ETHIOPIA - International Trade Centre · Figure 12 : Ethiopia’s pulse yields metric 1993–2013...

ETHIOPIAVALUE CHAIN ROADMAP FOR PULSES 2016-2020

ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES

This value chain roadmap was developed on the basis of the process, methodology and technical assistance of the International Trade Centre (ITC) within the framework of its Trade Development Strategy programme.

ITC is the joint agency of the World Trade Organization and the United Nations. As part of the ITC mandate of fostering sustainable development through increased trade opportunities, the Trade Development Strategy programme offers a suite of trade-related strategy solutions to maximize the development payoffs from trade. ITC-facilitated trade development strategies and roadmaps are oriented to the trade objectives of a country or region and can be tailored to high-level economic goals, specific development targets or particular sectors, allowing policy makers to choose their preferred level of engagement.

The views expressed herein do not reflect the official opinion of ITC. Mention of firms, products and product brands does not imply the endorsement of ITC. This document has not been formally edited by ITC.

The International Trade Centre ( ITC )

Street address : ITC, 54-56, rue de Montbrillant, 1202 Geneva, SwitzerlandPostal address : ITC Palais des Nations 1211 Geneva, SwitzerlandTelephone : + 41- 22 730 0111Postal address : ITC, Palais des Nations, 1211 Geneva, SwitzerlandEmail : [email protected] : http :// www.intracen.org

Layout: Jesús Alés – www.sputnix.es

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ACKNOWLEDGMENTS

The value chain roadmap was elaborated as a component of ITC’s Supporting India’s Trade and Investment project ( SITA ), a South-South trade and investment initiative that aims to improve the competitiveness of select value chains through the provisions of partnerships from institutions and business from India. SITA is funded by the U.K. Department of International Development ( DFID ).

The formulation of the value chain roadmap was led by the Government with the technical assistance of the International Trade Centre ( ITC ). This document repre-sents the ambitions of the private and public sector stakeholders for the develop-ment of the sector. Stakeholders’ commitment and comprehensive collaboration have helped build consensus around a common vision that reflects the realities and limitations of the private sector, as well as policymakers and trade-related institutions.

The document benefited particularly from the inputs and guidance provided by the members of the sector team :

� Genzeb Akele � Kassahun Bekele � Eyerusalem Regassa � Ahmed M. Mukred � K.P.C. Rao

Technical support and guidance from International Trade Centre ( ITC ) was rendered through Alberto Amurgo Pacheco, Anna Victoria Quiñones Barr, Aman Goel, and Bharat Kulkarni. Assefa Yohannes provided valuable support as national consultant.

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CONTENTS

Acknowledgments v

EXECUTIVE SUMMARY XIV

GLOBAL TRENDS IN PULSES 19Global production of pulses 19

Global trade in pulses 20

Top markets for pulses 23

PULSES IN ETHIOPIA 25

VALUE CHAIN ANALYSIS 25

STRATEGIC ISSUES AND COMPETITIVE CONSTRAINTS 31

Supply-side issues 31

Business environment constraints 33

Market entry constraints 34

Socioeconomic and developmental constraints 36

STRATEGIC IMPLICATIONS FOR THE VALUE CHAIN ROADMAP 37

THE WAY FORWARD 40

THE STRATEGIC OBJECTIVES 40

THE VALUE CHAIN ROADMAP FOR THE NEXT FIVE YEARS 44

FDI AND SOUTH–SOUTH COOPERATION 45

The Ethiopian business environment for the pulses sector 48

FUTURE VALUE CHAIN 50

MOVING TO ACTION 52

ROADMAP PLAN OF ACTION 53

APPENDICES 65

Appendix I : Ethiopia’s production of pulses 66

Government policy 66

Scope of the pulse sector 66

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Employment 67

Pulse market 68

Planting and harvesting season 68

Planting regions 69

Production 69

Appendix II : Ethiopia’s exports of pulses 75

Export partners 75

Export products 78

Appendix III : Policy environment and trade agreements 80

Agricultural policy 80

Industrial policies 82

Trade policy 83

Development policies 85

Appendix IV : Sector development targets 86

Appendix VIII : List of participants at consultations 92

References 94

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FIGURES

Figure 1 : The logical framework of the roadmap xvi

Figure 2 : World import basked of pulses ( US $ thousands ) 20

Figure 3 : Imports by pulse category and leading importing region ( US $ thousands ) 21

Figure 4 : Exports of pulses by region or regional group, 2004–2013 ( US $ thousands ) 22

Figure 5 : Value chain of the pulses sector in Ethiopia 26

Figure 6 : Key determinants for a vision for the pulses sector 40

Figure 7 : The logical framework of the roadmap 44

Figure 8 : The future pulses value chain 50

Figure 9 : Ethiopia’s pulse area–production metric 1993–2013 70

Figure 10 : Ethiopia’s pulse production metric 1993–2013 70

Figure 11 : Ethiopia’s pulse area harvested metric 1993–2013 71

Figure 12 : Ethiopia’s pulse yields metric 1993–2013 71

Figure 13 : Yield of ‘Beans, dry’ : world-leading top three and top six African countries 2000–2013 73

Figure 14 : Ethiopia’s pulse exports 2001–2014 75

Figure 15 : Ethiopia’s top 20 markets for pulses, 2009 and 2014 ( US $ thousands ) 76

Figure 16 : Ethiopia’s exports of pulses by region or regional group, 2001–2013 ( US $ thousands ) 77

Figure 17 : Ethiopia’s export basket of pulses, 2001–2014 ( US $ thousands ) 78

Figure 18 : Ethiopian exports a share of world exports 2001–2014 ( % ) 79

Figure 19 : Geographical distribution for tariffs applied 89

Figure 20 : Comparative yields 2012 ( hectograms / ha ) 90

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TABLES

Table 1 : World-leading exporters of pulses, market share >=1 % ( US $ thousands ) 22

Table 2 : World-leading importers of pulses, average for 2012–2013 >= US $ 100 million ( US $ thousands ) 24

Table 3 : Value chain segments needing FDI and likely sources 47

Table 4 : The investment climate in Ethiopia and possible competitors for pulse investment 48

Table 5 : Comparison of costs and competitive factors 49

Table 6 : Number of private holders of temporary crops by size of holding during the Meher season 67

Table 7 : Pulses : estimates of improved seeds, irrigation, and areas that applied pesticides and fertilizer ( private holdings, Meher season ) 2008 / 09–2011 / 12 72

Table 8 : Regions share in total production by pulse variety ( 2014 / 15, Meher season ) 74

Table 9 : Ethiopia’s top 20 markets for pulses 76

Table 10 : Ethiopia’s pulses export growth 2009 / 10–2013 / 14 86

Table 11 : Countries granting preferential schemes to least developed countries 88

Table 12 : Pulse varieties’ and regions’ share in total pulses production ( 2014 / 015, Meher season ) 90

Table 13 : Estimates on improved seed, irrigation, pesticide and fertilizer applied area by pulse variety ( private holdings, Meher season ), 2008 / 09–2011 / 12 91

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ACRONYMS

The following abbreviations are used :

ADLI Agricultural Development Led Industrialization

AGOA African Growth and Opportunity ActATA Ethiopian Agricultural Transformation

AgencyBoA Bureau of AgricultureCAGR Compound Annual Growth RateCOMESA Common Market for Eastern and Southern

AfricaCRGE Ethiopian Climate Resilient Green EconomyECX Ethiopian Commodity ExchangeEGTE Ethiopian Grain Trade EnterpriseEIAR Ethiopian Institute of Agricultural ResearchENAO Ethiopian National Accreditation OfficeEPOSPEA Ethiopian Pulses, Oilseeds and Spices

Processors-Exporters AssociationESE Ethiopian Seed EnterpriseEU European UnionFAO Food and Agricultural Organization

of the United NationsFCA Federal Cooperative AgencyFDI Foreign Direct InvestmentGCC Gulf Cooperation CouncilGDP Gross Domestic Product

GSP Generalized Scheme of PreferencesGTP Growth and Transformation Planha HectaresICRISAT International Crops Research Institute

for the Semi-Arid TropicsIPM Integrated Pest ManagementITC International Trade CentreMFN Most Favoured NationMoA Ministry of AgriculturePASDEP Plan for Accelerated and Sustainable

Development to End PovertyPoA Plan of ActionRARI Regional Agricultural Research InstituteSITA Supporting Indian Trade and Investment

in AfricaSNNPR Southern Nations, Nationalities,

and Peoples’ RegionSNV Netherlands Development OrganizationTL III Tropical Legumes III projectUSAID United States Agency for International

DevelopmentWEF World Economic ForumWTO World Trade Organization

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FOREWORD

MR. AYANA ZEWDIE STATE MINISTER,

ETHIOPIA MINISTRY OF TRADE

The Ministry of Trade of the Federal Democratic Republic of Ethiopia is pleased to welcome the Value Chain Roadmap for the development of Pulses sector in Ethiopia. This Roadmap has been developed with technical assistance from the International Trade Centre ( ITC ) as part of their Supporting Indian Trade and Investment for Africa ( SITA ) project – the first South-South Aid-for-Trade project funded by the United Kingdom’s Department for International Development ( DFID ).

This document follows comprehensive sector-wide consultations that guided its designed. The Strategy will contribute to facilitate productivity, improve the quality and the effective promotion of the Pulses sector in the country.

We believe that this Pulses Roadmap, will not only offer us guidelines on the best way forward but is of vital importance for Ethiopia as it comes at a time when the country is launching its second growth and transformation plan ( GTP II ).

I also take this opportunity to thank the ITC-DFID association in taking up the initiative, as well as all stakeholders who have contributed to the creation of this document. Through your continued support and commitment.

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FOREWORD

MR. HAILE BERHE PRESIDENT OF THE ETHIOPIAN

PULSES, OILSEEDS AND SPICES PROCESSORS-EXPORTERS ASSOCIATION

The Ethiopian Pulses, Oilseeds and Spices Processors-Exporters Association ( EPOSPEA ) has been established with the objective of building the capacity of its members to make them competitive in the global market. In this context, EPOSPEA is pleased to have partnered with ITC-DFID Supporting Indian Trade and Investment ( SITA ) project, having closely collaborated since the start of its implementation phase.

This Value Chain Roadmap, aimed at strengthening the Ethiopian Pulses sector, is prepared after extensive consultations – on the opportunities and constraints in pulses production, productivity, quality, processing and packing as well as marketing aspects – with members of EPOSPEA and other stakeholders at the national level.

I wish to thank the International Trade Centre ( ITC ), the implementation agency of the SITA project, and the United Kingdom’s Department for International Development ( DFID ), the funding partner, as well as all other stakeholders involved in the making of this strategic document. As we embark on the imple-mentation of the project, EPOSPEA will endeavor to work closely with ITC and other stakeholders for the overall benefit of the Pulses sector, as well as members of the Association.

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FOREWORD

ITC MS ARANCHA GONZALEZ

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Photo: (CC BY-SA 2.0) DFID - UK Department for International Development (CC BY 2.0) , A AAAA AA AAAAA AAAAAAAA

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EXECUTIVE SUMMARYThe objective of this roadmap is to improve the performance of Ethiopia’s pulses sector by raising productivity and improving its internal organization while preserving the environment and contributing to the developmental divi-dend. The roadmap begins with an introduction to the global supply and demand of pulses. It then details Ethiopia’s local supply in the context of global demand. This is followed by an analysis of the various constraints currently impeding the Ethiopian sector from realizing its full potential. Finally, it lays the roadmap for removing the current constraints and presents a detailed Plan of Action ( PoA ).

Global trends in pulses

The global importance of pulses makes these crops ideal for simultane-ously achieving three developmental goals – reducing poverty, improv-ing human health and nutrition, and enhancing ecosystem resilience.

Pulses’ nutritional value and versatile use has rendered them a hot com-modity on the global market. In fact, by 2013, pulse exports amounted to US $ 9,425,000,000. While developed countries are increasing both supply and demand, demand is still largely driven by population growth in developing countries. Nonetheless, Ethiopia is keeping up with the developed countries, as it is the leading African exporter of pulses. Between 2012 and 2014 Ethiopia ranked twelfth among global pulse exporters.

Though African countries are lagging behind the leading pulse suppliers, the conti-nent is attracting more investors in agriculture as production costs rise in Asia. The 2014 Grow Africa annual report stated that in Ethiopia alone there was US $ 29 million in agricultural investments during 2014. As investments and agricultural outputs in-crease, it is important that African countries target the largest markets, notably India and China. For the last decade, India has been by far the largest importer of pulses. Since 2010, China has become the world’s second-largest importer of pulses.

Pulses in Ethiopia

Ethiopia’s pulses sector has experienced tremendous growth in the last five years and is now the second-largest component of Ethiopia’s agricultural sector and an important part of Ethiopia’s gross domestic product ( GDP ). This growth is largely due to the Growth and Transformation Plan ( GTP ) which parliament approved in 2010. This development plan spearheaded the Government’s strong support for the agricultural and pulses sectors.

Photo: (CC BY-SA 2.0) DFID - UK Department for International Development (CC BY 2.0) , A AAAA AA AAAAA AAAAAAAA

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[ EXECUTIVE SUMMARY ]

As Ethiopia’s pulses sector has grown, so have its export markets. Between 2001 and 2014, the number of markets with sales val-

ued above US $ 1 million grew from six to 31. Thus, Ethiopia is clearly gaining ground in many markets. However, it

has still not capitalized on all opportunities and should focus on the Indian and Chinese markets within the

next five years.

Constraints on the pulses sector

The roadmap unveils a wide set of con-straints that are directly or indirectly holding the Ethiopian pulses sector back from reaching its full potential. These constraints are then catego-rized into production, intermediation or developmental issues. Each of these categories of constraints is finally addressed in the PoA.

Production issues : the production issues section focuses on describing three main causes of Ethiopia’s pulses sector’s low production level. First, it

details four reasons for the high cost of local pulse production. These include :

the small average farm size, the limited affordability and availability of seeds, the

excessive cost of finance, and the poor production mechanization and postharvest

techniques used.

Next, the main causes of low productivity among smallholders are described. These include : limited

pesticide and fertilizer use, the lack of crop rotation, low-yielding seeds, and the lack of mechanization. Finally, six

causes of the low quality of pulse yields are noted. These include the absence of quality diagnostics, low seed quality, the absence of

quality incentives, the lack of technical skills, poor postharvest techniques, and unskilled labour and outdated machinery.

Intermediation issues : the intermediation issues section focuses on the causes of the sector’s poor internal organization, its limited competitiveness in existing markets, and inability to enter new markets. The section notes five main causes of the sector’s poor organization including : the lack of institutional organization and sector representation, the lack of necessary information, agents’ misaligned price expectations, the excessive number of mediators and brokers in the value chain, and the limited and flawed use of contracts.

xvi

It continues to describe six causes of the sector’s limited competitiveness and in-ability to enter new markets including : inadequate financial support for international trade, underinvestment, costly transportation and logistics, inadequate sources of market intelligence, weak trade promotion and the sector’s overall lack of adequate business skills.

Developmental issues : the developmental issues section focuses on two causes of the high level of unskilled labour among women and youth – i.e. land scarcity and social restrictions – and on two causes of possible environmental issues, i.e. low crop rotation and poor disposal and management.

The way forward

The Ethiopian pulses sector stakeholders’ vision is to create an internationally com-petitive sector that supports Ethiopia’s overall development. The realization of this vision is to be achieved through the implementation of three strategic objectives, which are broken down into operational objectives that define the scope of their implementation.

The strategic objectives include major thematic issues that are addressed throughout the roadmap and solidify the intended goals and purpose of this project. The three strategic objectives include : ( 1 ) boosting local productivity and product quality ; ( 2 ) improving intermediation ; and ( 3 ) maximizing the developmental dividend of the sector. Figure 1 provides an illustration of how each strategic objective and their succeeding operational objectives contribute to the overall improvement of Ethiopia’s pulses sector over the coming five years.

Figure 1 : The logical framework of the roadmap

xvii

Boosting productivity and quality aims to bring the pulse supply to the level re-quired by international markets, and requires the creation and use of public and market-led incentives. There are three steps that must be taken for this objective to be met. First, the average cost of pulse production must fall ( 1.1 ). Second, the production of pulses must expand ( 1.2 ). Finally, the overall quality of pulses must increase ( 1.3 ). As seen in figure 1, the combination of cost reduction and production expansion, along with the implementation of the operational objectives of the second and third strategic objectives, will place the sector in a situation where it can start to tackle structural quality issues ( 1.3 ).

Improving intermediation aims both to increase exports and to obtain the informa-tion necessary to channel to producers. This requires strengthening the connection between producers and the relevant intermediaries and will result in increased export competitiveness. The strategic objective is broken down into two operational objec-tives. First, the sector’s internal organization must be strengthened and improved ( 2.1 ). Second, the sector’s export competitiveness must increase ( 2.2 ). As seen in figure 1, the implementation of the first operational objective, combined with the execution of the third strategic objective, should lead to an increase in the sector’s export competitiveness ( 2.2 ).

Maximizing the developmental dividend aims to ensure that development of the sector still preserves the environment and contributes to the developmental dividend. Specifically, this includes protection of the environment and the inclusion of women and youth. There are two steps that must be taken for this strategic objective to be met. First, the skills of women and youth must be strengthened ( 3.1 ). Second, the development of the pulses sector must be done in an environmentally sensitive manner. In other words, development cannot jeopardize the environment and must contribute to the developmental dividend ( 3.2 ).

PoA

The PoA provides the overall framework that will guide the implementation of the roadmap over the next five years. This contains strategic objectives, operational objectives and relevant activities. Activities define the precise actions that will be undertaken and the responsible organization( s ). Activities specify concrete targets and measures.

Photo: (CC BY-SA 2.0) Helen, GrAAn LAnAAAAAAAA

[ GLOBAL TRENDS IN PULSES ]

19

GLOBAL TRENDS IN PULSES

Pulses are the edible dry mature seeds of leguminous crops, excluding those harvested for fresh products, which are classified as vegetables.1 Pulses include dry beans, dry peas, dry broad beans, chickpeas, lentils, cow peas, pi-geon peas, lupins, vetches and pulses.2 This excludes green beans and green peas, which are considered vegetable crops.3 Also excluded are crops that are mainly grown for oil extraction ( oilseeds like soybeans and peanuts ), and crops which are used exclusively for sowing ( clovers, alfalfa ).4

Pulses are very high in protein and fibre, and are low in fat. Like their cousins in the legume family, pulses are nitrogen-fixing crops that improve the environmental sustain-ability of annual cropping systems.

Because of their versatility and nutritional value, the glob-al market for pulses is large and rapidly increasing. Indeed, the Food and Agricultural Organization of the United Nations ( FAO ) and its Member states declared 2016 the International Year of Pulses.5 According to the FAO Statistics Division, roughly two-thirds of pulses are used for human consump-tion, 20 % to feed animals, and the remainder is used as seeds.6

Pulses are a vital source of proteins and amino acids for humans.7 Pulses are a large part of many countries’ traditional diets and are the main protein source for lower-income people worldwide. They also have medicinal value. In a 2014 study, Canadian doctors found that ‘dietary pulse intake significantly reduces low-density lipoprotein choles-terol levels.’8 Another study conducted in 2015 demonstrated

1.– Food and Agriculture Organization of the United Nations ( 2002 ). AArAAuA-tural Commodities : Profiles and Relevant WTO Negotiating Issues, chapter 1 – Basic Foodstuffs : GrainsA Rome : FAO. Available from : https : / / www.fao.org / docrep / 006 / y4343e / y4343e02.htm.2.– Ibid.3.– Pulse Canada ( 2015 ). What is a pulse? Available from https : / / www. pulsecanada.com / about-us / what-is-a-pulse.4.– Food and Agriculture Organization of the United Nations ( 1994 ). Definition and classification of commodities – pulses and derived products. Available from https : / / www.fao.org / es / faodef / fdef04e.htm.5.– The International Year of Pulses aims to recognize pulses’ nutritional ben-efits, their importance for food security in developing countries, and their posi-tive impact on soil fertility when used in rotation with other crops.6.– Food and Agriculture Organization of the United Nations ( 2015 ). 2016 International Year of Pulses website. Available from https : / / www.fao.org / pulses-2016 / en / . 7.– Ibid.8.– Ha, V. and others ( 2014 ). Effect of dietary pulse intake on established therapeutic lipid targets for cardiovascular risk reduction : a systematic review and meta-analysis of randomized controlled trials. CAnAdAAn MAdAAAA AAAAAAA-AAAn JAurnAA, 17 April. Available from https : / / www.ncbi.nlm.nih.gov / pmc / arti-cles / PMC4016088 / pdf / 186e252.pdf.

that increased consumption of pulses decreases the risk of colorectal cancer.9

Pulses are also used globally as animal feed because of their high protein content.10 Thus, they are increasingly serv-ing emerging countries, which are increasing their consump-tion of meat. In addition, because pulses are leguminous plants that have nitrogen-fixing properties, including pulses in farming rotation will replenish the soil with oxygen that crops like corn deplete from the soil. Thus, pulses increase soil fertility and have a positive impact on the environment.11

The importance of pulses makes them ideal crops for simultaneously achieving three developmental goals – re-ducing poverty, improving human health and nutrition, and enhancing ecosystem resilience.

GLOBAL PRODUCTION OF PULSES

This section provides analysis of global trends and sheds light on pulse crop production, price, trade and consump-tion patterns observed globally. As mentioned above, pulses include dry beans, dry peas, dry broad beans, chickpeas,12 lentils, cow peas, pigeon peas, lupins, vetches and pulses.13 Pulses are produced globally. Typically, especially in devel-oping countries, pulse crops are planted on marginal land and often grown under rain-fed conditions.14 This explains their low yields and large year-to-year production variability.15

Production of the major pulses ( except dry peas ) is con-centrated in developing countries, which account for 70 % of production.16 Dry pea production is dominated by devel-oped countries, accounting for over 80 % of global dry pea output. Since 1980 global trade of pulses has exhibited an

9.– Beibei Zhu, Yu Sun, Lu Qi, Rong Zhong and Xiaoping Miao ( 2015 ). Dietary legume consumption reduces risk of colorectal cancer : evidence from a meta-analysis of cohort studies, Nature.com, 5 March. Available from https : / / www.nature.com / articles / srep08797?WT.ec_id=SREP-692-20150310. ( The study broadly encompassed legumes, which they defined as ‘a diverse group of foods, including soybeans, peas, beans, lentils, peanuts, and other podded plants, which are widely cultivated and consumed.’ Most of these also qualify as pulses. )10.– Food and Agriculture Organization of the United Nations ( 2015 ). 2016 International Year of Pulses website. Available from https : / / www.fao.org / puls-es-2016 / en / . 11.– Ibid.12.– Available from https : / / www.cgiar.org / our-strategy / crop-factsheets / chick-pea / .13.– Food and Agriculture Organization of the United Nations ( 2002 ). Agricultural Commodities : Profiles and Relevant WTO Negotiating Issues, chapter 1 – Basic Foodstuffs : GrainsA Rome : FAO. Available from https : / / www.fao.org / docrep / 006 / y4343e / y4343e02.htm.14.– Ibid.15.– Ibid.16.– Ibid.

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[ ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES ]

annual growth rate of 7 %, which translates into an annual increase of roughly 5 million tons.17 The proportion of pulse production that is traded increased from 6 % to 7 % in the early 1980s to about 15 % currently.18

As demonstrated in figure 2, dry peas are the most-trad-ed pulse with a 37 % share of the total pulse trade, followed by dry beans ( 28 % ), lentils ( 9 % ) and chickpeas ( 8 % ).19

17.– Ibid.18.– Ibid.19.– Ibid.

Global trade in pulses is not a residual market, as several countries produce for the export market while many others rely on the world market to meet domestic demand. The largest markets for food pulses are in Bangladesh, India, Pakistan and Sri Lanka, while the largest market for feed pulses is the European Union ( EU ).20

20.– Ibid.

Figure 2 : World import basked of pulses ( US $ thousands )

0

2.00

0.00

0

4.00

0.00

0

6.00

0.00

0

8.00

0.00

0

10.0

00.0

00

Beans,small red (Adzuki)

Beans dried, shelled... nes(071339)

Broad beans&horse beans..(071350)

Leguminous vegetables..nes(071390)

Mung,black/green gram…(071331)

Chickpeas, …(071320)

Lentils dried, shelled…(071340)

Kidney &white pea beans …(071333)

Peas dried, shelled…(071310)

Pulses

Avg.12-13 Avg. 08-09

SAurAA : International Trade Centre ( 2015 ).

Note : The arrows indicate Ethiopia’s pulses with more than 1 % share in world’s export basket in the period 2012–2013.

GLOBAL TRADE IN PULSES

Pulses are a globally consumed commodity. Hence, trade trends for this crop are determined by importing countries’ local production and by production in exporting countries, both of which are affected by weather conditions, manage-ment of plagues, price increases of other crops ( as farmers can be compelled to move towards a higher rent crop ) and countries’ trade policies ( such as export incentives ). Such characteristics are reflected in the sector’s trade data ; in other words, unstable flows are observed in world trends.

For example, as seen in figure 3, although Asia is the region that imports the most pulses, not all categories of pulses have Asia as the leading importing region. The reasons underpinning these trends depend not only on the specif-ics of the product, but also on the value chain in which the commodity has been used as input and the end market. Evaluating a country’s trade participation in any segment, therefore, should be conducted in a holistic fashion.


21

Figure 3 : Imports by pulse category and leading importing region ( US $ thousands )


Top expor ters of pulses

In the past three decades there has been impressive growth in the global exports of pulses. A 2004 FAO study observed that exports of these crops doubled in 2003 in compari-son with the previous 20 years.21 In subsequent years, the trend continued along the same path. Between 2004 and 2008, annual percentage growth varied from 10 % to 35 %. The compound annual growth rate ( CAGR ) between 2004 and 2008 was 22 %. By 2013, pulse exports reached a re-cord high of US $ 9,425,000,000. This may be surpassed in 2014 as available trade values are already close to those of 2013, and the trade data for pulses of many countries is still missing.

Such trends on the supply side may be explained by increased yields, especially in developed countries, and the surge in cultivated areas ( chiefly led by developing coun-tries ). On the demand side, the trends may be explained by the increasing world population, the increased consumption of meat in developing countries, and by greater importance being given to pulses’ nutritional value around the globe.

21.– Food and Agriculture Organization of the United Nations ( 2005 ). Pulses : Past Trends and Future Prospects. Summary of paper contributed by FAO to the Fourth International Food Legumes Research Conference, New Delhi, 18–22 October. Available from https : / / www.fao.org / filead-min / templates / est / COMM_MARKETS_MONITORING / Pulses / Documents / PulsesStudy.pdf.

On the supply side, the pulses sector has seen an increase in the number of exporters and suppliers during the last five years. The number of countries with export values above US $ 1 million went from about 70 in the early 2000s to 78 in 2008, and reached 90 in 2013. The two leading export-ers of pulses, Canada and China, increased the value of their exports almost every year. Other leading suppliers are catching up rapidly. Countries such as Australia, India and the Russian Federation have shown growth in double digits and have expanded their share.

Another country that is carving a path in international markets is Kenya. This is the only country with export values above US $ 10 million with a triple-digit CAGR between 2009 and 2013 ( it was 111 % ), and a rising market share ( from 0.1 in 2008–2009 to 0.4 in 2012–2013 ). Notwithstanding Kenya’s remarkable growth over the decade – 59 % CAGR between 2004 and 2013 – trade flows during that period saw extreme peaks. For example, in 2009, exports fell below US $ 10 mil-lion and reached US $ 59 million in 2013.

Ethiopia is also keeping up, as it is the leading African exporter of pulses. Between 2012 and 2013 Ethiopia ranked twelfth among the world’s exporters of pulses, and it ranked seventh when using 2013 data.

Table 1 provides further details of today’s world-leading exporters of pulses. Average values were preferred to single years because of the volatility of trends that characterize the sector, and to present a more accurate picture.

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Table 1 : World-leading exporters of pulses, market share >=1 % ( US $ thousands )

Rank ExporterAverage

2012–2013CAGR

( 2004–2013 ) ( % )CAGR

( 2009 – 2013 ) ( % )

Share

Average 2008–2009 ( % )

Average 2012–2013 ( % )

World 9 237 100 14 11

1 Canada 2 288 784 17 9 30 25

2 China 1 011 932 13 5 13 11

3 Australia 970 553 16 18 6 11

4 United States 859 038 13 6 11 9

5 Myanmar 817 815 13 -4 14 9

6 Argentina 348 142 10 -4 4 4

7 India 273 967 15 46 1 3

8 Russian Federation 244 570 33 28 1 3

9 France 234 192 2 7 3 3

10 Mexico 233 949 9 4 2 3

11 Turkey 210 531 3 -6 4 2

12 Ethiopia 208 027 25 20 2 2

13 United Kingdom 147 047 5 6 2 2

14 Egypt 137 041 28 6 2 1

15 United Republic of Tanzania 93 489 19 10 1 1

16 United Arab Emirates 74 165 n.a. 20 1 1

17 Netherlands 73 943 5 12 1 1

18 Kyrgyzstan 61 007 26 25 0 1

19 Ukraine 55 191 6 -10 1 1

20 Nicaragua 48 295 10 -8 1 1


Figure 4 : Exports of pulses by region or regional group, 2004–2013 ( US $ thousands )

-

1.000.000

2.000.000

3.000.000

4.000.000

5.000.000

6.000.000

7.000.000

8.000.000

9.000.000

10.000.000

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

World

Americas

Asia

Oceania

Europe

Africa

CIS*

GCC**


* The Commonwealth of Independent States ( CIS ) includes Azerbaijan, Armenia, Belarus, Kazakhstan, Kyrgyzstan,

the Republic of Moldova, the Russian Federation, Tajikistan, Turkmenistan, Uzbekistan and Ukraine.

** Gulf Cooperation Council ( GCC ) members include, Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain and Oman.


23

As table 1 shows, Ethiopia and the United Republic of Tanzania are the only African countries growing at double digits in the top 20 world exporters of pulses. Nonetheless, as figure 4 demonstrates, Africa is lagging behind in the export of pulses, although it has arable land and more than 50 % of its population lives in rural areas and depends on agriculture.

Stakeholders aiming to develop the pulses sector in Africa may consider examining Ethiopia and the United Republic of Tanzania’s success stories and the factors impeding further development of the sector. Stakeholders across the region may also consider joining forces because low yields, low productivity and limited access to quality seeds are issues that most African countries must resolve. In addition, government policies and entrepreneurial prac-tices also dictate the destiny of the sector. Thus, cooperation across countries could provide the level playing field from which African countries could escalate their share in the in-ternational pulses market.

Although African countries have yet to make the cut among leading suppliers, the continent is attracting more investors in agriculture as production costs ( such as labour ) are rising in some Asian markets ( notably China ), emerging countries’ policies are shifting towards knowledge-based sectors, and the agricultural sector is seen by many as a profitable business at present and in the future. In fact, the sector could seize the opportunity provided by initiatives of reputed organizations with international reach, such as the World Economic Forum ( WEF ) New Vision for Agriculture.22

The WEF New Vision for Agriculture programme sup-ports multi-stakeholder partnerships in 11 countries across Africa, Asia and Latin America – including Kenya, Ethiopia and the United Republic of Tanzania. Similarly, in partner-ship with the African Union and the New Partnership for African Development, WEF began the Grow Africa partner-ship.23 This partnership connects producers and investors, and facilitates the use of best practices.24 Thus far, invest-ment commitments within the Grow Africa partnership have more than doubled to a total of US $ 7.2 billion, with most to be converted in the next three to five years.25 The 2014 Grow Africa annual report stated that in Ethiopia alone, there has been US $ 29 million in agricultural investments.26 Stakeholders may want to capitalize on the momentum of

22.– World Economic Forum ( 2015 ). New vision for agriculture. Available from https : / / www.weforum.org / projects / new-vision-agriculture.23.– For more on GrowAfrica see https : / / www.weforum.org / projects / grow-africa.24.– For more on GrowAfrica see https : / / www.weforum.org / projects / grow-africa. Best practices – a set of guidelines, ethics or ideas that represent the most efficient or prudent course of action – are often set forth by an authority, such as a governing body or management, depending on the circumstances. While best practices generally dictate the recommended course of action, some situations require that such practices be followed. Read more about best practices at https : / / www.investopedia.com / terms / b / best_practices.asp#ixzz3mjyzd4jN.25.– World Economic Forum ( 2014 ). Grow Africa Annual Report. Availa-ble from https : / / www.3.weforum.org / docs / IP / 2014 / GA / WEF_GrowAfrica_ AnnualReport2014.pdf.26.– Ibid.

such programmes by finding their position and proper strat-egy to increase production and add value to their produce.

TOP MARKETS FOR PULSES

From 2004 to 2012, the demand for pulses witnessed a steady, two-digit annual percentage change. In 2012 and 2013, increases were estimated at 7 % and 5 %, respectively.

India is by far the largest importer of pulses over the past decade,27 as it accounts for about 23 % to 25 % of world imports. Specifically, India’s imports increased from US $ 1,459,000,000 in 2008 to US $ 2,291,000,000 in 2013.28 The high demand for pulses is due to its vegetarian popula-tion, the increase of purchasing power across its poorest population, and unfavourable local weather conditions.29 This is clearly a county that is worth exploring further, be-cause it is one of the world’s most populated countries, its economy is booming, and a greater demand may be fore-seen in both the near and the long term.

Another country that has shown an impressive rise of demand for pulses during the past five years is China. Since 2010, China has been the world’s second-largest importer of pulses. Its CAGR between 2009 and 2013 was 50 %, and its share in world markets has risen from a 2 % average for the years 2008–2009 to a 6 % average for 2012–2013.30

Other countries that have also increased their demand and expanded their market share are, in descending order : Brazil, Algeria, Saudi Arabia, Canada, Indonesia, Sudan and South Sudan. It would be interesting to look further into these countries’ production, government policies ( including preferential access ) and factors driving growth.31

India is also a large exporter of pulses, ranking seventh in the world. This may be explained by the creation of vari-ous governmental incentives within the last five years that advance the sector. Brazil, Algeria, Saudi Arabia, Indonesia, Sudan and South Sudan are also net exporters of pulses.32

Table 2 provides information on importers of pulses whose international demand, on average for 2012–2013, was above US $ 100 million.

27.– Reddy, A.A., Bantilan, M.C.S. and Mohan, G. ( 2013 ). Pulses production scenario : policy and technological options. Policy Brief No. 26. Documen-tation. International Crops Research Institute for the Semi-Arid Tropics, Pa-tancheru, Andhra Pradesh, India. Available from http : / / oar.icrisat.org / 6812 / .28.– Shalendra, Dr ( 2012 ). Marketing of Pulses in India. Jaipur : CCS National Institute of Agricultural Marketing. Available from https : / / www.ccsniam.gov.in / research / 2013-research %20report %20on %20pulses.pdf.29.– Reddy, A.A., Bantilan, M.C.S. and Mohan, G. ( 2013 ). Pulses production scenario : policy and technological options. Policy Brief No. 26. Documen-tation. International Crops Research Institute for the Semi-Arid Tropics, Pa-tancheru, Andhra Pradesh, India. Available from http : / / oar.icrisat.org / 6812 / .30.– Ibid.31.– Food and Agriculture Organization of the United Nations ( 2012 ). FAO Sta-tistical Yearbook 2012 : part 3 : feeding the world. Available from https : / / www.fao.org / docrep / 018 / i3107e / i3107e03.pdf.32.– Shalendra, Dr ( 2012 ). Marketing of Pulses in India. Jaipur : CCS National Institute of Agricultural Marketing. Available from https : / / www.ccsniam.gov.in / research / 2013-research %20report %20on %20pulses.pdf ;

24


Table 2 : World-leading importers of pulses, average for 2012–2013 >= US $ 100 million ( US $ thousands )

Rank ImporterAverage

2012–2013CAGR

( 2004–2013 ) ( % )CAGR

( 2009–2013 ) ( % )CAGR ( average 2008–

2009 to 2009–2013 ) ( % )

ShareAverage

2008–2009 ( % )Average

2012–2013 ( % )

World 9 869 341 13 9 18 100 100

1 India 2 281 740 19 3 14 25 23

2 China 631 915 41 50 105 2 6

3 United States 445 946 11 12 29 4 5

4 Egypt 430 648 12 12 22 4 4

5 Pakistan 343 360 14 2 23 3 3

6 Bangladesh 341 271 15 15 19 3 3

7 Brazil 318 162 28 38 36 2 3

8 Spain 302 787 0 11 20 3 3

9 Italy 278 124 6 10 12 3 3

10 Algeria 264 234 13 18 22 2 3

11 Mexico 258 431 13 -3 23 2 3

12 Turkey 238 098 37 6 -6 4 2

13 United Kingdom 229 088 10 1 0 3 2

14 United Arab Emirates 210 963 n.a. 6 -2 3 2

15 Japan 192 263 5 5 15 2 2

16 Venezuela 151 947 15 6 20 1 2

17 Sri Lanka 141 000 14 0 -5 2 1

18 France 120 422 7 6 4 2 1

19 Saudi Arabia 118 506 22 96 147 0 1

20 Canada 113 337 14 11 20 1 1

21 Colombia 108 403 8 8 21 1 1

22 Germany 105 168 9 10 15 1 1

23 Belgium 105 130 2 12 8 1 1


Trade data disaggregated by region illustrates the rising de-mand for pulses not only in Asia, but also in Africa and Gulf Cooperation Council ( GCC ) members.33 The CAGR for im-ports of pulses between 2009 and 2013 in the last two regions has been at double digits, at 10 % and 14 %, respectively.34

These three regions are particularly interesting for African countries due to their geographical proximity and their po-tentially stable demand. This demand may occur because pulses are used in traditional foods, the increased purchas-ing power of the poor, population growth and government policies encouraging production of pulse crops.

