Regional Overview

The Amhara region is clustered into 16 ACCs across 128 woredas, of which six clusters have been identified to receive ATA support as part of the first wave of the pilot project. These six clusters include seven primary commodities (sesame, wheat, malt barley, tef, horticulture, honey, and dairy). Significant work has begun in four of the commodity clusters (sesame, wheat, malt barley, and tef) whereas strategies and interventions for the remaining commodities are expected to launch in late 2016. Outside of the work led by the ATA for these clusters, the regional government is utilizing the cluster approach across the region.

In addition to the main approaches for increasing production and productivity through full package scale-up and ITV, Amhara region clusters are integrating their activities with other Transformation Agenda Deliverables to enhance their impact. Joint efforts underway in Amhara include the IVS for increased access to input loans, the DSM modality, the IVR / SMS hotline, and linkages with the Tef International Market Access (TIMA) initiative. A Regional Transformation Council, chaired by the Regional President, has been established to help guide and evaluate this work. Additionally, value chain alliances (VCAs) have been established at the cluster level and are serving as important platforms to engage and enable joint problem-solving between relevant stakeholders. Successful and sustainable market linkages are emerging for focus commodities, notably WFP’s purchase of maize and the supply of malt barley to Gondar Malt Factory.

Clusters

SESAME

This cluster includes North Gondar and Awi zones covering 1.7 million hectares over six woredas, 134 kebeles, and 93,080 farmers. Sesame is the most important crop in the area, cultivated over 175,770 hectares and amounting to 40% of the national production of the crop. Sesame is grown mostly for export, with 98% of the crop marketed through ECX while only 2% is sold directly to end markets.

The cluster has the vision to generate annual revenues of 361 million USD by 2020 through 352 million USD in export sales of sesame grain, hulled sesame, and tahini to the Middle East, North Africa, and Far East markets (processed 100% within the cluster), as well as six million USD of domestic sales of whole sesame, sesame grain, tahini, and feed by-products. Annual targets for this cluster include increasing usage of improved inputs by over 750%, marketed surplus by more than 80%, and decreasing post-harvest losses by 50% by 2020.

At present, the vast majority of sesame sold from this area is exported in raw form, but the goal is to increase agro-processing capacity by 115% within the same time period. Other issues in the cluster that must be addressed include poor agronomic practices by farmers due to limited access to extension services; low availability of working capital for pre-financing for input delivery, product aggregation, transport and marketing by cooperatives; high labor costs for crop production; and limitations in accessing finance for operational expenses.

A number of interventions have been designed as solutions to the above-stated bottlenecks that include expanding the reach and capacity of MFIs and RuSACCOs for increased financing; enhancing the extension package and expanding its reach throughout the cluster; scaling up cooperatives’ value-addition activities and bolstering their marketing capacity; and providing incentives to improve mechanized service provision to smallholders.

MAIZE 

The maize cluster in Amhara encompasses West Gojam, South Gondar and Awi zones, across 10 woredas and 240 kebeles, reaching 286,728 farmers. This area produces 17% of the nation’s maize (which is the most important crop in the cluster) with production and revenue both being double that of the next most important crop, tef.

The vision for this cluster is to generate annual revenues of 81 million USD by 2020 through domestic sales of maize grain, flour, feed, and processed cereals and snacks, including substituting imports of maize products of nine million USD. Ninety percent of the products are to be processed in the cluster and 10% through contractual agreements with processors in Bahir Dar.

Some targets set for this cluster include increasing farmers’ use of improved inputs by 60%, expanding agro-processing capacity by 67%, and increasing the amount of maize marketed by 91%. Doing so, naturally, requires addressing systemic bottlenecks facing the cluster. Among the interventions planned in this regard are to strengthen the capacity of the public sector in seed inspection and certification; improve the rates of adoption of the recommended farming package through training of DAs and experts and carrying out demonstrations; and strengthen linkages with large scale maize buyers like the Strategic Food Reserve Association and the Ethiopian Grain Trade Enterprise (EGTE).

BREAD WHEAT

Encompassing 862,889 hectares of the West Gojam and East Gojam zones, the bread wheat cluster covers nine woredas and reaches 286,728 farmers. The cluster currently produces 3% of the country’s bread wheat (amounting to 1.2 million quintals) by 37% of the cluster’s farmers. Only 20% of the wheat grown in this area is currently marketed, and the role of primary cooperatives and unions in output marketing remains low at about 12%. Potential exists for value addition, however, as the cluster is already home to 24 agro-processing plants, and there are plans to establish an Agro-Industrial Park within Bure woreda.

It is anticipated that 19 million USD can be generated in annual revenues by 2020 through domestic sales of bread wheat grain, flour, and bread. This includes substituting imports of bread wheat products amounting to four million USD, with all product processing taking place within the cluster. Future efforts will introduce contract farming and cooperative-based seed production. Locally-specific wheat varieties will also be promoted in target areas. Among others, the cluster targets increasing the use of improved inputs by 60%, the amount of wheat marketed by 74%, and the number of non-farming jobs by 96% within the same time frame.

