Ethiopia Value Chain Roadmap for Pulses 2016-2020

ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES 2016-2020

ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES

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, Switzerland Postal address : ITC Palais des Nations 1211 Geneva, Switzerland Telephone : + 41- 22 730 0111 Postal address : ITC, Palais des Nations, 1211 Geneva, Switzerland Email : [email protected] Internet : http :// www.intracen.org

Layout: Jesús Alés – www.sputnix.es v

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 represents the ambitions of the private and public sector stakeholders for the development 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. R ao

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. vi

CONTENTS

Acknowledgments v

EXECUTIVE SUMMARY XIV

GLOBAL TRENDS IN PULSES 19 Global 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 vii

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 viii

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 ix

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 x

ACRONYMS

The following abbreviations are used :

ADLI Agricultural Development Led GSP Generalized Scheme of Preferences Industrialization GTP Growth and Transformation Plan AGOA African Growth and Opportunity Act ha Hectares ATA Ethiopian Agricultural Transformation ICRISAT International Crops Research Institute Agency for the Semi-Arid Tropics BoA Bureau of Agriculture IPM Integrated Pest Management CAGR Compound Annual Growth Rate ITC International Trade Centre COMESA Common Market for Eastern and Southern MFN Most Favoured Nation Africa MoA Ministry of Agriculture CRGE Ethiopian Climate Resilient Green Economy PASDEP Plan for Accelerated and Sustainable ECX Ethiopian Commodity Exchange Development to End Poverty EGTE Ethiopian Grain Trade Enterprise PoA Plan of Action EIAR Ethiopian Institute of Agricultural Research RARI Regional Agricultural Research Institute ENAO Ethiopian National Accreditation Office SITA Supporting Indian Trade and Investment EPOSPEA Ethiopian Pulses, Oilseeds and Spices in Africa Processors-Exporters Association SNNPR Southern Nations, Nationalities, ESE Ethiopian Seed Enterprise and Peoples’ Region EU European Union SNV Netherlands Development Organization FAO Food and Agricultural Organization TL III Tropical Legumes III project of the United Nations USAID United States Agency for International FCA Federal Cooperative Agency Development FDI Foreign Direct Investment WEF World Economic Forum GCC Gulf Cooperation Council WTO World Trade Organization GDP Gross Domestic Product xi

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. xii

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 implementation 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. xiii

FOREWORD

ITC MS ARANCHA GONZALEZ

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DDDDDDDDDD 2.0) DDDD DDDDDDDDD Y-SA DDDDDD C B DDDD : (C DDDD oto DDD Ph DDD DDD DD DD DDD DD D DD DD EXECUTIVE SUMMARY DD D D, A AA A A A AA A AA A AA A AA A A A AA A The objective of this roadmap is to improve the performance of Ethiopia’s A pulses sector by raising productivity and improving its internal organization while preserving the environment and contributing to the developmental dividend. 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 simultaneously achieving three developmental goals – reducing poverty, improving human health and nutrition, and enhancing ecosystem resilience.

Pulses’ nutritional value and versatile use has rendered them a hot commodity 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 continent 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 increase, 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. xv

DDDDDDDDDD 2.0) DDDD DDDDDDDDD Y-SA DDDDDD C B DDDD : (C DDDD oto DDD Ph DDD DDD As Ethiopia’s pulses sector has grown, so have its export markets. DD DD DDD Between 2001 and 2014, the number of markets with sales val- DD DD ued above US $ 1 million grew from six to 31. Thus, Ethiopia DD DD DD is clearly gaining ground in many markets. However, it D, A AA A has still not capitalized on all opportunities and should A A AA focus on the Indian and Chinese markets within the A AA A AA next five years. A AA A A A AA A A Constraints on the pulses sector

The roadmap unveils a wide set of constraints 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.

[ EXECUTIVE SUMMARY ] xvi

It continues to describe six causes of the sector’s limited competitiveness and inability 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 competitive 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 required 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 information 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 objectives. 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, Green Lentils.jpg 19