In 2012 and 2013, Ethiopia’s share in Asia’s imports hov-ered at 1.5 %, in Africa at 4.3 % and in GCC at 3 %. In 2013, Ethiopia’s share in Commonwealth of Independent States countries amounted to 14 %.35 Investors and buyers from

33.– GCC members include Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain and Oman.34.– International Trade Centre ( 2015 ). Trade Map Database. Available from https : / / www.trademap.org / Index.aspx. Accessed 19 August 2015.35.– The Commonwealth of Independent States are Azerbaijan, Armenia, Belarus, Kazakhstan, Kyrgyzstan, the Republic of Moldova, the Russian Fed-eration, Tajikistan, Turkmenistan, Uzbekistan and Ukraine.

Asia, GCC and Africa are already partnering with countries in Africa in agriculture and agro-industry.36 However, the pulses sector is still underdeveloped in most African countries.37

To unlock the potential of the pulses sector, high-growth potential markets must be identified, understood and target-ed.38 This would allow the drafting of compelling investment projects that would probe project viability. In addition, these projects would also be aligned with Ethiopia’s national de-velopment objectives.

Regarding the specific case of expanding exports within and from Africa, it would be beneficial for African governments to find common ground on cooperation and the promotion of pulses, and build on their existing agreements. Such collabora-tion could unleash their competitive advantage – notably in terms of costs – and could promote the development of segments with higher added value, as well as diversifying end markets.

36.– World Trade Organization ( 2015 ). International Trade Statistics 2014. Availa-ble from https : / / www.wto.org / english / res_e / statis_e / its2014_e / its2014_e.pdf.37.– Ibid.38.– This means understanding of their needs and constraints, such as iden-tifying the seasons in which they face the greatest deficit, singling out distri-butional channels, and so on.

[ PULSES IN ETHIOPIA ]

25

PULSES IN ETHIOPIA

VALUE CHAIN ANALYSIS

A value chain describes the full range of activities necessary for moving a product or service from conception through the different phases of production, delivery to final con-sumers and final disposal after use.39 Value chains act as frameworks for understanding how a sector works, and for finding relevant issues and formulating proper solutions.40 Value chain analysis, therefore, is a proper mechanism to understand how Ethiopian pulse crop farmers may engage, improve the effectiveness and quality of their inputs and, ultimately, increase their exports.41

With over 90 million inhabitants, Ethiopia is the most populous landlocked country in the world, as well as the second most populated nation on the African continent.42 It occupies a total area of 1.1 million square kilometres and is the world’s twenty-seventh-largest country.43 Ethiopia is sub-Saharan Africa’s fifth biggest economy with promising signs of growth in the future.44 In 2013, agriculture accounted for 43 % of Ethiopia’s GDP and 51 % in 2007.45 The agricultural

39.– Kaplinsky, R. and Morris, M. ( 2001 ). A Handbook for Value Chain Re-search. Ottawa : Interna tional Development Research Centre. Available from https : / / www.value-chains.org / dyn / bds / docs / 395 / Handbook %20for %20Val-ue %20Chain %20Analysis.pdf.40.– Mitchell, J., Coles, C. and Keane, J. ( 2009 ). Upgrading Along Value Chains : Strategies for Poverty Reduction in Latin America. Overseas Develop-ment Institute. Available from https : / / www.odi.org / sites / odi.org.uk / files / odi-assets / publications-opinion-files / 5654.pdf ; United Nations Conference on Trade and Development ( 2013 ). Global Value Chains and Development : In-vestment and Value Added Trade in the Global Economy – A Preliminary Analy-AAA. UNCTAD / DIAE / 2013 / 1. Available from http : / / unctad.org / en / Publication-sLibrary / diae2013d1_en.pdf.41.– Mitchell, J., Coles, C. and Keane, J. ( 2009 ). Upgrading Along Value Chains : Strategies for Poverty Reduction in Latin America. Overseas Develop-ment Institute. Available from https : / / www.odi.org / sites / odi.org.uk / files / odi-assets / publications-opinion-files / 5654.pdf : Herr, M.L. ( 2007 ) Local Value Chain Development for Decent Work : An Operational Guide. Geneva : Interna-tional Labour Office. Available from https : / / www.ilo.org / wcmsp5 / groups / pub-lic / ---ed_emp / ---emp_ent / ---.ifp_seed / documents / instructionalmateri-al / wcms_115490.pdf.42.– International Federation of Freight Forwarders Associations ( 2015 ). FIATA Review, No. 108, July. Available from http : / / fiata.com / fileadmin / user_upload / documents / fiata_reviews / FIATA_Review_Nr._108_-_July_2015.pdf.43.– Ibid.44.– Ibid. ; Deloitte & Touche ( 2013 ). The “new” economies in Africa. Deloitte on Africa Collection, Issue 5.Available from https : / / www.2.deloitte.com / con-tent / dam / Deloitte / au / Documents / international-specialist / deloitte-au-aas-new-economies-africa-13.pdf.45.– International Federation of Freight Forwarders Associations ( 2015 ). FIATA Review, No. 108, July. Available from http : / / fiata.com / fileadmin / user_upload / documents / fiata_reviews / FIATA_Review_Nr._108_-_July_2015.pdf.

sector also generates over 70 % of export values and em-ploys 85 % of the population.46

The pulses sector is the second-largest component of Ethiopia’s agricultural sector and contributes immensely to the country’s economic growth, second only to cof-fee.47 According to recent export performance data for the 2013 / 14 fiscal year, the pulses, oilseeds and spices subsec-tor contributed US $ 920 million to Ethiopia’s export earnings with a share of over 28 %.48 Ethiopia produces more than 400,000 tons of chickpea annually and is the sixth-largest chickpea producer in the world.49

The strategy under development by all key stakeholders in Ethiopia’s Agricultural Transformation Agenda envisions the creation of an efficient and well-functioning value chain in the country’s pulses sector.50 To achieve this, all value chain actors must be well-integrated and unified.51 The pulse value chain, however, is lacking integration and unification. This value chain analysis, shown in figure 5, attempts to iden-tify the various impediments in order to develop possible solutions to help Ethiopia achieve its goal of having an ef-ficient and well-functioning value chain in the pulses sector.

As seen in figure 5, the value chain is divided into five broad stages : input, production, assembly, processing and markets. A characterization of each stage and general chal-lenges faced in each stage of the value chain are elaborated below.

46.– Ibid. ; Ethiopia, Agricultural Transformation Agency. Available from htt-ps : / / www.ata.gov.et / programmes / value-chains / pulses / .47.– United States Agency for International Development ( 2014 ). USAID works to strengthen Ethiopia’s pulses, oilseeds and spices sector, November 12. Available from https : / / www.usaid.gov / ethiopia / press-releases / usaid-works-strengthen-ethiopias-pulses-oilseeds-and-spices.48.– Precise Consult International ( 2014 ). Nation working to expand pulses, oil seeds market linkages, 13 November. Available from http : / / preciseethiopia.com / nation-working-to-expand-pulses-oilseeds-market-linkages / .49.– United States Agency for International Development ( 2014 ). USAID works to strengthen Ethiopia’s pulses, oilseeds and spices sector, November 12. Available from https : / / www.usaid.gov / ethiopia / press-releases / usaid-works-strengthen-ethiopias-pulses-oilseeds-and-spices ; Parkinson, N.J. ( 2015 ). Why Ethiopia just got its 1st industrial chickpea processor Now?, 26 August. Available from https : / / www.linkedin.com / pulse / ethiopia-get-its-first-industrial-chickpea-processor-parkinson.50.– Ethiopia, Agricultural Transformation Agency. Available from https : / / www.ata.gov.et / programmes / value-chains / pulses / 51.– International Food Policy Research Institute ( 2010 ). Pulses value chain in Ethiopia : constraints and opportunities for enhancing exports. Working Paper, July. Available from http : / / cdm15738.contentdm.oclc.org / utils / getfile / collec-tion / p15738coll2 / id / 8106 / filename / 8107.pdf.

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Figure 5 : Value chain of the pulses sector in Ethiopia

Rain Water

Unskilled Labor

(abundant)

Seeds (poor varieties)

Manure

Land

Farm Equipment (mechanization)

Chemical Fertilizers

(small proportion)

Pesticide and Insecticide (in small

proportion)

State Commercial Farms 1-2%

(Very few left)

Smallholder Producers 95%

(8 to 9 Million)

Cleaning

Sorting & grading

International Transporter

Regional Wholesalers

Farmers’ Unions

Local Retailers

Local Wholesalers

Processors

International Consumer 20%

National Consumer 50%

Assemblers

Brokers

Primary Cooperatives

Exporters (40 Adama)

Input Production Assembly Processing Markets

Marketing & labeling

National Component International Component

Packaging

Subsistence Needs 30%

•  Urban supermarket

•  National Local Consumer

Warehousing (Processors, ECX,

EGTE)

•  India •  China •  Egypt •  Pakistan •  Bangladesh •  UK •  Italy •  Spain •  Algeria •  Other

Biofertilizers

Farm Equipment

Private Commercial Farms 2.5%

(Very big)

ECX

EGTE

Quality control

Dehusting, splitting (local consumption)

Transformation

Inputs

Ethiopia is endowed with fertile soil and abundant water re-sources. It is no wonder that agriculture accounts for over 40 % of its GDP and that the pulses sector accounts for over 13 %. Major pulse crops include chickpeas, red kidney beans and white pea beans.52 Nonetheless, local pulse pro-duction is characterized as labour-intensive and low-input, and is rain-fed.53 Because of these inefficiencies, production is low. However, the potential for increasing production is tremendous. Productivity per hectare ( ha ) could be dou-bled simply with increased use of fertilizers, the use of better quality seeds, and the use of irrigation systems rather than

52.– Netherlands African Business Council and FME-CWM ( n.d. ). BuAAnAAA Opportunity Report : Oilseeds and Pulses. Available from https : / / www.nabc.nl / uploads / content / files / BOR %20Oilseeds %20 %26 %20Pulses %20- %20Final( 1 ).pdf.53.– Ibid.

relying on rainwater, not to mention that only 20 % of total available agricultural land is used, mainly in the highlands.54

Ethiopia’s pulses sector value chain inputs are character-ized as land, rainwater, unskilled labour, seeds, biofertilizers, manure and farm equipment.

Rainwater

Ethiopia’s two extreme seasons are the summer or AArAmAA ( the rainy season between June and August ) and the win-ter or bega season ( the dry season between December and February ). It is during the three summer months that

54.– Leonard Berry and FAO, 2003 Land degradation in Ethiopia : Its extent and Impact. https : / / www.google.co.uk / url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=2&cad=rja&uact=8&ved=0CCgQFjABahUKEwjE4bfQp9HIAhUDaxQKHQYJC0k&url=http %3A %2F %2Fwww.fao.org %2Fnr %2Fla-da %2Findex.php %3Foption %3Dcom_docman %26task %3Ddoc_down-load %26Itemid %3D165 %26gid %3D477 %26lang %3Den&usg=AFQjCNH61XzdNene954T2fTiR10EGLLnzA.


27

most of the country receives at least 90 % of its total annual rainfall.55 The drought that results from the winter season is thought to be the environmental stressor of greatest con-cern in the highlands of Ethiopia.56 Autumn or belg, which takes place from September to November, is the harvest season.57 Meher season, the main planting season, which takes place from April to June. Finally, spring or tseday oc-curs from March to May and is the hottest season, with spo-radic showers.58

Smallholders, the backbone of the pulses sector, rely on rainwater for their crop irrigation. Because of the low reli-ability of rainwater for crop irrigation and the lack of drainage systems, it is not uncommon for full crop losses to occur in high rainfall areas.59

Unskilled labour

According to World Bank’s data, Ethiopia’s total labour force was measured at 45,145,776.60 Of these, 80 % to 85 % are employed in farming. Thus the availability of human labour is not the issue. Rather, it is the lack of best practices knowl-edge and resources that disable the potential and current human labour to reach their full potential. What is more, drought, lack of availability of productive land and the poor productivity of available land often lead these labourers to migrate into urban areas.61

Seeds

‘The Ethiopian Seed Enterprise ( ESE ) was established in 1979 as a fully Government-owned parastatal to undertake seed production, processing and distribution, while regula-tory functions were managed by the Ministry of Agriculture and Rural Development.’62 Pulse seed varieties include

55.– Wordpress.com ( 2011 ). The science of rainy season and the problem of drought in Ethiopia, 31 August. Available from https : / / threepotsofbuna.wordpress.com / 2011 / 08 / 31 / the-science-of-rainy-season-and-the-problem-of-drought-in-ethiopia / .56.– Morrissey, James ( 2008 ). Rural–urban migration in Ethiopia. Forced Migration Review, Issue 31, October. Available from https : / / www.fmreview.org / FMRpdfs / FMR31 / 28-29.pdf.57.– Wordpress.com ( 2011 ). The science of rainy season and the problem of drought in Ethiopia, 31 August. Available from https : / / threepotsofbuna.wordpress.com / 2011 / 08 / 31 / the-science-of-rainy-season-and-the-problem-of-drought-in-ethiopia / .58.– Ibid.59.– Netherlands African Business Council and FME-CWM ( n.d. ). BuAAnAAA Opportunity Report : Oilseeds and Pulses. Available from https : / / www.nabc.nl / uploads / content / files / BOR %20Oilseeds %20 %26 %20Pulses %20- %20Final( 1 ).pdf.60.– Netherlands African Business Council and FME-CWM ( n.d. ). BuAAnAAA Opportunity Report : Oilseeds and Pulses. Available from https : / / www.nabc.nl / uploads / content / files / BOR %20Oilseeds %20 %26 %20Pulses %20- %20Final( 1 ).pdf.61.– Morrissey, James ( 2008 ). Rural–urban migration in Ethiopia. Forced Mi-gration Review, Issue 31, October. Available from https : / / www.fmreview.org / FMRpdfs / FMR31 / 28-29.pdf.62.– Kassie, M. and other ( 2009 ). Current Situation and Future Outlooks of the Chickpea Sub-sector in Ethiopia. Nairobi : ICRISAT & EIAR. Available from https : / / www.icrisat.org / TropicalLegumesII / pdfs / Current_Situation.pdf.

horse beans, chickpeas, haricot beans, lentils, dry peas, vetches and mung beans.63

Biofer tilizer & manure

Ethiopian smallholder farmers’ typically apply two types of fertilizers : chemical fertilizers ( i.e., urea and diammonium phosphates ) and fertilizers from manure and crop residuals. The high-quality chemical fertilizers are imported from an in-ternational provider, which makes access to these products limited and costly. Thus, most smallholder farmers rely on manure-based fertilizers.64 Unfortunately, according to local farmers, the preparation of this type of fertilizer is also costly because it is labour intensive. As a result there is limited, or often lack of, fertilizer use.65

Land

Ethiopia has a total area of 112 million ha. Only 15 % of this is arable and only 1 % is currently cultivated.66 Pulses are grown throughout Ethiopia and account for roughly 13 % of cropped land area. However, production is concentrated in the Amhara and Oromia regions.67 Together, these areas account for 92 %of chickpea production, 85 % of faba bean production, 79 % of haricot bean and white pea bean pro-duction, and 79 % of field pea production.68

Farm equipment

Ethiopia’s agriculture is characterized by its low level of mechanization. Land preparation on smallholdings is typi-cally done with oxen. Tillage performed three times is rec-ommended to create a fine seedbed, but in practice labour and oxen are limited during the sowing season,69 leading to shortages.70

63.– Sutton, J. and Kellow, N. ( 2010 ). An Enterprise Map of Ethiopia. London : International Growth Centre. Available from http : / / personal.lse.ac.uk / sutton / Enterprise_Map_Ethiopia_Book.pdf.64.– Gebre-Selassie, A. and Bekele, T. ( 2012 ). A review of Ethiopian agricul-ture : roles, policy and small-scale farming systems. In Global Growing Case-book. Global Growing Campaign. Available from http : / / global-growing.org / sites / default / files / GGC _Ethiopia.pdf.65.– Ibid.66.– Netherlands African Business Council and FME-CWM ( n.d. ). BuAAnAAA Opportunity Report : Oilseeds and Pulses. Available from https : / / www.nabc.nl / uploads / content / files / BOR %20Oilseeds %20 %26 %20Pulses %20- %20Final ( 1 ).pdf.67.– Netherlands African Business Council and FME-CWM ( n.d. ). BuAAnAAA Opportunity Report : Oilseeds and Pulses. Available from https : / / www.nabc.nl / uploads / content / files / BOR %20Oilseeds %20 %26 %20Pulses %20- %20Final( 1 ).pdf68.– Ibid.69.– Gebre-Selassie, A. and Bekele, T. ( 2012 ). A review of Ethiopian agri-culture : roles, policy and small-scale farming systems. In Global Growing Casebook. Global Growing Campaign. Available from http : / / global-growing.org / sites / default / files / GGC _Ethiopia.pdf..70.– Ibid.

28


Ethiopia’s major agricultural imports include agricultural machinery.71 However, the purchase and use of modern machinery such as tractors and combine harvesters is typi-cally limited to large-scale farms.72 This is because of the high cost and low availability of modern farming machinery for smallholder farmers.73

Production

The next step in the value chain is production. This is mostly undertaken by small and medium-scale farmers and, to a limited extent, by large-scale farmers ( i.e. private and state commercial farms ).74 Indeed, Ethiopian smallholders are the backbone of the agricultural sector. They produce approxi-mately 95 % of pulses and number 8 to 9 million farmers.75

Private commercial farms lag far behind, accounting for only 2.5 % of pulse production, and state commercial farms account for around 1 % of production. Recent policy changes are the cause of the near extinction of state com-mercial farms.

Assembly

The assembly stage of the value chain involves the process where the producers ( smallholders and commercial farms ) sell their product to the Ethiopian Grain Trade Enterprise ( EGTE ), assemblers, brokers, primary cooperatives, local re-tailers, local and regional wholesalers, farmers’ unions, and processors. One popular place to trade these commodities is the Ethiopian Commodity Exchange ( ECX ).

The ECX is a relatively new initiative for Ethiopia and the first of its kind in Africa. It is an organized marketplace where buyers and sellers come together to trade and are assured of quality, quantity, payment and delivery. ECX is jointly gov-erned by a private – public board of directors.76

The EGTE most typically purchases and exports white pea beans ( haricot beans ), chickpeas, horse beans ( faba

71.– Enterprise Canada Network ( 2015 ). Agricultural Technology and Equip-ment Sector Profile – Ethiopia. Available from https : / / www.enterprisecanad-anetwork.ca / _uploads / resources / Agricultural-Technology-and-Equipment-Sector-Profile-Ethiopia.pdf.72.– Netherlands African Business Council and FME-CWM ( n.d. ). BuAAnAAA Opportunity Report : Oilseeds and Pulses. Available from https : / / www.nabc.nl / uploads / content / files / BOR %20Oilseeds %20 %26 %20Pulses %20- %20Final( 1 ).pdf73.– For a list of importers of Agricultural machinery and equipment in Ethiopia see : Enterprise Canada Network ( 2015 ). Agricultural Technology and Equip-ment Sector Profile – Ethiopia. Available from https : / / www.enterprisecanad-anetwork.ca / _uploads / resources / Agricultural-Technology-and-Equipment-Sector-Profile-Ethiopia.pdf.74.– Sutton, J. and Kellow, N. ( 2010 ). An Enterprise Map of Ethiopia. London : International Growth Centre. Available from http : / / personal.lse.ac.uk / sutton / Enterprise_Map_Ethiopia_Book.pdf.75.– Netherlands African Business Council and FME-CWM ( n.d. ). BuAAnAAA Opportunity Report : Oilseeds and Pulses. Available from https : / / www.nabc.nl / uploads / content / files / BOR %20Oilseeds %20 %26 %20Pulses %20- %20Final ( 1 ).pdf76.– Ethiopia Commodity Exchange ( 2009 ). Website. Available from http : / / www.ecx.com.et / .

beans ), whole brown lentils, red kidney beans and green mung beans.77

Processing

After the assembly phase comes the processing phase. Processing not only adds value to pulses but also main-tains the quality, thereby increasing farmers’ confidence in their product.78 Processing is where the product is cleaned, sorted and graded ; goes through quality control ; is de-husked and split for local consumption ; is warehoused at ECX or EGTE ; packaged, marketed and labelled ; and / or transformed.

Cleaning

Most of the agricultural research centres and universities that are responsible for breeder seed, pre-basic or even ba-sic seed production, have seed cleaning facilities.79 Similarly, ESE, the Ethiopian Public Health Institute, Farmer-Based Seed Production and Marketing Schemes, and the Swedish International Development Cooperation Agency Seed Project have seed processing plants and / or cleaners.80

Sorting and grading

The Edget Seed Production and Marketing Union has 15 pri-mary seed production and marketing cooperative members that operate in three Silte zone woredas ( districts ) ( Silte, Lanfro and Sankura ) and three woredas in Gurage zone of the Southern Nations, Nationalities, and People’s Region ( SNNPR ) ( Sodo, Marako and Meskan ), with six and nine cooperatives, respectively.81 These 15 cooperatives united in 2009 to facilitate their access to cleaning, sorting, grading and warehousing services, and seed marketing.82

77.– Ethiopian Grain Trade Enterprise ( 2014 ). Export products. Available from https : / / www.egte-ethiopia.com / en / products.html ; for more informa-tion on each see Ethiopian Grain Trade Enterprise ( 2014 ). Pulses. Available from https : / / www.egte-ethiopia.com / en / 2014-04-06-10-45-01 / pulses.html.78.– Gebeyehu, G., Dabi, G. and Shaka, G. and Bishaw, Z. ( 2001 ). Focus on Seed Programs : The Ethiopian Seed. West Asia and North Africa ( WANA ) Seed Network Secretariat, International Center for Agricultural Research in the Dry Areas ( ICARDA ), Aleppo, Syria. Available from https : / / www.goog-le.co.uk / url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=2&ved=0CCcQFjABahUKEwixtoyR_ZnIAhUGjnIKHYW9Cm4&url=https %3A %2F %2Fapps.icarda.org %2FwsInternet %2FwsInternet.asmx %2FDownload-FileToLocal %3FfilePath %3DResearch_publications_archive %2FSeed_sys-tems %2FSeed_Focus %2FFOCUS-Ethiopia.pdf %26fileName %3DFOCUS-Ethiopia.pdf&usg=AFQjCNGC5680GVSkW8Ibw-fxLb_Jv28mxw.79.– Ibid.80.– Ibid.81.– Alemu, D. ( 2011 ). Farmer-based seed multiplication in the Ethiopian seed system : approaches, priorities and performance. Working Paper 036, Fu-ture Agricultures Consortium. Available from https : / / www.future-agricultures.org / search-documents / research-and-analysis / working-papers / 1554-farmer-based-seed-multiplication-in-the-ethiopian-seed-system-approaches-priori-ties-performance / file.82.– Ibid.


29

Quality control

Quality is the major limiting factor for the export of pulses from Africa. The Asian market generally has quality pulses but the availability of these at the grass-roots level is not suf-ficient. The mechanism of quality certification and standardi-zation is not very common. Hence, the buyer finds it difficult to trust that the supplier understands the quality demanded and will supply the same. Also, each destination country has a different quality expectation. Hence, the supplier needs to understand the buyer’s requirements in terms of qual-ity and should have the necessary structure to supply the quality. Buyers in international markets prefer to buy from transnational companies rather than from exporters in Africa, because transnationals offer a better assurance of quality.

Dehusking

Dehusking or splitting for local consumption. Pulses are mainly consumed in the form of dehusked split pulses.83 Dehusking is a process that reduces the fibre content and improves the appearance, texture, cooking quality, palat-ability and digestibility of the pulse.84

Emery rollers are typically used to dehusk pulses. Roughly 50 % of pulses are dehusked in a single operation ( in one pass ). Dehusked pulses are then split into two parts and are separated by sieving.85 The whole process is re-peated two to three times.

In Ethiopia, however, dehusking is a much more labori-ous and time-consuming task completed without modern technology. Dehusking can be performed by the dry method or the wet method. Traditionally in African and Asian coun-tries, the dry method involves pounding of the dried grains in mortars with pestles or in hand-operated wooden or stone shellers.86 The wet grinding process for dehusking involves soaking of the grains before drying.87 The separated husks are removed from the cotyledons by winnowing. Winnowing is also typically done manually, which is time-consuming and laborious.88 Finally, the seeds are separated. This pro-cess is used to remove or separate whole grains from split,

83.– Tamil Nadu Agricultural University Agritech Portal ( 2015 ). Postharvest technology : agriculture : pulses. Available from https : / / www.agritech.tnau.ac.in / postharvest / pht_pulses.html.84.– M. Shafiur Rahman, ed. ( 2007 ). Handbook of Food Preservation. Boca Raton : CRC Press. Available from https : / / books.google.co.uk / books?id=sKgtq62GB_gC&pg=PA126&lpg=PA126&dq=dehusking +and+splitting+pulses+seeds&source=bl&ots=DGL9_JTEAV&sig =Mjyn2mK7AVIR-h8GWsirk2-4MVY&hl=en&sa=X&ved=0CCAQ6AEwAGoVChMIu9DDw9GtyAIVx4ssCh0xhw4N#v=onepage&q=dehusking %20and %20splitting %20pulses %20seeds&f=false.85.– Ibid.86.– Subuola, F., Widodo, Y. and Kehinde, T. ( 2012 ). Processing and utiliza-tion of legumes in the tropics. In Trends in Vital Food and Control Engineering, Prof. Ayman Amer Eissa, ed. InTech. Available from http : / / cdn.intechopen.com / pdfs / 35126.pdf.87.– Ibid.88.– Ibid.

broken and powdery ones. It is also typically done manually using sieves.89

Warehousing

Recommended storage techniques imply that pulses must be stored below 25 degrees Celsius and above the freezing point. Ethiopia is blessed with highlands where the tempera-ture is naturally within this range and, as a result, storage in these locations can naturally reduce postharvest losses.

Both bag-based storage through warehouses and bulk storage through silos and bins can be used. In Ethiopia, the most common method used is storing produce indoors in industrially produced sacks.90 This storage mechanism is not effective as insect and rodent infestations are common threats.91

Depending on the weather conditions in storage ar-eas, storage can happen in different ways : in permanent structured warehouses, in refrigerated warehouses or even in the open. In the warehouse-based storage system, pe-riodic checks and spraying of insecticides is important. If a silo system is used, then silos made from metal sheet or concrete can be used. Proper ventilation to reduce the temperature is required.

Efficient control of storage pests. The most common pest that damages the pulses crop is bruchids, or pulses beetles. There are various types depending on the area. The major sources are fields, carryover commodities, process-ing plants, re-used sacks or even transportation sources. To control this, a proper monitoring, identification and control mechanism is required. It will be important for the ware-house to carry out regular inspections to detect infestations or potential infestations for proper treatment. The inspection can be visual, by sampling and counting, Detection of latent infestation can be done through chemicals, X-rays, sound amplification and use of chemical attractants. Treatment can be done through physical methods or chemical treatments, or by exclusion and sanitation.

Transformation

Pulses often go through ‘transformation’ : secondary pro-cessing in order to transform the raw dehusked and split pulse into an edible product. Among the various second-ary processing methods are roasting, frying and canning. Roasting improves the taste and edibility of pulses and re-duces or eliminates anti-nutritional factors. This entails roast-ing the pulses on an open frying pan in the presence or absence of salts or ash.92

89.– Ibid.90.– Gebre-Selassie, A. and Bekele, T. ( 2012 ). A review of Ethiopian agri-culture : roles, policy and small-scale farming systems. In Global Growing Casebook. Global Growing Campaign. Available from http : / / global-growing.org / sites / default / files / GGC _Ethiopia.pdf.91.– Ibid.92.– Subuola, F., Widodo, Y. and Kehinde, T. ( 2012 ). Processing and utiliza-

Photo: (CC BY-SA 2.0) Swathi Sridharan, Chickpea seller in Addis Ababa, Ethiopia.jpg

30


Frying improves the digestibility of pulses and reduces their anti-nutritional factors. For this, several pulses are wet milled and mixed with other ingredients in preparing different local or oriental dishes.93 CAnnAnA is a sophisticated technology of packaging cooked beans in cans. The packaged beans are usually in brine, sugar or tomato purees. This technology allows for year-round availability of the product and for food preservation. However, legumes processed in this form are expensive.94 Transformation of exported pulses in Ethiopia is rare because global demand is for unprocessed pulses.

Markets

The last step in the value chain is the exporting phase.95 The geographic position of Ethiopia provides a competitive

tion of legumes in the tropics. In Trends in Vital Food and Control Engineering, Prof. Ayman Amer Eissa, ed. InTech. Available from http : / / cdn.intechopen.com / pdfs / 35126.pdf.93.– Ibid.94.– Ibid.95.– All the pulses exporters of Ethiopia are listed here : Ethiopian Exporters Institute ( n.d. ). Exported Ethiopian Products. Available from https : / / www.

advantage for exports, mainly due to the relative proximity to major chickpea importing countries. Specifically, it has close proximity with the world’s leading four importers : India, Pakistan, Algeria and the United Arab Emirates ( UAE ).

Trade data demonstrate that in 2014, the biggest im-porter of Ethiopian pulses was Pakistan. In terms of vol-ume, Pakistan’s imports of pulses went up by 107,672 tons ( 41.02 % ) to 370,181 tons in July–January 2014–2015 from 262,509 tons in July–January 2013–2014.96 Pakistan depends on Australia, Myanmar, the United Republic of Tanzania and Ethiopia for its pulses imports to meet about 0.6 million tons of demand for the commodity every year.97 Pakistan is followed by Nicaragua, Sudan and Indonesia as importers of Ethiopian pulses. Appendix II provides further information regarding Ethiopia’s pulses exports.

ethiopianexporters.com / pulses.html.96.– Black Sea Grain ( 2015 ). Pakistan. Pulses import surges to $224.135 million, 26 February. Available from https : / / www.blackseagrain.net / novo-sti / pakistan-pulses-import-surges-to-224-135-million.97.– Ibid.


31

STRATEGIC ISSUES AND COMPETITIVE CONSTRAINTS

Border IssuesBorder-In Issues

Border-Out IssuesDevelopment Issues

CapacityDevelopment

Cost ofDoing Business

Developinig skills

and Entrepreneurship

Capac

ity

Diversi

ficati

on

Infrastructure and

Regulatory Reform

Trad

eFa

cilita

tion

Market Accessand Policy Reform

National Promotion

and Branding Trad

e Su

ppor

t

Serv

ices

Poverty Alleviationand Gender Issues

Regional Development

and Integration

Envir

onm

enta

l

Sust

aina

bilit

y and

Clim

ate

Chan

ge

The traditional approach to strategic planning tends to focus exclusively on market entry issues such as market access, trade promotion and export development. This restrictive approach can lead to ignoring several important factors in a country’s export competitiveness. Effective tools for export strategic planning address a wide set of constraints, includ-ing any factor that limits the ability of firms to supply export goods and services, the overall quality of the business envi-ronment, and the development impact of the country’s trade, which is important to its sustainability.

The schematic above illustrates the four-gear integrated approach that has been followed to uncover the main com-petitiveness constraints of the pulses sector. The four gears encompass supply-side constraints, business environment constraints, market entry constraints and social and devel-opmental constraints.98

SUPPLY-SIDE ISSUES

Supply-side constraints affect the production capacity of the sector. These include challenges in areas such as the avail-ability of appropriate skills and necessary competencies, the capacity of the sector to diversify, and the technological content and value added in the sector’s products.

98.– This integrated approach is called the four-gear approach, whereby gear one deals with market entry issues, gear two with supply issues, gear three with the business environment, and gear four with developmental constraints. Overall competitiveness is affected by the four gears.

Limited farmer productivity ( low quantity of output and high cost of production ) stems from :

� Limited technical skills of farmers and specialists � Limited knowledge and application of best agronomic

practices � Weak extension services � Low capacity utilization on farms � Limited development of commercial farms � Limited development of collective farms � Lack of mechanization ( outdated machinery, unaware of

machinery on the market, unable to evaluate needs, lack of maintenance planning and budgeting, lack of financing )

� Lack of irrigation ( no financial means to irrigate, no aw-areness of what they should be doing )

� Limited use of appropriate agro-inputs including certified seeds, pesticides and fertilizers

� Low yields of local seed varieties � Limited use of crop rotation.

Value chain segment Production

Severity ● ● ● ● ●

Highlight

The sector is dominated by fragmented smallholder farms that lack economies of scale. The investment

required to boost production ( mechanization, irrigation, fertilization, pesticides ) may not pay off for such small

operations. Even so, current levels of production are just enough to satisfy local demand. Expanding exports will

require improvements in productivity.

PoA reference Operational objectives 1.1 and 1.2

Limited quality of pulses stems from : � Lack of price incentive ( premium ) for quality � Limited access to quality seeds � Lack of appropriate storage facilities � Heavy handling by numerous intermediaries � Poor agronomic and postharvest handling practices � Weak capacities of processors � Low awareness of international standards, including vol-

untary standards � Limited awareness of the benefits of adhering to foreign

standards � Reliance on outdated machinery during all segments of

the value chain � Limited farmer skills � Limited use of appropriate inputs � Fragmented farming system ( which makes it difficult for

farmers to access knowledge and extension services, and results in lack of uniformity )

� Poor waste disposal mechanisms � Lack of guidelines on quality standards and quality con-

trol mechanisms.

32


Value chain segment All segments


Highlight

Quality management is neglected due to limited knowledge among farmers and management of

processing companies. Stakeholders lack knowledge of both modern practices and market requirements.

PoA reference Operational objective 1.3

Limited use of quality inputs stems from : � An inefficient supply chain � The rural dispersion of fragmented stallholder farmers � Limited access to finance � Weak extension services � Limited knowledge of best practices and their benefits � Weak research and development capacities to produce

improved inputs � Limited availability of improved seed varieties � Adulteration / mixture of seed varieties on delivery ( both

intentional and unintentional ).

Value chain segment Inputs


HighlightMost pulses in Ethiopia are grown from the seeds

local farmers retain from their produce.1 This leads to decreased crop quality due to low genetic potential.2

PoA reference Activities 1.1.4, 1.3.2 and 1.3.6

Limited alignment of goods with international demand stems from :

� Lack of business skills among farmers, assemblers, co-operatives and exporters

� The presence of middlemen that put space between pro-ducers and final buyers

� Limited trade intelligence and poor awareness about cus-tomer requirements

� Limited exposure to export markets � Poorly developed market research departments at small

and medium-sized enterprises and support institutions.



Highlight

Most farmers, cooperatives and assemblers do not have a market-driven approach to their customers.

Instead, farmers are production driven, looking to supply assemblers with their pulses regardless of market trends

and requirements.

PoA reference Activities 1.3.2, 1.3.3, 2.1.4 and 2.2.7

Limited value addition stems from reliance on outdated ma-chinery, limited use of trade intelligence, and poor sourcing practices.

Value chain segment Inputs, processing


Highlight

The combination of obsolete equipment and poor knowledge of agronomic practices diminishes

productivity and hinders value addition. The limited value addition reduces competitiveness in international

markets.

PoA reference Activity 1.3.6

Postharvest losses and quality degradation stem from : � Lack of adequate warehouse space, both domestically

and in destination countries � Poor warehouse management skills � Improper storage practices that lead to infestation � Poor ventilation, moisture, sunlight exposure and tem-

perature management � Inadequate sanitation of premises.

Value chain segment Processing


Highlight

Recommended storage techniques imply that pulses must be stored below 25 degree Celsius and above

freezing point. Ethiopia is blessed with highlands where the temperature is naturally within this range and, as a result, storage in these locations can naturally reduce

postharvest losses.


Limited capacities for sector coordination stem from : � The long supply channel � Smallholder farmers dispersed over large distances � Many middlemen in the value chain � Weak domestic and international market linkages � The prevalence of short-term business relationships � Limited information sharing � Limited use of information and communications technol-

ogy tools � Weak institutional strength � Lack of a platform for dialogue between stakeholders � Limited value chain integration.



