Sesame Business Network Ethiopia

Mekelle, March 21st 2015

Results group 2 : Direct supplier-buyer relations

1. Why are there only few direct supplier-buyer relations ?

2. What practical cases of direct supplier-buyer relations can you identify, which could be established or improved upon ? (think of the options mentioned in the presentation)

3. What role can (should) the Government play to enable direct supplier-buyer relations ?

Lead questions

Union Capacities• Skilled man power to meet requirements is lacking• Man power cannot handle The relationship; Lack of trust b/n union and buyers• Man power cannot involve smallholders; integration is weak• Unions have limited experience in export • The buyer needs huge amount; cannot be met by supplier• Poor union management system e.g delegation /• Poor capacity of coops & Unions: storage, transport, machinery

Farmer capacities• Fragmented land; hence challenging to collect• Poor awareness of farmers about collective marketing• Limited investors to deliver high volumes• Buyer requires processed sesame; cannot be supplied by farmers / Buyers demanding sustainable

supply and limited capacity of producers/ Limited supply and absence of established market• The buyer needs huge amount; cannot be met by supplier• Lack of skill and information of farmers

Results question 1 : why few direct supplier-buyer relations?

Regulating Environment• There is no conducive environment• Limited government support for value chain actors• Limited government attention for sesame (more attention for coffee)

Sector actors• Dominant presence of ECX• Was dominated by limited companies• Exporter and brokers dominated marketing system-price setting• Limited processing capacity

Information• Lack of awareness about creating direct relation• Lack of information with Unions• Limited information for infrastructure, internet

Finance• Shortage of finance; input and output loan

Results Lead question 1 (continued)

Relation development and promotion• Facilitate to create trust and long term relationship• Create good relationship with buyers and consumer• Discussion forum for B2B discussions• Searching buyers and bring to suppliers• Involve embassies for MIS (buyers, price, etc.)• Participation in trade fairs and exhibitions• Promotion through different media, and embassies for relations• Networking through trade portals• Introducing the role of each parties

Field improvement• Improve quality (quality management)• Capacity building on farmers• Increasing productivity / Bulky production• Awareness creation on benefits of direct relations

Results question 2: practical cases related to identified options

Union and coop capacity development• Improve unions decision making –business oriented • Internal capitalisation• Training on export management• Awareness creation on benefits of direct relations• Strengthening cooperatives to involve in processing• Avoid default• Strengthening cooperatives /Build capacity of coops

Environment improvement• Establishing responsible organisations for marketing• Financial & infrastructure strengthening• Stakeholders in the sector should pay attention to this issue

Results Lead question 2 (continued)

Governmental facilitation on relations• Government has to work on buyer identification and brokering using modern

technologies• Inviting different buyers from different countries• Inviting buyers to visit farmers• Support in experience sharing• Promotion through embassies• Government to provide information

Field interventions• Develop skill and capacity• Improving quality• Grading at grass root level• Informing the farmers about the importance of contracts

Results question 3: role of government

Regulations and policy• Improve the regulatory framework• The gov’t should create enabling environment and build the capacity of value chain actors. • Clear identification of policy document• Improving ECX system• The government or ECX should allow the farmers to sell their producer whenever and

where ever• Take measures to marketing problems• Evaluating the sector every three months

Multi-stakeholder support• Aware all value chain actors to be ethical• Organising stakeholder consultative meeting• Discuss with value chain actors and take measures accordingly• Focus on export market (also from government self)

Results Lead question 3 (continued)