sold (%) NA 62 ---
Proportion of households
selling
NA 52 ---
Input supply and services in dairy development
Private AI service
Community animal health workers (CAHW)
Multiplication and distribution of forage seeds,
seedlings and cuttings.
Commercial production of seeds by farmers has not
reached commercially viable stage.
Animal feed
Animal feed, both in quality and quantity, main constraint
of dairy development. Successful interventions include:
Development of grazing land enclosures and
promotion of stall feeding through cut and carry
system,
enrichment plantations of improved forage species,
development of irrigated and backyard fodder,
processing of crop residues to increase their feed
value, and
improved awareness of and access of farmers to
processed feed.
Dairy sales and marketing
Adoption of grade animals and associated
practices had the most significant effect on
household milk production, and revenue.
Collective marketing and processing increased
household access to milk markets:
Establishment of milk collection centers
Milk processing in small local cooperatives
Processing by some of the larger dairy
producers in some of the district towns
Developmental changes in market oriented
improved small ruminant production
2005/06 2009/10 %∆
Number of households
producing
27, 523 54, 554 98
Number of female-headed
households
4, 657 9, 519 104
Total number of animals
fattened
164, 296 314, 077 91
Real revenue (million Birr) 46 120 159
Shoats fattened per
household
NA 6 ---
Proportion of animals sold
(%)
NA 50 - 95 ---
Proportion of households
selling
NA 100 ---
Fattening cycle/year NA 2 ---
Market oriented developmental
changes in cattle fattening 2005/06 2009/10 ∆%
Number of households
producing
6, 157 24, 391 296
Number of female-headed
households
308 2, 121 587
Total number of fattened
animals
9902 47, 524 380
Real revenue (million Birr) 44 207.5 867
Cattle fattened per
household per year NA 2 ---
Proportion of animals sold
(%) NA 100 ---
Proportion of households
selling NA 100 ---
Fattening cycle/year
NA 1.5 ---
Input supply and services in improved
meat production
Private bull stations
Improved access to processed feed
Multiplication and supply of forage seeds,
seedlings and cuttings
Credit for fattening purposes, and
Community-based livestock insurance schemes
Mixed results were achieved on these
interventions
Fattening practices and income
Significant benefits to farmers from fattening of animals
shorter fattening periods and stall feeding
de-worming animals at the beginning of the fattening
period
Use of concentrates during the fattening period
commonly accepted
Use of crop residues widespread.
urea treatment of crop residues and stover choppers
have so far not been adopted widely
Marketing of live animals
Marketing not a major problem.
Most animals are sold in nearby local markets,
through individual or collective action.
Market linkages had mixed results.
Export market value chains still developing for
smallholders
Conclusions and implications
The financial viability of private input supply and service
provision are constrained by the lack of economies of scale
(low business volume), and competition from government
subsidized service provision in the same location.
The crowding out effect of the public input supply and service
provision needs to be reconsidered.
The project demonstrated successfully the use of credit for
fattening purposes.
Both farmers and credit institutions should adopt a commercial
attitude towards credit rather than the usual (project) attitude in
which credit is considered as a subsidy.
Also, once the amount of credit required per farm increases,
group collateral systems may need to be replaced by other
flexible systems.
Conclusions and implications (2)
The use of a community based insurance scheme for
small ruminants can be used to stimulate commercial
fattening with credit, especially benefiting women.
This insurance scheme may also be considered as collateral for
the individual and/or group loans.
Institutionalized support structure is also needed to scale out
such schemes.
The awareness of farmers of processed feed is
increasing, and is likely to increase faster with the level of
market orientation.
Hence, once the scale of the fattening businesses increases,
feed agro dealerships should be further developed to ensure a
regular quality supply of feeds.
Conclusions and Implications (3)
The traditional production and technology focused
extension service approach is inadequate for market
oriented agricultural development; market oriented
extension service is required.
sustained and continuous effort is needed to build capacity for
market oriented extension and to institutionalize it from federal to
district levels.
Provision of market information in various forms,
facilitating virtual or physical linkages of producers with
buyers, and formal and informal collective action for
produce marketing increase bargaining power of
farmers.
Conclusions and Implications (4)
Farmers who used improved technologies and
management practices benefited more than
those who did not
Strengthen promotion of technologies for market
oriented commodities
Thank You!!