HighlightStakeholders lack the necessary trust among themselves

to be able to find ways to work together for the betterment of the sector.



33

BUSINESS ENVIRONMENT CONSTRAINTSBusiness environment constraints influence transaction costs, such as regulatory environment, administrative proce-dures and documentation, infrastructure bottlenecks, certifi-cation costs, Internet access and cost of support services.

Weak institutional capacities stem from limited expertise in areas such as policy advocacy, market intelligence, trade promotion, and quality management among other issues ; and inadequate financial resources.



Highlight

Institutions are unable to effectively coordinate sector participants. This lack of coordination is a key roadblock

to sectoral development, as it would allow for group bargaining and the consolidation of orders to flexibly

meet larger orders.


Weak quality management infrastructure is a result of the lack of international accreditation of the Ethiopian National Accreditation Office ( ENAO ) ; lack of laboratory capacities to perform relevant tests ; lack of third-party consulting services related to quality and certification issues ; and the lack of an institution for food safety dealing with aflotoxins.



Highlight

ENAO is responsible for accrediting all conformity assessment bodies in Ethiopia. Nevertheless, its

accreditation is only valid at the national level, as it is not yet recognized by International Laboratory Accreditation Cooperation and the International Accreditation Forum.

The test results of Ethiopian conformity assessment bodies, such as laboratories, are therefore not

recognized internationally. This means that even where enterprises are able to produce goods of adequate

quality, they are unable to prove compliance without resorting to expensive foreign testing.


Expensive and inaccessible financial services stem from : � Lack of skills at financial institutions for loan and risk anal-

ysis and generally weak capacities at banks � Shortage of foreign exchange � Limited credit registry and bureau coverage � Low depth of credit information � Inadequate financial / legal framework � Stringent collateral requirements � Frequent delays in processing financial transactions � Lack of online banking � Single borrower limit ( no entity can borrow more than

US $ 22 million ).



Highlight

Basic services such as letters of credit are expensive ( 3 % for import letters of credit and 2 % for export letters of credit as opposed to 1 % in China ), and the National

Bank charges a 1.5 % foreign exchange commission for the dollars required to purchase inputs. As such,

manufacturers looking to import materials must pay a total of 4.5 %.

PoA reference Activities 1.1.4 and 2.2.1

Poor contract enforcement stems from the lack of arbitra-tion mechanisms ; conflicts between exporters and import-ers for price and quality defaults ; inadequately developed futures contracts ; and an inadequately developed legal framework for contract farming.



HighlightIt is not unusual for exporters to default on international

buyers and vice versa.


Expensive and unreliable transportation network stems from : � Ethiopia’s status as a landlocked country � High port handling fees in Djibouti � Poor road and rail infrastructure, particularly in rural areas � Limited transportation services in rural areas � An inadequate number of trucks � Lack of competition in the trucking industry � Limited quality of vehicles � Lack of financing for road construction and maintenance.



Highlight

Transportation costs are so high that, under the right conditions, they can almost nullify Ethiopia’s other

competitive advantages ; it costs 60 % more to ship through Djibouti to the United States of America and the

EU than it does to ship from China. The Government is building a new railway to Djibouti which is expected to

reduce transport costs by 25 %. In addition, a new road and rail corridor is being built in conjunction with Kenya.


The inefficient and unreliable Customs system stems from : � Weak information technology infrastructure � Inadequately trained Customs agents, particularly regarding

their knowledge of international standards for commodities � Burdensome document requirements � Limited opportunities for interaction between firms and

Customs agents � Lack of a fast-track system for reputable importers /ex-

porters � Lack of updated prices at Customs posts.

34


Value chain segment Inputs, distribution


Highlight

According to the World Bank’s Doing Business Report 2015, it takes 44 days to export or import from Ethiopia, significantly longer than the 30.5 and 37.6 days it takes

to export and import respectively from the average sub-Saharan country.


Weak communications infrastructure stems from the lack of competition in the telecom space, and low fixed line penetration.



Highlight

Although mobile communications and high speed Internet are not available in all areas of the country ( and

can be unreliable outside of major urban areas ), the Government is committed to investing heavily in the information and communications technology sector.

Improvements would help improve price dissemination and logistical services, and increase value chain

cooperation.


MARKET ENTRY CONSTRAINTS

Market entry constraints are external to the country but manifested internally. These include issues related to market access, development and diversification, as well as export promotion.

Limited access to and use of trade intelligence stems from :

� The multilayer value chain dominated by middlemen ( these do not serve as information conduits and simply put space between producers and final markets )

� Limited availability of information and advisory services � The high cost of data from the private sector � Limited availability of relevant public services � Weak extension services � Limited skills at small and medium-sized enterprises, as-

sociations and institutions in analysis and use of trade intelligence.



Highlight

Ethiopia enjoys preferential market access to the United States under the African Growth and Opportunity Act

( AGOA ), to the EU under the Everything But Arms initiative, and to the Common Market for Eastern and

Southern Africa ( COMESA ) by virtue of its membership. As a result, many pulses can enter duty-free to some of the most important regional and international markets.

Even so, stakeholders have thus far been unable to fully benefit from these market access opportunities. The key constraint on export expansion is limited understanding

of the opportunities offered by these markets and the requirements of entry.


Limited branding and sales capacities due to : � The absence of a coherent ‘voice’ for the sector � Limited attention from the Government / absence of strategy � Poor market information and limited knowledge of export

markets and their requirements � Poor product quality that has damaged the sector’s repu-

tation � Weak product presentation � Limited marketing and sales skills � High marketing costs.

Value chain segment Marketing and distribution


Highlight

Europeans perceive Ethiopia to be food insecure, leading to a lack of confidence from international buyers. This image is further hindered by high rates of default and

the inconsistent quality of pulses coming from Ethiopia. As long as these negative perceptions persist, they will

continue to present roadblocks to market expansion and investment promotion.


Inadequate trade promotion capacities stem from : � Limited skills of small and medium-sized enterprises in

marketing, promotion and strategy development � Insufficiently prepared managers � Inadequate university curricula � Limited exposure to foreign markets � Lack of trade intelligence � Absence of in-market support from institutions and

Government � Weak financial and technical capacities at institutions � Lack of support from embassies and trade attachés.

Value chain segment Distribution


HighlightThe recently formed Ethiopian Export Promotion Agency

also lacks adequate capacities, and it engages in limited and unstructured participation in trade fairs.


Photo: (CC BY-SA 2.0) Rod Waddington (CC BY-SA 2.0), SAAAAnA PAAAAAAA


35

Limited foreign direct investment ( FDI ) promotion stems from lack of skills in relevant agencies to identify, approach and engage with potential investors ; and limited coordina-tion among actors.



Highlight

In addition to the federal Government’s investment commission, each region has its own investment

promotion agency. As such, there is little coordination among agencies.


Limited incentives to export stem from an imbalance be-tween domestic costs and international prices. During some months of the year the domestic price of pulses is higher than the international one.



Highlight

Domestic prices for most pulses have risen at a faster pace than international prices. This largely reduces

the incentives to export during the periods of the year when these episodes take place. When transportation is included, production costs are such that producers may

actually suffer a loss if they sell their goods abroad.


The sector’s strategic development is hindered by the lack of a strategy and Government support ; the prevalence of short-term export relationships ; short-term thinking ; lack of coordination within the sector ; and lack of a customer-oriented mentality.



Highlight

Less than 50 % of export relationships survive the first year, significantly worse than the roughly 70 % one-year

survival rate of its competitors. This is the result of a variety of factors, and while the prevalence of short-term relationships is a result of underlying challenges, it also

represents a challenge in and of itself : more stable relationships would lead to longer-term thinking and a shift towards a strategic development mentality. In

addition, stronger partnerships with buyers can serve to facilitate a customer-oriented mentality.


36


SOCIOECONOMIC AND DEVELOPMENTAL CONSTRAINTSSocioeconomic constraints include issues related to pov-erty reduction, gender equity, youth development, environ-mental sustainability and regional integration.

Gender-specific challenges stem from : � Women’s limited access to productive resources ( credit,

markets, market information ) � Restrictive social norms � Inadequate implementation of equality laws � Limited mobility ( the opportunity cost of leaving children

to tend land and access markets ) � Limited land tenure rights.



Highlight

‘Social norms restrict women from tiling land and female-headed households are forced to enter into

share-cropping arrangements, asking male relatives to till the land for them, in return for sharing half of the crops

produced on their small plot’.*


* Global Water Initiative (2013). Valuing women in rural agriculture, 24 September. Available from http://www.gwieastafrica.org/valuing-woment-in-rural-agrticulture/; Ethiopian Institute of Agricultural Research. Available from http://www.eiar.gov.et/16-featured-articles/ 185-enhancing-women-s-engagement-in-chickpea-production.

Limited entrance of youth into the pulses sector stems from lack of access to agricultural land and other resources ( capital, skills and inputs ) ; migration from rural to urban areas ; and limited interest in pursuing farming and other agricultural activities.



Highlight

The majority of the youth in Ethiopia live in rural areas where farming has traditionally been the main

source of livelihood.* However, the participation of youth in the pulses sector is very low. They generally lack representation and leadership roles in farmers’

organizations. Only 9 % of the rural youth in the south of Ethiopia plan to pursue agriculture as their livelihood.**


* Bezu, Sosina and Holden, Stein, (2014), Are rural youth in Ethiopia abandoning agriculture? World Development, Volume 64, December, pp. 259–272. Available from http://www.sciencedirect.com/science/article/pii/S0305750X14001727.

** Ibid.

Potential for environmental harm stems from :i. Land degradation :

– Deforestation ( estimated at 62,000-150,000 ha per year ) – Overgrazing

– Population growth – Inappropriate land policy – Limited application of best agronomic practices,

including crop rotation that would aid soil fertility management in the cereal belts

– Poor rural infrastructure – Low levels of technology – Poor waste disposal mechanisms and an inappropri-

ate reject product / grain management system.2. Water pollution :

– Limited awareness of the benefits that might come from more sustainable processes

– Limited application of best agronomic practices.3. Large-scale farming :

– Lack of appropriate environmental impact assess-ments

– Land in national parks has been turned over to farm-ing operations.



Highlight

Corporate social responsibility is becoming a core requirement for many of the world’s most important

buyers. Should these buyers believe that a part of the pulses value chain regularly benefits from environmentally unfriendly practices, the sector’s growth potential may be

imperilled as buyers look for more socially responsible suppliers.


Potential violations of indigenous rights stem from an ex-pansion of farming in fertile agricultural lands traditionally oc-cupied by indigenous peoples ; lack of proper consultations with indigenous peoples and reports of forced evictions ; and lack of proper environmental impact assessments.



Highlight

The SNNPR is home to 26.3 % of pulse farmers. This region includes the Lower Valley of the Omo, the home of many of Ethiopia’s indigenous people and a United

Nations Educational, Scientific and Cultural Organization world heritage site. As such, every effort should be made

to ensure that impacts to its ecosystems and cultural landscape are adequately assessed and considered

before the implementation of large-scale projects.


Thus, as explained in detail above, the four gear diagnostic shows that there are seven pressing supply-side constraints, seven business environment constraints, six market entry constraints, and four socioeconomic and development con-straints that are holding Ethiopia back from becoming a global competitor in the pulses sector. What follows is a brief descrip-tion of the format and context in which the competitive con-straint issues will be addressed and resolved in this roadmap.


37

STRATEGIC IMPLICATIONS FOR THE VALUE CHAIN ROADMAP

To sum up, the previous sections and related appendices have identified a series of issues in the Ethiopian pulses sector.99 Given the scope of this strategic roadmap, not all the issues identified so far in the document are going to be addressed in the same manner by the PoA. All of the is-sues identified can, however, be qualified under at least one of the three overarching types of issues that fall within the scope of this roadmap. This section provides a description of the three types of issues, i.e. production issues, inter-mediation issues and developmental issues. Then it briefly addresses the sub-issues that lie within each of these types.

Production issues

Production issues encompass three overarching prob-lems causing the low productivity in Ethiopia’s pulse sec-tor. Specifically, ( 1 ) the high cost of local pulse production, ( 2 ) low crop yields and ( 3 ) the low quality of pulse yields. Together, the combination of these three issues causes the sector’s low productivity.

The main production issues can be summarized as follows. � High cost of production. The following four sub-issues

are the main causes of the high cost of local production. – Small average farm size. Smallholders encompass

95 % of Ethiopian pulse production. This leads to a number of issues including production fragmentation. The PoA addresses this in section 1.1.1.

– Limited affordability and availability of necessary seeds. This is an issue most African countries face, including Ethiopia. The PoA addresses this in sections 1.1.2 and 1.1.3.

– Excessive cost of finance. In summary, this is due to the lack of financial systems that cater to the agricul-tural sector. The PoA addresses this in section 1.1.4.

– Poor production mechanization and postharvest techniques. There is a lack of adequate warehouse space ( i.e. with proper ventilation, moisture, sunlight, temperature, sanitation ) and storage practices ( i.e. management, pesticide use ). This is addressed in section 1.1.5 of the PoA.

� Low smallholder production output. – Limited pesticide use. This issue is because of the

lack of availability and affordability of quality pesti-cides, and farmers’ lack of best practices knowledge. The PoA addresses this in section 1.2.1.

99.– The current value chain, strategic issues and competitive advantages, appendix I : Ethiopia’s production of pulses, appendix II : Ethiopia’s exports of pulses, and appendix III : Policy environment and trade agreements.

– Limited fertilizer use. This issue is due to the lack of availability and affordability of quality fertilizers. It is also due to farmers’ lack of best practices knowledge. The PoA addresses this in section 1.2.6.

– Lack of crop rotation. In short, this issue is due to the lack of best practices knowledge. The PoA addresses this in sections 1.2.2 and 1.2.3.

– Low-yielding seeds. This is due largely to the lack of quality seeds and limited seed variety available to farmers. This is addressed in section 1.2.4 of the PoA.

– Lack of mechanization. This is due to the lack of knowledge about, and limited availability and afford-ability of, modern machinery. The PoA addresses this in section 1.2.5.

� Low pulse quality. This refers particularly to the lack of uniformity in the colour, size and weight of the pulses. The quality of the pulses is low and suffers from issues related to the production and distribution stages of the value chain.

– Lack of a quality diagnostic. There is often a lack of uniformity in bean size, quality and weight due to the lack of quality standards and control mechanisms. The PoA addresses this in section 1.3.1.

– Low seed quality. There is low awareness of interna-tional standards regarding pulse quality and a lack of access to quality seeds. The latter is due in large part to poorly developed seed systems. This issue is addressed in section 1.3.2 of the PoA.

– Absence of quality incentives, e.g. quality-linked pricing. This is due to the limited attention by traders to pay a premium price for high-quality products. The PoA addresses this in section 1.3.3.

– Lack of technical skills. Quality management is neglected due to limited knowledge among farmers of both modern practices and market requirements. The fragmented farming system makes it difficult for farmers to access knowledge and extension services that would improve such techniques. This issue is ad-dressed in section 1.3.4 of the PoA.

– Poor postharvest techniques. This limits the quality at the production stage and is due to the lack of stor-age facilities and poor agronomic and postharvest handling practices. The PoA addresses this in section 1.3.5.

– Unskilled labour and outdated machinery. Local farmers’ low skill levels, together with outdated ma-chinery, limit value addition and diminish the profit-ability of the sector. These factors are largely due to the lack of technology that enables the development of value added products. The PoA addresses this in section 1.3.6.

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The combined effect of the production issues is that the pulses sector struggles to produce what the market demands. The current growth model of the pulses sector shows important signs of exhaustion. Ethiopia’s pulses sec-tor has yet to realize its full potential, as sales are heavily concentrated among a few product categories of fairly low value addition and market diversification is limited. Despite the increase in FDI and governmental support in recent years, all five stages of the value chain remain underdevel-oped. Productivity meanwhile continues to suffer as a result of limited skills in the workforce, weak management capaci-ties and reliance on old equipment, among other factors. In addition, remaining problems in the business environment create unnecessary cost burdens and delays.

Intermediation issues

Intermediation issues refer to the sector’s poor internal or-ganization, its competitiveness in existing markets, and the sector’s ability to enter new markets.

� Poor internal organization. This refers to the capacity of the sector to undertake initiatives in its favour and to ensure the effective flow of information along the value chain.

– Lack of institutional organization and sector repre-sentation. This is due to the large number of unorgan-ized smallholder farmers. This is addressed in section 2.1.1 of the PoA.

– Lack of necessary information. This is due to lack of an effective forum for information sharing and gather-ing. This is addressed in sections 2.1.2 & 2.1.3 of the PoA.

– Agents’ misaligned price expectations. This is largely due to the lack of business orientation among farmers. The PoA addresses this in section 2.1.4.

– Excessive quantity of mediators and brokers in value chain. This is due to the overload of intermedi-aries in the value chain, which results in a decrease in product quality. The PoA addresses this in section 2.1.5.

– Limited and flawed use of contracts. Smallholders’ limited and flawed use of contracts is due, in large part, to the lack of contract enforceability. In turn, this diminishes the effectiveness of legally binding agreements and often leads to market defaults. This is addressed in section 2.1.6 of the PoA.

� Limited competitiveness in existing markets and inabil-ity to enter new markets. This refers to the capacity of the sector to ensure its profitability in domestic and inter-national markets.

– Inadequate financial support for international trade. This results in difficulty in remaining in existing mar-kets and entering new ones. The PoA addresses this in section 2.2.1.

– Underinvestment. There is a serious problem with underinvestment, especially among Indian suppliers. This can be explained by the absence of good pro-cessing companies, which impedes the sector’s abil-ity to exploit these opportunities. This is addressed in section 2.2.2 of the PoA ;

– Costly transportation and logistics. The cost of transportation and logistics is high and there is a lack of storage for international trade. This is addressed in section 2.2.3 of the PoA ;

– Inadequate sources of market intelligence. This is due to the lack of competency of trade and invest-ment support institutions. The PoA addresses this in section 2.2.4.

– Weak trade promotion. This is partially due to limited participation in trade fairs. This is addressed in sec-tions 2.2.5 and 2.2.6 of the PoA.

– Overall lack of adequate business skills. This is ad-dressed in section 2.2.7 of the PoA.

The combined effect of these intermediation issues is a poor flow of information along the value chain. Exporters are not capable of sending the correct signals to farmers. This information refers to pricing, volumes, characteristics, etc. Concurrently, local farmers are incapable of interpreting market signals. Together, these issues cause the market and the production sides of the value chain to be dissociated.

Developmental issues

Developmental issues include those that impede the sec-tor from maximizing its socioeconomic impact through the protection of the environment and inclusiveness of women and youth.

� Unskilled labour, particularly among women and youth. The participation of women and youth in the pulses sec-tor is relatively low as a result of land access restrictions as well as constraining social norms.

– Land access restrictions. The lack of access to ag-ricultural land limits the involvement of women and youth. Specifically, this results in the discouragement of youth from farming pulses and prevents the emer-gence of a new generation of entrepreneurs. This is addressed in sections 3.1.1, 3.1.2 and 3.1.3 of the PoA.

– Social norms. Social restrictions limit women’s and youth’s access to arable land. This is addressed in section 3.1.4 of the PoA.

� Risks of environmental harm. There is a risk that the development of the pulses sector could cause environ-mental harm.

– Low crop rotation awareness. There is low aware-ness of optimizing rotational cropping of pulses for soil fertility management in the cereal belts. This is addressed in sections 3.2.1 and 3.2.3 of the PoA.

Photo: (CC BY-SA 2.0) Swathi Sridharan, MArAAA An AddAA AbAbAAAAA


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– Poor disposal and management. Poor waste dis-posal mechanisms and inappropriate product / grain management systems. This is addressed in section 3.2.3 of the PoA.

The combined effect of the developmental issues is that the long-term sustainability of the sector could be af-fected. As shown in the four gears analysis, the sec-tor’s sustainable development will require a set of integrated actions that holistically address challenges across the entire value chain. These challenges are not limited simply to farms’ capacities or government policy. Many challenges are the result of a combination of factors that require wide-ranging poli-cies. It is for this reason that a comprehensive roadmap becomes all the more nec-essary : individual stake-holders, and even small groups of stakeholders, will not be able to ad-equately deal with the constraints on their own. It is only through strategic cooperation that the most effec-tive results will be achieved.

The identification and acceptance of these issues allows for the roadmap’s proposed solutions to tackle them in a strate-gic and effective manner. It is critical that, moving forward, public and private stakeholders work together and build on past successes. In addition, the Government must remove the remaining policy and business environment road-blocks to competitiveness. What is more, because a continued increase of FDI is critical for the sector’s development, the Government ought to more effectively tar-get foreign investors and help modernize the pulses value chain by allowing local farmers greater access to machinery and skill development workshops. These efforts will prove fruitful, as they will result in improved agricultural technology, the generation of income, increased quality of inputs and outputs, and the overall competitiveness of the pulses sector.

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THE WAY FORWARD

Figure 6 : Key determinants for a vision for the pulses sector

After several consultations ( i.e. public and private dialogue meetings ) it was evident that there were four overarching goals that were important to all sector stakeholders. This is shown in figure 6. These include : ( 1 ) improvement of agri-cultural technology, ( 2 ) increase the generation of local in-come, ( 3 ) increase the quality of inputs and outputs, and ( 4 ) increase the overall competitiveness of the pulses sector.

The stakeholders’ vision is to build an internationally com-petitive sector that supports Ethiopia’s development. This will be done through the adoption of innovative agricultural technology and the use of quality inputs, which will lead to the production and global sale of high-quality pulses and the increase of local income. This, in turn, will result in the movement of the pulses sector in Ethiopia’s GDP from num-ber two to number one.

The realization of the stakeholders’ vision will not be an easy task. However, following the roadmap’s suggestions in an organized and united manner will ensure that Ethiopia’s pulses sector becomes internationally competitive and sup-ports Ethiopia’s development.

The following section explains the strategic and operational objectives for the sector. This will act as the framework that will guide the implementation of the roadmap. It will focus on three main objectives : ( 1 ) boosting productivity and quality through incentives ; ( 2 ) improving export competitiveness by strengthening the connection between intermediaries and producers in the value chain ; and ( 3 ) maximizing the developmental dividend of the sector through environmental protection and inclusiveness.

THE STRATEGIC OBJECTIVES

The realization of the vision for the sector will be achieved through three strategic objectives that will take place over a period of five years. Each strategic objective provides a major area that the roadmap will address in greater detail. Each of the strategic objectives is further broken down into two or three operational objectives.

The PoA is organized around the three strategic objectives and the corresponding operational objectives. The three strategic objectives are : ( 1 ) boost productivity and quality ; ( 2 ) improve intermediation ; and ( 3 ) maximize the devel-opmental dividend.

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Strategic objective 1 : Boost productivity and quality by using public and market-led incentives.

This strategic objective aims to bring the current pulse sup-ply to the level required by international markets. Because of this, only the supply side of the pulses sector is dealt with. The supply side includes : operating costs of pulse production, total sector output, pulse quality and sector productivity.

A description of the operational objectives follows.

Lower the average cost of producing pulses.To achieve this, a group of purpose-designed activities will be undertaken. First, incentives that help increase the aver-age size of pulse farms must be created. This is necessary because large-scale farms operate under lower average cost structures. Second, it is necessary to facilitate com-mercial farms and smallholder farmers’ access to sufficient amounts of affordable seeds and establish a seed bank that guarantees farmers’ access to seeds when needed. These two initiatives are necessary because seed-related issues are very prominent in the cost. Third, smallholder farmers’ access to finance must be facilitated. This is likely to reduce the cost of inputs and other production services. Finally, existing technical solutions that can sustainably lower pro-duction costs should be exploited. Access to finance issues related to international trade will be addressed in the second strategic objective.

Expand the production of pulses.For this, a two-pillar approach is proposed. This is based on the use of modern agricultural practices and better in-puts. The use of crop rotation should increase total pulse production without increasing the amount of land used.100 Improving the availability and use of quality inputs such as biofertilizers, pesticides and modern mechanization should increase the sector’s output. The use of new high-yielding pulse seed varieties should also raise yields.

Extending seed supply will also likely increase pulse pro-duction. This will require identifying and developing varieties of pulses that are suitable for each region and that are in line with international market requirements. In addition, a plan to make these publicly available must be created. This could include piloting farm initiatives for production and harvest-ing. Farmers’ associations and private sector stakeholders should be involved in the distribution of the improved seeds.

100.– A nationwide crop rotation plan can only be completed after an agro-nomic assessment of the land has taken place, and the potential for differ-ent types of pulses has been assessed. Logistical considerations, storage infrastructure, market structure and trading practices will also be taken into consideration in order to obtain a clear picture of the pulses industry.

Improve the overall quality of the pulses that are produced.This will be achieved through a three-layered approach that helps build farmers’ capacity to produce quality pulses. The approach includes : ( 1 ) availability of improved seed varieties ; ( 2 ) pre- and post-harvest techniques ; and ( 3 ) increased awareness of quality standards and market requirements.

� Availability of improved seed varieties. This concen-trates on securing sufficient improved varieties of seeds for production, particularly those with higher demand in target markets.

� Pre- and post-harvest techniques. This focuses on pro-moting the use of new technologies and quality controls, and on improving planting, agro-techniques and posthar-vest management. For this, training and skill upgrading programmes should be created to strengthen farmers’ and assemblers’ capacity to effectively deal with various postharvest challenges. Improving postharvest manage-ment and ensuring that the crop is handled and stored properly is essential across all the activities in this opera-tional objective.101

� Increased awareness of quality standards and market requirements. Issues related to quality standards will be addressed by a gap map of Ethiopian pulses. This will focus on the quality standards and requirements of po-tential target markets. Another area that will be improved is international accreditation and quality infrastructure. Ethiopian farmers should be able to certify their produc-tion to the relevant standards of their target markets. To support these changes, key regulations must be adjusted so as to streamline the sector’s functioning.

Strategic objective 2 : Improve expor t competitiveness by strengthening the connection between producers and the intermediaries in the value chain.

This strategic objective aims both to increase exports and to obtain information necessary to channel to producers. This then simultaneously targets both the demand and the sup-ply sides. A description of the operational objectives follows.

Strengthen the organization of the sector to ensure the exchange of information between producers and international markets.This operational objective aims to strengthen the sector’s organization to ensure an effective exchange of informa-tion between farmers, international markets and all of the intermediary value chain stakeholders. For this, the sector

101.– The Supporting Indian Trade and Investment in Africa project intends to collaborate with the Government to improve the use of existing collection centres and warehouses by the pulses sector. New storage facilities should also be created where a need has been identified. This network of ware-houses will help develop a structured national wholesale market for pulses.

Photo: (CC BY-SA 2.0) Swathi Sridharan, Securing incomes for women in Ethiopia.jpg

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must be united. This will enable it to speak to the authorities with one voice, to act as the focal point for issues affect-ing the sector, and to promote the overall development of the sector in Ethiopia and abroad. This shall be achieved by the creation of a ‘national pulses platform’ that, together with the Ethiopian Pulses, Oilseeds and Spices Processors-Exporters Association ( EPOSPEA ), should coordinate the implementation of the activities and recommendations in-cluded in this roadmap.

In addition, the working modalities between farmers, processors and exporters in the value chain must improve. In particular, the degree of transparency with which infor-mation is exchanged along the value chain must increase. An Internet-based platform providing real-time and up-to-date information relevant to all the stakeholders of the pulses value chain will enable this improvement.102 In parallel, the capacities of each linkage in the value chain must be in-creased to ensure that the information is used to increase crop and market diversification. The sector should discuss whether there could be some room for ECX to provide trans-parency to pricing practices.

Ensuring that the sector abides by the rule of law is an-other central aspect of this operational objective. Farmers, farmers’ organizations and assemblers are expected to be trained on the use of contract farming and similar contrac-tual arrangements to avoid market defaults. This is should help streamline the number of intermediaries in the pulses sector and change their roles to better serve various stake-holder needs. This should also positively affect potential investors’ perception of the sector.

102.– Trade information, market reports, trade intelligence, trade deals, pulses knowledge, market reports, and domestic and international prices are ex-amples of the different types of information expected to find a space on the site. The development of reliable market information systems will ensure the continuous growth and global reach of the sector.

Improve the capacity of the sector to enter new markets and to remain competitive in existing ones.The activities included in this operational objective are in-tended to promote exports and market development.103 The strategic objective includes crucial activities designed to provide adequate access to finance for those involved in international trade ( e.g. importers of inputs and exporters of pulses ) and to ensure that the sector has the capacity to absorb international investment and deliver on the ad-ditional exports. In this regard, some efforts exist to make the operational environment more suitable, including trade facilitation issues involving Customs and the development of business skills.

An important component of export promotion is devel-oping the capacity of commercial attachés in selected dip-lomatic missions to promote Ethiopian pulses and related processed products abroad. This will be accompanied by other initiatives to help promote the participation of the pulses sector in international trade fairs and exhibitions, and branding strategies : for example, developing pilot activities with key foreign organizations, piloting a market entry pro-gramme with India and organizing regular trade missions to selected target markets. Given the importance of the Indian pulses market, fostering knowledge-sharing and business connections between Ethiopian and Indian pulses produc-ers would benefit the sector by providing a better under-standing of Indian market requirements. Several activities factor this in through field trips.

Another central component is the use of market in-centives to facilitate access to financial resources for pro-cessors and exporters. Facilitating exporters’ access to finance should help them better cope with cash flow issues

103.– There is much diversification scope for the pulses sector in terms of markets and products.

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generated by international transactions. Strengthening the business skills of farmers, assemblers and exporters will be achieved by teaching a group of trainers on international trade issues. These trainers will then be expected to repli-cate the training.

This operational objective requires developing transpor-tation and logistics services as well as dealing with the most pressing trade facilitation issues.104 The emphasis of this activity is on infrastructure services. While the Supporting Indian Trade and Investment in Africa ( SITA ) project will not directly contribute to the development of transport infrastruc-ture, it may play a key role in improving services based on existing infrastructure and creating awareness of important infrastructure deficits. It may also leverage resources and strongly advocate for improved road and rail networks and cheaper transport to the port.

The investment absorption capacity of the sector will be increased by creating incentives that help retain existing in-vestors and attract new ones. Particularly, Indian FDI could be mobilized for product upgrading, e.g. processed food containing pulses.105 To become more attractive for foreign investors, Ethiopia should also incorporate specific policies for FDI in the production and processing of pulses. This involves creating incentives for foreign enterprises.

Strategic objective 3 : Maximize the develop-mental dividend of a booming pulses sector by ensuring the protection of the environment and inclusiveness.

This strategic objective aims to ensure that the benefits of the sector’s future growth will be passed through to sensi-tive segments of the population such as women and youth while protecting the environment. This strategic objective targets medium-to-long-term conditions that need to im-prove in order to ensure both the country’s and the sector’s sustainable development. A description of the operational objectives follows.

Strengthen the training and skills of the youngest actors in the pulses value chain, and ensure that gender-sensitive issues are addressed.The most important dimension of this operational objective is to provide the sector with the necessary skills needed to achieve the vision. Thus, the activities will rely heavily on women and youth. Whenever possible, skills should be developed for these two segments of the population. The

104.– Transportation, logistics and trade facilitation have also been identi-fied as major obstacles for trade, highlighting a crucial need for support to address these bottlenecks.105.– Following an export ban on processed pulses imposed by India since 2006, Indian investors have established processing plants abroad to be able to continue to supply the large South Asian diaspora across the world. Indian FDI has targeted countries like Nepal, Myanmar and the UAE. African coun-tries – including Ethiopia – could also take advantage of this market oppor-tunity and become a preferred destination for pulse processors from India.

activities in this section are geared towards enhancing the capacity of youth and women to participate in the value add-ing segments of the value chain. Tackling land access for women is one of the most pressing issues in this regard.

Although Ethiopia enjoys a large workforce, it still re-quires extensive training and specialization in a wide range of areas for full agricultural development. Developing the skills of the sector’s stakeholders will ensure that the sector’s growth is supported by an adequate labour supply. This implicates farmers and managers alike.

Developing the skills of stakeholders in the pulses sec-tor will be achieved through developing the knowledge and skills of key market actors, with a particular focus on seed production, storage, testing and certification. These actors, who are instrumental in relaying information at grass-roots level, will be trained regularly to keep them abreast with the latest technology and practices. Trainings will also cover ele-ments such as sowing and harvesting techniques, posthar-vest handling and market opportunities.

Ensure that the development of the pulses sector does not jeopardize the preservation of the environment.To not jeopardize the environment, the activities that are foreseen promote management and agricultural practices that environmentally neutral, e.g. promoting the use of pulse crops to replenish soil fertility in non-pulse crops.106 Pulses add nitrogen and also a significant amount of or-ganic residues to the soil in the form of root biomass and leaf litter. Roots and leaf litter, being rich in nitrogen, fa-cilitate the decomposition of crop residues in soil and in-crease microbial activity.107

This operational objective has been designed with the additional objective of ensuring the sustainability of the agri-cultural development of Ethiopia by putting the pulses sector at the forefront of the promotion of most sustainable prac-tices. To achieve this, a position paper describing the overall benefits that the pulses sector can bring to the preservation of the environment and the economic development of the country will be developed.

106.– Crop rotation involving pulses is beneficial to soil structure and stability.107.– The fungi present in the pulse crop rhizosphere produce a glycopro-tein called glomalin. The sticky part of glomalin entraps soil mineral, organic matter and debris to form stable soil aggregates. Hence, microbial activity of the rhizosphere is directly responsible for the improved soil structure in crop rotations involving pulses. Pulse crops have the ability to reduce the pH of the soil in the rhizosphere and make the micro-environment favourable for nutrient availability. Since pulses acquire a greater part of their nitrogen requirement from the air as diatomic nitrogen rather than from the soil as NO3, their net effect is to lower the pH of soil. Chickpea reduces the pH most, followed by pea and pigeon pea. This reduction in pH of the soil helps to create a favour-able soil environment, especially in neutral and alkaline soil environments, and also to increase the nutrient availability and microbial activity.

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THE VALUE CHAIN ROADMAP FOR THE NEXT FIVE YEARS

Figure 7 : The logical framework of the roadmap

Figure 7 crystallizes the chain of logic behind the roadmap for the sector. The ultimate objective is to improve the per-formance of the sector by raising productivity, improving the organization of the sector, and preserving the environment and the developmental dividend of the sector.

The numbers in the chart correspond to the following strategic and operational objectives.

1. Boost productivity and quality by using public and market-led incentives. This operational objective ulti-mately aims to adapt the current offer of pulses to what the international market demands.1.1. Lower the average cost of producing pulses.1.2. Expand the production of pulses.1.3. Improve the overall quality of the pulses that are

produced.

2. Improve export competitiveness by strengthening the connection between producers and the intermediar-ies in the value chain. This strategic objective has the double aim of increasing exports and obtaining infor-mation that needs to be channelled to producers. This simultaneously targets both the demand and the supply sides of the sector.

2.1. Strengthen the organization of the sector to ensure the exchange of information between producers and international markets.

2.2. Improve the capacity of the sector to enter new markets and to remain competitive in existing ones.

3. Maximize the developmental dividend of a booming pulses sector by ensuring the protection of the en-vironment and inclusiveness. This strategic objective aims to ensure that the benefits of the future growth of the sector will be passed through to sensitive segments of the population such as women and youth, while at the same time protecting the environment. This strategic objective targets the medium-to-long-term conditions that need to improve in order to ensure the sustainable development of the sector and the country.3.1. Strengthen the training and skills of the youngest

actors in the pulses value chain and ensure that gender-sensitive issues are addressed.

3.2. Ensure that the development of the pulses sec-tor does not jeopardize the preservation of the environment.

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FDI AND SOUTH–SOUTH COOPERATIONEthiopia has a significant advantage in the production of pulses, which still has considerable room to grow in terms of both acreage and yield. However, the country’s pulse export ban on foreign traders denies FDI its most advantageous entry point, and the challenges upstream and downstream of trading leave investors looking at the United Republic of Tanzania and Kenya as better places to invest. Ethiopia could improve its position through certain policy meas-ures, most notably lifting the trading ban and completion of agroprocessing-focused export processing zones. Even without these measures, Ethiopia is attractive to providers of agribusiness services and suppliers of agricultural inputs, making them viable targets for Ethiopia’s FDI promoters.

Target FDI source countries

India is the world’s largest producer of pulses. Among the six countries ( India, Pakistan, Canada, Myanmar, Australia and the United States ) that dominate global production, there are only two net importers : India and Pakistan. India is both the largest producer and importer, accounting for 26 % of the global import market. Pakistan is the second-largest producer and seventh largest importer, accounting for 3.5 % of the global import market. With high consumer demand and expertise in the production and marketing of pulses, India and Pakistan are the two most likely sources of FDI in the pulses sector.