GLOBAL TRENDS IN PULSES

Pulses are the edible dry mature seeds of leguminous that increased consumption of pulses decreases the risk of crops, excluding those harvested for fresh products, which colorectal cancer.9 are classified as vegetables.1 Pulses include dry beans, dry Pulses are also used globally as animal feed because of peas, dry broad beans, chickpeas, lentils, cow peas, pi- their high protein content.10 Thus, they are increasingly serv- geon peas, lupins, vetches and pulses.2 This excludes green ing emerging countries, which are increasing their consump- beans and green peas, which are considered vegetable tion of meat. In addition, because pulses are leguminous crops.3 Also excluded are crops that are mainly grown for oil plants that have nitrogen-fixing properties, including pulses extraction ( oilseeds like soybeans and peanuts ), and crops in farming rotation will replenish the soil with oxygen that which are used exclusively for sowing ( clovers, alfalfa ).4 crops like corn deplete from the soil. Thus, pulses increase Pulses are very high in protein and fibre, and are low soil fertility and have a positive impact on the environment.11 in fat. Like their cousins in the legume family, pulses are The importance of pulses makes them ideal crops for nitrogen-fixing crops that improve the environmental sustain- simultaneously achieving three developmental goals – re- ability of annual cropping systems. ducing poverty, improving human health and nutrition, and Because of their versatility and nutritional value, the glob- enhancing ecosystem resilience. al market for pulses is large and rapidly increasing. Indeed, the Food and Agricultural Organization of the United Nations GLOBAL PRODUCTION OF PULSES ( FAO ) and its Member states declared 2016 the International Year of Pulses.5 According to the FAO Statistics Division, This section provides analysis of global trends and sheds roughly two-thirds of pulses are used for human consump- light on pulse crop production, price, trade and consumption, 20 % to feed animals, and the remainder is used as tion patterns observed globally. As mentioned above, pulses seeds.6 include dry beans, dry peas, dry broad beans, chickpeas,12 Pulses are a vital source of proteins and amino acids lentils, cow peas, pigeon peas, lupins, vetches and pulses.13 for humans.7 Pulses are a large part of many countries’ Pulses are produced globally. Typically, especially in devel- traditional diets and are the main protein source for lower- oping countries, pulse crops are planted on marginal land income people worldwide. They also have medicinal value. and often grown under rain-fed conditions.14 This explains In a 2014 study, Canadian doctors found that ‘dietary pulse their low yields and large year-to-year production variability.15 intake significantly reduces low-density lipoprotein choles- Production of the major pulses ( except dry peas ) is con- terol levels.’8 Another study conducted in 2015 demonstrated centrated in developing countries, which account for 70 % of production.16 Dry pea production is dominated by developed countries, accounting for over 80 % of global dry pea output. Since 1980 global trade of pulses has exhibited an

1.– Food and Agriculture Organization of the United Nations ( 2002 ). Agricul- tural Commodities : Profiles and Relevant WTO Negotiating Issues, chapter 9.– Beibei Zhu, Yu Sun, Lu Qi, Rong Zhong and Xiaoping Miao ( 2015 ). 1 – Basic Foodstuffs : Grains. Rome : FAO. Available from : https : / / www.fao. Dietary legume consumption reduces risk of colorectal cancer : evidence org / docrep / 006 / y4343e / y4343e02.htm. from a meta-analysis of cohort studies, Nature.com, 5 March. Available from 2.– Ibid. https : / / www.nature.com / articles / srep08797?WT.ec_id=SREP-692-20150310. ( The study broadly encompassed legumes, which they defined as ‘a diverse 3.– Pulse Canada ( 2015 ). What is a pulse? Available from https : / / www. group of foods, including soybeans, peas, beans, lentils, peanuts, and other pulsecanada.com / about-us / what-is-a-pulse. podded plants, which are widely cultivated and consumed.’ Most of these 4.– Food and Agriculture Organization of the United Nations ( 1994 ). Definition also qualify as pulses. ) and classification of commodities –pulses and derived products. Available 10.– Food and Agriculture Organization of the United Nations ( 2015 ). 2016 from https : / / www.fao.org / es / faodef / fdef04e.htm. International Year of Pulses website. Available from https : / / www.fao.org / puls- 5.– The International Year of Pulses aims to recognize pulses’ nutritional ben- es-2016 / en / . efits, their importance for food security in developing countries, and their posi- 11.– Ibid. tive impact on soil fertility when used in rotation with other crops. 12.– Available from https : / / www.cgiar.org / our-strategy / crop-factsheets / chick- 6.– Food and Agriculture Organization of the United Nations ( 2015 ). 2016 pea / . International Year of Pulses website. Available from https : / / www.fao.org / pulses-2016 / en / . 13.– Food and Agriculture Organization of the United Nations ( 2002 ). Agricultural Commodities : Profiles and Relevant WTO Negotiating Issues, 7.– Ibid. chapter 1 – Basic Foodstuffs : Grains. Rome : FAO. Available from https : / / www. 8.– Ha, V. and others ( 2014 ). Effect of dietary pulse intake on established fao.org / docrep / 006 / y4343e / y4343e02.htm. therapeutic lipid targets for cardiovascular risk reduction : a systematic review 14.– Ibid. and meta-analysis of randomized controlled trials. Canadian Medical Associa- tion Journal, 17 April. Available from https : / / www.ncbi.nlm.nih.gov / pmc / arti- 15.– Ibid. cles / PMC4016088 / pdf / 186e252.pdf. 16.– Ibid.

