This post originally appeared on LinkedIn.
Written by Nicholas J Parkinson.
Communications Manager at Agribusiness Market Development Program in Ethiopia
Ethiopia is Africa’s leading producer of chickpea and the sixth largest in the world. One of the most popular dishes—shiro—is made from chickpea. Still, a lack of financial capital and technological know-how has kept the chickpea value chain from realizing its full potential.
The United States Agency for International Development (USAID) Mission Director, Dennis Weller, joined Ethiopian food processor and exporter Agro Prom to inaugurate Ethiopia’s first industrial chickpea processing and cleaning machine in Adama, Ethiopia.
The processing machine is the result of an innovation grants program designed by the Feed the Future and USAID funded AGP-Agribusiness Market Development—initiative focused on improving the competitiveness and potential of Ethiopia’s chickpea sector. The processor and warehouse are worth an estimated $1.2mn, of which USAID funded $168,000, and Agro Prom invested the rest.
“USAID’s partnership with Agro Prom is a prime example of the new model of aid development in which the private sector also makes investments. These types of partnerships guarantee better prices for farmers and are important for the entire value chain,” the USAID Mission Director said at the event.
Due to gaps in quality, Ethiopia chickpea exports go to lesser value markets. In addition, exporters sell to high volume food processing companies in India and Pakistan, where the chickpea end up mixed with other chickpea lots, losing their ‘Ethiopianess’, one of the selling points for marketing the grain to high value markets.
With the processing equipment, Agro Prom is poised to sell to the more demanding and higher value American, European and Middle Eastern markets. The machinery cleans chickpeas to above 99% purity using gravity separators and electromagnetic technology to remove soils and other impurities. In 2014, 1 million farmers produced over 400,000 MT of chickpea, of which an average of 60,000 MT per year are exported.
“Quality is our biggest problem and preventing us from entering the big markets. Yes the Pakistanis buy from us, package it and sell it for more to better markets. But now that will change. If we want to reach quality standards, we had to put up a quality machine. We now have that machine,” says Agro Prom founder and CEO, Elias Geneti.
While the Ethiopian chickpea is smaller than most chickpeas on the world market, it makes up for size with its rich taste. Within the next two years, Agro Prom plans to turn its cleaned and sorted chickpeas into value added products, especially hummus, before exporting.
A Sustainable Source
In 2005, Agro Prom became the first Ethiopian agro-processor to use contract farming with nearly 5000 smallholder sesame farmers in Northern Ethiopia. For chickpea, Agro Prom is using the same contract farming model to source grain for its Adama-based processing plant. Under the contract farming structure, Agro Prom provides financing, pays a guaranteed price, provides on-site agronomists and gives training to sesame farmers.
“Agro Prom is replicating the same contract farming model with chickpea farmers. We need to link the entire value chain to guarantee fair distribution of the benefits and nurture sustainability,” says Geneti.
The USAID AGP-Agribusiness Market Development initiative made the initial link between Agro Prom and chickpea growing farmer unions, Erer and Lume. The two unions signed initial contracts to each provide 1000 MT of chickpea to Agro Prom in the first year, an activity that benefits over 2000 farmers.
USAID AGP-AMDe uses an integrated value chain approach to improve productivity and competitiveness, among farmer unions as well as private agribusiness. In chickpea and sesame, the program partners with the Ministries of Agriculture and Trade, farmer cooperative unions and the private sector to introduce improved quality seeds, better harvesting and post-harvest handling techniques in addition to processing and cleaning technology. The program has assisted chickpea and sesame exporters gain access to finance and international buyers through conferences and international trade shows.
Over the past four years, USAID AGP-AMDe reached over 13,500 chickpea farmers with training and activities and helped farmers sell approximately 5000 MT of chickpea at farmgate, worth $2.8mn USD.
Under the contract farming agreement, Erer Union manager, Mekonnen Hailu, can guarantee income for two primary cooperatives representing over 1000 farmers. “The advantages are that farmers do not have to worry about a market for their produce and when they get better prices, they are encouraged to increase production,” according to Hailu.
Next year, Agro Prom and the chickpea farmers will increase the contract to 1500 MT, which will allow Erer FCU to incorporate more primary cooperative members into the chickpea value chain.
Mechanization on the Farm
Earlier this year, chickpea farmer Million Meskele made history when he made the first mechanized chickpea harvest of 75 hectares with a combine harvester. Million owns the Bale Green farm located in the Oromia Region in Southeastern Ethiopia.
In February 2015, Million harvested, threshed and winnowed 125 metric tons of chickpea with the combine. Area farmers came and witnessed so they too could understand the benefits and opportunities of the new farm machinery. These types of technologies improve the chances of reaching a higher quality grain and the ability to reach processors such as Agro Prom. In addition, a combine can increase Bale Green’s chickpea harvest by approximately 15% compared to a manual harvest. The combine is a result of a matching-grants partnership with AGP-Agribusiness Market Development.
“This has been a great contribution to Bale Green and represents a turning point in the development of the chickpea agricultural sector. We will serve as a model for others trying to expand into mechanized farming,” explains Million Meskele, owner of Bale Green.
AGP-AMDe also supported Bale Green to attain a seed business license in order to distribute seed to area farmers. Next planting season, more than 1000 farmers could benefit through Bale Green’s seed multiplication activities.
“Really, the link between farmer and processor is at the heart of the Feed the Future initiative. A processing facility is the first step in adding value, and these actions all add money in the pocket of chickpea farmers,” said Dennis Weller, USAID Mission Director.