Medium-sized pulse processors and distributors ( 20–50 tons per day ) in India and Pakistan, who had been importing pulses from East Africa, have begun exploring the possibil-ity of setting up trading offices in the region. The United Republic of Tanzania has won the most attention thanks to its high pulse volumes and established trading networks with India. This appears to be further stimulated by the com-petitive threat of the giant Export Trading Group expanding from Africa-based trading alone into processing and dis-tribution in its South Asian markets. As such, South Asian investors are under competitive pressure to cut out middle-men and directly source their inputs. These investors pre-sent very immediate opportunities for investment generation in the pulses sector and could be targeted for investment promotion, backed by sector-strengthening public policies to increase Ethiopia’s competitiveness with alternatives like the United Republic of Tanzania and Myanmar.

In the past few years, Ethiopia has seen so much inter-est from Indian buyers and investors that the Export–Import Bank of India has sought to facilitate business by opening an Ethiopian branch – one of only seven foreign branches and only the second one in Africa after the one in South Africa. However, Ethiopia presents several obstacles to in-vestors which competing locations do not and which seri-ously threaten to neutralize its advantages. These include a ban on raw pulse exports by foreign traders ; high-profile and

controversial failures of large-scale pulse farming projects by Indian investors ; and the difficulty South Asian buyers ex-perience in obtaining the short-term visas needed to inspect pulses prior to purchase and shipment.

The activities of a company successfully investing in a foreign country tend to follow a typical evolutionary path, depending on the product and sector. For a commodity such as pulses, one might expect to see foreign investors first establishing buying offices for the procurement and export of raw supply, then investing in basic processing, then in increasingly diverse product lines and value added processing. This allows investors to secure supply of inputs, learn the particularities of doing business in a new location, and establish marketing channels before committing larger amounts of capital.

The Ethiopian ban on raw pulse exports by foreign traders is, therefore, a major impediment to the sector’s attraction of FDI and its market-organizing, efficiency-promoting benefits, such as contract farming arrangements and connectivity to export markets. An investor might choose to enter the mar-ket further downstream, but a company venturing into un-familiar territory for the first time is unlikely to risk skipping the earlier steps in that evolutionary path in favour of more sophisticated, more capital-intensive steps, especially where competitors have not already demonstrated the possibility of success. This added risk and the higher level of industrializa-tion in a competitor such as Kenya makes Ethiopia relatively uncompetitive for the attraction of FDI in pulse processing.

Another alternative for market entry is to enter upstream, in primary production. With competitive land leases avail-able in Ethiopia, a number of Indian companies have estab-lished large-scale farms to produce pulses and other crops but with mixed success and a degree of controversy. Most notable is the case of Karuturi, which leased 300,000 ha of land in Gambela but has struggled to produce at more than a low percentage of targets and to service loans of several million dollars from Ethiopian banks.

Other modes of investment and engagement with do-mestic stakeholders, including those that are more funda-mental to the sector’s development ( e.g. contract farming, collateral management ) and those that promise higher value added ( e.g. packaged food manufacturing ) will be linked to government action to improve pulse quality and supply, as described in the four gears and PoA sections of this road-map. Top actions relate to the improvement of inputs ( seeds, fertilizer and pesticides ), better-organized pulse markets at the farm-gate level, better access to financing for small farm-ers, and more widespread farm mechanization.

FDI would both follow these improvements and play a role in achieving them. For example, a few early successes in attracting contract farmers or foreign development of seeds would make it easier for other investors to follow. In this way, FDI is both a means and an objective of sector development.

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The market for FDI in pulses and agribusiness

As the global population grows and concern over food se-curity with it, the fact that 60 % of the world’s uncultivated arable land is in Africa is earning the continent considerable attention as a source of food commodities and agribusiness investment opportunities. The African population itself is projected to double between 2010 and 2050, many of whom will represent a new middle class, as six of the world’s 10 fastest growing economies are in Africa. As a consequence of these trends, Africa’s food market is projected to grow from US $ 313 billion in 2010 to US $ 1 trillion in 2030, with a corresponding boom in investment.

A US $ 500 million investment announced by Syngenta across multiple African countries is an example of the sort of large-scale investment which is becoming possible and which Ethiopia could be targeting. Syngenta plans to make the investment over 10 years in local production, logistics, distribution channel development, recruitment and training for seed and crop protection products.

Pulse trading and basic processing

In the short term, trading in pulses is the main opportunity likely to attract foreign investors. Medium-sized pulse pro-cessors and distributors ( 20–50 tons per day ) in India and Pakistan who had been importing pulses from East Africa have begun exploring the possibility of setting up trading offices in the region, with the United Republic of Tanzania’s high pulse volumes and established trading networks with India winning it the most attention.

If the export ban on foreign traders were lifted, these investors would present very immediate opportunities for investment generation and could be targeted for investment promotion. Although trading itself is a low value added activ-ity, FDI in this area would strengthen Ethiopia’s competitive-ness with alternatives like Myanmar, the United Republic of Tanzania and Kenya, assuring higher volumes of low value added FDI, attracting more FDI to critical agribusiness ser-vices, and laying the groundwork for higher value added food processing in the longer term.

Primary production of pulses on a large scale has not historically been an activity to attract FDI ; however, there is significant investment opportunity for existing domestic farmers to expand pulse yields and quantities, including through contract farming arrangements with foreign traders and processors. Although Ethiopia is already a global leader in pulse production, there remains significant room for ex-panded production, especially considering the suitability of pulses as an intercrop with several of Ethiopia’s major food crops : teff, wheat, barley, maize, sorghum and millet. At the same time, global demand for pulses as a heart-healthy food is growing and may be boosted further by the United Nations designation of 2016 as the International Year of Pulses.

Traders and processors with experience in contract farming arrangements could have a large effect on total production and, importantly, on the organization of the Ethiopian mar-ket. By guaranteeing prices to farmers and committing them to predetermined volumes, such arrangements add visibility on market volumes and prices, which is sorely lacking for pulses in Ethiopia today.

Agribusiness inputs and services

Perhaps the most attractive investments in the pulse sector are those that go beyond pulses specifically and have much larger markets in agribusiness generally, such as seeds, farm machinery and agrochemicals. Approximately 80 % of Ethiopians depend on agriculture in one way or another for their livelihoods, yet agriculture is largely conducted by small-holder farmers who make little use of the most modern inputs.

Table 3 presents the value chain segments where FDI is both needed and viable, along with leading sources of such FDI and competing locations in the region where in-vestors are active. Where a company is already present in Ethiopia, it may not yet be active in the product lines of most benefit to the pulses sector ( e.g. seed pulses, pulse-specific herbicides, pulse cultivation machinery, pulse processing technology ).

Ethiopia’s investment promoters and sector stakehold-ers should work to present proven investors with Ethiopia’s investment opportunities and, simultaneously, to advocate investment climate reforms that will enhance Ethiopia’s attractiveness. Table 3 presents the group of companies which collectively control large majorities of the global mar-kets in their given fields. These are not the only potential investors, and smaller regional companies may be better poised to move quickly into Ethiopia given their proximity and knowledge of the country. However, world-leading com-panies wanting to retain that leadership are likely to con-sider expansion into Africa more and more as the continent is given increasing importance in global food strategies. Conversely, realizing full potential for agribusiness is more likely if the world’s leading players are involved in the scaling up of its production.

Furthermore, most of the companies in Table 3 already have presences in the region. Future investment projects in Ethiopia might originate with headquarters or with these regional affiliates. For the companies with no presence cur-rently in Ethiopia, a first venture would likely take the form of a sales office. Although this does not create the jobs, technology spillovers or skill spillovers of a manufacturing project, for example, the possibility of a sales office should not be dismissed by investment promoters as being of low value. A first sales office is an opportunity for a foreign com-pany to make tentative entry into a new market, learning the business landscape and achieving a level of comfort. Of more immediate importance, it can provide Ethiopia’s pulses sector with valuable access to more affordable, high-quality inputs that are essential to the strengthening of the sector.

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Table 3 : Value chain segments needing FDI and likely sources

Value chain segments where FDI is needed and viable

Leading companies with foreign affiliates in

Eastern and Southern Africa

Source countryEastern and Southern African countries

with an existing affiliate

Seeds, fertilizers and pesticides – sales, distribution, manufacturing, and research and development

BASF Germany South Africa

Bayer CropScience Germany Mozambique, South Africa, Sudan, Zambia, Zimbabwe

Dow AgroSciences United States South Africa

DuPont ( Pioneer ) United StatesEthiopia, Kenya, South Africa, the United Republic of

Tanzania, Zambia, Zimbabwe

KWS Saat ( seeds ) Germany Kenya, South Africa, Sudan

Monsanto United States Kenya, Malawi, South Africa, Zimbabwe

Syngenta SwitzerlandEthiopia, Kenya, Mozambique, South Africa, Sudan, the

United Republic of Tanzania, Zambia, Zimbabwe

Farm machinery and equipment – sales, distribution, manufacturing, operation, maintenance and repair

AGCO United States None

CLAAS Germany None

CNH Netherlands South Africa

John Deere United States South Africa

Kubota JapanKenya, Madagascar, Mozambique, South Africa, the United

Republic of Tanzania, Uganda

SAME Deutz-Fahr Italy None

Animal feed – manufacturing, and research and development

Brasil Foods Brazil None

Cargill United States Kenya, Mozambique, South Africa, Zambia, Zimbabwe

Charoen Pokphand Thailand None

New Hope Group China None

Tyson Foods United States None

Vertically integrated trading, including warehousing, transportation, and risk management ( as well as agricultural consulting and manufacturing of biofuels and animal feed in some cases )

Archer Daniels Midland United States None

Bunge United States Kenya, South Africa

Cargill United States Kenya, Mozambique, South Africa, Zambia, Zimbabwe

Louis Dreyfus Commodities Netherlands Kenya, South Africa

Quality testing and certification

Cotecna Switzerland South Africa

Intertek United KingdomDjibouti, Kenya, Mozambique, South Africa, the United

Republic of Tanzania, Uganda

NSF United States South Africa

SCS United States None ( Only Ghana in Africa )

SGS Switzerland

Burundi, Djibouti, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Mozambique, South Africa, United Republic of

Tanzania, Uganda, Zambia, Zimbabwe

SAurAAA : Shand, Hope ( 2012 ), Noealt Corporate Services ( 2013 ), Peter Best and Ken Jennison ( 2012 ),

Murphy, S., Burch, D. and Clapp, J. ( 2012 ), and company websites.

Ethiopia’s investment promoters and sector stakeholders should work to present proven investors with Ethiopia’s in-vestment opportunities and, simultaneously, to advocate investment climate reforms that will enhance Ethiopia’s attractiveness. Table 3 presents the group of companies which collectively control large majorities of the global mar-kets in their given fields. These are not the only potential investors, and smaller regional companies may be better

poised to move quickly into Ethiopia given their proximity and knowledge of the country. However, world-leading com-panies wanting to retain that leadership are likely to con-sider expansion into Africa more and more as the continent is given increasing importance in global food strategies. Conversely, realizing full potential for agribusiness is more likely if the world’s leading players are involved in the scaling up of its production.

48


Furthermore, most of the companies in Table 3 already have presences in the region. Future investment projects in Ethiopia might originate with headquarters or with these regional affiliates. For the companies with no presence cur-rently in Ethiopia, a first venture would likely take the form of a sales office. Although this does not create the jobs, technology spillovers or skill spillovers of a manufacturing project, for example, the possibility of a sales office should not be dismissed by investment promoters as being of low value. A first sales office is an opportunity for a foreign com-pany to make tentative entry into a new market, learning the business landscape and achieving a level of comfort. Of more immediate importance, it can provide Ethiopia’s pulses sector with valuable access to more affordable, high-quality inputs that are essential to the strengthening of the sector.

THE ETHIOPIAN BUSINESS ENVIRONMENT FOR THE PULSES SECTOR

The national investment climate

Table 4 presents several indicators of the attractiveness of Ethiopia’s business environment, particularly as it com-pares with those of other likely destinations for pulse FDI. In terms of the ease of doing business, Ethiopia is in the same ballpark as India, Pakistan, the United Republic of Tanzania and Kenya. Myanmar, which is the source of 90 % of India’s imports of pulses, lags significantly, giving East African countries a relative selling point among Indian and Pakistani investors.

Based on interviews with sector experts, it appears that Myanmar, the United Republic of Tanzania, and Kenya are Ethiopia’s closest competitors for Indian and Pakistani investment in pulse trading and basic processing. By the investment climate measures below, Ethiopia consistently

outranks Myanmar. With respect to the United Republic of Tanzania and Kenya, Ethiopia ranks significantly worse in terms of economic freedom and level of industrialization ( United Nations Industrial Development Organization ), al-though it does better in terms of the perception of corrup-tion. In terms of the ‘set of institutions, policies and factors that determine the level of productivity of a country’ ( WEF ), Kenya does significantly better than Ethiopia.

Perhaps more important than the position of Ethiopia’s investment climate is its trajectory. Its impressive eco-nomic growth of the last several years ( 6 %–12 % per year, depending on the data source ) and recent reforms have helped Ethiopia achieve significant positive buzz in inves-tor circles as a rapidly emerging economy. Underlying the Government’s business environment reforms is its national development plan, the GTP.

The GTP targets Ethiopia achieving middle-income sta-tus by 2025, with enhanced productivity in manufacturing as a key driver. Public expenditures and domestic savings are far from adequate to the task, so foreign investment is cited as crucial to realization of the GTP. Anecdotal evidence suggests that investors generally view Ethiopia’s high-level government commitment to FDI in certain sectors as being deep and meaningful, with investors being given ‘red carpet’ treatment, including direct access to the Prime Minister and other officials. Agroprocessing is one of the GTP’s eight sec-toral priorities and well-organized sector stakeholders with a clear vision of the sector’s development potential would, in principle, receive the same practical commitments from the Government.

Chief among the Government’s business environment reforms have been large public investment in infrastructure and power generation ; creation of industrial zones with dedi-cated infrastructure and special incentives ; and streamlining of Government procedures through clarification of the com-mercial code and setting up of an effective one-stop shop.

Table 4 : The investment climate in Ethiopia and possible competitors for pulse investment

International benchmark IndiaUnited Republic

of TanzaniaPakistan Kenya Bangladesh Ethiopia Myanmar

Average of six major rankings 94 108 115 121 125 127 136

Ease of Doing Business ranking ( World Bank Group, 2015 ) 142 131 128 136 173 132 177

Competitive Industrial Performance ranking ( United Nations Industrial Development

Organization, 2010 ) 43 106 74 102 78 130 Not ranked

Global Competitiveness Index ( WEF, 2014 ) 71 121 129 90 109 118 134

Inward FDI Performance Index ( United Nations Conference on Trade and

Development, 2010 ) 97 59 110 129 114 120 52

Corruption Perception Index ( Transparency International, 2014 ) 85 119 126 145 ( tie ) 145 ( tie ) 110 156

Economic Freedom Index ( Heritage Foundation, 2015 ) 128 109 121 122 131 149 161

Photo: CIAT (CC BY-SA 2.0)

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49

Table 5 : Comparison of costs and competitive factors

Estimated value Ethiopia Kenya United Republic of Tanzania India China

Cost of labour ( US $ / month ) 50–60 110–150 70 175 550

Labour skills Low Low–medium Low High High

Cost of electricity ( US¢ per kilowatt-hour ), estimated average 2–5 16–18 12 7–12 9–15

Percentage of annual sales lost to electrical outages 2.6 5.6 5.5 2.0 0.1

Cost of construction ( US $ / ft2 ) 40 21 34 18–20 15–20

Lending rates ( estimated ) 8.5 14–18 19 7–13 7

Time to clear Customs, imports & exports ( days ) 37 31 44 12 17

In terms of FDI policy specifically, investors enjoy standard protection from expropriation and unrestricted repatriation of profits, although a shortage of foreign exchange can cause delays. Ethiopia is a member of the Multilateral Investment Guarantee Agency, thereby offering investors the possibility of qualifying for invest-ment guarantees. There is a minimum capital requirement of US $ 200,000 for wholly for-eign-owned projects, although this is not required of reinvestments.

Sector specificsThe Ethiopian Agricultural Transfor-mation Agency ( ATA ) is implement-ing a strategy to increase integration of pulses and cereals in a way that is meant to raise the percentage of cropland under pulse cultivation from 13 % to approximately 40 %. Standard incentives available to foreign agribusi-ness investors are as follows :

� Customs duty exemptions of up to 100 % on imports of capital goods

� Income tax exemptions for a period ranging between one and nine years, depending on the specific activity and the location of the investor

� Loss carry forward for businesses that suffer losses during the income tax exemption period, for half of the tax exemption period

� No export tax is levied on Ethiopian export products � Duty drawback scheme, voucher scheme, bonded fac-

tory and manufacturing warehouse schemes � Various non-fiscal incentives for exporters.

In Ethiopia, agricultural wages are approximately US $ 55 per month, and electricity is US $ 0.02–0.05. This is much more competitive than in either the United Republic of Tanzania or Kenya ( see table 5 ). However, the agricultural value add-ed per worker ( in constant 2005 US $ ) in Ethiopia ( 269 ) is lower than in both the United Republic of Tanzania ( 310 ) and Kenya ( 390 ).

The percentage of agricultural land that is irrigated is very low and comparable to the percentages in Myanmar and Kenya, though lower than in the United Republic of Tanzania. In terms of the average application rate of fer-tilizer ( in kilograms / ha / year ), Ethiopia’s ( 14 ) is more than the United Republic of Tanzania’s ( 5 ) but less than Kenya’s ( 30 ).

50


FUTURE VALUE CHAIN

Figure 8 : The future pulses value chain

Irrigation

Skilled Labor

Quality Seeds

Land

State Commercial Farms 1-2%

(Very few left)

Smallholder & Medum-sized

Producers

>95% (8 to 9 Million)

Cleaning

Sorting & Grading

International Transporter

Processors

International Consumer 20%

National Consumer 50%

Assemblers

Brokers

Primary Cooperatives

Exporters (40 Adama)

Input Production Assembly Processing Markets

Marketing & labeling

National Component International Component

Packaging

Subsistence Needs 30%

•  Urban supermarket

•  National Local Consumer

Warehousing (Processors, ECX,

EGTE, ESE)

•  India •  China •  Egypt •  Pakistan •  Bangladesh •  UK •  Italy •  Spain •  Algeria •  Other

Quality Fertilizers

Modern Machinery

Private Commercial

Farms <2.5% (Very big)

EGTE

ECX

Quality Control

Dehusking & Splitting

Transformation

Quality Pesticide & Insecticide

ESE

Customs

Local Retailers

Local Wholesalers

Regional Wholesalers

Farmers’ Unions

Unlocking the potential of the pulses sector will require transformations throughout the value chain. These adjust-ments, as reflected in the future value chain schematic ( fig-ure 9 ), are the result of the targeted efforts detailed in the PoA that address the constraints identified in the four gears analysis. The future value chain will be characterized by :i. Greater use of quality inputs including quality irrigation

systems, skilled labour, quality seeds, quality fertilizers, quality pesticides / insecticides, land and modern farm machinery ( e.g. planters, sprayers ) ;

ii. An increased percentage of medium-sized farms and a decrease in smallholder producers ;

iii. Increased transparency and support services between all stakeholders during the assembly phase ;

iv. Development and promotion of quality standards and increased use of modern machinery during the process-ing phase ;

v. Increased markets, i.e. India, and strengthened ties to current ones.

Of the segments depicted in the future value chain, FDI will be the sector’s main engine of growth over the next several years. Realizing a future value chain with the aforementioned characteristics depends heavily on the ability of the sector stakeholders to :i. Create linkages between FDI and domestic producersii. Quickly address the infrastructural, bureaucratic

and logistical constraints that harm Ethiopia’s global competitiveness

iii. Proactively develop smallholders’ agricultural skills and knowledge of agricultural best practices.

FDI in support services and industrial zone development would closely follow. Also, as the quality and quantity of do-mestic pulse production increases, a greater supply of FDI may flow to integrate processing systems, thereby further reinforcing the national value chain.

[ THE WAY FORWARD ]

51

Inputs

a. Rainwater irrigation. Smallholders and mid-sized farmers move from exclusively relying on rainwater to understanding the benefits that various alternative or complementary types of irrigation can bring.

b. Unskilled labour skilled labour. Part of the labour force acquires important skills through their participation in crop rotation, planting and postharvest programmes, and their increased exposure to sector specialists.108

c. Seeds quality seeds. A quality standards gap map of Ethiopian pulses is developed, use of improved seed varieties is promoted, and quality seeds are cheaper and readily accessible from ESE.109

d. Fertilizers quality fertilizers. Quality fertilizers are affordable and accessible, and classes are available to understand and implement the proper use of these. This leads to increased production.110

e. Pesticides & insecticides quality pesticides & insecticides. Quality pesticides and insecticides are affordable and accessible, and classes are available to understand and implement the proper use of them. This leads to increased production.111

f. Farm equipment modern machinery. Appropriate farm mechanization technologies have been identified i.e. raw planters, combine harvesters and threshers are purchased and are being used. This leads to significant reductions in farmers’ production costs.112

Production

a. Smallholder farms smallholder & medium-sized producers. The average size of private commercial farms increases. A plan to increase the average size of pulse farms is implemented. This includes trainings on the use of contract farming, which leads to the increase in private commercial farms.113

108.– This would be achieved as a result of the implementation of the activi-ties delineated in the PoA in sections 1.2.2, 1.3.4, 1.3.5, 2.2.7, 3.2.2 and 3.2.1.109.– The PoA targets this area in sections 1.1.2, 1.1.3, 1.3.1 and 1.3.2.110.– 1.2.6 Increase production through better use of biofertilizers and similar inputs and agronomic practices.111.– 1.2.1 Increase production through increased and responsible use of pesticides.112.– 1.2.5 Increase production of pulses through better use of available and / or affordable mechanization. 1.1.4 Set up a funding and credit guaran-tee plan involving commercial banks, microfinance institutions, donors and the public sector. The beneficiaries of the fund would have to first graduate from the credit guarantee mechanism to later tap into the funds that would be intended for more capital-intensive projects with a high impact potential.113.– 1.1.1 Develop a plan to increase the average size of pulses farms. 2.1.6 Train farmers, farmers’ organizations and assemblers on the use of contract farming and similar contractual arrangements to avoid market defaults and to streamline the number of intermediaries in the pulses sector.

Assembly

a. ECX potentially includes pulses under its trading umbrella.b. ESE potentially acts as a seed bank. It also has vis-

ual dictionary on file for the benefit of all value chain stakeholders.

c. Local retailers, regional and local wholesalers, and farmers’ unions begin working together. There is effec-tive information exchange between these. There is also an Internet-based platform that provides real-time and up-to-date information that is relevant to pulses value chain stakeholders.

Processing

a. Quality control. Quality standard requirements are de-veloped, promoted and implemented by stakeholders in the processing phase.

b. Dehusking and splitting. Modern machinery is pur-chased and used for dehusking and splitting pulses.

c. Warehousing. Educational programmes and increased skills have led to the use of pesticides during storage and the use of better storage units.

Leveraging market oppor tunities

Customs. Customs processes are modified to reduce both the amount of time needed to clear Customs and the amount of paperwork to export pulses.

In order to take advantage of existing and future market opportunities, Ethiopia should continue to deepen trade of unprocessed pulses and simultaneously develop an indus-try of processed pulses.

The move towards gluten-free diets is promoting the use of pulses. The last few years have seen important changes in dietary patterns that affect pulses. For example, greater awareness of coeliac disease and gluten sensitivity has made the demand for gluten-free products rise.114 A variety of gluten-free grains, flours and starches can be substituted for wheat, rye and barley in product formulations. However, replacing grains with gluten-free alternatives in food prod-ucts is not easy. Pulses, such as yellow peas, lentils and chickpeas, are already gaining recognition as the ‘new and improved’ heart of healthy foods. The high-quality protein in dry pea, lentil and chickpea flour makes for a perfect amino acid offering when blended with other gluten-free grains such as rice flour. What is more, these pulses deliver quan-tity as well as quality : Dry pea, lentil and chickpea flours contain 22 %–25 % protein, are high in lysine and listed as both a vegetable and protein. This is pushing the demand for pulses from non-traditional consuming countries.

114.– Gluten is comprised of proteins ( e.g. gliadin, glutenin ) predominantly found in cereal grains such as wheat, rye and barley.

52


Pulses are increasingly being used for products like noo-dles, pasta and chips, and as ingredients in other processed foods as an alternative to animal protein. The rise in the mid-dle class in non-traditional markets like the Africa and Asian markets, followed by the rise in supermarket culture, has led to an increase in demand for processed foods. The types of pulses that are seeing an increase in use by the processing industry overseas are chickpeas and dry peas. These are precisely the types that are grown in Ethiopia.

The opportunity for Ethiopia is further increased due to some structural changes that have taken place in recent times in India – the largest consuming and importing coun-try. Traditionally the large South Asian diaspora across the world imported processed dhal from India and other neigh-bouring countries. However, since 2006 Indian exports of

pulses, even processed pulses, have been banned. This has led to some structural changes, and processing plants are being relocated to places like Dubai and Singapore, in part because raw materials for processing are readily avail-able to Indian processors in these locations. Also, the cost of processing is low and exporting is less competitive. In addition, transnational companies have started to dominate value chains. With a big regional market for dhal, the ben-efits of agreements like AGOA and Everything But Arms cre-ate opportunities for Ethiopia to attract FDI.

Processing is an option in the short term given the low cost of processing pulses in Ethiopia. However, processing for other products like pasta and chips may take some more time. Box 1 illustrates the matrix of product and market op-portunities available to the sector.

Box 1 : Ethiopia’s product and market opportunities

Existing pulses New pulses

Existing markets

Deepen the marketHaricot beans, pea beans, horse beans, chickpeas and lentils :

� Gulf States ( Saudi Arabia, Yemen, Israel ) � EU � Asian countries ( mainly Pakistan ) � Neighbouring African countries

Product development � Processed dhal to the regional market,

the United States and the United Kingdom � Processed pulse flours to the UAE and the EU

New markets

Market development � Mung beans and lentils to India

Diversification � Pigeon peas to India � New varieties of chickpeas to India,

Pakistan and the UAE

MOVING TO ACTION

The development of the future value chain for the pulses sector is a five-year project defined through a consultative process between public and private sector stakeholders in the country. Achieving the future value chain of the pulses sector depends heavily on the ability of sector stakeholders to implement the activities defined in the roadmap. For this reason, it is recommended that the following key areas of intervention be implemented with priority in order to facilitate the implementation of the pulses roadmap :

� Establish a network of institutions to guide development efforts to maintain public–private dialogue

� Build collaboration with national and international techni-cal and financial partners to support the implementation of the roadmap

� Strengthen the ability of key national institutions to attract national and international investment to the value chain.

These actions aim to enable the implementation of the road-map’s PoA in a coordinated and transparent manner. Pulses being an emerging sector, a large share of value chain de-velopment will fall under the responsibility of the private sector as key drivers and beneficiaries. By enabling and supporting private sector operators to develop the sector, policymakers will be able to contribute to its overall national development goals.

ROADMAP PLAN OF ACTION

The following PoA provides the overall framework that will guide the implementation of the strate-gic roadmap over the next five years. The PoA contains strategic objectives, operational objectives and relevant activities.

Strategic objectives represent the major thematic issues that the roadmap addresses. They embed the ultimate goals and purpose that the programmed actions are intended to achieve. For clarity of purpose, strategic objectives are broken down into operational objectives that define their scope of implementation. There are short-, medium- and long-term operational objectives. Operational objectives are in turn broken down into activities. The activities define the precise actions that will be undertaken and the organization( s ) that will be responsible. Activities specify concrete targets and measures.

Photo: CIAT (CC BY-SA 2.0), climbing beans.jpg

54


Stra

tegi

c ob

ject

ive

1 : B

oost

pro

duct

ivity

and

qua

lity

by u

sing

pub

lic a

nd m

arke

t-led

ince

ntiv

es.

Oper

atio

nal o

bjec

tive

Activ

ityPr

iorit

y1=

high

2=m

ed3=

low

Star

ting

perio

dTa

rget

mea

sure

sLe

adin

g na

tiona

l in

stitu

tion

and

poss

ible

impl

emen

ting

partn

ers

Ongo

ing /

futu

re

deve

lopm

ent

prog

ram

mes

+

inte

rnat

iona

l pa

rtner

s

2016

2017

2018

2019

2020

1.1

Lowe

r the

ave

r-ag

e co

st o

f pro

ducin

g pu

lses.

1.1.

1 De

velo

p a p

lan to

incr

ease

the a

vera

ge s

ize o

f pul

se fa

rms.

This

activ

ity is

divi

ded

in tw

o pa

rts. I

n th

e sho

rt ter

m, i

t co

nsist

s of p

ilotin

g a c

luste

ring

appr

oach

that

allow

s farm

s to

pool

reso

urce

s and

mate

rializ

e som

e of t

he b

enefi

ts of

integ

ra-tio

n in

a loo

se fo

rm. I

n th

e med

ium-to

-long

term

, the

activ

ity co

nsist

s of m

aking

use

of f

iscal

incen

tives

to en

cour

age p

ulse

far

ms t

o ga

in siz

e.In

the s

hort

term

, the

clus

tering

appr

oach

will

seek

to es

tablis

h a g

roup

of 1

0 clu

sters

of p

ulse

farm

s dea

ling

with

chick

peas

( fo

ur ),

pige

on p

eas (

two )

and

mun

g be

ans (

four

). Th

e aim

of t

hese

clus

ters w

ould

be t

o :

• Or

ganiz

e sm

allho

lder

farm

ers f

or co

llecti

ng p

rodu

ction

;•

Pool

reso

urce

s to

guara

ntee

acce

ss to

appr

opria

te m

echa

nizati

on se

rvice

s thr

ough

seco

nd-h

and

acqu

isitio

n an

d im

ports

, an

d tes

ting

of n

ew m

achin

ery,

amon

g ot

her i

nitiat

ives ;

• Int

rodu

ce, a

dopt

and

pilo

t new

farm

mac

hiner

y for

plo

ughin

g, p

lantin

g, h

arves

ting

and

thres

hing

appr

opria

te fo

r pul

ses ;

• Al

low

farm

s to

enjo

y the

ben

efits

of si

ze u

nder

a lo

ose f

orm

of i

nteg

ratio

n ;•

Supp

ly th

e mark

et wi

th af

ford

able

impr

oved

seed

varie

ties o

f pul

ses t

hat a

re in

dem

and

thro

ugh

the i

ntro

ducti

on, t

estin

g an

d m

ultip

licati

on o

f see

ds.

In th

e med

ium-to

-long

term

, the

fisc

al ap

proa

ch w

ould

seek

the f

orm

ation

and

cons

olid

ation

of l

arge-

scale

farm

s thr

ough

ap

prop

riate

incen

tives

. Som

e of t

he in

cent

ives t

hat c

ould

be c

onsid

ered

inclu

de th

e fol

lowi

ng :

• Th

e use

of f

iscal

incen

tives

( i.e.

tax i

ncen

tives

, tem

porar

y reb

ates )

for f

arms t

o int

egrat

e or m

erge

• Th

e use

of i

nteg

ratio

n inc

entiv

es su

ch as

man

dato

ry m

inim

um vo

lum

es•

The p

rom

otio

n of

land

rent

al m

arket

mec

hanis

ms.

Larg

e-sc

ale fa

rms o

perat

e und

er lo

wer a

verag

e cos

t stru

ctures

. The

y are

in a b

etter

pos

ition

to ex

ploi

t eco

nom

ies o

f sca

le an

d sy

nerg

ies d

erive

d fro

m co

stly i

nves

tmen

ts in

irrig

ation

and

mec

haniz

ation

. This

activ

ity sh

ould

be d

evelo

ped

in pa

rallel

to

2.1

.6 o

n co

ntrac

ting.

3X

XX

• Inc

rease

in th

e ave

rage

farm

size

dur

ing th

e im

plem

entat

ion

of th

e ro

adm

ap•

Increa

se in

the n

umbe

r of

large

-sca

le far

ms d

edica

ted

to p

ulse

s•

Num

ber o

f pul

ses c

luste

rs es

tablis

hed

• Nu

mbe

r of p

ulse

s vari

eties

pr

ovid

ed•

Num

ber o

f ben

eficia

ries o

f im

prov

ed va

rietie

s•

Num

ber o

f im

plem

ents

intro

duce

d, ad

opted

and

distr

ibut

ed to

use

rs

Ethio

pian

Inve

st-m

ent A

genc

yM

inistr

y of A

gri-

cultu

re ( M

oA )

Mini

stry o

f Fin

ance

and

Eco-

nom

ic De

velo

p-m

ent,

Ethio

pian

Insti

tute

of A

gricu

ltural

Re

searc

h ( E

IAR )

, se

ed en

terpr

ises

Inter

natio

nal

dono

r age

ncies

, Int

erna

tiona

l Cr

ops R

esea

rch

Instit

ute f

or th

e Se

mi-A

rid Tr

opics

( IC

RISA

T )

1.1.

2 De

velo

p a p

lan th

at fac

ilitat

es co

mm

ercial

farm

s’ an

d sm

allho

lder

farm

ers’

acce

ss to

suffi

cient

amou

nts o

f affo

rdab

le se

eds.

The f

ocus

of t

his ac

tivity

is o

n se

ed m

ultip

licati

on. T

he el

abor

ation

of t

he p

lan w

ould

take

into

cons

ider

ation

som

e of

the f

ollo

wing

elem

ents.

• Ide

ntify

the i

mpr

oved

seed

varie

ties t

hat a

re ( a

nd sh

ould

be )

mos

t com

mon

ly us

ed to

redu

ce th

e cos

t of p

rodu

ction

whil

e en

surin

g th

e req

uired

leve

l of q

ualit

y.•

Crea

te aw

arene

ss am

ong

farm

ers o

n th

e cos

t adv

antag

es o

f the

iden

tified

varie

ties.

Expo

rters

shou

ld g

et inv

olve

d.•

Deve

lop

a see

d m

ultip

licati

on p

rogr

amm

e tha

t ena

bles

the s

uppl

y of s

uffic

ient s

eeds

. Farm

ers’

asso

ciatio

ns w

ill p

lay a

role

in di

strib

uting

the s

eeds

.•

Expe

rienc

e- an

d kn

owled

ge-s

harin

g be

twee

n Ind

ian an

d Et

hiopi

an fa

rmer

s. De

velo

p a p

acka

ge o

f bes

t prac

tices

for

prod

ucing

pul

ses c

rops

pro

fitab

ly.•

Traini

ng o

f exte

nsio

n pe

rsonn

el, an

d pr

omot

ing p

rodu

ction

and

orga

nizing

dem

onstr

ation

s thr

ough

farm

er tr

aining

cent

res.

Colle

ct an

d inc

orpo

rate f

armer

pref

erenc

es an

d fee

dbac

k.

1X

XX

• Ei

ght w

ored

as in

four

regi

ons

( Oro

mia

– th

ree, A

mha

ra –

three

, Tig

ray –

one

, SNN

PR

– on

e )•

Star

t with

600

ha u

nder

each

va

riety

• Fiv

e exte

nsio

n of

ficer

s and

50

farm

ers i

n ea

ch w

ored

a tra

ined

EIAR

Regi

onal

Agric

ul-

tural

Res

earc

h In-

stitu

tes ( R

ARIs )

, Bu

reau

of A

gri-

cultu

re ( B

oA ),

MoA

, Fed

eral

Co-

oper

ative

Age

ncy

( FCA

), AT

AEd

get S

eed

Pro-

ducti

on an

d M

ar-ke

ting

Unio

n

Tropi

cal L

egum

es

III pr

ojec

t ( TL

III )

( fund

ed b

y the

Bi

ll an

d M

elind

a Ga

tes F

ound

a-tio

n ) o

n ch

ickpe

aNo

pro

ject o

n pi

geon

pea

ICRI

SAT,

Inter

natio

nal

Trade

Cen

tre

( ITC )

1.1.

3 Es

tablis

h a s

eed

bank

that

guara

ntee

s farm

ers’

acce

ss to

seed

s tha

t the

y nee

d wh

en th

ey n

eed

them

. This

activ

ity w

ill

focu

s on

relau

nchin

g th

e rol

e of E

SE, w

hich

is th

e ins

titut

ion

with

a m

anda

te th

at is

close

st to

a se

ed b

ank.

The m

ain fu

nc-

tions

of t

he b

ank w

ould

inclu

de th

e fol

lowi

ng.

• St

ore s

eeds

as a

sour

ce fo

r plan

ting

or m

ultip

licati

on in

case

seed

rese

rves e

lsewh

ere ar

e des

troye

d. E

nsur

e ava

ilabi

lity o

f pu

lse va

rietie

s tha

t are

strate

gic t

o Et

hiopi

a, an

d fo

r bio

dive

rsity

reaso

ns.