[ GLOBAL TRENDS IN PULSES ] 20

annual growth rate of 7 %, which translates into an annual Global trade in pulses is not a residual market, as several increase of roughly 5 million tons.17 The proportion of pulse countries produce for the export market while many others production that is traded increased from 6 % to 7 % in the rely on the world market to meet domestic demand. The early 1980s to about 15 % currently.18 largest markets for food pulses are in Bangladesh, India, As demonstrated in figure 2, dry peas are the most-trad- Pakistan and Sri Lanka, while the largest market for feed ed pulse with a 37 % share of the total pulse trade, followed pulses is the European Union ( EU ).20 by dry beans ( 28 % ), lentils ( 9 % ) and chickpeas ( 8 % ).19

17.– Ibid. 18.– Ibid. 19.– Ibid. 20.– Ibid.

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

Avg.12-13 Avg. 08-09

Pulses Peas dried, shelled…(071310) Kidney &white pea beans …(071333) Lentils dried, shelled…(071340) Chickpeas, …(071320) Mung,black/green gram…(071331) Leguminous vegetables..nes(071390) Broad beans&horse beans..(071350) Beans dried, shelled... nes(071339) Beans,small red (Adzuki) 0 2.000.000 4.000.000 6.000.000 8.000.000 10.000.000

S ource: International Trade Centre ( 2015 ). N o t e : 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 For example, as seen in figure 3, although Asia is the region trends for this crop are determined by importing countries’ that imports the most pulses, not all categories of pulses local production and by production in exporting countries, have Asia as the leading importing region. The reasons both of which are affected by weather conditions, manage- underpinning these trends depend not only on the specif- ment of plagues, price increases of other crops ( as farmers ics of the product, but also on the value chain in which the can be compelled to move towards a higher rent crop ) and commodity has been used as input and the end market. countries’ trade policies ( such as export incentives ). Such Evaluating a country’s trade participation in any segment, characteristics are reflected in the sector’s trade data ; in therefore, should be conducted in a holistic fashion. other words, unstable flows are observed in world trends.

[ ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES ] 21

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

S ource: International Trade Centre ( 2015 ).

Top exporters of pulses On the supply side, the pulses sector has seen an increase in the number of exporters and suppliers during the last five In the past three decades there has been impressive growth years. The number of countries with export values above in the global exports of pulses. A 2004 FAO study observed US $ 1 million went from about 70 in the early 2000s to 78 that exports of these crops doubled in 2003 in compari- in 2008, and reached 90 in 2013. The two leading export- son with the previous 20 years.21 In subsequent years, the ers of pulses, Canada and China, increased the value of trend continued along the same path. Between 2004 and their exports almost every year. Other leading suppliers are 2008, annual percentage growth varied from 10 % to 35 %. catching up rapidly. Countries such as Australia, India and The compound annual growth rate ( CAGR ) between 2004 the Russian Federation have shown growth in double digits and 2008 was 22 %. By 2013, pulse exports reached a re- and have expanded their share. cord high of US $ 9,425,000,000. This may be surpassed in Another country that is carving a path in international 2014 as available trade values are already close to those markets is Kenya. This is the only country with export values of 2013, and the trade data for pulses of many countries is above US $ 10 million with a triple-digit CAGR between 2009 still missing. and 2013 ( it was 111 % ), and a rising market share ( from 0.1 Such trends on the supply side may be explained by in 2008–2009 to 0.4 in 2012–2013 ). Notwithstanding Kenya’s increased yields, especially in developed countries, and the remarkable growth over the decade – 59 % CAGR between surge in cultivated areas ( chiefly led by developing coun- 2004 and 2013 – trade flows during that period saw extreme tries ). On the demand side, the trends may be explained by peaks. For example, in 2009, exports fell below US $ 10 mil- the increasing world population, the increased consumption lion and reached US $ 59 million in 2013. of meat in developing countries, and by greater importance Ethiopia is also keeping up, as it is the leading African being given to pulses’ nutritional value around the globe. 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. 21.– Food and Agriculture Organization of the United Nations ( 2005 ). Pulses : Past Trends and Future Prospects. Summary of paper contributed Table 1 provides further details of today’s world-leading by FAO to the Fourth International Food Legumes Research Conference, exporters of pulses. Average values were preferred to single New Delhi, 18–22 October. Available from https : / / www.fao.org / filead- years because of the volatility of trends that characterize the min / templates / est / COMM_MARKETS_MONITORING / Pulses / Documents / PulsesStudy.pdf. sector, and to present a more accurate picture.