Primary bottlenecks facing this cluster are the insufficient supply of improved wheat seed that is rust resistant, and relatedly, the spread of wheat rust disease resulting from the absence of an early warning system, as well as an ineffective system of demand assessment for seed and fertilizer that leads to mismatched supply.

To address these (and other) bottlenecks, a number of interventions are already underway, such as building the capacity of research institutions to increase the supply of breeder seed and that of cooperative-based seed producers to provide certified seed. Site-specific fertilizer recommendations are being made to meet farmer’s demand, while ICT based systems are being developed to assist with tracking input delivery and establish an early warning system for wheat rust.

TEF

Twelve woredas and 331 kebeles in the East and West Gojam zones of Amhara are dedicated to the tef cluster, which covers 100,278 hectares and reaches 212,461 farmers. Presently, 4.2 million quintals of tef, or 9% of national production, comes from this cluster, 56% of which is consumed in farmer households while 44% is marketed. Traders play the predominant role in marketing tef from this area, with three farmer unions (Merkeb, Motta and Ghion) playing a secondary role.

By 2020, the cluster aims to generate annual revenues of 99 million USD. Of this total, 677,000 USD will be earned through tef export to the US and Western Europe, with 90% of the products being processed within the cluster and 10% through contractual agreements with processors in Addis Ababa. A further 59 million USD will be earned through domestic sales of tef grain, flour, and injera. These additional revenue streams are expected to increase total revenue by 61%, while a growth of 83% is intended for the amount of tef marketed and a growth of 148% for the amount of processed tef marketed.

Achieving the above stated targets requires addressing the major challenges currently facing the cluster. Among these are a these are lack of effective farm implements and machinery specific and relevant to tef production; poor agronomic practices of farmers (inappropriate seeding rates, planting techniques, use of crop protection technologies, etc.); and high default rates on contract farming agreements due to the absence of enforcement mechanisms.

MALT BARLEY

The malt barley cluster covers six woredas and 32 kebeles of the North Shewa zone, engaging 42,220 farmers. In addition to barley, sorghum, tef, and wheat are also grown extensively in the area. The Gondar Malt Factory, one of only two malting factories in Ethiopia, sources barley from this cluster, but the supply does not fully satisfy the demand of breweries.

The vision for this cluster is to generate annual revenues of 16 million USD by 2020 through domestic sales of malt barley grain, malt, and beer in the country. Malt barley import substitution will account for two million USD of this total, with 50% product processing within the cluster and 50% through contractual agreements with processors in Gondar. A number of targets have been set for the same five year period to aid this cluster in achieving its vision: increasing the amount of marketed malt barley by 164%, agro-processing capacity by 140%, total revenue by 84%, and ultimately raising annual farmers’ incomes by 138%.

The low level of domestic malting capacity is a challenge for this cluster, as are limited access to extension services and the inefficiencient distribution system for agro-chemicals, to name just a few. Attempts to address these obstacles include expanding malting capacity through greenfield investments, improving farmers’ agronomic practices through wider delivery of extension services, and ensuring that balanced fertilizers are available to smallholders in the cluster.

Key Progress

Considerable progress has been made in reaching farmers with the inputs and training needed to increase production and productivity across all pilot clusters. Integration with Transformation Agenda Deliverables and Sub-deliverables have yielded positive results.

In the sesame, maize, bread wheat, and tef clusters, the IVS system has supported the effort by granting over 4.5 million USD worth of input credit to smallholder farmers.

In the maize cluster led by the regional government, 217 experts were trained on the basic principles of the DSM modality, and 234 marketing agents were trained on the business quality and quarantine aspects of seed sales. DSM is intended to be active in 27 woredas.

Training on tef agronomic best practices has been conducted in Debre Markos as part of the linkage with the TIMA project.

An IVR / SMS system has been introduced in three bread wheat woredas to help farmers access agronomic best practices information via mobile phones.

Market linkages have been created with a number of institutions through the CBM initiative, which has facilitated capacity building and technical support provision to five FCUs, and the purchase of a combined 40,672 quintals of grain from these unions.

Additionally, five unions have delivered 47,700 quintals of maize grain to WFP through contractual agreement Ghion Union has delivered 8,524 quintals of tef grain to universities.

Five more unions and 25 PCs have delivered 47,973 quintals of malt barley grain to the Gondar Malt Factory. The regional and federal food security offices also purchased 7,941 quintals of maize and 71,606 quintals of wheat from unions.

Challenges 

During the first year of ACC implementation, the sesame commodity proved to be the most challenging. Among the obstacles faced were international price failure (which also affected bread wheat); the absence of processing plants and financing for inputs, operations, and output marketing; and a lack of mechanization services.

Fertilizer-related problems affected the maize scale-up and ITV, which suffered from the untimely delivery of urea. Shortage of improved seed was a challenge for the bread wheat cluster, where farmers resorted to using their own uncertified seed. Meanwhile, the untimely delivery of malt barley seed affected both that cluster and overall scale-up and ITV.

Overall, the biggest challenge faced by all commodities has been the lack of mechanization to increase efficiency and production and decrease post-harvest loss, thereby hampering the improvement of the farming system throughout the value chain.