• M

aintai

n sto

cks o

f cer

tified

seed

s for

farm

ers.

This

func

tion

shou

ld o

perat

e und

er a

syste

m o

f quo

tas fo

r farm

ers.

The s

eed

bank

aim

s to

lowe

r the

cost

of in

puts

while

ensu

ring

the l

ong-

term

susta

inabi

lity o

f the

pul

ses s

ecto

r.

3X

X•

Seed

ban

k esta

blish

ed o

r the

ro

le of

ESE

rede

fined

• Nu

mbe

r of s

eeds

iden

tified

• Nu

mbe

r of s

tock

s ava

ilabl

e

Seed

com

panie

sM

oA, I

CRIS

AT,

ESE

FAO

[ ROADMAP PLAN OF ACTION ]

55

Stra

tegi

c ob

ject

ive

1 : B

oost

pro

duct

ivity

and

qua

lity

by u

sing

pub

lic a

nd m

arke

t-led

ince

ntiv

es.

Oper

atio

nal o

bjec

tive

Activ

ityPr

iorit

y1=

high

2=m

ed3=

low

Star

ting

perio

dTa

rget

mea

sure

sLe

adin

g na

tiona

l in

stitu

tion

and

poss

ible

impl

emen

ting

partn

ers

Ongo

ing /

futu

re

deve

lopm

ent

prog

ram

mes

+

inte

rnat

iona

l pa

rtner

s

2016

2017

2018

2019

2020

1.1

Lowe

r the

ave

r-ag

e co

st o

f pro

ducin

g pu

lses.

1.1.

4 Se

t up

a fun

ding

and

cre

dit g

uara

ntee

plan

invo

lving

com

merc

ial b

anks

, micr

ofina

nce i

nstit

utio

ns, d

onor

s and

the

publ

ic se

ctor.

The b

enefi

ciarie

s of t

he fu

nd w

ould

hav

e to

first

grad

uate

from

the c

redit

guara

ntee

mec

hanis

m to

later

tap

into

the f

unds

that

woul

d be

inten

ded

for m

ore c

apita

l-int

ensiv

e pro

jects

with

hig

h im

pact

poten

tial.

Cred

it gu

arant

ee w

ould

be

prov

ided

again

st a c

ombi

natio

n of

facto

rs, in

cludi

ng th

e ‘ex

pecte

d’ re

turn

on

capi

tal an

d th

e unc

ondi

tiona

l cap

acita

tion

of th

e be

nefic

iaries

. The

sche

me w

ould

be o

pen

to al

l stak

ehol

ders

of th

e valu

e cha

in ex

cept

expo

rters

( they

will

hav

e a d

edica

ted

mec

hanis

m u

nder

2.2

). So

me o

f the

mos

t im

med

iate a

ction

s wou

ld in

clude

the f

ollo

wing

.

• Ide

ntify

the f

inanc

ial in

stitu

tions

that

woul

d tak

e par

t in

the s

chem

e.•

Nego

tiate

the s

pecif

ic all

ocati

on o

f fun

ds fr

om th

e priv

ate se

ctor,

dono

rs an

d th

e Gov

ernm

ent.

The p

rivate

secto

r wou

ld

have

to as

sum

e mos

t of t

he in

itial

capi

tal, t

he p

ublic

secto

r a sm

all p

ercen

tage,

and

dono

r( s ) a

marg

inal o

ne.

• Ide

ntify

a do

nor( s

) will

ing to

par

ticip

ate w

ith a

small

perc

entag

e of t

he to

tal am

ount

of f

unds

and

to p

rovid

e or f

inanc

e the

co

nditi

onal

capa

city-

build

ing.

• Ide

ntify

the c

apac

ity-b

uildi

ng tr

aining

pro

gram

mes

that

will

be re

quire

d.•

Decid

e the

prio

rity a

reas t

o su

ppor

t, inc

ludi

ng se

ed d

evelo

pmen

t res

earc

h, se

ed m

ultip

licati

on, t

echn

olog

y dev

elopm

ent,

infras

tructu

re an

d pr

oces

sors.

• Ide

ntify

the e

ligib

ility

cond

ition

s for

pul

ses v

alue c

hain

stake

hold

ers,

i.e. f

armer

s, co

mpa

nies,

indivi

dual

entre

pren

eurs

and

coop

erati

ves.

• Ch

oose

dec

ision

-mak

ing cr

iteria

and

rules

for t

he fu

nctio

ning

of th

e fun

d.Fa

cilita

ting

small

hold

er fa

rmer

acce

ss to

fina

nce i

s exp

ected

to h

elp th

em re

duce

the c

ost o

f inp

uts a

nd o

ther

pro

ducti

on

servi

ces.

It is

also

expe

cted

to cr

eate

oppo

rtunit

ies fo

r oth

ers i

n th

e valu

e cha

in to

incr

ease

pro

ducti

on an

d qu

ality

and

re-du

ce th

e ove

rall c

ost o

f pul

ses.

This

activ

ity is

cros

s-cu

tting

to o

perat

iona

l obj

ectiv

es 1

.1, 1

.2 an

d 1.

3.

1X

XX

X•

Cred

it gu

arant

ee p

lan

estab

lishe

d•

Num

ber o

f fina

ncial

ins

titut

ions

par

ticip

ating

• Fu

nd es

tablis

hed

• Nu

mbe

r of f

armer

s who

hav

e ac

cess

to cr

edit

Non-

gove

rnm

ent

orga

niza

tions

Micr

ofina

nce

instit

utio

ns, c

om-

merc

ial b

anks

, SI

TA

Mul

tinati

onal

finan

cial i

nstit

u-tio

ns

1.1.

5 Ide

ntify

and

pilo

t app

ropr

iate f

arm

mec

hani

zatio

n tec

hnol

ogies

( raw

plan

ters,

com

bine

harv

ester

s and

thres

hers

) tha

t ca

n lea

d to

sign

ifica

nt re

ducti

ons i

n far

mer

s’ pr

oduc

tion

costs

. This

shou

ld in

clude

matu

re tec

hnol

ogies

and

equip

men

t tha

t ca

n be

easil

y mad

e ava

ilabl

e to

large

gro

ups o

f farm

ers a

t rea

sona

ble c

ost.

The a

ction

s wou

ld co

nsist

of t

he fo

llowi

ng :

• Fo

rm a

mec

haniz

ation

core

team

• Co

nduc

t des

k and

field

rese

arch

( par

ticip

ation

in tr

ade f

airs a

nd o

n-sit

e visi

ts of

Indi

an p

artn

ers )

to id

entif

y app

ropr

iate

farm

mec

haniz

ation

tech

nolo

gies

• De

mon

strate

the i

dent

ified

mec

haniz

ation

equip

men

t at f

arms i

n co

llabo

ratio

n wi

th fa

rmer

s’ or

ganiz

ation

s, alo

ng w

ith

traini

ng•

Deve

lop

good

prac

tices

for t

he in

trodu

ction

of t

echn

olog

ies an

d eq

uipm

ent i

n th

e pul

ses s

ecto

r.Th

is ac

tivity

inten

ds to

dem

onstr

ate th

at th

ere ar

e affo

rdab

le tec

hnica

l sol

utio

ns th

at ca

n su

staina

bly l

ower

pro

ducti

on co

sts.

In or

der f

or it

not

to ra

ise p

rodu

ction

cost

it sh

ould

be d

evelo

ped

in pa

rallel

to 1

.1.1

.

2X

X•

Mec

haniz

ation

core

team

fo

rmed

• Pa

rticip

ation

in si

te vis

its•

At le

ast t

hree

tech

nolo

gies

id

entif

ied

Non-

gove

rnm

ent

orga

niza-

tions

/ Gov

ern-

men

tM

elkas

sa A

gri-

cultu

ral R

esea

rch

Cent

re,De

brez

eit A

gricu

l-tu

ral R

esea

rch

Cent

re, m

odel

farm

ers /

farm

ers’

orga

nizati

ons

56


Stra

tegi

c ob

ject

ive

1 : B

oost

pro

duct

ivity

and

qua

lity

by u

sing

pub

lic a

nd m

arke

t-led

ince

ntiv

es.

Oper

atio

nal o

bjec

tive

Activ

ityPr

iorit

y1=

high

2=m

ed3=

low

Star

ting

perio

dTa

rget

mea

sure

sLe

adin

g na

tiona

l in

stitu

tion

and

poss

ible

impl

emen

ting

partn

ers

Ongo

ing /

futu

re

deve

lopm

ent

prog

ram

mes

+

inte

rnat

iona

l pa

rtner

s

2016

2017

2018

2019

2020

1.2

Expa

nd th

e pr

o-du

ctio

n of

puls

es.

1.2.

1 Inc

rease

pro

ducti

on th

roug

h inc

rease

d an

d res

pons

ible

use o

f pes

ticid

es, a

ltern

ative

wee

d co

ntro

l mec

hanis

ms a

nd

agro

nom

ic pr

actic

es. T

he ac

tions

for t

his ac

tivity

wou

ld co

nsist

of t

he fo

llowi

ng.

• Ide

ntify

, tes

t and

pro

mot

ing th

e use

of h

erbi

cides

that

affec

t chic

kpea

s.•

Prom

ote t

he u

se o

f Int

egrat

ed Pe

st M

anag

emen

t ( IP

M ) p

ractic

es to

cont

rol p

re- an

d po

st-ha

rvest

pests

and

dise

ases

by

traini

ng an

d ca

pacit

y-bu

ilding

.•

Ident

ify an

d pr

omot

ing to

ols a

nd m

achin

es th

at ca

n red

uce t

he co

st of

wee

ding

, harv

estin

g an

d th

reshin

g.•

Prom

ote t

he u

se o

f pes

ticid

es fo

r pes

t man

agem

ent.

• De

velo

p a p

lan to

facil

itate

farm

ers’

acce

ss to

pes

ticid

es. T

his p

lan co

uld

inclu

de so

me o

f the

follo

wing

actio

ns :

–M

ap o

ut th

e main

plag

ues a

nd d

iseas

es an

d th

e mos

t suit

able

pesti

cides

to ad

dres

s the

m ;

–Ide

ntify

soil

chara

cteris

tics a

nd th

e typ

e and

qua

ntity

of f

ertil

izers

and

the m

axim

um am

ount

of p

estic

ides

for

susta

inabl

e dev

elopm

ent o

f the

secto

r ; –

Deve

lop

a mec

hanis

m to

diss

emina

te inf

orm

ation

on

the r

espo

nsib

le us

e of p

estic

ides

amon

g far

mer

s, us

ing b

ulk

text m

essa

ges a

nd ra

dio.

Exp

lore

alter

nativ

e way

s to

mak

e farm

ers c

onsc

ious

of t

he im

porta

nce o

f res

pons

ible

use o

f pe

sticid

es.

Impr

oving

the c

apac

ity o

f the

secto

r to

deal

with

pes

ts is

inten

ded

to b

oost

the p

rodu

ction

of a

ll cu

rrent

pul

ses b

ut w

ill al

so

have

a sig

nifica

nt im

pact

on im

prov

ing th

e qua

lity o

f the

pul

ses (

oper

ation

al ob

jectiv

e 1.3

).

2X

XX

X•

At le

ast o

ne h

erbi

cide

iden

tified

, tes

ted an

d reg

istere

d•

A gr

oup

of tr

ainer

s trai

ned

in IP

M p

ractic

e•

Five e

xtens

ion

offic

ers a

nd

50 fa

rmer

s in

each

wor

eda

traine

d pe

r yea

r in

IPM

• On

e piec

e of e

quip

men

t id

entif

ied•

Num

ber o

f farm

ers u

sing

pest

man

agem

ent s

ystem

s•

Num

ber o

f IPM

tool

s int

rodu

ced

to fa

rmer

s

MoA

EIAR,

RAR

Is, B

oA,

FCA

TL III

pro

ject o

n ch

ickpe

aNo

pro

ject o

n pi

geon

pea

ICRI

SAT,

ITC

1.2.

2 Pil

ot a

crop

rota

tion

prog

ramm

e tha

t enc

ourag

es th

e use

of t

his ag

ricul

tural

prac

tice a

mon

g lo

cal f

armer

s. Th

e acti

ons

for t

his ac

tivity

cons

ist o

f the

follo

wing

.

• M

ap th

e reg

ions

and

the m

atchin

g cr

ops w

ith th

e hig

hest

poten

tial f

or cr

op ro

tatio

n. Th

e exa

ct cr

oppi

ng p

atter

n ca

n on

ly be

defi

ned

after

agro

nom

ic tes

ting

of th

e lan

d an

d lo

gisti

cal c

onsid

erati

ons h

ave b

een

taken

into

acco

unt,

e.g. s

uitab

le sto

rage.

• De

velo

p a c

rop

rotat

ion

pack

age a

nd p

ractic

e suit

able

to d

iffere

nt ag

roec

olog

ies. T

he p

acka

ge sh

ould

spec

ify a

grou

p of

pi

lot r

egio

ns.

• Se

lect t

he g

roup

of f

arms t

hat w

ill p

ilot t

he in

itiati

ve.

• As

sess

the r

esul

ts of

the p

ilot p

rojec

t.•

Decid

e on

wheth

er ex

tensio

n of

the p

ilot i

s des

irabl

e.Cr

op ro

tatio

n inv

olvin

g pu

lses i

s ben

eficia

l to

soil

struc

ture

and

stabi

lity.

Pulse

s add

nitr

ogen

and

also

a sig

nifica

nt am

ount

of

org

anic

resid

ues t

o th

e soi

l in

the f

orm

of r

oot b

iom

ass a

nd le

af lit

ter. R

oots

and

leaf l

itter,

bein

g ric

h in

nitro

gen,

facil

itate

the d

ecom

posit

ion

of cr

op re

sidue

s in

soil

and

increa

se m

icrob

ial ac

tivity

. This

activ

ity is

inten

ded

to h

ave a

n im

pact

on ra

is-ing

pro

ducti

vity.

2X

XX

• M

appi

ng o

f the

regi

ons w

ith

poten

tial f

or cr

op ro

tatio

n do

ne•

Num

ber o

f pac

kage

s de

velo

ped

• Pil

ot p

rojec

t com

plete

d

MoA

1.2.

3 Pil

ot a

prog

ramm

e of e

xpan

sion

of th

e pro

duct

ion

area

by i

nteg

rating

the p

rodu

ction

syste

ms o

f the

pul

ses a

nd th

e ce

real s

ecto

rs. Th

is ac

tivity

wou

ld in

clude

the f

ollo

wing

actio

ns.

• Inc

rease

the a

rea u

nder

pro

ducti

on b

y pro

mot

ing cr

op ro

tatio

n wi

th ch

ickpe

a and

inter

crop

ping

with

pig

eon

pea.

• Im

prov

e pro

ducti

vity b

y pro

viding

supp

lemen

tal ir

rigati

on, e

spec

ially

in se

mi-a

rid ar

eas.

Impr

ove h

arves

ting,

thres

hing

and

trans

porti

ng.

• Pr

omot

e pro

ducti

on o

f chic

kpea

and

pige

on p

ea in

non

-trad

ition

al are

as w

ith th

e pot

entia

l to

grow

thes

e cro

ps. T

he ‘D

esi’

varie

ty of

chick

pea i

s quit

e com

mon

, but

the ‘

Kabu

li’ o

ne is

new

to E

thio

pia.

Pigeo

n pe

as ar

e a re

lative

ly ne

w pr

oduc

t to

Eth

iopi

a. In

areas

like

Bec

ho W

oliso

, Lum

e Ada

ma a

nd Ts

ehay

, sev

eral

initia

tives

for p

rom

oting

chick

peas

are a

lread

y be

ing d

evelo

ped

and

shou

ld b

e tak

en in

to ac

coun

t.Th

is ac

tivity

wou

ld h

ave t

he ad

ditio

nal p

ositi

ve ef

fect o

f boo

sting

pro

ducti

on w

ithou

t inc

reasin

g th

e sur

face o

f lan

d de

dica

ted

to ag

ricul

tural

use

s. Th

ere is

a lin

k with

activ

ity 3

.2.1

on

envir

onm

ental

susta

inabi

lity.

1X

XX

X•

At le

ast 8

% in

crea

se in

pr

oduc

tion,

5 %

incr

ease

in

area p

er ye

ar fo

r chic

kpea

fro

m ye

ar th

ree o

nward

s•

At le

ast 1

,000

ha u

nder

pi

geon

pea

expo

rting

at le

ast

750

tons

EIAR

RARI

s, Bo

A, M

oA,

FCA,

ATA

TL III

on

chick

pea

No p

rojec

t on

pige

on p

eaIC

RISA

T, ITC


57

Stra

tegi

c ob

ject

ive

1 : B

oost

pro

duct

ivity

and

qua

lity

by u

sing

pub

lic a

nd m

arke

t-led

ince

ntiv

es.

Oper

atio

nal o

bjec

tive

Activ

ityPr

iorit

y1=

high

2=m

ed3=

low

Star

ting

perio

dTa

rget

mea

sure

sLe

adin

g na

tiona

l in

stitu

tion

and

poss

ible

impl

emen

ting

partn

ers

Ongo

ing /

futu

re

deve

lopm

ent

prog

ram

mes

+

inte

rnat

iona

l pa

rtner

s

2016

2017

2018

2019

2020

1.2

Expa

nd th

e pr

o-du

ctio

n of

puls

es.

1.2.

4 Fa

st tra

ck th

e int

rodu

ction

of n

ew h

igh-

yield

ing p

ulse

see

d va

rietie

s in

the c

ount

ry. Th

is wo

uld

inclu

de th

e fol

lowi

ng

actio

ns.

• Ta

ke st

ock o

f exis

ting

regist

ered

varie

ties t

hat h

ave n

ot b

een

com

merc

ialize

d. M

oA h

as a

datab

ase o

f all

regist

ered

seed

s.•

Pilot

a pr

ivate

and /

or co

mm

unity

-bas

ed se

ed m

ultip

licati

on m

odel,

pref

erab

ly wi

th co

oper

ative

s tha

t hav

e the

ir ow

n far

ming

land

for s

eed

mul

tiplic

ation

. ICR

ISAT

coul

d als

o pl

ay a

role.

• Fa

cilita

te di

alogu

e am

ong

resea

rch

cent

res fo

r bas

ic se

eds,

seed

pro

duce

rs, se

ed u

sers,

pro

cess

ors a

nd ex

porte

rs.•

Share

bes

t prac

tices

from

with

in an

d ou

tside

the c

ount

ry th

at ha

ve w

orke

d.•

Expl

ore n

ew ty

pes o

f see

ds. T

rials

will

be co

nduc

ted b

y res

earc

h ins

titut

es.

• De

velo

p a n

umbe

r of d

emon

strati

on p

lots

for f

armer

s to

unde

rstan

d th

e ben

efits

of h

ybrid

/ hig

her y

ieldi

ng va

rietie

s.•

Facil

itate

inter

actio

n be

twee

n se

ed co

mpa

nies,

expo

rters,

farm

ers a

nd IC

RISA

T.•

Intro

duce

, tes

t and

relea

se / r

egist

er m

arket-

dem

ande

d leg

ume v

arieti

es.

• M

ultip

ly br

eede

r, ba

sic, p

re-ba

sic an

d ce

rtifie

d se

eds o

f the

se le

gum

e vari

eties

.Th

is ac

tivity

is in

tende

d to

pro

vide h

igh-

yield

ing, m

arket-

dem

and-

drive

n im

prov

ed va

rietie

s and

inpu

ts of

targ

eted

pulse

co

mm

oditi

es fo

r sm

allho

lder

s.

3X

X•

Amou

nt o

f see

d su

pply

and

num

ber o

f vari

eties

• Pil

ot p

rogr

amm

e con

ducte

d

MoA

Agric

ultu

ral R

e-se

arch

Instit

utes

EIAR,

coop

-er

ative

s, se

ed

enter

prise

s ( ES

E,

regio

nal s

eed

enter

prise

s )Ed

get S

eed

Pro-

ducti

on an

d M

ar-ke

ting

Unio

n

ICRI

SAT

1.2.

5 Inc

rease

pro

ducti

on o

f pul

ses t

hrou

gh b

etter

use

of a

vaila

ble a

nd / o

r affo

rdab

le m

echa

niza

tion.

The a

ction

s for

this

activ

ity co

nsist

of t

he fo

llowi

ng.

• Co

nduc

t an

asse

ssm

ent o

f farm

ers’

mec

haniz

ation

nee

ds fo

r the

nex

t five

years

. Em

phas

is sh

ould

be p

laced

on

irrig

ation

, lig

ht in

frastr

uctu

re an

d eq

uipm

ent t

hat c

an b

e use

d fo

r pul

ses a

nd o

ther

crop

s, su

ch as

tool

s and

mac

hines

that

reduc

e th

e cos

t of w

eedi

ng, p

lantin

g, h

arves

ting

and

thres

hing.

• Co

nduc

t an

asse

ssm

ent o

f ass

embl

ers,

and

asse

mbl

ers’

mec

haniz

ation

nee

ds fo

r the

nex

t five

years

( i.e.

pac

kagi

ng

equip

men

t ).•

Defin

e a p

lan to

ensu

re th

e ava

ilabi

lity o

f spa

re pa

rts an

d aff

orda

ble s

uppo

rt se

rvice

s.•

Bring

Indi

an eq

uipm

ent m

anuf

actu

rers a

nd d

istrib

uter

s in

the r

egio

n fac

e to

face w

ith fa

rmer

s.•

Expl

ore o

ppor

tunit

ies fr

om so

urce

s alte

rnati

ve to

Indi

a tha

t can

offe

r sim

ilar v

alue f

or m

oney

( i.e.

Braz

il, It

aly, J

apan

, Chin

a an

d Vi

et Na

m ).

This

activ

ity is

inten

ded

to p

rom

ote t

he u

se o

f mor

e mod

ern

mec

haniz

ation

and

to co

nnec

t pot

entia

l ben

eficia

ries o

f equ

ip-

men

t to

its p

rovid

ers.

3X

XX

• As

sess

men

t on

mec

haniz

ation

com

plete

d•

Asse

ssm

ent o

n pa

ckag

ing

com

plete

d•

Plan

for p

rovis

ion

of sp

are

parts

dev

elope

d•

Visit

from

Indi

an d

istrib

utor

s or

ganiz

ed

EIAR

MoA

.

ITC

1.2.

6 Inc

rease

pro

ducti

on th

roug

h be

tter u

se o

f bio

ferti

lizer

s an

d rel

ated

input

s and

agro

nom

ic pr

actic

es. T

he ac

tions

for

this

activ

ity w

ill in

volve

the f

ollo

wing

.

• M

ake a

n inv

ento

ry of

the m

ost c

omm

on ty

pes o

f fer

tilize

rs cu

rrent

ly us

ed. F

ertil

izers

shou

ld b

e gro

uped

acco

rding

to tw

o br

oad

categ

ories

: org

anic

and

non-

orga

nic.

• Te

st th

e pro

perti

es ( i

.e. p

rodu

ctivit

y, im

pact

on th

e env

ironm

ent )

of th

e ide

ntifi

ed fe

rtiliz

ers a

gains

t affo

rdab

le alt

erna

tives

in

the m

arket.

This

study

shou

ld b

e don

e tak

ing in

to co

nsid

erati

on th

e soi

l diff

erenc

es am

ong

the d

iffere

nt p

ulse

gro

wing

reg

ions

.•

Docu

men

t the

less

ons f

rom

the p

revio

us p

oint

s and

mak

e the

main

conc

lusio

ns av

ailab

le to

farm

ers a

nd in

put p

rovid

ers

in th

e valu

e cha

in.•

Prom

ote t

he u

se o

f the

iden

tified

ferti

lizer

s thr

ough

a pi

lot e

xerc

ise in

volvi

ng a

limite

d nu

mbe

r of f

armer

s.•

Deve

lop

a plan

to su

pply

the f

arming

com

mun

ity w

ith th

e req

uired

ferti

lizer

s.Th

is ac

tivity

inten

ds to

incr

ease

pro

ducti

on th

roug

h m

ore e

ffecti

ve u

se o

f fer

tilize

rs. A

lthou

gh in

the s

hort

term

it co

uld

have

a c

ost i

mpl

icatio

n, in

the m

edium

term

it w

ill al

so co

ntrib

ute t

o lo

werin

g th

e ave

rage p

rodu

ction

cost

of p

ulse

s ( op

erati

onal

objec

tive 1

.2 ).

2X

XX

• Inv

ento

ry of

ferti

lizer

s use

d co

mpl

eted

• At

leas

t five

ferti

lizer

s id

entif

ied, t

ested

and

regist

ered

• A

grou

p of

train

ers t

raine

d in

biof

ertil

izer p

ractic

es•

Five e

xtens

ion

offic

ers a

nd

50 fa

rmer

s in

each

wor

eda

traine

d pe

r yea

r•

One p

iece o

f equ

ipm

ent

iden

tified

• Nu

mbe

r of f

armer

s usin

g bi

ofer

tilize

rs•

A pl

an to

intro

duce

ferti

lizer

s de

velo

ped

MoA

EIAR ;

RARI

s, Bo

A, F

CA

TL III

on

chick

pea

No p

rojec

t on

pige

on p

eaIC

RISA

T, ITC

58


Stra

tegi

c ob

ject

ive

1 : B

oost

pro

duct

ivity

and

qua

lity

by u

sing

pub

lic a

nd m

arke

t-led

ince

ntiv

es.

Oper

atio

nal o

bjec

tive

Activ

ityPr

iorit

y1=

high

2=m

ed3=

low

Star

ting

perio

dTa

rget

mea

sure

sLe

adin

g na

tiona

l in

stitu

tion

and

poss

ible

impl

emen

ting

partn

ers

Ongo

ing /

futu

re

deve

lopm

ent

prog

ram

mes

+

inte

rnat

iona

l pa

rtner

s

2016

2017

2018

2019

2020

1.3

Impr

ove

the

over

-all

qua

lity o

f the

puls

es

that

are

pro

duce

d.

1.3.

1 De

velo

p a q

uality

sta

ndar

ds g

ap m

ap fo

r Eth

iopi

an p

ulse

s. Th

e acti

ons f

or th

is ac

tivity

wou

ld co

nsist

of t

he fo

llowi

ng.

• Cr

eate

aware

ness

of q

ualit

y stan

dard

s am

ong

farm

ers.

• Ide

ntify

the g

aps i

n th

e qua

lity o

f pul

ses f

or ex

port,

e.g.

one

of t

he m

ajor p

robl

ems i

n qu

ality

has b

een

the s

ize o

f ch

ickpe

as. T

he m

ajor c

onsu

ming

mark

ets lo

ok fo

r grai

n siz

e of 8

-10

mill

imetr

es in

the ‘

Desi’

varie

ty ; h

owev

er, E

thio

pian

ch

ickpe

as ar

e a b

it sm

aller.

Also

, the

colo

ur o

f pul

ses i

s ofte

n a q

ualit

y im

pedi

men

t.•

Benc

hmark

exist

ing q

ualit

y aga

inst t

he d

esire

d qu

ality

in 1.

3.2.

• De

velo

p co

llabo

ratio

n be

twee

n EN

AO an

d Ind

ian in

stitu

tions

for m

utua

l rec

ognit

ion.

• W

ork w

ith E

NAO

to d

evelo

p a n

etwor

k of m

utua

l rec

ognit

ion

agree

men

ts an

d co

nfor

mity

asse

ssm

ent b

odies

.Th

is ac

tivity

is in

tende

d to

focu

s on

quali

ty iss

ues i

n pr

oduc

tion.

1X

X•

Num

ber o

f doc

umen

tsEIA

REP

OSPE

A,EN

AO

1.3.

2 Pr

omot

e the

use

of i

mpr

oved

var

ieties

of s

eeds

for p

rodu

ction

per

mark

et req

uirem

ent.

The a

ction

s for

this

activ

ity

will

cons

ist o

f :

• Ide

ntify

ing im

prov

ed va

rietie

s for

qua

lity

• Int

rodu

cing

and

adop

ting

the i

mpr

oved

varie

ties

• M

ultip

licati

on an

d sc

aling

up

of th

e im

prov

ed va

rietie

s•

Map

ping

out

seed

varie

ties t

o de

stina

tion

mark

ets•

Base

d on

the r

esul

ts of

1.3

.1, m

atchin

g th

e qua

lity g

aps t

o th

e mos

t suit

able

seed

s per

regi

on.

The m

arket

requir

emen

t refe

rred

to is

relat

ed to

varie

ties t

hat t

he m

arkets

pref

er. F

or ex

ampl

e, in

India

the v

ariety

of c

hickp

ea

that

is pr

eferre

d is

a bit

bigg

er in

size

and

mor

e yell

ow in

colo

ur.

This

activ

ity is

inten

ded

to fo

cus o

n qu

ality

issue

s in

prod

uctio

n.

2X

XX

X•

Num

ber o

f vari

eties

int

rodu

ced

and

prom

oted

MoA

EIAR,

seed

s en-

terpr

ises

ITC–S

ITA,

ITC

1.3.

3 De

velo

p an

d pr

omot

e qua

lity s

tand

ard

requ

irem

ents

by t

arget

mark

et. Th

e acti

ons f

or th

is ac

tivity

cons

ist o

f :

• Fo

rming

clus

ters o

f pro

ducti

on ar

eas t

argeti

ng sp

ecifi

c vari

ety an

d qu

ality

as re

quire

d by

the t

arget

mark

et•

Deve

lopi

ng an

d pr

omot

ing cl

eanin

g an

d gr

ading

tech

nolo

gies

to m

eet t

he g

rades

and

stand

ards o

f targ

et m

arkets

• Inc

entiv

izing

pro

duce

rs to

pro

duce

qua

lity p

ulse

s by l

inking

pur

chas

e pric

e with

qua

lity

• Tra

ining

exten

sion

offic

ers a

nd b

uyer

s on

grad

es an

d sta

ndard

s•

Deve

lopi

ng a

mod

ule o

n int

erna

tiona

l qua

lity s

tanda

rds f

or p

ulse

s•

Orga

nizing

a tra

ining

wor

ksho

p on

qua

lity s

tanda

rds.

A be

nchm

arking

stud

y tha

t will

dev

elop

a matr

ix of

the q

ualit

y req

uired

and

prod

uced

is n

eede

d.

3X

XX

X•

Expo

rt rej

ectio

ns re

duce

d to

5 %

from

the c

urren

t 12 %

EIAR

RARI

s, Bo

A, M

oA,

ATA,

Ethio

pian

Stan

d-ard

s Age

ncy,

Ethio

pian

Con

-fo

rmity

Ass

ess-

men

t Ent

erpr

ise,

EPOS

PEA

TL III

on

chick

pea

No p

rojec

t on

pige

on p

eaIC

RISA

T, ITC

1.3.

4 De

velo

p pr

e-ha

rves

t cap

aciti

es fo

r farm

ers,

trade

rs an

d ex

porte

rs. Th

e acti

ons f

or th

is ac

tivity

cons

ist o

f the

follo

wing

• Tra

in 10

0 m

odel

farm

ers f

rom

each

clus

ter in

1.1

on

pre-

harve

st, p

lantin

g, h

andl

ing an

d m

anag

emen

t agr

o-tec

hniq

ues.

• Tra

in de

velo

pmen

t age

nts,

agric

ultu

ral ex

perts

and

coop

erati

ve ex

perts

from

the F

armer

s’ Co

oper

ative

Unio

n.•

Raise

aware

ness

amon

g se

ed p

rodu

cers

and

farm

ers o

n th

e nee

d to

pro

perly

sort

seed

s prio

r to

plan

ting.

• Ide

ntify

the v

arieti

es th

at req

uire v

alue a

dditi

on ( c

olou

r sor

ting,

size

sorti

ng, e

tc. ).

Atten

tion

shou

ld b

e paid

to h

igh-

quali

ty pr

oduc

ts wi

th a

prem

ium p

rice.

• Or

ganiz

e a kn

owled

ge-s

harin

g an

d ex

posu

re vis

it to

Indi

a for

farm

ers,

trade

rs an

d ex

porte

rs.Th

e frag

men

ted n

ature

of th

e farm

ing sy

stem

mak

es it

diff

icult

for f

armer

s to

acce

ss kn

owled

ge an

d ex

tensio

n se

rvice

s th

at wo

uld

impr

ove t

heir

techn

ique

s. Th

is ac

tivity

aim

s to

mak

e the

nec

essa

ry tra

ining

avail

able.

In ad

ditio

n, th

e acti

vity i

s ex

pecte

d to

hav

e an

impa

ct on

redu

cing

mark

et de

faults

from

buy

ers a

nd su

pplie

rs th

at cu

rrent

ly oc

cur a

t the

mom

ent o

f de

liver

y due

to ad

ulter

ation

of p

ulse

s.

2X

XX

XX

• Nu

mbe

r of t

raine

es•

Num

ber o

f exp

osur

e visi

tsM

oAEIA

R, E

POSP

EA


59

Stra

tegi

c ob

ject

ive

1 : B

oost

pro

duct

ivity

and

qua

lity

by u

sing

pub

lic a

nd m

arke

t-led

ince

ntiv

es.

Oper

atio

nal o

bjec

tive

Activ

ityPr

iorit

y1=

high

2=m

ed3=

low

Star

ting

perio

dTa

rget

mea

sure

sLe

adin

g na

tiona

l in

stitu

tion

and

poss

ible

impl

emen

ting

partn

ers

Ongo

ing /

futu

re

deve

lopm

ent

prog

ram

mes

+

inte

rnat

iona

l pa

rtner

s

2016

2017

2018

2019

2020

1.3

Impr

ove

the

over

-all

qua

lity o

f the

puls

es

that

are

pro

duce

d.

1.3.

5 St

rengt

hen

the c

apac

ity o

f farm

ers a

nd as

sem

bler

s to

deal

effec

tively

with

the c

halle

nges

asso

ciated

with

the p

osth

ar-

vest

link

ages

of t

he va

lue c

hain.

The a

ction

s for

this

activ

ity co

nsist

of t

he fo

llowi

ng.

• Pr

omot

e the

use

of e

xistin

g sto

rage i

nfras

tructu

re an

d sy

stem

s. Im

prop

er st

orag

e may

lead

to in

festat

ion

and

loss

due

to

moi

sture.

Pro

per v

entil

ation

, tem

perat

ure a

nd co

ntro

lling

expo

sure

to su

nlig

ht ar

e im

porta

nt as

pects

that

need

to b

e m

aintai

ned

in de

velo

ping

stor

age i

nfras

tructu

re. S

anita

tion

of th

e prem

ises,

expo

sure

to p

ests,

and

rode

nt m

anag

emen

t are

criti

cal.

• De

velo

p ad

ditio

nal s

torag

e cap

acity

whe

re ne

eded

. This

will

cons

ider

the r

ental

of a

fford

able

wareh

ouse

s und

er co

st-sh

aring

sche

mes

and

publ

ic–pr

ivate

partn

ersh

ip co

oper

ation

stru

ctures

. For

exam

ple,

a pilo

t ware

hous

e at p

rimary

co

oper

ative

s / un

ions

( cem

ented

floo

r and

corru

gated

iron

wall

s ).

• Pr

ovid

e cap

acity

-buil

ding

on

posth

arves

t man

agem

ent t

echn

ique

s for

farm

ers a

nd ag

greg

ators.

Train

farm

ers o

n sto

rage,

and

coop

erati

ves /

unio

ns o

n wa

rehou

se m

anag

emen

t. Ex

porte

rs an

d pr

oces

sors

shou

ld al

so ta

ke p

art i

n th

is tra

ining

. This

wo

uld

inclu

de, a

mon

g ot

her a

reas,

pre-

clean

ing m

achin

ery a

nd th

e use

of g

rading

mac

hiner

y to

reduc

e im

purit

ies.

• Pr

ovid

e effi

cient

cont

rol o

f sto

rage p

ests.

Inse

cts an

d m

icroo

rgan

isms d

amag

e pul

ses d

uring

their

stor

age.

The

recom

men

ded

storag

e tec

hniq

ues i

mpl

y tha

t the

pul

ses m

ust b

e sto

red b

elow

25 d

egree

s Cels

ius an

d ab

ove t

he fr

eezin

g po

int.

This

activ

ity is

inten

ded

to fo

cus o

n qu

ality

issue

s tha

t orig

inate

posth

arves

t. Th

ere is

a co

mm

on u

nder

stand

ing am

ong

the

stake

hold

ers t

hat f

armer

s can

assu

me t

he p

osth

arves

t acti

vities

, pro

vided

the p

rice o

f the

pul

ses i

s hig

h en

ough

.

1X

XX

X•

Num

ber o

f pos

tharv

est

hand

ling

struc

tures

• Nu

mbe

r of t

raine

es•

Posth

arves

t los

ses a

re red

uced

to 1

5 % fr

om th

e cu

rrent

20 %

–30 %

MoA

Priva

te su

pplie

rs,EIA

R, R

ARIs,

BoA

, M

oA, F

CA, A

TANe

ther

lands

De

velo

pmen

t Or-

ganiz

ation

( SNV

) ( d

elive

r trai

ning )

TL III

on

chick

pea

No p

rojec

t on

pige

on p

eaIC

RISA

T, ITC

1.3.