[ GLOBAL TRENDS IN PULSES ] 22

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

Share Average CAGR CAGR Rank Exporter 2012–2013 ( 2004–2013 ) ( % ) ( 2009 – 2013 ) ( % ) Average Average 2008–2009 ( % ) 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

S ource: International Trade Centre ( 2015 ).

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

10.000.000 9.000.000 World 8.000.000 Americas 7.000.000 6.000.000 Asia 5.000.000 Oceania

4.000.000 Europe

3.000.000 Africa 2.000.000 CIS* 1.000.000 GCC** - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2004

S ource: International Trade Centre ( 2015 ). * 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.

[ ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES ] 23

As table 1 shows, Ethiopia and the United Republic of such programmes by finding their position and proper strat- Tanzania are the only African countries growing at double egy to increase production and add value to their produce. 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 TOP MARKETS FOR PULSES its population lives in rural areas and depends on agriculture. Stakeholders aiming to develop the pulses sector in From 2004 to 2012, the demand for pulses witnessed a Africa may consider examining Ethiopia and the United steady, two-digit annual percentage change. In 2012 and Republic of Tanzania’s success stories and the factors 2013, increases were estimated at 7 % and 5 %, respectively. impeding further development of the sector. Stakeholders India is by far the largest importer of pulses over the across the region may also consider joining forces because past decade,27 as it accounts for about 23 % to 25 % of low yields, low productivity and limited access to quality world imports. Specifically, India’s imports increased from seeds are issues that most African countries must resolve. US $ 1,459,000,000 in 2008 to US $ 2,291,000,000 in 2013.28 In addition, government policies and entrepreneurial prac- The high demand for pulses is due to its vegetarian popula- tices also dictate the destiny of the sector. Thus, cooperation tion, the increase of purchasing power across its poorest across countries could provide the level playing field from population, and unfavourable local weather conditions.29 which African countries could escalate their share in the in- This is clearly a county that is worth exploring further, be- ternational pulses market. cause it is one of the world’s most populated countries, its Although African countries have yet to make the cut economy is booming, and a greater demand may be fore- among leading suppliers, the continent is attracting more seen in both the near and the long term. investors in agriculture as production costs ( such as labour ) Another country that has shown an impressive rise of are rising in some Asian markets ( notably China ), emerging demand for pulses during the past five years is China. Since countries’ policies are shifting towards knowledge-based 2010, China has been the world’s second-largest importer of sectors, and the agricultural sector is seen by many as a pulses. Its CAGR between 2009 and 2013 was 50 %, and its profitable business at present and in the future. In fact, the share in world markets has risen from a 2 % average for the sector could seize the opportunity provided by initiatives of years 2008–2009 to a 6 % average for 2012–2013.30 reputed organizations with international reach, such as the Other countries that have also increased their demand World Economic Forum ( WEF ) New Vision for Agriculture.22 and expanded their market share are, in descending order : The WEF New Vision for Agriculture programme sup- Brazil, Algeria, Saudi Arabia, Canada, Indonesia, Sudan ports multi-stakeholder partnerships in 11 countries across and South Sudan. It would be interesting to look further into Africa, Asia and Latin America – including Kenya, Ethiopia these countries’ production, government policies ( including and the United Republic of Tanzania. Similarly, in partner- preferential access ) and factors driving growth.31 ship with the African Union and the New Partnership for India is also a large exporter of pulses, ranking seventh African Development, WEF began the Grow Africa partner- in the world. This may be explained by the creation of vari- ship.23 This partnership connects producers and investors, ous governmental incentives within the last five years that and facilitates the use of best practices.24 Thus far, invest- advance the sector. Brazil, Algeria, Saudi Arabia, Indonesia, ment commitments within the Grow Africa partnership have Sudan and South Sudan are also net exporters of pulses.32 more than doubled to a total of US $ 7.2 billion, with most Table 2 provides information on importers of pulses to be converted in the next three to five years.25 The 2014 whose international demand, on average for 2012–2013, Grow Africa annual report stated that in Ethiopia alone, was above US $ 100 million. there has been US $ 29 million in agricultural investments.26 Stakeholders may want to capitalize on the momentum of 27.– Reddy, A.A., Bantilan, M.C.S. and Mohan, G. ( 2013 ). Pulses production scenario : policy and technological options. Policy Brief No. 26. Documen- 22.– World Economic Forum ( 2015 ). New vision for agriculture. Available from tation. International Crops Research Institute for the Semi-Arid Tropics, Pa- https : / / www.weforum.org / projects / new-vision-agriculture. tancheru, Andhra Pradesh, India. Available from http : / / oar.icrisat.org / 6812 / . 23.– For more on GrowAfrica see https : / / www.weforum.org / projects / grow- 28.– Shalendra, Dr ( 2012 ). Marketing of Pulses in India. Jaipur : CCS National africa. Institute of Agricultural Marketing. Available from https : / / www.ccsniam.gov. in / research / 2013-research %20report %20on %20pulses.pdf. 24.– For more on GrowAfrica see https : / / www.weforum.org / projects / growafrica. Best practices – a set of guidelines, ethics or ideas that represent the 29.– Reddy, A.A., Bantilan, M.C.S. and Mohan, G. ( 2013 ). Pulses production most efficient or prudent course of action – are often set forth by an authority, scenario : policy and technological options. Policy Brief No. 26. Documen- such as a governing body or management, depending on the circumstances. tation. International Crops Research Institute for the Semi-Arid Tropics, Pa- While best practices generally dictate the recommended course of action, tancheru, Andhra Pradesh, India. Available from http : / / oar.icrisat.org / 6812 / . some situations require that such practices be followed. Read more about 30.– Ibid. best practices at https : / / www.investopedia.com / terms / b / best_practices. 31.– Food and Agriculture Organization of the United Nations ( 2012 ). FAO Sta- asp#ixzz3mjyzd4jN. tistical Yearbook 2012 : part 3 : feeding the world. Available from https : / / www. 25.– World Economic Forum ( 2014 ). Grow Africa Annual Report. Availa- fao.org / docrep / 018 / i3107e / i3107e03.pdf. ble from https : / / www.3.weforum.org / docs / IP / 2014 / GA / WEF_GrowAfrica_ 32.– Shalendra, Dr ( 2012 ). Marketing of Pulses in India. Jaipur : CCS National AnnualReport2014.pdf. Institute of Agricultural Marketing. Available from https : / / www.ccsniam.gov. 26.– Ibid. in / research / 2013-research %20report %20on %20pulses.pdf ;

[ GLOBAL TRENDS IN PULSES ] 24

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

Share Average CAGR CAGR CAGR ( average 2008– Rank Importer 2012–2013 ( 2004–2013 ) ( % ) ( 2009–2013 ) ( % ) 2009 to 2009–2013 ) ( % ) Average Average 2008–2009 ( % ) 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

S ource: International Trade Centre ( 2015 ). Trade data disaggregated by region illustrates the rising de- Asia, GCC and Africa are already partnering with countries in mand for pulses not only in Asia, but also in Africa and Gulf Africa in agriculture and agro-industry.36 However, the pulses Cooperation Council ( GCC ) members.33 The CAGR for im- sector is still underdeveloped in most African countries.37 ports of pulses between 2009 and 2013 in the last two regions To unlock the potential of the pulses sector, high-growth has been at double digits, at 10 % and 14 %, respectively.34 potential markets must be identified, understood and target- These three regions are particularly interesting for African ed.38 This would allow the drafting of compelling investment countries due to their geographical proximity and their po- projects that would probe project viability. In addition, these tentially stable demand. This demand may occur because projects would also be aligned with Ethiopia’s national de- pulses are used in traditional foods, the increased purchas- velopment objectives. ing power of the poor, population growth and government Regarding the specific case of expanding exports within policies encouraging production of pulse crops. and from Africa, it would be beneficial for African governments In 2012 and 2013, Ethiopia’s share in Asia’s imports hov- to find common ground on cooperation and the promotion of ered at 1.5 %, in Africa at 4.3 % and in GCC at 3 %. In 2013, pulses, and build on their existing agreements. Such collabora- Ethiopia’s share in Commonwealth of Independent States tion could unleash their competitive advantage – notably in terms countries amounted to 14 %.35 Investors and buyers from of costs – and could promote the development of segments with higher added value, as well as diversifying end markets.

33.– GCC members include Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain and Oman. 36.– World Trade Organization ( 2015 ). International Trade Statistics 2014. Availa- 34.– International Trade Centre ( 2015 ). Trade Map Database. Available from ble from https : / / www.wto.org / english / res_e / statis_e / its2014_e / its2014_e.pdf. https : / / www.trademap.org / Index.aspx. Accessed 19 August 2015. 37.– Ibid. 35.– The Commonwealth of Independent States are Azerbaijan, Armenia, 38.– This means understanding of their needs and constraints, such as iden- Belarus, Kazakhstan, Kyrgyzstan, the Republic of Moldova, the Russian Fed- tifying the seasons in which they face the greatest deficit, singling out distri- eration, Tajikistan, Turkmenistan, Uzbekistan and Ukraine. butional channels, and so on.

[ ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES ] 25

PULSES IN ETHIOPIA

VALUE CHAIN ANALYSIS

A value chain describes the full range of activities necessary sector also generates over 70 % of export values and em- for moving a product or service from conception through ploys 85 % of the population.46 the different phases of production, delivery to final con- The pulses sector is the second-largest component of sumers and final disposal after use.39 Value chains act as Ethiopia’s agricultural sector and contributes immensely frameworks for understanding how a sector works, and for to the country’s economic growth, second only to cof- finding relevant issues and formulating proper solutions.40 fee.47 According to recent export performance data for the Value chain analysis, therefore, is a proper mechanism to 2013 / 14 fiscal year, the pulses, oilseeds and spices subsec- understand how Ethiopian pulse crop farmers may engage, tor contributed US $ 920 million to Ethiopia’s export earnings improve the effectiveness and quality of their inputs and, with a share of over 28 %.48 Ethiopia produces more than ultimately, increase their exports.41 400,000 tons of chickpea annually and is the sixth-largest With over 90 million inhabitants, Ethiopia is the most chickpea producer in the world.49 populous landlocked country in the world, as well as the The strategy under development by all key stakeholders second most populated nation on the African continent.42 It in Ethiopia’s Agricultural Transformation Agenda envisions occupies a total area of 1.1 million square kilometres and is the creation of an efficient and well-functioning value chain in the world’s twenty-seventh-largest country.43 Ethiopia is sub- the country’s pulses sector.50 To achieve this, all value chain Saharan Africa’s fifth biggest economy with promising signs actors must be well-integrated and unified.51 The pulse value of growth in the future.44 In 2013, agriculture accounted for chain, however, is lacking integration and unification. This 43 % of Ethiopia’s GDP and 51 % in 2007.45 The agricultural value chain analysis, shown in figure 5, attempts to identify the various impediments in order to develop possible solutions to help Ethiopia achieve its goal of having an efficient and well-functioning value chain in the pulses sector. 39.– Kaplinsky, R. and Morris, M. ( 2001 ). A Handbook for Value Chain Re- As seen in figure 5, the value chain is divided into five search. Ottawa : International Development Research Centre. Available from https : / / www.value-chains.org / dyn / bds / docs / 395 / Handbook %20for %20Val- broad stages : input, production, assembly, processing and ue %20Chain %20Analysis.pdf. markets. A characterization of each stage and general chal- 40.– Mitchell, J., Coles, C. and Keane, J. ( 2009 ). Upgrading Along Value lenges faced in each stage of the value chain are elaborated Chains : Strategies for Poverty Reduction in Latin America. Overseas Develop- below. 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- 46.– Ibid. ; Ethiopia, Agricultural Transformation Agency. Available from htt- sis. UNCTAD / DIAE / 2013 / 1. Available from http : / / unctad.org / en / Publication- ps : / / www.ata.gov.et / programmes / value-chains / pulses / . sLibrary / diae2013d1_en.pdf. 47.– United States Agency for International Development ( 2014 ). USAID works 41.– Mitchell, J., Coles, C. and Keane, J. ( 2009 ). Upgrading Along Value to strengthen Ethiopia’s pulses, oilseeds and spices sector, November 12. Chains : Strategies for Poverty Reduction in Latin America. Overseas Develop- Available from https : / / www.usaid.gov / ethiopia / press-releases / usaid-works- ment Institute. Available from https : / / www.odi.org / sites / odi.org.uk / files / odi- strengthen-ethiopias-pulses-oilseeds-and-spices. assets / publications-opinion-files / 5654.pdf : Herr, M.L. ( 2007 ) Local Value 48.– Precise Consult International ( 2014 ). Nation working to expand pulses, Chain Development for Decent Work : An Operational Guide. Geneva : Interna- oil seeds market linkages, 13 November. Available from http : / / preciseethiopia. tional Labour Office. Available from https : / / www.ilo.org / wcmsp5 / groups / pub- com / nation-working-to-expand-pulses-oilseeds-market-linkages / . lic / ---ed_emp / ---emp_ent / ---.ifp_seed / documents / instructionalmateri- 49.– United States Agency for International Development ( 2014 ). USAID works al / wcms_115490.pdf. to strengthen Ethiopia’s pulses, oilseeds and spices sector, November 12. 42.– International Federation of Freight Forwarders Associations ( 2015 ). Available from https : / / www.usaid.gov / ethiopia / press-releases / usaid-works- FIATA Review, No. 108, July. Available from http : / / fiata.com / fileadmin / user_ strengthen-ethiopias-pulses-oilseeds-and-spices ; Parkinson, N.J. ( 2015 ). upload / documents / fiata_reviews / FIATA_Review_Nr._108_-_July_2015.pdf. Why Ethiopia just got its 1st industrial chickpea processor Now?, 26 August. 43.– Ibid. Available from https : / / www.linkedin.com / pulse / ethiopia-get-its-first-industrial- 44.– Ibid. ; Deloitte & Touche ( 2013 ). The “new” economies in Africa. Deloitte chickpea-processor-parkinson. on Africa Collection, Issue 5.Available from https : / / www.2.deloitte.com / con- 50.– Ethiopia, Agricultural Transformation Agency. Available from https : / / www. tent / dam / Deloitte / au / Documents / international-specialist / deloitte-au-aas- ata.gov.et / programmes / value-chains / pulses / new-economies-africa-13.pdf. 51.– International Food Policy Research Institute ( 2010 ). Pulses value chain in 45.– International Federation of Freight Forwarders Associations ( 2015 ). Ethiopia : constraints and opportunities for enhancing exports. Working Paper, FIATA Review, No. 108, July. Available from http : / / fiata.com / fileadmin / user_ July. Available from http : / / cdm15738.contentdm.oclc.org / utils / getfile / collec- upload / documents / fiata_reviews / FIATA_Review_Nr._108_-_July_2015.pdf. tion / p15738coll2 / id / 8106 / filename / 8107.pdf.