6 Pr

omot

e the

use

of n

ew te

chno

logi

es an

d qu

ality

cont

rols.

This

activ

ity w

ould

requ

ire th

e fol

lowi

ng ac

tions

:

• As

sess

tech

nolo

gica

l nee

ds•

Diag

nosti

c of i

nnov

ation

capa

city

• Pr

omot

ion

of p

rodu

ction

to q

ualit

y ass

uran

ce an

d sp

ecifi

catio

ns th

roug

h m

ass m

edia

and

othe

r com

mun

icatio

n m

ateria

ls.Th

is ac

tivity

is in

tende

d to

focu

s on

the l

ong-

term

dete

rmina

nts o

f pro

ducti

vity.

3X

XX

XX

• Nu

mbe

r of p

rom

otio

nal

mate

rials

prod

uced

, air

time

for p

rom

otio

n co

vered

EIAR

MoA

, bro

adca

st-ing

servi

ces

60


Stra

tegi

c ob

ject

ive

2 : Im

prov

e ex

port

com

petit

iven

ess

by s

treng

then

ing

the

conn

ectio

n be

twee

n pr

oduc

ers

and

the

inte

rmed

iarie

s in

the

valu

e ch

ain.

Oper

atio

nal

objec

tive

Activ

ityPr

iorit

y1=

high

2=m

ed3=

low

Star

ting

perio

dTa

rget

mea

sure

sLe

adin

g na

tiona

l in

stitu

tion

and

poss

ible

impl

emen

ting

partn

ers

Ongo

ing /

futu

re

deve

lopm

ent

prog

ram

mes

+

inte

rnat

iona

l pa

rtner

s

20162017201820192020

2.1

Stre

ngth

en th

e or

gani

zatio

n of

the

sect

or to

ens

ure

the

exch

ange

of

info

rmat

ion

betw

een

prod

ucer

s an

d in

tern

atio

nal

mar

kets

.

2.1.

1 Es

tablis

h a n

atio

nal p

ulses

plat

form

that

acts

as th

e foc

al po

int o

f the

secto

r. Th

e main

func

tions

of t

he p

latfo

rm ar

e to

repre-

sent

the i

ntere

sts o

f the

secto

r and

to co

ordi

nate

all th

e effo

rts o

f the

stak

ehol

ders

in th

e valu

e cha

in. Th

e plat

form

shou

ld co

mpr

ise

repres

entat

ives f

rom

bot

h th

e pub

lic an

d th

e priv

ate se

ctor.

Its ac

tions

shou

ld b

e the

follo

wing

.

• De

fine t

he re

latio

nship

betw

een

EPOS

PEA

and

the p

latfo

rm. I

n pr

incip

le, th

e plat

form

shou

ld b

e spo

nsor

ed b

y EPO

SPEA

( i.e.

fac

ilitat

ion

and

orga

nizati

on o

f mee

tings

).•

Learn

from

the e

xper

ience

of t

he h

oney

secto

r to

crea

te a s

takeh

olde

r plat

form

whe

re th

e stak

ehol

ders

addr

ess p

olicy

issu

es an

d sh

are b

est p

ractic

es in

a sim

ilar p

latfo

rm. S

NV an

d ITC

also

hav

e am

ple e

xper

ience

s on

simila

r typ

es o

f bod

ies. B

uild

on ex

isting

ini

tiativ

es an

d ad

apt t

hem

to th

e pul

ses s

ecto

r.•

Gene

rate a

nd d

issem

inate

com

petit

ive in

tellig

ence

.•

Estab

lish

a tas

k for

ce w

ithin

MoA

that

focu

ses o

n bo

ostin

g th

e pro

ducti

on o

f pul

ses o

n th

e gro

und.

A si

mila

r init

iative

alrea

dy

exist

s at t

he fe

deral

leve

l. Th

is tas

k for

ce sh

ould

act a

t reg

iona

l lev

el.•

Deter

mine

effec

tive w

ays t

o pr

omot

e the

secto

r and

to in

fluen

ce re

levan

t pul

ses p

olicy

.Th

e nati

onal

pulse

s plat

form

shou

ld p

rom

ote t

he d

evelo

pmen

t of t

he p

ulse

s sec

tor i

n Et

hiopi

a and

abro

ad. F

undi

ng re

quire

d : m

eetin

g fac

ilitie

s tha

t sho

uld

be su

ppor

ted b

y its

mem

bers.

The i

nstit

utio

ns fr

om w

hich

the p

artic

ipan

ts or

igina

te m

ust b

e will

ing to

share

the

costs

.

1X

XX

• Es

tablis

hmen

t of

the n

ation

al pu

lses

platf

orm

• Co

mpo

sitio

n of

the

publ

ic an

d pr

ivate

secto

r mem

bers

deter

mine

d•

Defin

ition

of c

oncr

ete

gove

rnan

ce ru

les•

Defin

ition

of s

pecif

ic ter

ms o

f refe

rence

for

its m

embe

rs

EPOS

PEA

ATA,

EIA

R, M

oA,

ECX,

all o

ther

relev

ant

stake

hold

ers s

uch

as re

searc

hers,

pro

-du

cers,

trade

rs, co

unty

gov-

ernm

ents

and

othe

r rep

resen

tative

s fro

m

the p

rivate

secto

r

Inter

natio

nal d

o-no

r age

ncies

ITC–S

ITA te

amSN

V

2.1.

2 Es

tablis

h an

Inter

net-b

ased

know

ledge

plat

form

that

prov

ides

real-

time a

nd u

p-to

-date

info

rmat

ion

relev

ant t

o th

e stak

ehol

ders

of th

e pul

ses v

alue c

hain.

The i

nfor

mati

on sh

ould

be m

ade a

cces

sible

to al

l stak

ehol

ders.

The f

ollo

wing

wou

ld b

e the

mos

t im

med

i-ate

actio

ns.

• Ide

ntify

the d

ata an

d inf

orm

ation

al ne

eds o

f the

diff

erent

valu

e cha

in ac

tors.

Info

rmati

on o

n do

mes

tic an

d int

erna

tiona

l pric

es

for t

he d

iffere

nt ty

pes o

f pul

ses s

houl

d be

mad

e ava

ilabl

e. In

addi

tion,

relev

ant i

nfor

mati

on o

n de

man

d tre

nds,

mark

et ou

tlook

, ex

porte

d qu

antit

y, inp

uts,

requir

emen

ts, et

c. co

uld

also

be m

ade a

vaila

ble.

• De

term

ine th

e mos

t reli

able

sour

ces f

or th

e inf

orm

ation

requ

ired.

• De

cide t

he m

ost d

esira

ble w

ay to

mak

e the

info

rmati

on av

ailab

le, i.

e. se

tting

up

adeq

uate

text m

essa

ge an

d int

erac

tive v

oice

res

pons

e inf

orm

ation

-sha

ring

syste

ms.

• Co

ordi

nate

this

activ

ity w

ith E

POSP

EA to

ensu

re th

at its

curre

nt w

eb p

ortal

is u

pgrad

ed fo

r effe

ctive

info

rmati

on d

issem

inatio

n.•

Enha

nce t

he ca

pacit

y of t

he re

levan

t org

aniza

tions

( EPO

SPEA

and

othe

rs ) t

o m

anag

e and

main

tain

the i

nfor

mati

on sy

stem

.•

Capa

citate

the u

sers

of th

e plat

form

on

the u

se o

f the

info

rmati

on, e

.g. c

oach

pro

cess

ors a

nd fa

rmer

s’ or

ganiz

ation

s on

setti

ng a

trans

paren

t pric

ing m

echa

nism

.Th

is ac

tivity

will

enha

nce t

he ca

pacit

y of v

alue c

hain

acto

rs to

acce

ss in

form

ation

and

enha

nce t

ransp

arenc

y in

the s

ecto

r. Inf

orm

a-tio

n fro

m 2

.2 co

uld

also

be ev

entu

ally d

issem

inated

und

er th

is ac

tivity

.

3X

X•

Estab

lishm

ent o

f the

sy

stem

• At

leas

t 2,0

00

bene

ficiar

ies

acce

ssing

the

infor

mati

on fr

om th

e pl

atfor

m•

One w

eb p

ortal

up

grad

ed

Mini

stry o

f For

eign

Affai

rs ( tr

ade a

t-tac

hés )

EPOS

PEA,

ATA

, EIA

R, M

oA, B

oA,

Ethio

pian

Cha

mbe

r of

Com

merc

e & S

ec-

toral

Ass

ociat

ions

,EC

X, F

CA

Inter

natio

nal d

o-no

r age

ncies

ITC

2.1.

3 Pr

epare

a vis

ual d

ictio

nary

of p

ulse

s for

the b

enefi

t of a

ll th

e stak

ehol

ders

in th

e valu

e cha

in. Th

e dict

iona

ry wi

ll pr

esen

t pic-

tures

of t

he d

iffere

nt ty

pes o

f pul

ses a

ccom

panie

d by

their

mos

t com

mon

nam

es in

diff

erent

coun

tries

. This

will

inclu

de th

e scie

ntifi

c na

me a

s well

as th

e com

mon

nam

e in

diffe

rent l

angu

ages

. The

actio

ns fo

r this

activ

ity w

ill co

nsist

of :

• Pa

rtner

ing w

ith a

relev

ant a

cade

mic

instit

utio

n th

at ca

n ca

rry o

ut th

e bul

k of t

he ta

sk•

Obtai

ning

pictu

res o

f the

diff

erent

type

s of p

ulse

s tha

t will

be i

nclu

ded

in th

e dict

iona

ry•

Obtai

ning

the s

cient

ific n

ames

as w

ell as

their

mos

t com

mon

nam

e in

Engl

ish•

Obtai

ning

equiv

alent

nam

es in

oth

er la

ngua

ges u

sed

by tr

ading

par

tner

s•

Prod

ucing

a sh

ort p

ublic

ation

with

the r

esul

ts an

d di

ssem

inatin

g it

amon

g sta

keho

lder

s.Th

is ac

tivity

aim

s to

prov

ide a

prac

tical

solu

tion

to a

frequ

ent p

robl

em o

f tho

se in

the v

alue c

hain

with

som

e int

erna

tiona

l exp

osur

e. Di

scus

sions

betw

een

expo

rters,

inve

stors,

neg

otiat

ors,

etc. v

ery o

ften

suffe

r fro

m a

lack o

f a co

mm

on u

nder

stand

ing o

f the

pro

duct

at ha

nd.

1X

• Di

ction

ary p

ublis

hed

Colla

borat

ion

be-

twee

n EP

OSPE

A, a

relev

ant a

cade

mic

instit

utio

n ( to

be d

e-ter

mine

d ) an

d EIA

R.

Ident

ified

acad

emic

instit

utio

n’s S

choo

ls of

Lang

uage

s, Tra

de


61

Stra

tegi

c ob

ject

ive

2 : Im

prov

e ex

port

com

petit

iven

ess

by s

treng

then

ing

the

conn

ectio

n be

twee

n pr

oduc

ers

and

the

inte

rmed

iarie

s in

the

valu

e ch

ain.

Oper

atio

nal

objec

tive

Activ

ityPr

iorit

y1=

high

2=m

ed3=

low

Star

ting

perio

dTa

rget

mea

sure

sLe

adin

g na

tiona

l in

stitu

tion

and

poss

ible

impl

emen

ting

partn

ers

Ongo

ing /

futu

re

deve

lopm

ent

prog

ram

mes

+

inte

rnat

iona

l pa

rtner

s

20162017201820192020

2.1

Stre

ngth

en th

e or

gani

zatio

n of

the

sect

or to

ens

ure

the

exch

ange

of

info

rmat

ion

betw

een

prod

ucer

s an

d in

tern

atio

nal

mar

kets

.

2.1.

4 De

velo

p an

d pi

lot e

ffecti

ve in

form

ation

exch

ange

and

work

ing

mod

alitie

s be

twee

n far

mer

s, pr

oces

sors

and

expo

rters

in th

e va

lue c

hain.

The a

ction

s will

be t

he fo

llowi

ng.

• De

sign

and

pilo

t an

infor

mati

on ex

chan

ge m

echa

nism

to al

ign

the p

rice e

xpec

tatio

ns o

f farm

ers,

asse

mbl

ers,

proc

esso

rs an

d ex

porte

rs.•

Ident

ify th

e pul

se va

rietie

s tha

t are

dem

ande

d in

inter

natio

nal m

arkets

( Eur

ope,

India,

Chin

a, etc

. ) an

d are

pref

erred

by E

thio

pian

pr

oduc

ers a

nd ex

porte

rs. Th

e majo

r pul

ses t

hat h

ave a

n inc

reasin

g m

arket

share

and

are p

rodu

ced

in Et

hiopi

a are

chick

peas

, len

tils,

dry p

eas a

nd p

igeo

n pe

as.

• Or

ganiz

e a jo

int m

issio

n to

targ

et m

arkets

( the

team

shou

ld in

clude

rese

arch

instit

utes

, farm

ers a

nd ex

porte

rs ).

Trade

miss

ions

sh

ould

be o

rgan

ized

on b

oth

sides

– vi

siting

buy

ers a

nd ex

porte

rs.•

Deve

lop

a cos

t-sha

ring

sche

me f

or co

mpa

nies t

o pi

tch in

for t

estin

g an

d se

ed m

ultip

licati

on co

sts.

This

activ

ity in

tends

to al

ign

the e

xpec

tatio

ns o

f farm

ers a

nd ex

porte

rs by

pilo

ting

a see

d m

ultip

licati

on m

echa

nism

of s

electe

d va

rie-

ties o

f pul

ses.

There

is a

link t

o 1.

1.2,

whic

h de

als w

ith d

evelo

ping

effec

tive s

eed

mul

tiplic

ation

sche

mes

.

2X

X•

Infor

mati

on ex

chan

ge

mec

hanis

m cr

eated

• Tra

de m

issio

ns

cond

ucted

EPOS

PEA

2.1.

5 Di

scus

s with

ECX

and

all th

e rele

vant

stak

ehol

ders

the p

ossib

ility

of in

cludi

ng p

ulse

s und

er th

e ECX

trad

ing

umbr

ella.

The a

c-tio

ns fo

r this

activ

ity w

ill co

nsist

of :

• An

alysin

g th

e pot

entia

l im

pact

that

this

solu

tion

woul

d ha

ve o

n red

ucing

of t

he n

umbe

r of a

ctors

in th

e valu

e cha

in.•

Disc

ussin

g th

e pot

entia

l nec

essa

ry ex

pans

ion

and

stren

gthe

ning

of E

CX to

dea

l with

pul

ses.

• Bu

ilding

a co

nsen

sus a

mon

g sta

keho

lder

s.•

Deve

lopi

ng an

actio

n pl

an w

ith sp

ecifi

c tim

eline

s.•

Spon

sorin

g th

e nec

essa

ry leg

al ch

ange

s.Th

is ac

tivity

is in

tende

d to

pro

vide t

ransp

arenc

y to

prici

ng p

ractic

es.

2X

• Th

e pos

sibili

ty th

at m

ajor e

xpor

ters’

trade

thro

ugh

ECX

is an

alyse

d

ECX

Mini

stry o

f Trad

eITC

2.1.

6 Tra

in far

mer

s, far

mer

s’ or

ganiz

ation

s and

asse

mbl

ers o

n th

e use

of c

ontra

ct fa

rmin

g an

d sim

ilar c

ontra

ctual

arran

gem

ents

to

avoi

d m

arket

defau

lts an

d to

strea

mlin

e the

num

ber o

f int

erm

ediar

ies in

the p

ulse

s sec

tor.

The a

ction

s for

this

activ

ity w

ill co

nsist

of

the f

ollo

wing

.

• As

sess

men

t of t

he in

cent

ives f

or al

l par

ties t

o de

fault

on co

ntrac

ts un

der e

xistin

g co

ntrac

tual

prac

tices

.•

Analy

sis o

f alte

rnati

ve co

ntrac

tual

solu

tions

avail

able

that

woul

d ad

dres

s defa

ult i

ssue

s.•

Train

a gro

up o

f farm

ers,

asse

mbl

ers a

nd ex

porte

rs to

test

cont

ractin

g un

der n

ew fo

rms o

f con

tracts

. Par

ticul

ar att

entio

n wi

ll be

pa

id to

defa

ults

in qu

ality

or sp

ecifi

catio

ns o

f pul

ses (

colo

ur so

rting

in re

d kid

ney b

eans

, size

sorti

ng o

f chic

kpea

s, qu

ality

seed

s ).

• Pil

ot th

e con

tract

farm

ing sc

hem

es in

selec

ted co

oper

ative

s. Le

gal c

ouns

el to

be p

rovid

ed.

• Se

t up

an ag

rono

mic

team

for e

ffecti

ve fo

llow-

up o

f the

train

ing.

• Pil

ot a

trial

cont

ract f

arming

agree

men

t betw

een

a gro

up o

f farm

ers,

an ex

porte

r and

Indi

an im

porte

rs.Th

is ac

tivity

inten

ds to

ensu

re th

e rul

e of l

aw in

the s

ecto

r and

to p

repare

a co

mm

on p

ositi

on o

n alt

erna

tive i

nter

med

iatio

n m

ethod

s. It

woul

d ha

ve th

e add

ition

al be

nefit

of l

evell

ing th

e play

ing fi

eld fo

r for

eign

inves

tors.

3X

XX

• Fa

rmer

s trai

ned

• Pil

ot p

rogr

amm

e co

nduc

ted

Coop

erati

ves

Unive

rsity

( law

facul

ty )

ITC–S

ITA

2.2

Impr

ove

the

capa

city

of th

e se

ctor

to e

nter

new

m

arke

ts a

nd to

re

main

com

petit

ive

in e

xistin

g on

es.

2.2.

1 Fa

cilita

te ac

cess

to fi

nanc

e fo

r pro

cess

ors f

or in

terna

tiona

l mark

ets an

d ex

porte

rs th

roug

h th

e use

of m

arket

incen

tives

. The

ac

tions

for t

his ac

tivity

will

inclu

de th

e fol

lowi

ng el

emen

ts.

• Se

t up

a fun

d fo

r exp

orter

s. Th

ere w

ill b

e a fu

nd se

t up

thro

ugh

dono

r ass

istan

ce p

lus a

bud

getar

y allo

catio

n fro

m G

over

nmen

t to

pro

vide r

efina

ncing

and

subs

idize

d ac

cess

to fi

nanc

e. Th

is co

mpo

nent

will

be i

mpl

emen

ted th

roug

h pr

e-id

entif

ied p

ublic

and

priva

te ba

nks.

The a

ssist

ance

will

be f

or p

rovid

ing cr

edit

guara

ntee

s and

refin

ancin

g fo

r loa

ns fo

r inp

uts.

• De

velo

p th

e cap

acity

of p

roce

ssor

s to

impr

ove t

echn

olog

y tran

sfer t

hrou

gh th

e pro

visio

n of

acqu

iring

pro

cess

ing m

achin

ery f

rom

Ind

ia th

roug

h lin

es o

f cred

it fro

m th

e Exp

ort–

Impo

rt Ba

nk o

f Ind

ia.•

Prom

ote p

ulse

s as a

strat

egic

crop

and

intro

duce

easy

term

s of f

inanc

e for

expo

rters,

inclu

ding

estab

lishm

ent o

f an

expo

rt de

velo

pmen

t fun

d.Fa

cilita

ting

expo

rters’

acce

ss to

fina

nce s

houl

d he

lp th

em an

d th

ose l

inkag

es o

f the

valu

e cha

in clo

sest

to in

terna

tiona

l mark

ets to

co

pe b

etter

with

cash

flow

issu

es g

ener

ated

by in

terna

tiona

l tran

sacti

ons.

2X

X•

Inves

tmen

t in

proc

essin

g fac

ilitie

s•

Amou

nt o

f cred

it rec

eived

• Nu

mbe

r of c

apac

ity-

build

ing p

rogr

amm

es

EPOS

PEA

Mini

stry o

f Fina

nce

and

Econ

omic

De-

velo

pmen

t

ITC, E

xpor

t–Im

port

Bank

of

India

62


Stra

tegi

c ob

ject

ive

2 : Im

prov

e ex

port

com

petit

iven

ess

by s

treng

then

ing

the

conn

ectio

n be

twee

n pr

oduc

ers

and

the

inte

rmed

iarie

s in

the

valu

e ch

ain.

Oper

atio

nal

objec

tive

Activ

ityPr

iorit

y1=

high

2=m

ed3=

low

Star

ting

perio

dTa

rget

mea

sure

sLe

adin

g na

tiona

l in

stitu

tion

and

poss

ible

impl

emen

ting

partn

ers

Ongo

ing /

futu

re

deve

lopm

ent

prog

ram

mes

+

inte

rnat

iona

l pa

rtner

s

20162017201820192020

2.2

Impr

ove

the

capa

city

of th

e se

ctor

to e

nter

new

m

arke

ts a

nd to

re

main

com

petit

ive

in e

xistin

g on

es.

2.2.

2 Im

prov

e the

inve

stm

ent a

bsor

ptio

n ca

pacit

y of t

he se

ctor b

y crea

ting

incen

tives

to re

tain

exist

ing in

vesto

rs an

d to

attra

ct ne

w on

es. T

his ac

tivity

will

inclu

de th

e fol

lowi

ng ac

tions

.

• Pr

omot

e tec

hnol

ogy t

ransfe

r for

inve

stors

to ac

cess

tech

nolo

gy fo

r pro

cess

ing an

d pa

ckag

ing.

• Ide

ntify

the p

ulse

s-ba

sed

proc

esse

d fo

ods w

ith g

reates

t pot

entia

l.•

Deve

lop

a mec

hanis

m fo

r int

rodu

cing

techn

olog

y sup

plier

s to

inves

tors.

• Pr

omot

e joi

nt ve

ntur

es w

ith in

terna

tiona

l pro

cess

ors a

nd E

thio

pian

inve

stors.

• De

velo

p an

inve

stmen

t pro

file f

or E

thio

pia’s

pul

ses s

ecto

r.•

Map

out

all e

xistin

g an

d po

tentia

l inv

esto

rs. P

artic

ularl

y, id

entif

y Ind

ian in

vesto

rs int

ereste

d in

estab

lishin

g pr

oces

sing

plan

ts in

Ethio

pia.

• Or

ganiz

e visi

ts to

forei

gn co

untri

es fo

r inv

estm

ent p

rom

otio

n to

expl

ore i

nves

tmen

t opp

ortu

nities

for n

ew m

arkets

, new

pro

ducts

an

d ne

w bu

sines

s par

tner

s.•

Prom

oting

FDI

attra

ction

thro

ugh

the o

rgan

izatio

n of

bus

iness

-to-b

usine

ss m

issio

ns.

• At

tract

Indian

inve

stmen

t, tak

ing ad

vant

age o

f the

Indi

an b

an o

n ex

ports

of p

roce

ssed

pul

ses.

2X

XX

• Nu

mbe

r of

agree

men

ts sig

ned

• Nu

mbe

r of i

nves

tors

Mini

stry o

f For

eign

Affai

rsEP

OSPE

A, E

thio

pian

Inv

estm

ent A

genc

y,M

inistr

y of T

rade t

o be

invo

lved

ITC,

ITC–S

ITA

2.2.

3 De

velo

p th

e tra

nspo

rtatio

n an

d lo

gist

ics se

rvice

s nec

essa

ry to

supp

ort t

he se

ctor.

This

is int

ende

d to

be a

chiev

ed b

y pro

vid-

ing in

cent

ives t

o se

rvice

pro

vider

s to

lowe

r the

cost

and

increa

se th

e effe

ctive

ness

of t

he tr

ansp

ortat

ion

need

s of t

he se

ctor.

This

activ

ity w

ill in

clude

the f

ollo

wing

actio

ns.

• M

ap th

e exis

ting

prov

ider

s of l

ogist

ics an

d tra

nspo

rtatio

n se

rvice

s. Sp

ecial

atten

tion

will

be p

aid to

all t

he co

mpa

nies o

fferin

g ro

ad

trans

porta

tion

servi

ces t

o Dj

ibou

ti.•

Asse

ss th

e cos

t and

pric

ing st

ructu

re of

road

tran

spor

tatio

n co

mpa

nies v

is--

vis in

form

ing a

nego

tiatio

n pr

oces

s betw

een

the

secto

r and

servi

ce p

rovid

ers.

• Or

ganiz

e a p

ublic

–priv

ate co

nsul

tatio

n be

twee

n rep

resen

tative

s of t

he se

ctor a

nd tr

ansp

ortat

ion

and

logi

stics

servi

ces p

rovid

ers.

As p

art o

f this

mee

ting

a neg

otiat

ion

shou

ld ta

ke p

lace t

o ag

ree o

n sp

ecifi

c mea

sures

to re

duce

the c

ost o

f roa

d tra

nspo

rtatio

n of

pu

lses t

o Dj

ibou

ti.•

Agree

on

a way

forw

ard fo

r the

secto

r to :

( 1 ) s

tart p

repari

ng sh

ipm

ents

in Et

hiopi

a as o

ppos

ed to

Djib

outi.

Whe

n co

ntain

ers a

re pr

epare

d in

Djib

outi

it tak

es lo

nger

and

costs

mor

e ; an

d ( 2

) pro

cedu

res fo

r con

taine

r con

solid

ation

. Diff

erent

pul

ses f

rom

diff

erent

co

mpa

nies t

o be

ship

ped

in co

mpa

rtmen

ts of

the s

ame c

ontai

ner.

• Ide

ntify

spec

ific s

torag

e nee

ds fo

r exp

ort o

perat

ions

, e.g

. col

d sto

rage f

or p

artic

ular

types

of p

ulse

s.•

Ident

ify th

e lon

g-ter

m in

frastr

uctu

re ne

eds o

f tran

spor

tatio

n co

mpa

nies.

• As

sess

, tog

ether

with

Cus

tom

s offi

cials,

the m

ain im

pedi

men

ts th

at slo

w do

wn p

ulse

expo

rts at

the b

orde

r. De

sign

a pilo

t pr

ogram

me t

o str

eam

line t

he p

roce

dures

for t

he se

ctor.

This

activ

ity ai

ms t

o red

uce t

he co

st of

tran

spor

tatio

n an

d lo

gisti

cs to

mak

e exp

orts

mor

e com

petit

ive. T

he m

ain tr

ansp

ortat

ion

cost

is fo

r roa

d tra

nspo

rtatio

n fro

m d

iffere

nt p

arts

of E

thio

pia t

o th

e por

t of D

jibou

ti. Th

ere is

a lar

ge sc

ope f

or re

ducti

on o

f this

cost,

as w

ell

as g

reat p

oten

tial f

or co

nsol

idati

ng sh

ipm

ents

and

prep

aring

ship

men

ts in

Ethio

pia r

ather

than

Djib

outi.

3X

XX

X•

Redu

ction

of

trans

porta

tion

costs

Mini

stry o

f Tran

spor

tEt

hiopi

an R

even

ues

and

Custo

ms A

u-th

ority

2.2.

4 De

velo

p th

e cap

aciti

es o

f dip

lom

atic

miss

ions

to p

rom

ote E

thio

pian

pul

ses a

broa

d. Th

e acti

ons f

or th

is ac

tivity

will

cons

ist o

f th

e fol

lowi

ng.

• Ide

ntify

a gr

oup

of p

ilot c

ount

ries f

or th

e init

iative

. Ind

ia wo

uld

be am

ong

this

list.

• Ide

ntify

and

cont

actin

g th

e rele

vant

miss

ions

, and

agree

with

them

the s

cope

of t

heir

invol

vem

ent.

• Pr

oduc

e the

nec

essa

ry sa

les an

d di

ssem

inatio

n lit

eratu

re an

d sa

mpl

es.

• Tra

in pe

rsonn

el in

dipl

omati

c miss

ions

to ca

rry o

ut th

e tas

k.•

Asse

ss th

e ove

rall i

mpa

ct of

the i

nitiat

ive an

d tak

e a d

ecisi

on o

n wh

ether

to ex

tend

it to

new

coun

tries

.Th

is ac

tivity

shou

ld le

ad to

the g

ener

ation

of f

oreig

n res

erve

earn

ings a

nd m

arket

dive

rsific

ation

. In

addi

tion,

the d

iplo

mati

c miss

ions

wo

uld

obtai

n inf

orm

ation

on

relev

ant t

rade f

airs.

There

is a

link w

ith ac

tivity

2.2

.5 o

n tra

de fa

irs.

2X

X•

Num

ber o

f dip

lom

atic

miss

ions

invo

lved

Mini

stry o

f For

eign

Affai

rsEP

OSPE

A

ITC,

ITC–S

ITA


63

Stra

tegi

c ob

ject

ive

2 : Im

prov

e ex

port

com

petit

iven

ess

by s

treng

then

ing

the

conn

ectio

n be

twee

n pr

oduc

ers

and

the

inte

rmed

iarie

s in

the

valu

e ch

ain.

Oper

atio

nal

objec

tive

Activ

ityPr

iorit

y1=

high

2=m

ed3=

low

Star

ting

perio

dTa

rget

mea

sure

sLe

adin

g na

tiona

l in

stitu

tion

and

poss

ible

impl

emen

ting

partn

ers

Ongo

ing /

futu

re

deve

lopm

ent

prog

ram

mes

+

inte

rnat

iona

l pa

rtner

s

20162017201820192020

2.2

Impr

ove

the

capa

city

of th

e se

ctor

to e

nter

new

m

arke

ts a

nd to

re

main

com

petit

ive

in e

xistin

g on

es.

2.2.

5 Pr

omot

e par

ticip

ation

of t

he p

ulse

s sec

tor i

n int

erna

tiona

l tra

de fa

irs an

d ex

hibiti

ons.

The a

ction

s for

this

activ

ity co

nsist

of t

he

follo

wing

.

• Ide

ntify

suita

ble t

rade f

airs.

This

invol

ves d

eterm

ining

thos

e tha

t will

max

imize

the c

hanc

es o

f esta

blish

ing co

ntac

ts wi

th re

levan

t pr

oces

sors,

tech

nolo

gy co

mpa

nies a

nd in

vesto

rs ( fo

r exa

mpl

e, Gu

lfood

).•

Prom

ote p

artic

ipati

on in

glo

bal e

vent

s, es

pecia

lly th

ose r

elated

to 2

016

being

the I

nter

natio

nal Y

ear o

f Pul

ses.

• St

udy t

he fe

asib

ility

of o

rgan

izing

an in

terna

tiona

l trad

e fair

in E

thio

pia i

n wh

ich g

loba

l buy

ers o

f pul

ses w

ould

be i

nvite

d to

take

pa

rt.•

Foste

r coo

perat

ion

with

ove

rseas

pul

se fa

rmer

s’ or

ganiz

ation

s. Th

is wo

uld

invol

ve d

etaile

d id

entif

icatio

n an

d pr

ofili

ng o

f the

key

farm

ers’

orga

nizati

ons o

perat

ing in

coun

tries

such

as In

dia ;

and

evalu

ating

the r

each

of t

he o

rgan

izatio

ns, t

heir

past

work

on p

ulse

s va

lue c

hains

, and

their

bes

t prac

tices

;•

Asse

ss th

e cur

rent v

alue o

f the

‘Eth

iopi

a bran

d’ fo

r pul

ses.

This

shou

ld le

ad to

a se

ctor-w

ide d

iscus

sion

on b

randi

ng is

sues

.Th

is ac

tivity

is g

eared

towa

rds p

rom

oting

Eth

iopi

an p

ulse

s abr

oad

and

deve

lopi

ng p

ilot a

ctivit

ies w

ith ke

y for

eign

orga

nizati

ons.

There

is

a link

betw

een

this

activ

ity an

d 3.

1.

2X

XX

• Nu

mbe

r of e

xhib

ition

s an

d / or

trad

e fair

s•

Num

ber o

f trad

e fair

s att

ende

d•

Datab

ase o

f for

eign

asso

ciatio

ns of

pul

ses

farm

ers e

stabl

ished

• Di

scus

sion

on

bran

ding

take

s plac

e

Mini

stry o

f Trad

eEP

OSPE

A, E

thio

pian

Ch

ambe

r of C

om-

merc

e & S

ecto

ral

Asso

ciatio

ns

ITC ITC–S

ITA

2.2.

6 Pil

ot a

mar

ket e

ntry

pro

gram

me w

ith In

dia.

The a

ction

s for

this

activ

ity w

ill co

nsist

of t

he fo

llowi

ng.

• Im

prov

e farm

ers’

acce

ss to

the c

hickp

ea an

d pi

geon

pea

seed

varie

ties t

hat a

re pr

eferre

d by

the I

ndian

mark

et. Th

e chic

kpea

varie

ty th

at is

mos

t com

mon

in In

dia i

s call

ed D

esi.

India

requir

es a

size b

etwee

n 8

and

10 m

illim

etres

. The

pref

erred

varie

ty of

pig

eon

pea i

s the

Lem

on Tu

r tha

t is m

ostly

impo

rted

from

Mya

nmar.

• Ind

ian im

porte

rs an

d Et

hiopi

an ex

porte

rs vis

it IC

RISA

T hea

dqua

rters

in Hy

derab

ad to

defi

ne th

eir re

quire

men

ts an

d id

entif

y va

rietie

s tha

t mee

t the

ir req

uirem

ents.

• De

velo

p a c

ertif

ied se

ed p

rogr

amm

e thr

ough

nati

onal,

regi

onal

and

priva

te se

ed en

terpr

ises.

This

inclu

des d

evelo

ping

bree

der a

nd

foun

datio

n se

eds f

or th

e ide

ntifi

ed va

rietie

s.•

Prom

ote c

ontra

ct far

ming

agree

men

ts be

twee

n Ind

ian im

porte

rs an

d Et

hiopi

an fa

rmer

s.•

Evalu

ate th

e pot

entia

l to

exten

d th

e pilo

t to

othe

r cou

ntrie

s.•

Asse

ss th

e les

sons

learn

ed fr

om th

e pilo

t int

erna

tiona

l con

tract

farm

ing ex

perie

nce i

n Ind

ia.•

Evalu

ate th

e perc

eptio

n of

Indi

an im

porte

rs of

the ‘

Ethio

pian

bran

d’ fo

r pul

ses.

This

activ

ity sh

ould

gen

erate

forei

gn re

serve

earn

ings.

1X

XX

X•

At le

ast t

wo va

rietie

s of

chick

pea a

nd tw

o va

rietie

s of p

igeo

n pe

a ide

ntifi

ed•

Three

tons

of

bree

der s

eed /

varie

ty pr

oduc

ed•

Sixty

tons

of

certi

fied

seed

pr

oduc

ed / v

ariety

• 60

0 ha

cove

red b

y ea

ch va

riety

• Nu

mbe

r of c

ontra

cts

EIAR

Regi

onal

and

feder

al se

ed en

terpr

ises,

BoA,

farm

ers’

coop

-er

ative

s, AT

AM

oA, t

rader

s and

pr

oces

sors,

coop

era-

tives

, exp

orter

s

SITA

TL III

on

chick

-pe

aNo

pro

ject o

n pi

geon

pea

ICRI

SAT,

ITC,

ATA

2.2.

7 St

rengt

hen

the b

usin

ess

skills

of f

armer

s, as

sem

bler

s and

expo

rters

by tr

aining

a sm

all g

roup

of t

raine

rs in

the s

ecto

r. Th

e ac-

tions

for t

his ac

tivity

will

cons

ist o

f the

follo

wing

.

• Ide

ntify

a gr

oup

of fa

cilita

tors

to p

rovid

e the

train

ing. T

he tr

aining

shou

ld fo

cus o

n m

anag

emen

t skil

ls fo

r com

petit

ive b

usine

sses

. It

shou

ld b

e cus

tom

ized

for f

armer

s, as

sem

bler

s and

expo

rters.

Pub

lic o

fficia

ls an

d rep

resen

tative

s of t

he p

ublic

secto

r sho

uld

also

take p

art i

n th

e trai

ning.

• Ide

ntify

a sm

all g

roup

of f

armer

coop

erati

ves t

hat c

an p

ilot t

he re

plica

tion

of th

e trai

nings

( buil

d on

exist

ing in

itiati

ves o

f de

velo

ping

par

tner

s ).

• De

velo

p th

e cur

ricul

a of t

he tr

aining

. Som

e top

ics w

ill in

clude

: pro

ducti

on, m

arketi

ng, f

inanc

e and

mark

et lin

kage

s.Th

is ac

tivity

aim

s to

build

capa

cities

to ef

fectiv

ely m

anag

e a b

usine

ss ac

ross

the e

ntire

valu

e cha

in.

2X

X•

Num

ber o

f trai

ners

traine

d•

Num

ber o

f cou

rses

give

n

SNV,

ATA,

ECX

, AC

DI / V

OCA

ITC ( E

nter

prise

Co

mpe

titive

ness

se

ction

)

64


Stra

tegi

c ob

ject

ive

3 : M

axim

ize th

e de

velo

pmen

tal d

ivid

end

of a

boo

min

g pu

lses

sec

tor b

y en

surin

g th

e pr

otec

tion

of th

e en

viro

nmen

t and

incl

usiv

enes

s.

Oper

atio

nal

objec

tive

Activ

ities

Prio

rity

1=hi

gh2=

med

3=lo

w

Star

ting

perio

dTa

rget

mea

sure

sLe

adin

g na

tiona

l in

stitu

tion

and

poss

ible

impl

emen

ting

partn

ers

Ongo

ing /

futu

re

deve

lopm

ent

prog

ram

mes

+

inte

rnat

iona

l par

tner

s

2016

2017

2018

2019

2020

3.1

Stre

ngth

en

the

train

ing

and

skills

of t

he

youn

gest

act

ors

in th

e pu

lses

value

cha

in,

and

ensu

re th

at

gend

er-s

ensit

ive

issue

s ar

e ad

dres

sed.

3.1.

1 En

hanc

e you

th an

d wo

men

’s ca

pacit

y to

par

ticip

ate

in th

e valu

e cha

in. Th

e acti

ons f

or th

is ac

tivity

will

cons

ist o

f the

fol-

lowi

ng.

• Or

ganiz

e a st

akeh

olde

r con

sulta

tion

with

wom

en’s

asso

ciatio

ns an

d rep

resen

tative

s, an

d tec

hnica

l and

voca

tiona

l edu

catio

n an

d tra

ining

stak

ehol

ders.

• M

ap th

e spe

cific

ways

in w

hich

the l

egal

syste

m m

ight

be i

mpe

ding

the p

artic

ipati

on o

f wom

en ac

ross

all t

he se

gmen

ts in

the

valu

e cha

in ( a

cces

s to

arabl

e lan

d in

parti

cular

).•

Orga

nize a

cons

ultat

ive b

ody o

f wom

en th

at lo

bbies

for c

hang

es to

impe

ding

laws

and

advo

cates

on

gend

er-se

nsiti

ve is

sues

in

the p

ulse

s sec

tor.

This

activ

ity ai

ms t

o en

sure

equit

able

acce

ss to

the o

ppor

tunit

ies o

ffered

by t

he se

ctor b

y rais

ing aw

arene

ss o

f wom

en’s

and

yout

h iss

ues.

There

is a

link w

ith ac

tivity

2.1

.1 o

n th

e nati

onal

pulse

s plat

form

.

2X

XX

X•

Cons

ultat

ion

orga

nized

• A

10 %

incr

ease

in

wom

en

and

yout

h pa

rticip

ating

in

the v

alue c

hain

All o

rgan

izatio

nsITC

3.1.

2 Pr

ovid

e sk

ills c

apac

ity-b

uild

ing

for t

he d

evelo

pmen

t of a

gent

farm

ers a

nd ag

ricul

ture

expe

rts. T

he ac

tions

for t

his ac

tivity

wi

ll co

nsist

of t

he fo

llowi

ng.

• St

rengt

hen

the s

kills

of th

e you

nges

t acto

rs in

the p

ulse

s valu

e cha

in an

d en

sure

that

gend

er-se

nsiti

ve is

sues

are a

ddres

sed

along

the e

ntire

valu

e cha

in.•

Stren

gthe

n th

e cap

acity

of w

omen

and

yout

h to

assu

me r

epres

entat

ion

and

leade

rship

roles

in th

e sec

tor.

This

shou

ld in

clude

en

surin

g th

at wo

men

and

yout

h pa

rticip

ate in

mark

eting

, bus

iness

netw

orkin

g an

d tra

ining

with

the I

ndia

Pulse

s and

Grai

n As

socia

tion.

• Pr

ovid

e trai

ning

to w

omen

and

yout

h on

pro

ducti

vity-

enha

ncing

pro

ducti

on te

chniq

ues f

or th

e pul

ses s

ecto

r.•

Prov

ide t

rainin

g to

wom

en an

d yo

uth

on p

roce

ssing

of v

alue a

dded

pro

ducts

bas

ed o

n pu

lses.

• Pr

ovid

e trai

ning

to w

omen

and

yout

h on

inter

natio

nal t

rade.

This

activ

ity ai

ms t

o str

engt

hen

the c

apac

ity o

f wom

en an

d yo

uth

to en

gage

in th

e hig

hest

valu

e add

ing se

gmen

ts of

the p

ulse

s va

lue c

hain.

2X

XX

X•

Num

ber o

f tra

inees

MoA

EIAR,

Indi

a Pul

ses a

nd

Grain

Ass

ociat

ion

ITC–S

ITAIC

RISA

T

3.2

Ensu

re th

at

the

deve

lopm

ent

of th

e pu

lses

sect

or d

oes

not

jeopa

rdize

the

pres

erva

tion

of

the

envir

onm

ent.

3.2.

1 Pr

omot

e the

use

of p

ulse

crop

s to

replen

ish s

oil f

ertili

ty in

non

-pul

se cr

ops.

This

activ

ity d

epen

ds o

n th

e com

pleti

on o

f 1.

2.1

and

1.2.

2. Th

e acti

ons f

or th

is ac

tivity

will

cons

ist o

f :

• De

velo

ping

mark

eting

and

best

prac

tices

diss

emina

tion

mate

rials

for f

armer

s in

othe

r sec

tors

• Or

ganiz

ing a

yearl

y sem

inar w

ith th

e par

ticip

ation

of g

over

nmen

t offi

cials

and

repres

entat

ives o

f oth

er se

ctors

• Pu

tting

pul

ses a

t the

cent

re of

disc

ussio

ns ab

out s

oil f

ertil

ity in

the c

ount

ry•

Orga

nizing

farm

ers’

mee

tings

to p

rom

ote p

rodu

ction

of p

ulse

s as i

nterc

rops

.Th

is ac

tivity

aim

s to

ensu

re th

e sus

taina

bilit

y of t

he ag

ricul

tural

dev

elopm

ent o

f Eth

iopi

a by p

uttin

g th

e pul

ses s

ecto

r at t

he fo

re-fro

nt o

f the

pro

mot

ion

of m

ost s

ustai

nabl

e prac

tices

.

3X

X•

Redu

ce th

e cere

al to

legu

me c

rop

ratio

by 2

0 %

from

the c

urren

t 6 :

1 rat

io

EIAR

RARI

s, Bo

A, M

oA, F

CA,

ATA

TL III

on

chick

pea

No p

rojec

t on

pige

on

pea

ICRI

SAT,

ITC

3.2.

2 Pr

omot

e man

agem

ent a

nd ag

ricul

tural

prac

tices

that

are as

neu

tral a

s pos

sible

on th

e env

ironm

ent.

The a

ction

s for

this

activ

ity w

ill co

nsist

of :

• Cr

eatin

g aw

arene

ss o

f the

dam

aging

impa

ct on

pub

lic h

ealth

and

the e

nviro

nmen

t tha

t can

be p

rovo

ked

by th

e use

of s

pecif

ic ch

emica

ls an

d ag

ricul

tural

prac

tices

;•

Appr

oach

ing al

l the

stak

ehol

ders

in Et

hiopi

a who

hav

e a sa

y on

envir

onm

ental

issu

es an

d req

uesti

ng th

eir su

ppor

t for

the s

ecto

r.Th

is ac

tivity

aim

s to

obtai

n su

ppor

t for

the s

ecto

r fro

m en

viron

men

tal p

ractit

ione

rs.

2X

XX

X•

A red

uctio

n of

20

% in

the u

se

of ch

emica

ls fo

r pe

st co

ntro

l

EIAR

RARI

s, Bo

A, M

oA, F

CA,

ATA

TL III

on

chick

pea

No p

rojec

t on

pige

on

pea

ICRI

SAT,

ITC

3.2.

3 W

rite a

pos

ition

pape

r tha

t des

crib

es th

e ove

rall b

enefi

ts th

at th

e pul

ses s

ecto

r can

brin

g to

the c

ount

ry. Th

is pa

per w

ill

later

be u

sed

to lo

bby t

he G

over

nmen

t for

an in

crea

sed

focu

s on

the s

ecto

r. Th

e main

area

s tha

t the

pap

er sh

ould

tack

le inc

lude

:

• Th

e cur

rent a

nd p

oten

tial n

utrit

iona

l ben

efits

of p

ulse

s for

the p

opul

ation

• Th

e pos

itive

envir

onm

ental

and

ecol

ogica

l asp

ects

of p

ulse

s•

The p

ositi

ve so

cioec

onom

ic be

nefit

s of t

he se

ctor a

s a g

ener

ator o

f em

ploy

men

t and

reve

nue

• Th

e main

chall

enge

s ahe

ad an

d sp

ecifi

c nee

ds to

stren

gthe

n th

e sec

tor.

The p

aper

shou

ld b

orro

w he

avily

from

the c

urren

t roa

dmap

doc

umen

t.

2X

• Pa

per p

ublis

hed

Inter

natio

nal L

ivesto

ck

Rese

arch

Instit

ute i

s alr

eady

wor

king,

refer

to

their

doc

umen

tsInd

ian In

stitu

te of

Pul

ses

Rese

arch

coul

d be

a po

-ten

tial p

artn

er

APPENDICES

Photo: ICRISAT, Livestock graze on chickpea stalks in dryland Ethiopia.jpg

66


APPENDIX I : ETHIOPIA’S PRODUCTION OF PULSES

GOVERNMENT POLICY

Over the past decade, Ethiopia’s pulses sector has been subject to swift devel-opment and increased national importance. Underpinning its development are Ethiopia’s national agricultural development blueprints, the Agricultural Development Led Industrialization ( ADLI ) strategy and the GTP. The notion of ADLI was introduced as the key policy thrust for national development in the first half of the 1990s.115 After overcoming a series of difficulties arising from internal politics, external conflicts, droughts and famines, Ethiopia became ready to earnestly undertake economic development strategies guided by ADLI principles in the early 2000s.116

Based on its developmental experience and policy learning of the last several years, the Ethiopian Government launched a five-year plan, the GTP.117 This was approved by the parliament in November 2010.118 As the highest national policy framework, the GTP has governed Ethiopia’s developmental policies, budgets and government organizations, as well as the actions of development partners and foreign investors, during the past five years.119

Although the country is blessed with fertile land and has benefited from the growing worldwide demand for pulses, it is certainly the above-mentioned development plans that spearheaded the Government’s strong support for agriculture and the pulses sector. Indeed, in line with the GTP, Ethiopia has committed itself to increasing pro-ductivity through new seeds, research and technology. To this end, the Government allocates 10 % of its annual national budget to delivering enhanced production tech-nologies and support services.120

SCOPE OF THE PULSE SECTOR

Ethiopia is endowed with fertile soil and abundant water resources. It is no wonder that agriculture accounts for over 40 % of its GDP and that the pulses sector ac-counts for over 13 %.121 In fact, the pulses sector is the second-largest component of Ethiopia’s agricultural sector, and it contributes immensely to the country’s economic growth, second only to coffee.122

A total of 12 varieties of pulses are cultivated in the country. The cooler highland regions grow faba beans, field peas, grass peas, chickpeas, lentils, fenugreek and lupins, while all other varieties ( i.e. red and white haricot beans, cowpeas, pigeon

115.– Japan International Cooperation Agency & National Graduate Institute for Policy Studies ( 2011 ). Ethiopia’s industrialization drive under the growth and transformation plan. In Intellectual Partnership for Africa Industrial Policy Dialogue between Japan and Ethiopia. Available from https : / / www.grips.ac.jp / forum-e / pdf_e12 / JICA&GDFReport_Ethiopia_phase1 / Intellectual_Partnership_for_Africa / 5Final_Report_ch3.pdf.116.– Ibid.117.– Ibid.118.– Ibid.119.– Ibid.120.– Ethiopia, Ministry of Agriculture ( 2013 ). Working Strategy for Strengthening Ethiopia’s Chickpea Value Chain Vision, Systemic Chal-lenges and Prioritized Interventions. EIAR and ATA.121.– Netherlands African Business Council and FME-CWM ( n.d. ). Business Opportunity Report : Oilseeds and Pulses. Available from https : / / www.nabc.nl / uploads / content / files / BOR %20Oilseeds %20 %26 %20Pulses %20- %20Final( 1 ).pdf122.– United States Agency for International Development ( 2014 ). USAID works to strengthen Ethiopia’s pulses, oilseeds and spices sector, 12 November. Available from https : / / www.usaid.gov / ethiopia / press-releases / usaid-works-strengthen-ethiopias-pulses-oilseeds-and-spices.

[ APPENDICES ]

67

peas and mung beans ) are generally cultivated in the warmer lowlands.123 Notably, Ethiopia produces more than 400,000 tons of chickpeas annually and is the sixth-largest chickpea producer in the world.124

EMPLOYMENT

Smallholders are the backbone of the pulse sector. The term smallholders is widely understood to include small farmers who do not own or control the land they farm.125 Smallholders number between 8 and 9 million farmers, and they account for ap-proximately 95 % of the pulses sector’s production.126 The majority of these farmers grow faba beans, red haricot beans, field peas and chickpeas.127

According to Ethiopia’s Central Statistical Agency, and as detailed in table 6, during the 2008 / 09 to 2011 / 12 Meher season :

� 1 %–2 % of pulses were cultivated in farms of between 5.01 and 10 ha � 15 %–17 % were cultivated on farms of between 2.01 and 5 ha � 25 %–28 % were cultivated on farms of between 1.01 and 2 ha � 24 %–25 % on farms of between 0.51 and 1 ha � 24 %–27 % on farms of between 0.10 and 0.5 ha � 5 %–6 % of pulse crops were cultivated on farms under 0.1 ha.

These statistics serve as further evidence of the importance of smallholder farming to the sector.

Table 6 : Number of private holders of temporary crops by size of holding during the Meher season

Term Total

Area : pulses /

temp crop

Size of holding ( ha )

> 0.1 0.10–0.5 0.51–1.00 1.01–2.00 2.01–5.00 5.01–10.00 10.01+

2008 / 2009

No. holders 12 710 825 14 % 614 683 3 230 400 3 168 362 3 524 811 1 992 137 169 358 11 073

Share ( % ) 5 25 25 28 16 1 0

2009 / 2010

No. holders 12 647 843 12 % 609 960 3 040 419 3 166 745 3 516 654 2 120 428 179 099 14 537

Share ( % ) 5 24 25 28 17 1 0

2010 / 2011

No. holders 13 909 361 11 % 891 008 3 695 894 3 455 009 3 498 910 2 099 754 241 672 27 114

Share ( % ) 6 27 25 25 15 2 0

2011 / 2012

No. holders 13 931 157 13 % 832 419 3 617 757 3 297 838 3 578 761 2 350 266 227 136 26 980

Share ( % ) 6 26 24 26 17 2 0

123.– International Food Policy Research Institute ( 2010 ). Pulses Value Chain Potential in Ethiopia : Constraints and Opportunities for En-hancing Exports, p. 9.124.– United States Agency for International Development ( 2014 ). USAID works to strengthen Ethiopia’s pulses, oilseeds and spices sec-tor, 12 November. Available from https : / / www.usaid.gov / ethiopia / press-releases / usaid-works-strengthen-ethiopias-pulses-oilseeds-and-spices ; Parkinson, N.J. ( 2015 ). Why Ethiopia just got its 1st industrial chickpea processor Now? 26 August. Available from https : / / www.linkedin.com / pulse / ethiopia-get-its-first-industrial-chickpea-processor-parkinson.125.– Women in Informal Employment : Globalizing and Organizing ( 2015 ). Smallholder farmers. Available from http : / / wiego.org / informal-economy / occupational-groups / smallholder-farmers.126.– World Bank ( 2013 ) ; Trading Economics Ethiopia ( 2015 ) ; FAO ; Netherlands African Business Council and FME-CWM ( n.d. ). BuAA-ness Opportunity Report : Oilseeds and Pulses. Available from https : / / www.nabc.nl / uploads / content / files / BOR %20Oilseeds %20 %26 %20Pulses %20- %20Final( 1 ).pdf.127.– In the Harmonized System classification these varieties will fall under broad beans, dried beans, dried peas and chickpeas respectively.

68


Term Total

Area : pulses /

temp crop

Size of holding ( ha )

> 0.1 0.10–0.5 0.51–1.00 1.01–2.00 2.01–5.00 5.01–10.00 10.01+

CAGR 3 % 11 % 4 % 1 % 1 % 6 % 10 % 35 %

2014 / 2015

No. holders 24 214 182 12 %

Pulse holders 7 931 562

Share ( % ) 33

SAurAAA : Ethiopia, Central Statistical Agency ( 2011 and 2012 ). Statistical Abstract, Section D, Agriculture ; and Ethiopia,

Central Statistical Agency ( 2015 ). Agricultural Sample Survey 2014 / 2015 ( 2007 E.C. ).’128

Regarding the distribution of pulse farmers across regions in 2014 / 2015, it was found that the highest percentages were in Oromia ( 36.5 % ), Amhara ( 31.8 % ) and SNNPR ( 26.3 % ) ; the rest were located in Tigray ( 4.1 % ), Benishangul-Gumuz ( 0.9 % ) and Somali ( 0.2 % ).129

PULSE MARKET

After the revolution, pulses were grown mostly for individual sustenance, although a small portion was used as a commercial crop.130 This is largely due to the fact that pulses are the second most important element in the national diet and a principal protein source for the local population.131 Boiled or roasted, they are used as both a main dish and as a supplementary food.132

The share of pulses cultivated for commercial purposes is rising, as this is becoming a mature market that provides an important source of income for Ethiopian farmers. It is worth noting, however, that the proportion of the marketed pulse output varies significantly across regions, pulse types and production years. For instance, lentils and chickpeas are grown primarily for local consumption ( almost 100 % ), whereas nearly 100 % of white pea beans are produced for export.133

PLANTING AND HARVESTING SEASON

Pulses are typically grown during Ethiopia’s main rainy season of production, the Meher season.134 These crops are generally harvested from September to February, having relied on the significant rains that fall from mid-June to mid-September. A smaller proportion ( 5 % ) of pulses are planted during the BAAA season. This is the short rainy season from March to April.135

128.– Ethiopia Central Statistical Agency ( 2015 ). Agricultural Sample Survey 2014 / 2015 ( 2007 E.C. ), Volume I : Report on Area and Produc-tion of Major Crops ( Private Peasant Holdings, Meher Season ).129.– Performance Monitoring and Accountability 2020 Project, School of Public Health – Addis Ababa University ( 2014 ). Detailed Indicator Report : Ethiopia 2014. Baltimore : PMA2020. Available from https : / / www.pma2020.org / sites / default / files / DIR-PMA2014-ET-V4-2015-04-14.pdf.130.– Pulses were a particularly important export item before the revolution.131.– Wubne, Mulatu ( 1993 ). Agriculture ( and subsections ). In Ethiopia : A Country Study, Thomas P. Ofcansky and LaVerle Berry, eds. Library of Congress Federal Research Division.132.– Ibid.133.– Ethiopia, Central Statistical Agency ( 2015 ). Agricultural Sample Survey 2014 / 2015 ( 2007 E.C. ), Volume I : Report on Area and Produc-tion of Major Crops ( Private Peasant Holdings, Meher Season ).134.– Ethiopia, Central Statistical Agency ( 2014 ). Agricultural Sample Survey 2013 / 2014 ( 2006 E.C. ), Key Findings.135.– Encylopaedia Britannica ( 2015 ). Belg season. Available from https : / / www.britannica.com / EBchecked / topic / 1534292 / belg.

[ APPENDICES ]

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PLANTING REGIONS

Pulses are grown in almost all Ethiopian regions. The most important region for pulse production is Oromia, which is responsible for 45 % of national output. This is closely followed by Amhara ( 39 % ) and SNNPR ( 12 % ). Other regions include Tigray ( 2.1 % ), Benishangul-Gumuz ( 1.3 % ) and Somali ( data on the share of output is not available ).136 Oromia produces the majority of white haricot beans and contributes greatly to the majority of pulse varieties. Amhara is the most important region for many pulse varieties and it grows over 50 % of Ethiopia’s grass peas, lentils and fenugreek. In addition, 100 % of Ethiopia’s gibto and mung beans are cultivated in Amhara. SNNPR meanwhile produces 44 % of the red haricot beans as well as 20 % of the field peas.137

PRODUCTION

The production of pulses has followed a fluctuating but upward curve since the early 1990s. From the turn of the century until 2013, there have been six years in which double-digit growth was registered, and just three in which there was nega-tive growth.138 After more than a decade in which Ethiopia’s share of world pulse production increased, it reached a record high of 4.1 % in 2012 before declining to 1.9 % in 2013.

According to FAO Statistics Division data, Ethiopia’s production of most pulse crops dropped by nearly half in 2013.139 The data suggests that dried peas and lentils were the only segments that continued to grow in 2013 in all metrics, while broad beans and dry beans140 witnessed the most severe decreases. The severity of the drop is observed in Ethiopia’s world share of area harvested : Ethiopia accounted for 16.6 % of the world area harvested in 2012, but in 2013 its share shrank to 5.1 %.141

Figures 9, 10, 11 and 12 illustrate the trends concerning Ethiopia’s area harvested, production and yields for the sector, and by segment. Note that the data used here are from FAO, the product classification of which differs somewhat from the Harmonized System codes used when analysing trade trends. Here, ‘Beans, dry’ in-clude : ‘Kidney beans...,’ ‘Beans dried,’ ‘Mung, black / green gram bean...,’ ‘Adzuki…,’ and ‘Bambara bean’ ( i.e. Harmonized System codes 071331–071335 and 071339 ) ; similarly, ‘Vetches’ and ‘Pulses, n.e.s.’ form part of ‘Leguminous vegetables dried’ ( 071390 ).

136.– Miklyaev, M., Jenkins, P. and Pankowska, K. ( n.d. ). A Cost-Benefit Analysis of Small Scale Red Haricot Beans Production in Ethiopia : Intercropping as a Risk Diversification Mechanism. Available from https : / / www.queensjdiexec.org / publications / qed _dp_238.pdf.137.– Appendices IV and V provide further detail on regions share in total production by pulse variety ( 2014 / 15 Meher season ).138.– Food and Agriculture Organization of the United Nations ( 2015 ). Statistics database. Available from https : / / www.fao.org / statis-tics / en / . Accessed 7 June 2015.139.– Ibid.140.– Dry beans includes kidney beans, which account for 64 % of the total.141.– Data calculated from Food and Agriculture Organization of the United Nations ( 2015 ). Statistics database. Available from https : / / www.fao.org / statistics / en / . Accessed 7 June 2015.

70


Figure 9 : Ethiopia’s pulse area–production metric 1993–2013

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SAurAA : Food and Agriculture Organization of the United Nations ( 2015 ).

Figure 10 : Ethiopia’s pulse production metric 1993–2013

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[ APPENDICES ]

71

Figure 11 : Ethiopia’s pulse area harvested metric 1993–2013

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72


Despite the significant growth that the sector has been registering over the past decade, it is still faced with a number of threats that are taking a toll on yields and productivity. The most notable threats include overgrazing ; soil erosion ; lack of irrigation systems ; lack of quality seeds, fertilizers and pesticides ; and lack of knowledge of best practices. Specifically, smallholder farmers typically rely on inef-ficient traditional agronomic practices and technologies.

Moreover, a closer look at factors underpinning yields reveals that most segments still have much work to do with regards to increasing the use of improved seeds, fertilizers, pesticides and irrigation. According to data from 2008 / 09 to 2011 / 12, less than 1 % of the area that cultivated pulses used improved seeds or irrigation systems during that period. The only exceptions were ‘Haricot beans’ ( part of ‘Beans, dry’ ) and ‘Lentils’ with regard to seeds, and ‘Haricot beans’ and ‘Chickpeas’ in terms of irrigation.142

In terms of pesticide and fertilizer application, these were more widely applied by most segments. It must be recalled that crop yields are inevitably affected by many factors, including the weather, input prices, changes in agronomic practices, the amounts of fertilizer used, the quality of seed varieties, and the use of irrigation. Table 7 provides the yearly trends, and appendix VI presents the breakdown of the trends by pulse variety.

Table 7 : Pulses : estimates of improved seeds, irrigation, and areas that applied pesticides and fertilizer ( private holdings, Meher season ) 2008 / 09–2011 / 12

Total cropImproved seed

appliedIrrigated Pesticide applied Fertilizer applied

Area ( ha ) Area ( ha ) % Area ( ha ) % Area ( ha ) % Area ( ha ) %

2008 / 09 1 585 236 14 918 0.94 6 680 0.42 42 679 2.69 103 996 6.56

2009 / 10 1 489 308 12 912 0.87 7 891 0.53 143 451 9.63 112 194 7.53

2010 / 11 1 357 523 6 933 0.51 - - 51 991 3.83 36 074 2.66

2011 / 12 1 616 809 8 824 0.55 6 356 0.00 79 122 5.00 - -

SAurAA : Ethiopia, Central Statistical Agency ( 2011 and 2012 ). Statistical Abstract, Section D, Agriculture.

It is important to note that no data was found regarding the production breakdown by quality, productivity, value added, farmers’ incomes or production costs. This information would have enabled a better assessment of the position of the sector. It should be recalled that up-to-date data is of the utmost importance for decision mak-ers. This is especially true for investors aiming to assess and forecast the potential of the sector.

According to the above-mentioned information, it is clear that ‘Peas, dry’, ‘Lentils’ and ‘Chickpeas’ are promising areas for the future growth of the sector. Indeed, global demand for these goods is high. Specifically, the growth in world demand for chickpeas was the second-highest among pulses, with a 15 % CAGR between 2009 and 2013. However, Ethiopia is lagging behind, as the country has been reducing its exports of chickpeas over the past few years. Thus, greater and more dynamic efforts are needed to increase the sector’s global competitiveness.

Another segment in need of further attention is ‘Beans, dry’, as yields have been falling since 2009, and the increase in production was mainly due to increases in

142.– Regarding chickpeas, the implementation of improved seeds was below 1 %. However, this segment was among the few for which the use of improved seeds could be calculated for the entire period.

[ APPENDICES ]

73

harvested areas. In fact, after being the segment with the highest growth in yield between 2003 and 2008 ( 10 % CAGR ), it registered the second-lowest growth among Ethiopian pulses between 2008 and 2012 ( 5 % CAGR ) and recorded the highest fall between 2009 and 2013 ( -8 % CAGR ).

In terms of the international comparison for yield, Ethiopia ranked 61 in 2012–2013 for ‘Beans, dry’, 13 for production and 18 for area harvested. Among countries far-ing better than Ethiopia for yield in 2012–2013 were five African countries. Notably, Ghana and Cameroon had similar yields to Ethiopia in the early 2000s, although their yields did not always grow as much as Ethiopia’s. Also, the two countries did not experience the fluctuations and downward trends seen in Ethiopia, and they managed to maintain the high levels that they attained. Figure 13 illustrates the trends for the ‘Beans, dry’ yield of the five African countries mentioned, and for the three countries that showed the highest yield in 2012–2013.

Figure 13 : Yield of ‘Beans, dry’ : world-leading top three and top six African countries 2000–2013

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Even though Ethiopian yields have commendably made important progress over the years, they have yet to reach their full potential.143 Given Ethiopia’s fertile lands, its yields are well below those which could be achieved according to international standards and research trials.144

Among the main factors holding the sector back, as identified by ATA ( 2015 ), are : access to seeds and to rhizobium inoculants ; extension services ; access to finance, quality standards, market information and trade intelligence ; and mechanization uptake.145 While access to inputs and the use of appropriate agronomic practices are sine qua non conditions for the development of the sector, trust across economic actors operating in the sector is also a critical issue highlighted in most studies.

143.– Figure 13 illustrates Ethiopia’s yield in 2012 against East African countries and the world ; out of all Ethiopia’s principle varieties, only the yields for ‘Peas, dry’ were well below global averages in 2012.144.– International Food Policy Research Institute ( 2010 ). Pulses value chain in Ethiopia : constraints and opportunities for enhancing exports, p. 23. Working Paper, July. Available from http : / / cdm15738.contentdm.oclc.org / utils / getfile / collection / p15738coll2 / id / 8106 / file-name / 8107.pdf.145.– Ethiopia, Agricultural Transformation Agency ( 2015 ). Assessment of Systemic Interventions Pulses and Oilseeds.

74


Important pitfalls for the industry are the lack of an appropriate business model underpinning the industry and the development and implementation of standards for products and the industry. This extends from knowledge and credibility of post-harvest processing techniques to contract enforcement.

In addition, mixed bean quality, price speculation resulting in contract defaults, a lack of information on production levels,146 and a lack of appropriate quality inspections147 are reducing the incentive for the adoption of technology in cleaning, grading and sorting grain at the farm level. Furthermore, these issues are reducing the quantity of pulses available for export.148 Although some steps towards enhancing the situation have been taken, such as organizing supplies through ECX,149 most reports indicate the need for further action.

The potential and space for further strengthening the Ethiopian pulses sector and for developing niche markets is clear. The sector can and ought to emerge as a driving force of sustainable economic development for the people of Africa’s second most populous country.

Table 8 : Regions share in total production by pulse variety ( 2014 / 15, Meher season )

Variety Tigray Afar Amhara Oromia SomaliBenishangul-

GumuzSNNPR Gambela

Faba beans 2.27 % n.a. 36.34 % 48.27 % n.a. 0.11 % 13.01 % n.a.

Chickpeas 1.94 % n.a. 49.24 % 46.71 % n.a. 0.06 % 2.05 % n.a.

Field peas 1.79 % n.a. 34.34 % 43.28 % n.a. n.a. 20.59 % n.a.

Red haricot beans n.a. n.a. 10.08 % 44.39 % n.a. 1.42 % 44.12 % 0.00 %

Grass peas 5.02 % n.a. 62.07 % 32.88 % n.a. n.a. 0.04 % n.a.

White haricot beans 0.39 % n.a. 35.80 % 61.20 % n.a. 1.29 % 1.32 % n.a.

Lentils 4.59 % n.a. 56.75 % 38.30 % n.a. 0.01 % 0.34 % n.a.

Fenugreek n.a. n.a. 71.82 % 27.64 % n.a. n.a. 0.54 % n.a.

Gibto n.a. n.a. 100.00 % n.a. n.a. n.a. n.a. n.a.

Mung bean / ’maho’ n.a. n.a. 100.00 % n.a. n.a. n.a. n.a. n.a.

SAurAA : Ethiopia Central Statistical Agency ( 2015 ).

146.– This makes exporters unable to enter into new contracts.147.– This is often induced by a mismatch between domestic and export markets’ standards.148.– The ATA estimates that 10 %–25 % is rejected by exporters. See Ethiopia, Ministry of Agriculture ( 2013 ). Working Strategy for Strength-ening Ethiopia’s Chickpea Value Chain Vision, Systemic Challenges and Prioritized Interventions. Ethiopia Institute for Agricultural Research and ATA.149.– Bekele, K., ( 2013 ). An overview on Ethiopian pulses production & market perspective. Presentation. Acos Ethiopia PLC.

[ APPENDICES ]

75

APPENDIX II : ETHIOPIA’S EXPORTS OF PULSES

Ethiopia exported US $ 287 million of pulses in 2014, up nearly 20 % compared with 2013.150 Exports experienced steady growth over recent years, expanding by 22 % annually between 2009 and 2014. Moreover, Ethiopia consistently gained ground relative to competitors : while its share of global pulse exports was just 0.7 % at the turn of the century, it was 2.8 % in 2014.

Figure 14 : Ethiopia’s pulse exports 2001–2014

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EXPORT PARTNERS

Trade data shows that Ethiopia’s pulses sector has increased its sustainability in a number of foreign markets. The number of markets with sales valued above US $ 1 million grew from six in 2001 to 31 in 2014. Similarly, concentrations have improved. Today, the top four and eight markets receive just 45 % and 70 % of Ethiopia’s total pulse exports respectively, as opposed to 66 % and 80 % in 2009.

In 2014, the biggest importer of Ethiopian pulses was Pakistan ( 12 % of Ethiopian pulses ), followed by Nicaragua ( 12 % ), Sudan and South Sudan ( 11 % ) and Indonesia ( 11 % ). Growth was strong in the majority of Ethiopia’s main markets over the past five years, including Pakistan ( five-year CAGR 34 % ), Nicaragua ( n.a. ),151 Indonesia ( n.a. ),152 India ( 50 % ) and Yemen ( 29 % ). Particular note should be given to the negative growth to Sudan ( five-year CAGR of -5 % ) and the UAE ( -5 % ). While the fall in exports to the former may be explained by the sanctions placed on Sudan,

150.– Data calculated from : International Trade Centre ( 2015 ). Trade Map Database. Available from https : / / www.trademap.org / Index.aspx. Accessed 19 August 2015.151.– Five-year CAGR not available due to the absence of exports to this market in the base year, 2009.152.– Ibid.

76


the decline towards the UAE is partially explained by under-invoicing. Even so, both of these countries continue to be some of Ethiopia’s most important markets for pulse exports.

Figure 15 presents Ethiopia’s exports trends to its principal markets during the 2013–2014 term. Table 9 provides further details regarding exports to those markets.

Figure 15 : Ethiopia’s top 20 markets for pulses, 2009 and 2014 ( US $ thousands )

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Table 9 : Ethiopia’s top 20 markets for pulses

CountryAverage

2013–2014( US $ thousands )

CAGR ( 2004–2008 )

( % )

CAGR( 2009–2014 )

( % )

CAGR ( 2004–2014 )

( % )

Share

Average2008–2009 ( % )

Average2013–2014 ( % )

World 226 861 41 18 23 100 100

Pakistan 38 954 76 31 37 9 17

Sudan + South Sudan 23 702 42 -12 10 35 10

Indonesia( 1 ) 21 034 50 60 86 0 9

Nicaragua( 2 ) 18 970 n.a. 78 n.a. n.a. 8

India 18 197 6 47 32 2 8

Yemen 14 138 31 23 18 7 6

Russian Federation 11 643 70 194 77 0 5

Turkey 10 634 48 26 38 2 5

UAE 9 068 122 -9 25 15 4

[ APPENDICES ]

77

CountryAverage

2013–2014( US $ thousands )

CAGR ( 2004–2008 )

( % )

CAGR( 2009–2014 )

( % )

CAGR ( 2004–2014 )

( % )

Share

Average2008–2009 ( % )

Average2013–2014 ( % )

South Africa 7 941 75 27 35 3 4

Kenya 7 033 -100 49 33 0 3

Italy 4 982 17 23 15 2 2

Egypt 4 622 124 14 43 2 2

Bulgaria 4 501 83 38 50 1 2

Portugal( 3 ) 4 319 n.a. 431 n.a. 0 2

United Kingdom 3 674 8 -19 1 4 2

Belgium 3 195 36 9 20 2 1

Netherlands 2 663 12 6 4 2 1

Romania 2 603 70 22 30 1 1

Spain 2 577 -9 47 14 0 1


Note : ( 1 ) Indonesia : export flows recorded in 2008 and from 2010 to 2014 ; ( 2 ) Nicaragua : export flows only in 2010

and 2014 ; ( 3 ) Portugal : export flows recorded since 2013.

The data depicted in figure 16 suggest that the expansion in Ethiopian pulse exports is being driven by demand in a number of regions. While growth of exports to South Asia and East Asia & the Pacific has been particularly notable, at 38 % and 89 % respectively ( CAGR 2009–2014 ), it is clear that the same level of progress has not been achieved in all markets. Growth was slowest in the Middle East & North Africa, and exports of pulses to this region have yet to return to the highs achieved in 2008. Growth to sub-Saharan Africa meanwhile was driven by notable expansion in the South African and Kenyan markets ( five-year CAGR of 29 % and 52 % respectively ).

Figure 16 : Ethiopia’s exports of pulses by region or regional group, 2001–2013 ( US $ thousands )

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Although Ethiopian firms are gaining ground in many markets, they still have not capitalized on all opportunities. Tapping into remaining markets is achievable, as Ethiopian firms are continuously acquiring experience exporting to international buy-ers. This includes buyers from demanding countries, such as those in the EU, where requirements are quite stringent. In addition, Ethiopian stakeholders are investing in the quality, productivity and sustainability of the sector, which will eventually lead to greater competitiveness.

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Box 2 : Opportunities to leverage preferential market access

Ethiopia benefits from the United States’ AGOA,* a prefer-ential duty programme, and the United States Agency for International Development ( USAID )** programmes for trade development in the East African region. Similarly, the EU grants preferential access to Ethiopia in the framework of its programme Everything But Arms.

Moreover, as a least developed country Ethiopia receives preferential market access to other developed countries and to most emerging and frontier markets. In fact, about 22 countries ( the EU is counted as a single entity ) grant, on

a non-reciprocal basis, zero tariffs or reduced rates to least developed countries’ goods. While not all countries apply preferences to all pulses, data indicates that there are countries applying zero Customs duties to products exported by Ethiopia, such as ‘Peas dried...’ ( 071310 ). Some of these markets remain untapped by Ethiopian firms. Appendix V summarizes the list of countries providing non-reciprocal preferential duties to Ethiopia, and presents an example of tariffs applied to Ethiopia by geographical distribution.***

* Williams, B.R. (2015). African Growth and Opportunity Act (AGOA): Background and Reauthorization. Congressional Research Service.

Available from https://www.fas.org/sgp/crs/row/R43173.pdf.

** United States Agency for International Development (2015). Mission, vision and values. Available from

https://www.usaid.gov/who-we-are/mission-vision-values.

*** For further detail on tariffs, please see: International Trade Centre (2015). Market access map. Available from www.macmap.org.

EXPORT PRODUCTS

The majority of Ethiopia’s pulse exports are comprised of ‘Kidney beans....’ ( 64 % of exports ), ‘Leguminous vegetables...’ ( 13 % ), ‘Broad beans & horse beans...’ ( 10 % ) and ‘Chickpeas...’ ( 9 % ).

Figure 17 : Ethiopia’s export basket of pulses, 2001–2014 ( US $ thousands )

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Lentils dried, shelled, whether or not skinned or split

Dried, shelled Pigeon peas

Peas dried, shelled, whether or not skinned or split

Beans,small red (Adzuki) dried,shelled,whether or not skinned or split Urd,mung,black/green gram beans drid shelld,whether/not skinnd/split

Beans dried, shelled, whether or not skinned or split, nes


[ APPENDICES ]

79

Product concentration remains an issue, as the top four products account for 96 % of exports. In addition, while diversification improved somewhere between 2001 and 2007 ( during which time the number of products whose exports were valued above US $ 1 million grew from two to seven ), it has since stagnated ( today there are six products with exports valued above US $ 1 million ).

Both ‘Kidney beans...’ and ‘Leguminous vegetables...’ grew significantly over the past five years ( CAGR of 35 % and 114 % respectively ), as did less important products including ‘Beans, dried...’ ( 86 % ) and ‘Urd, mung, black / green gram bean’ ( 67 % ). Exports of ‘Broad beans...’ meanwhile stagnated ( -1 % CAGR ), whereas exports of ‘Chickpeas...’ grew at a lesser pace ( 8 % ). Of particular concern, however, is the decline in exports of ‘Lentils dried...’ While this used to be an important product whose exports were valued at nearly US $ 16 million in 2010, exports of this product are now negligible.

As illustrated in figure 18, Ethiopia’s exports of ‘Broad beans...’ and ‘Chickpeas...’ have been declining as a share of world imports, whereas exports of ‘Kidney beans...’ and ‘Leguminous vegetables...’ have been increasing as a share of world imports. While the former two products have failed to keep pace with growing global demand, Ethiopia’s exports of the latter two have grown at a much faster relative pace.

Figure 18 : Ethiopian exports a share of world exports 2001–2014 ( % )

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Chickpeas, dried, shelled, whether or not skinned or split

Broad beans&horse beans dried,shelled,whether or not skinned or split Beans dried, shelled, whether or not skinned or split, nes


Trade statistics show that Ethiopian pulses have yet to realize their full potential. While market concentrations have improved and exports are selling to demanding markets such as the EU and United States, efforts must be made to improve survival rates and penetrate new markets. In addition, limited product concentrations remain an issue. Stakeholders must work to boost productivity and leverage growing global demand for a wider basket of pulses.

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APPENDIX III : POLICY ENVIRONMENT AND TRADE AGREEMENTS

Ethiopia’s economic growth has been strongly supported by the Government, and agricultural, industrial and trade policies are set so as to create an enabling environ-ment for the private sector. Ethiopia has consistently promoted pro-business and pro-market policies based on the principle of export-led development.

The overall strategy for economic development in Ethiopia today is enshrined in the GTP. The ultimate goal of the GTP is to help Ethiopia reach middle-income status by 2025, and agricultural development has been identified as a priority. In order to reach its goals, the GTP provides a strategic framework for tackling issues related to eco-nomic development, environmental degradation, productivity of natural resources, food security and the protection of vulnerable households from natural disasters.153 As the first phase of the plan is set to be completed by 2015, this is an appropriate moment for stakeholders to evaluate its progress and provide considerations for the next phase.

AGRICULTURAL POLICY

Public policy has played a central role in facilitating the growth of the pulses sector. Markets were liberalized in the late 1990s, and the development of the private sector was encouraged. The pro-liberalization policies helped spur gains in production and exports, while other measures were successful in increasing the competitiveness of smallholder farmers. These policies were instrumental in developing the sector’s potential for supplying high-quality products to domestic and export markets.154

The ADLI policy is the Government’s main agricultural policy. Its goal is to enhance food security and agricultural productivity, and it has been used as a major policy framework since 1991.155 ADLI strategies relevant to the pulses sector include tai-loring interventions for assessing the country’s agroecological zones, establishing growth corridors, improving the supply of inputs, and implementing the Productive Safety Net Programme.

Based on ADLI, the Government implemented the Plan for Accelerated and Sustainable Development to End Poverty ( PASDEP 2005 / 06–2009 / 10 ). The objective of this plan was ‘to accelerate the transformation from subsistence to commer-cialization of smallholder agriculture through attaining increased productivity and increased share of marketed production and continued support to pro-poor basic agriculture within the framework of the national food security programme.’156 PASDEP endeavoured to reach these objectives by promoting :

improved pulse production technologies with high-yielding varieties, adoption of rec-ommended fertilizer application rates and crop protection practices, and the promo-tion of pulse export trade and financing incentives to enhance the competitiveness of

153.– Ethiopia, Agricultural Transformation Agency. Available from https : / / www.ata.gov.et / priorities / national-growth-transformation-plan / .154.– International Food Policy Research Institute ( 2010 ). Pulses value chain in Ethiopia : constraints and opportunities for enhancing exports, p.19. Working Paper, July. Available from http : / / cdm15738.contentdm.oclc.org / utils / getfile / collection / p15738coll2 / id / 8106 / filename / 8107.pdf.155.– Government of Ethiopia ( 1996 ). National Strategic Plan on Food Security. Available from https : / / www.africanchildforum.org / clr / pol-icy %20per %20country / ethiopia / ethiopia_foodsecurity_1996_en.pdf.156.– Ethiopia, Ministry of Agriculture and Rural Development ( 2006 ). Agricultural Policies, Programmes and Targets for a Plan for Acceler-ated and Sustainable Development to End Poverty ( PASDEP ) 2005 / 6–2009 / 10. Addis Ababa.

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pulse exporters. In large part, these farm level efforts have fallen short of achieving the key goals of increasing smallholder productivity, maintaining steady and high-quality production, and ensuring consistency in export volumes, primarily because of the lack of inputs, effective agencies to implement, and a cross-sectoral vision for the sector with the confidence of multiple stakeholders.157

Most of these issues still resonate today.

Building on ADLI, agricultural policies are currently anchored in the GTP ( 2011–2015 ), which succeeded the five-year PASDEP plan. The GTP pursues the following objec-tives that are relevant for the pulses sector :i. ‘Enhance productivity and production of smallholder farmers and pastoralistsii. Strengthen marketing systemsiii. Improve participation and engagement of the private sectoriv. Expand the amount of land under irrigationv. Reduce the number of chronically food insecure households.’158

Within this framework, the pulses sector has been identified as a priority segment.

A more recent policy is the Proclamation on Seeds, which was passed by Ethiopia’s parliament in January 2013.159 This provides guidelines for the release and registra-tion of seed varieties, as well as internal quality control. In addition, it also regulates the relationship between the federal MoA and the regional BoA.

Box 3 : Ethiopia’s Proclamation on Seed, 2013

A study comparing Ethiopia’s emerging seed regulatory framework with laws and regulations in nine other countries observed that:

Ethiopia’s private seed industry has been held back by limits on private variety introductions and absence of a seed retail market through thousands of (non-existent) private dealers. Ethiopia’s new 2013 Seed Proclamation is flexible, allowing Regulations and directives to fit various policy orientations; draft Regulations are more detailed, outlining a pattern of government controls that could either continue or significantly relax long-standing barriers to the development of Ethiopia’s private seed industry. What will happen depends on what MoA does with the authority it gets from the Regulations.

For example, the Proclamation requires variety registration for all crops, but does not say how this is to be done. Draft Regulations ask for one season of [Value for Cultivation and Use, and Distinctness, Uniformity, Stability] tests for varieties

registered in another country, or two seasons for varieties not yet registered elsewhere. The impact of these controls will de-pend on whether MoA accepts information from companies’ own tests and on how reliable MoA is to approve varieties that companies want to introduce. The draft Regulations do not clarify if seed certification is compulsory for any class of seed and, if so, for what classes. Article 23 of draft Regulations could be interpreted to allow truthfully labelled seed. One objective of the new regulatory framework is to share re-sponsibility with regional authorities. The Ministry has sole authority to register varieties. Both the Ministry and regional authorities are expected to issue certificates of competence allowing people to start seed-related businesses. Regional authorities are solely responsible to certify seed in domestic trade. This design roughly parallels practices in the US and India, where central governments and states share authority to regulate seed trade.

(United States Agency for International Development / Ethiopia Agriculture Growth Programme – Agribusiness and Market Development

(AGP-AMDe) Project (2013). Comparative Analysis of Ethiopia’s 2013 Seed Proclamation and Draft Seed Regulations, p.7. USAID).

157.– International Food Policy Research Institute ( 2010 ). Pulses value chain in Ethiopia : constraints and opportunities for enhancing exports, p. 20. Working Paper, July. Available from http : / / cdm15738.contentdm.oclc.org / utils / getfile / collection / p15738coll2 / id / 8106 / filename / 8107.pdf.158.– Ethiopia, Agricultural Transformation Agency. Available from https : / / www.ata.gov.et / priorities / national-growth-transformation-plan / .159.– United States Agency for International Development / Ethiopia Agriculture Growth Programme – Agribusiness and Market Develop-ment ( AGP-AMDe ) Project ( 2013 ). Comparative Analysis of Ethiopia’s 2013 Seed Proclamation and Draft Seed Regulations. USAID.

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A number of other agricultural strategies have developed as part of the Agricultural Transformation Agenda, including the Seed Sector Strategy, the Cooperative Sector Strategy, the Agricultural Cooperative Sector Development Strategy 2012–2016, the Household Irrigation Working Strategy document, and the Ethiopian National Agricultural Mechanization Strategy.160

The MoA Rural Economic Development and Food Security Sector Working Group was established in April 2008. This group serves as the Government–donor coor-dination platform for agriculture, natural resource management and food security. Its objective is to ‘jointly review sector level implementation status and coordinate and harmonize efforts of various development partners supporting thematic areas under RED & FS.’161

With regards to programmes that specifically target pulses, the ATA Pulses and Cereals Integration Strategy seeks to increase soil fertility and raise farmer incomes by improving land use. The strategy foresees cropping interventions in the Oromia, Amhara, Tigray and SNNPR regions for the 2014 / 15 season. Its goal is to reach 121 woredas and close to 1 million farmers.162

The pulses sector also benefits from the Comprehensive Africa Agriculture Development Programme, signed by Ethiopia in 2009. Established by the African Union, this programme is a framework for increasing food quality and quantity, and for stimulating food exports.

In order to stimulate FDI inflows, the Government protects investors through Ethiopia’s Investment Proclamation. The proclamation guarantees the repatriation of foreign investors’ capital and the remittance of dividends and interest. It also protects against certain measures of expropriation and nationalization.163

INDUSTRIAL POLICIES

The country’s industrial policies are framed in the GTP. The plan drafted for the industrial sector is organized according to three phases ; the first, ‘Enhancing the productivity of major industries’, started in 2013 and is to be completed by 2015.

Box 4 : GTP

Growth and Transformation Plan

1. Phase 1: Enhancing the productivity of major industries (2013–2015)

2. Phase 2: Diversifying and emerging new key industries (2016–2020)

3. Phase 3: Building up high-tech industries (2021–2025)

Source: Abtew, Ahmed (2014). Ethiopian industrial development. Presentation made at United Nations Industrial Development

Organization Inclusive and Sustainable Industrial Development Second Forum, Vienna, 4 November.

160.– Ethiopia, Agricultural Transformation Agency. Available from https : / / www.ata.gov.et / news / resources / sector-strategies / .161.– Rural Economic Development and Food Security Sector Working Group ( RED & FS WG ) https : / / www.moa-redfs.gov.et / .162.– Ethiopia, Agricultural Transformation Agency. Available from https : / / www.ata.gov.et / programmes / value-chains / pulses / .163.– Ethiopia, Ministry of Agriculture ( 2013 ). Investment incentives. Available from https : / / www.moa.gov.et / web / pages / investment-incentives.

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The Government has made the following relevant efforts within the overall framework of the GTP’s first phase :

� Promoting and developing an internationally competitive infrastructure : the Government has expanded the availability of hydropower, allowing for very competitive electricity prices ( US $ 0.03 per kilowatt-hour versus US $ 0.18 per kilowatt-hour in neighbouring Kenya ). Other infrastructure projects include the development of a road from Addis Ababa to the port of Djibouti ( 71,000 km of roads and 2,395 km of railways ). The Ethiopian Railway Corporation has also embarked on a project to construct 5,000 km of railways to connect various production centres in the country with import and export markets.164

� Reinforcing both foreign and domestic investment ( investment and fiscal poli-cies ) : the Government has implemented a number of investment incentives. The following are relevant for the pulses sector :

– Preferential rates for land lease and / or factory lease – The Development Bank of Ethiopia provides a 70 % loan for 30 % own equity,

and interest rates at 7.5 % – Tax exemptions for incoming raw materials and machinery – A tax holiday for a period of two to seven years, depending on the location – A profit tax exemption for up to seven years based on the size and / or the

location of the investment – Government support through support institutions such as the Ethiopian

Investment Agency – The Government is also taking part in joint ventures so as to attract more

risk-averse investors – Nine industrial zones are currently operational or planned.

TRADE POLICY

The Government of Ethiopia has made concerted efforts to foster a competitive ena-bling environment that stimulates international trade and strengthens domestic mar-keting systems. To this end, the Government has pursued the following strategies :

� Providing trade registration and licensing services according to international standards

� Improving the regulatory framework on competition � Liberalizing its market and promoting trade partnerships.

Regarding trade partnerships, Ethiopia is member of COMESA, and it receives and applies preferential tariffs. While the group has implemented a Free Trade Area, Ethiopia does not yet take part. Even so, the Government has stepped up its efforts in recent years to liberalize its trade policy. To this end, it is undertaking negotiations to finalize its membership to the World Trade Organization ( WTO ), complete the Economic Partnership Agreement with the EU as part of the Eastern and Southern African countries, and conclude the tripartite agreement for a Free Trade Area be-tween COMESA, the East African Community and the Southern African Development Community.

164.– Elissa Jobson and Marshall Van Valen ( 2014 ). Transport : riding the rails in Ethiopia and Kenya. The Africa Report, 25 March. Available from https : / / www.theafricareport.com / East-Horn-Africa / transport-riding-the-rails-in-ethiopia-and-kenya.html.

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Box 5 : Ethiopia and COMESA seed trade harmonization

‘Heads of State of COMESA member countries are expected to consider and approve COMESA Seed Trade Harmonization Regulations later this year. Harmonization is expected to “encourage investment in seed business” and to “stimulate the breeding and availability of improved seed varieties resulting in increased variety choices for all farmers” (quoted from the draft Regulations).

Ethiopia is well-situated to benefit from COMESA harmoni-zation due to its large population and seed market, the suit-ability of its climate to produce healthy seed, and the avail-ability of breeders and others with skills in seed production. COMESA seed trade harmonization would require at least one small but significant change in Ethiopia’s current draft Regulations. Specifically, harmonization proposes to create

a COMESA Variety Catalogue, which would include varie-ties registered in at least two member states. All COMESA countries are to accept all varieties in the Catalogue. Ethiopia’s Seed Proclamation is sufficiently flexible to allow MoA to accept varieties in a COMESA Variety Catalogue. However, Ethiopia’s current draft Seed Regulations specifi-cally require at least one season of [Value for Cultivation and Use, and Distinctness, Uniformity, Stability] tests for varieties registered in another country; this would have to be revised to accommodate COMESA harmonization.’ (United States Agency for International Development / Ethiopia Agriculture Growth Programme – Agribusiness and Market Development (AGP-AMDe) Project (2013). Comparative Analysis of Ethiopia’s 2013 Seed Proclamation and Draft Seed Regulations, p. 7. USAID).

As noted previously, 22 countries ( including the EU as a single entity ) grant zero tariffs or reduced rates to least developed countries’ goods in a non-reciprocal manner. Note that although most preferential tariffs are mentioned on the Ethiopian Revenues and Customs Authority website, not all are included, including the prefer-ences granted by India. It is important that such information is disseminated in a more efficient manner in order to stimulate pulse market diversification. Indeed, several studies on non-reciprocal preferential arrangements find that limited aware-ness among the private sector, and sometimes even among the public sector, is one of the main reasons that preferential duties are not leveraged to their full extent.

In addition to improving trade relations, the Government has also looked to facilitate trade by improving the Customs, tariff and trade facilitation environment.165

� Import tariffs on raw materials and fabrics were amended in 2013 to promote im-port substitution ; qualifying products face a tariff of 20 % instead of 35 %. Capital goods meanwhile receive a 100 % exemption. Imported products are subject to five types of levies, namely Customs duty, excise tax, value added tax, surtax and withholding tax. Note that the collection of Customs duties represents an important source of revenue for the Government ; the Ethiopian Revenue and Customs Authority estimates that this was 11.8 billion Ethiopian birr in 2009.

� In its aim to promote exports, the Government has withdrawn its export tariff on the majority of products.

� Customs have opened a separate window for exporters, and large exporters can now gain access to bonded warehouses inside Customs by being designated Authorized Economic Operators. In addition, Customs is minimizing documenta-tion and simplifying the process for the release of imports. A multi-modal system using dry ports has also been implemented.

Despite these improvements, logistics in Ethiopia remain an important cost factor. Ethiopia ranked 104 in the World Bank’s global trade Logistics Performance Index

165.– For further information see : Ethiopian Revenue and Customs Authority ( 2015 ). Imports and taxes in Ethiopia. Available from https : / / www.erca.gov.et / index.php / customs / others / 100-imports-and-taxes-in-ethiopia.

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( 2014 ), and it takes an average of 44 days to import or export a container.166 In a world where cost and reliability are some of the most important factors in a buyer’s decision, the Government must increase its efforts to address bottlenecks in the areas of trade facilitation.

DEVELOPMENT POLICIES

The GTP has served as Ethiopia’s national planning document for development from 2010 to 2015. The national development plan for the period 2015–2020 is under preparation, and the most relevant development policies for the pulses sector are presented below :

� Ethiopia’s Food Security Strategy was issued in 1996 and is anchored in ADLI.167 Its goal is to ensure food security at the household level. To this end, the strat-egy seeks to ‘( i ) increase the availability of food through increased domestic production ; ( ii ) to ensure access to food for food deficit households ; and ( iii ) to strengthen emergency response capabilities.’168

� Ethiopia’s Productive Safety Net Programme forms an integral part of its food security programme. The Productive Safety Net Programme is implemented by the Ethiopian Government and supported by the World Bank.169 In return for food and / or cash transfers, households perform various public works in areas such as infrastructure maintenance. In this way, households are given a predictable form of assistance so that they are no longer reliant on emergency aid.170

� The Ethiopian Climate Resilient Green Economy ( CRGE ) Strategy and the CRGE Facility seek to ensure a sustainable economic future by helping the country miti-gate and adapt to climate change. Its three main goals are : ‘( i ) fostering growth and economic development ; ( ii ) managing greenhouse gas emissions ; and ( iii ) improving resilience to climate change.’171 The CRGE Facility meanwhile is tasked with mobilizing resources from both domestic and international sources.

� An educated and skilled labour force is one of the principles that underpin the GTP, and formal training is being provided in different technical areas and for managerial skills. According to Ethiopia’s MoA, a total of 25 agricultural vocational training colleges have been established. These colleges have graduated 71,000 agricultural development agents since 2004 / 05 in areas such as animal science, plant science and natural resources. In addition, 8,870 farmer training centres have been established in order to spread best practices.172

� It is also worth noting that Ethiopia is one of the main beneficiaries of the Aid for Trade initiative, which has been instrumental in the country’s development.

166.– Aaron Maasho ( 2014 ). Africa investment – garment-making finds new low-cost home in Ethiopia, 5 September. Available from https : / / www.reuters.com / article / 2014 / 09 / 05 / africa-investment-idUSL5N0R61WH20140905.167.– Government of Ethiopia ( 1996 ). National Strategic Plan on Food Security. Available from https : / / www.africanchildforum.org / clr / pol-icy %20per %20country / ethiopia / ethiopia_foodsecurity_1996_en.pdf.168.– Ibid.169.– World Bank ( 2014 ). In Ethiopia, seeing food security as a human right, 14 November. Available from https : / / www.worldbank.org / en / news / feature / 2014 / 11 / 14 / in-ethiopia-seeing-food-security-as-human-right.170.– World Food Programme ( 2015 ). Livelihoods, early assessment and protection. Available from https : / / www.wfp.org / disaster-risk-reduction / leap.171.– See : Ethiopia, Ministry of Finance and Economic Development. Available from https : / / www.mofed.gov.et / English / Featured %20Ar-ticles / Pages / TheEthiopianClimateResilientGreenEconomy( CRGE )StrategyandtheCRGEFacility.aspx.172.– Ethiopia, Ministry of Agriculture ( 2013 ). Policies and strategies. Available from https : / / www.moa.gov.et / web / pages / policies-and-strategies.

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APPENDIX IV : SECTOR DEVELOPMENT TARGETS

A major focus area of this roadmap is to build on the current conjuncture and benefit from the growing demand for pulses from the East African and Asian regions. The pulses sector can be developed to benefit from existing production knowledge and potential. The policy focus in past years has been primarily on coffee and sesame ; however, the pulses sector offers similar potential to be developed as an export crop.

Rough calculations indicate that Ethiopia could expand its foreign market presence from its current levels of US $ 100 million through increased production levels. The production of pulses in Ethiopia is currently about 2 million tons. The major pulses exported are haricot beans, pea beans, horse beans and chickpeas. Market-oriented production can help Ethiopia generate more foreign exchange from exports.

Ethiopia’s pulse exports have been rising in recent years. The major export destina-tions are the Gulf States ( Saudi Arabia, Yemen and Israel ), the EU, Asian countries ( mainly Pakistan ) and neighbouring African countries. Exports have been mainly concentrated on haricot beans, horse beans and chickpeas. Ethiopia is currently the largest producer of chickpeas in Africa. Chickpea is known as the ‘pro-poor’ crop – it is widely cultivated by farmers and used for crop rotation with teff and wheat. Chickpeas also command a significant commercial demand, both locally and internationally.

The geographic position of Ethiopia provides a competitive advantage for exports, mainly due to the relative proximity to major chickpea importing countries. Ethiopia has a better logistics proximity with the world’s four leading importers – India, Pakistan, Algeria and the UAE. Another promising type of pulse is green mung. According to EPOSPEA, Ethiopia exported more than 227,000 tons of green mung beans in the concluded year of 2013 / 14, with demand going up from India, Indonesia, Belgium and the UAE.

Table 10 : Ethiopia’s pulses export growth 2009 / 10–2013 / 14

SAurAA : EPOSPEA

Photo: (CC BY-SA 2.0) Adam Posey (CC BY-SA 2.0), Beans of prosperity.jpg

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An increase in imports by countries like India and the UAE, coupled with China’s reversal as a net exporter, will generate significant opportunities for Ethiopia.

� Raw pulses : the South Asia region, which includes India, Pakistan, Bangladesh, Sri Lanka, Nepal and Bhutan, is the largest importer of pulses in the world. In this region, the major consumer of pulses is India, followed by Pakistan. Pulse consumption is part of the staple diet in this region. India alone imports more than 4–5 million tons of pulses every year. The major types that are imported are chickpeas, pigeon peas, mung beans, lentils and dry peas. It has been estimated that India’s population will reach 1.68 billion by 2030 from the present level of 1.21 billion. Accordingly, the estimated pulse requirement for 2030 is 32 million tons. Ethiopia has an advantage due to the fact that the pulses in produces for export ( chickpeas and mung beans ) are the pulses required by this market. Also, new types of pulses – like pigeon peas – are being tested and will be soon available for commercial use.

� Processed pulses : there is scope to export processed pulses from Ethiopia to regional and international markets. Traditionally the large South Asian diaspora across the world has imported processed dhal from India and other neighbour-ing countries. However, Indian exports of pulses, even processed pulses, have been banned since 2006. This has led to some structural changes. Exporters are looking at alternatives and are relocating their processing plants to other locations such as Dubai and Singapore. The ban is expected to be in place for a long time, and the gap between production and demand in India is continuously rising. This will keep the opportunity to export processed pulses open.

Based on the logic above, the roadmap aims to deliver the following production, export-related and developmental targets by 2020 :

� New types of pulses like pigeon peas to be introduced � New varieties in existing pulses such as chickpeas and mung beans to be

introduced � Exports of pulses to be increased from the existing 353,000 tons to 500,000 tons � At least four pulse processing plants to be established.

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APPENDIX V : PREFERENTIAL ACCESS AND TARIFFS

Table 11 : Countries granting preferential schemes to least developed countries

Preferences provider Preferential scheme SinceNext most favourable scheme or regime

Australia Australian System of Tariff Preferences for Least Developed Countries 1966 Australian System of Tariff Preferences

Belarus Least Developed Countries scheme n.a. Developing Countries scheme

Canada Least Developed Countries Tariffs 1974 / 1983 / 2003 General Preferential Tariff scheme

China China Special Preferential duties 2006 Most Favoured Nation ( MFN )

Chile Least Developed Countries scheme MFN

Chinese Taipei Least Developed Countries scheme n.a. MFN

27 EU Member SatesGeneralized Scheme of Preferences ( GSP ), Everything But Arms scheme 1971 / 2005 GSP+

Iceland GSP for Least Developed Countries 2002 MFN

India Least Developed Countries scheme MFN

Japan GSP for Least Developed Countries 1971 / 2007 GSP for Developing Countries

Kazakhstan GSP for Least Developed Countries 1996 GSP for Developing Countries

Korea, Republic of Preferential Tariff for Least Developed Countries 2000 MFN

Kyrgyzstan Least Developed Countries scheme n.a. General tariffs

Mauritius Least Developed Countries scheme 1998 MFN

Morocco Least Developed Countries scheme 2000 MFN

New Zealand GSP for Least Developed Countries 1972 / 1999 GSP for Less Developed Countries

Norway GSP for Least Developed Countries 1971 / 2000 / 2002 GSP for Developing Countries

Russian Federation Least Developed Countries scheme n.a. Developing Countries scheme

Switzerland GSP for Least Developed Countries 1972 / 1997 GSP for Developing Countries

Tajikistan Least Developed Countries scheme n.a. MFN

Turkey GSP for Least Developed Countries 2002 / 2005 GSP for Developing Countries

United States

� AGOA IV and textile / apparel articles � GSP for Least Developed Countries

( least developed beneficiary developing countries )

� AGOA : 2000 / 2006

� GSP : 1976

� AGOA IV and textile / apparel articles � GSP for developing countries

( beneficiary developing countries )

SAurAA : Authors’ compilation.

Notes : the year that follows ‘ / ’ indicates the year that a country implemented major changes to its non-reciprocal regime ;

n.a. : not available.

Photo: (CC BY-SA 2.0) Alina, Seed producer Bedilu Mamo from Tulu Rae central Ethiopia – closeup in his granary with his new variety chickpea seeds.

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Figure 19 : Geographical distribution for tariffs applied


Note : Applied tariff data source : ITC ( MAcMAp ) complemented by WTO ( Integrated Database ) ; Trade data source : ITC

normalized trade matrix ; Ad Valorem Equivalent ( AVE ) Methodology : AVE based on the World Tariff Profile.

Data : Latest available tariffs : 2013–2015 ; trade year : 2013.

Harmonized System Code : 071310 – Peas dried, shelled, whether or not skinned or split.

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APPENDIX VI : VARIETIES OF PULSES AND YIELDS

Table 12 : Pulse varieties’ and regions’ share in total pulses production ( 2014 / 015, Meher season )

Variety Tigray Afar Amhara Oromia SomaliBenishangul-

GumuzSNNPR Gambela Total

Faba beans 0.74 % n.a. 11.76 % 15.62 % n.a. 0.04 % 4.21 % n.a. 32.37 %

Chickpeas 0.34 % n.a. 8.71 % 8.27 % n.a. 0.01 % 0.36 % n.a. 17.70 %

Field peas 0.24 % n.a. 4.53 % 5.70 % n.a. n.a. 2.71 % n.a. 13.18 %

Red haricot beans n.a. n.a. 1.20 % 5.28 % n.a. 0.17 % 5.25 % 0.00 % 11.89 %

Grass peas 0.49 % n.a. 6.02 % 3.19 % n.a. n.a. 0.00 % n.a. 9.70 %

White haricot beans 0.03 % n.a. 2.78 % 4.76 % n.a. 0.10 % 0.10 % n.a. 7.78 %

Lentils 0.24 % n.a. 3.01 % 2.03 % n.a. 0.00 % 0.02 % n.a. 5.30 %

Fenugreek n.a. n.a. 0.68 % 0.26 % n.a. n.a. 0.01 % n.a. 0.95 %

Gibto n.a. n.a. 0.68 % n.a. n.a. n.a. n.a. n.a. 0.68 %

Mung bean / ’maho’ n.a. n.a. 0.46 % n.a. n.a. n.a. n.a. n.a. 0.46 %

Total 2.08 % 0.00 % 39.84 % 45.11 % 0.00 % 0.32 % 12.66 % 0.00 % 100.00 %

SAurAA : Ethiopia Central Statistical Agency ( 2015 ). Agricultural Sample Survey 2014 / 2015 ( 2007 E.C. ).

Figure 20 : Comparative yields 2012 ( hectograms / ha )

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

18.000

20.000

Beans, dry Broad beans, horse beans, dry

Peas, dry Chick peas Lentils Vetches Pulses, nes

Ethiopia yield World yield East Africa yield


Photo: (CC BY-SA 2.0) Swathi Sridharan, Tsedeke Abate, ICRISAT scientist, visits a small market in Addis Ababa to look at chickpea sales.jpg

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APPENDIX VII : ESTIMATES ON IMPROVED SEED, IRRIGATION, PESTICIDE AND FERTILIZER

Table 13 : Estimates on improved seed, irrigation, pesticide and fertilizer applied area by pulse variety ( private holdings, Meher season ), 2008 / 09–2011 / 12

Percentage of pulses area with improved seeds applied2008/2009

2009/2010

2010/2011

2011/2012

PULSES 0.94 0.87 0.51 0.55Horse beans 0.14 0.86 0.23 0.32Field peas 0.19 0.89 -Haricot beans 3.18 1.44 0.82 1.31Chickpeas 0.86 0.96 0.63 0.68Lentils 2.75 - 2.75 0.56Grass pea/vetch - - - -Soya beans 4.65 2.03 - -Fenugreek - - - -Gibto - - - -

2008/2009

2009/2010

2010/2011

2011/2012

PULSES 0.42 0.53 - 0.00Horse beans 0.28 0.39 0.22 0.00Field peas 0.11 - - 0.00Haricot beans 0.78 - 0.92 1.00Chickpeas 0.89 0.92 1.06 0.00Lentils 0.19 0.3 - -Grass pea/vetch 0.21 - - 1.00Soya beans - - - -Fenugreek 0.65 - - 1.00Gibto - -

Percentage of pulses area irrigated

2008/2009

2009/2010

2010/2011

2011/2012

PULSES 2.69 9.63 3.83 5.0Horse beans 1.12 9.54 2.89 4.0Field peas 2.27 10.08 4.29 4.0Haricot beans 2.37 6.08 1.7 5.0Chickpeas 2.37 12.79 6.65 7.0Lentils - 7.97 9.81 11.0Grass pea/vetch - 14.92 - -Soya beans - - - -Fenugreek - 2.77 - 0.0Gibto - - - -

Percentage of pulses area with pesticide applied2008/2009

2009/2010

2010/2011

2011/2012

PULSES 6.56 7.53 2.66 -Horse beans 7.55 6.01 2.21 -Field peas 11.11 7.45 4.27 -Haricot beans 12.34 2.64 3.79 -Chickpeas 0.41 13.56 0.64 -Lentils 1.8 14.72 5.92 -Grass pea/vetch - 9.17 0.25 -Soya beans - 0.63 8.12 -Fenugreek 2.05 3.97 6.81 -Gibto 0.98 - - -

Percentage of pulses area with fertilizer applied

SAurAA : Ethiopia, Central Statistical Agency ( 2011 and 2012 ). Statistical Abstract, Section D, Agriculture.

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APPENDIX VIII : LIST OF PARTICIPANTS AT CONSULTATIONS

Name of Institution Contact Person

MoA-Ministry of Agriculture Mr. Abdulsemed Abdo

EIAR- Ethiopian Institute of Agricultural Research Dr. Berhanu Amsalu

EIAR- Ethiopian Institute of Agricultural Research Dr. Million Eshete

FCA-Federal Cooperative Agency Mr. Usman Surur

Amhara BoA – Amhara Bureau of Agriculture Mr. Demeke Atlaw

Oromia ACC – (Oromia Agricultural Commercialization Cluster) Mr. Abebe Diriba

SNNP BoA – South nations and nationalities people – Bureau of Agriculture Mr.Germame Garuma

ATA-Agricultural Transformation Agency Mrs. Genzeb Akele

ATA-Agricultural Transformation Agency Dr. Daniel Dauro

ESE – Ethiopian Seed Enterprise Dr. Tafesse Gebru

MoT – Ministry of Trade Mr. Mulugeta Mohamed

MoT – Ministry of Trade Mr. Assefa Mulugeta

MoT – Ministry of Trade Mr. Samuel Gizaw

ECX – Ethiopian Commodity Exchange Mr. Ermias Eshetu

AGP/AMDe-Agricultural Growth Program-Agribusiness and Marketing Development Mr. Mesfin Terrefe

SNV Mrs. Eyerusalem Regassa

ICRISAT-Ethiopia – International Center for Research in Semi Arid Tropics Dr. K.P.C. Rao

Guts agro-industry PLC Mr. Mulugeta Enki

ACOS ETHIOPIA PRIVATE LIMITED COMPANY Mr. Kassahun Bekele

AGRO PROM INTERNATIONAL PLC. Mr. Elias Geneti

AJLI INTERNATIONAL TRADING PRIVATE Mr. Seid Ibrahim

AL-IMPEX IMPORT EXPORT. Mr. Alula G/michael

AMAL TRADING CO.,PLC Mr. Mohammed Bahajri

ARIDUNEGA TRADING PLC Mr. Melaku Mesele

BELSTY NEGESSA & HIS CHILDREN TRADI Mr. Mezgebu Belsti

COMA IMPORT AND EXPORT PLC Mr. Tesema bezabih

DESALIGN GEBREMICHAEL BUTA Mr. Desalegn G / Michael

ETHIOPIAN GRAIN TRADE ENTERPRISE Mr. Berhane Hailu

FEREG AND FAMILY PRIVATE LIMITED CO Mr. Nurihusen Fereja

GASCO TRADING PRIVATE LIMITED COMPA Mr. Ahmed M.Mukrid

GETAHUN MELESE LIYH Mr. Getahun Melese

GUNA TRADING HOUSE PLC. Mr. Attey Tadele

HACKFUN EXPORT TRADING PARTNER Mr. Getachew Mebrahtu

KABEW TRADING PLC Mr. Tedla Abraham

Photo: (CC BY-SA 2.0) ICRISAT, Chickpea eco-friendly transport, Ethiopia.jpg

[ APPENDICES ]

93

Name of Institution Contact Person

LANCHIHUN BUSINESS PLC Mr. Melku Bera Bahta

MULEY ADDISU FANTAY Mr. Muley Addisu

SORETI INTERNATIONAL Trading. Mr. Bulbula Tulea

TENAW ALEHEGN LIMENIH Mr. Dagmawi Alehegn

WONDO TRADE ANDINVESTMENT COMPANY Mr. Jemal Suleiman

YAHYA SEID OUMER Mr. Yahia Sayed Omar

ZABLON TRADING PLC Mr. Tadesse Hailu

Edao International trading Mr. Abdu Hussien

Navjeevan Dhall Mill (India) Mr. Sujay Kabra

Sagar group (India) Mr. Amit Salecha

EPOSPEA Mr. Assefa Yohannes

94


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