[ PULSES IN ETHIOPIA ] 26

Figure 5 : Value chain of the pulses sector in Ethiopia

Input Production Assembly Processing Markets

International Rain Water State Commercial Consumer 20% Farms 1-2% Unskilled (Very few left) • India Labor • China (abundant) Private • Egypt Commercial Cleaning Seeds International • Pakistan (poor varieties) Farms 2.5% Transporter (Very big) • Bangladesh UK EGTE • Biofertilizers Sorting & grading • Italy ECX • Spain Algeria Assemblers • Manure • Other Brokers Quality control

Land Primary Cooperatives National Consumer 50% Dehusting, splitting (local consumption) Farm Equipment Local Urban Retailers • supermarket Farm Warehousing Smallholder Exporters • National Local Equipment Producers 95% (Processors, ECX, (mechanization) Local (40 Adama) Consumer (8 to 9 Million) Wholesalers EGTE)

Chemical Packaging Fertilizers (small proportion) Regional Wholesalers Marketing & labeling Pesticide and Insecticide (in small Farmers’ proportion) Unions Transformation Subsistence Needs 30% Processors

National Component International Component

Inputs relying on rainwater, not to mention that only 20 % of total available agricultural land is used, mainly in the highlands.54 Ethiopia is endowed with fertile soil and abundant water re- Ethiopia’s pulses sector value chain inputs are character- sources. It is no wonder that agriculture accounts for over ized as land, rainwater, unskilled labour, seeds, biofertilizers, 40 % of its GDP and that the pulses sector accounts for manure and farm equipment. over 13 %. Major pulse crops include chickpeas, red kidney beans and white pea beans.52 Nonetheless, local pulse pro- Rainwater duction is characterized as labour-intensive and low-input, and is rain-fed.53 Because of these inefficiencies, production Ethiopia’s two extreme seasons are the summer or kit remp is low. However, the potential for increasing production is ( the rainy season between June and August ) and the win- tremendous. Productivity per hectare ( ha ) could be dou- ter or bega season ( the dry season between December bled simply with increased use of fertilizers, the use of better and February ). It is during the three summer months that quality seeds, and the use of irrigation systems rather than

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 52.– Netherlands African Business Council and FME-CWM ( n.d. ). Business &source=web&cd=2&cad=rja&uact=8&ved=0CCgQFjABahUKEwjE4bfQ Opportunity Report : Oilseeds and Pulses. Available from https : / / www.nabc. p9HIAhUDaxQKHQYJC0k&url=http %3A %2F %2Fwww.fao.org %2Fnr %2Fla- nl / uploads / content / files / BOR %20Oilseeds %20 %26 %20Pulses %20- %20 da %2Findex.php %3Foption %3Dcom_docman %26task %3Ddoc_down- Final(. 1 ).pdf load %26Itemid %3D165 %26gid %3D477 %26lang %3Den&usg=AFQjCNH6 53.– Ibid. 1XzdNene954T2fTiR10EGLLnzA.

[ ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES ] 27

most of the country receives at least 90 % of its total annual horse beans, chickpeas, haricot beans, lentils, dry peas, rainfall.55 The drought that results from the winter season is vetches and mung beans.63 thought to be the environmental stressor of greatest concern in the highlands of Ethiopia.56 Autumn or belg, which Biofertilizer & manure takes place from September to November, is the harvest season.57 Meher season, the main planting season, which Ethiopian smallholder farmers’ typically apply two types of takes place from April to June. Finally, spring or tseday oc- fertilizers : chemical fertilizers ( i.e., urea and diammonium curs from March to May and is the hottest season, with spo- phosphates ) and fertilizers from manure and crop residuals. radic showers.58 The high-quality chemical fertilizers are imported from an in- Smallholders, the backbone of the pulses sector, rely ternational provider, which makes access to these products on rainwater for their crop irrigation. Because of the low reli- limited and costly. Thus, most smallholder farmers rely on ability of rainwater for crop irrigation and the lack of drainage manure-based fertilizers.64 Unfortunately, according to local systems, it is not uncommon for full crop losses to occur in farmers, the preparation of this type of fertilizer is also costly high rainfall areas.59 because it is labour intensive. As a result there is limited, or often lack of, fertilizer use.65 Unskilled labour Land According to World Bank’s data, Ethiopia’s total labour force was measured at 45,145,776.60 Of these, 80 % to 85 % are Ethiopia has a total area of 112 million ha. Only 15 % of this employed in farming. Thus the availability of human labour is arable and only 1 % is currently cultivated.66 Pulses are is not the issue. Rather, it is the lack of best practices knowl- grown throughout Ethiopia and account for roughly 13 % of edge and resources that disable the potential and current cropped land area. However, production is concentrated in human labour to reach their full potential. What is more, the Amhara and Oromia regions.67 Together, these areas drought, lack of availability of productive land and the poor account for 92 %of chickpea production, 85 % of faba bean productivity of available land often lead these labourers to production, 79 % of haricot bean and white pea bean pro- migrate into urban areas.61 duction, and 79 % of field pea production.68

Seeds Farm equipment

‘The Ethiopian Seed Enterprise ( ESE ) was established in Ethiopia’s agriculture is characterized by its low level of 1979 as a fully Government-owned parastatal to undertake mechanization. Land preparation on smallholdings is typi- seed production, processing and distribution, while regula- cally done with oxen. Tillage performed three times is rec- tory functions were managed by the Ministry of Agriculture ommended to create a fine seedbed, but in practice labour and Rural Development.’62 Pulse seed varieties include and oxen are limited during the sowing season,69 leading to shortages.70

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 63.– Sutton, J. and Kellow, N. ( 2010 ). An Enterprise Map of Ethiopia. London : Migration Review, Issue 31, October. Available from https : / / www.fmreview. International Growth Centre. Available from http : / / personal.lse.ac.uk / sutton / org / FMRpdfs / FMR31 / 28-29.pdf. Enterprise_Map_Ethiopia_Book.pdf. 57.– Wordpress.com ( 2011 ). The science of rainy season and the problem 64.– Gebre-Selassie, A. and Bekele, T. ( 2012 ). A review of Ethiopian agricul- of drought in Ethiopia, 31 August. Available from https : / / threepotsofbuna. ture : roles, policy and small-scale farming systems. In Global Growing Case- wordpress.com / 2011 / 08 / 31 / the-science-of-rainy-season-and-the-problem- book. Global Growing Campaign. Available from http : / / global-growing.org / of-drought-in-ethiopia / . sites / default / files / GGC _Ethiopia.pdf. 58.– Ibid. 65.– Ibid. 59.– Netherlands African Business Council and FME-CWM ( n.d. ). Business 66.– Netherlands African Business Council and FME-CWM ( n.d. ). Business Opportunity Report : Oilseeds and Pulses. Available from https : / / www.nabc. Opportunity Report : Oilseeds and Pulses. Available from https : / / www.nabc.nl / nl / uploads / content / files / BOR %20Oilseeds %20 %26 %20Pulses %20- %20 uploads / content / files / BOR %20Oilseeds %20 %26 %20Pulses %20- %20Final Final(. 1 ).pdf (. 1 ).pdf 60.– Netherlands African Business Council and FME-CWM ( n.d. ). Business 67.– Netherlands African Business Council and FME-CWM ( n.d. ). Business Opportunity Report : Oilseeds and Pulses. Available from https : / / www.nabc. Opportunity Report : Oilseeds and Pulses. Available from https : / / www.nabc. nl / uploads / content / files / BOR %20Oilseeds %20 %26 %20Pulses %20- %20 nl / uploads / content / files / BOR %20Oilseeds %20 %26 %20Pulses %20- %20 Final(. 1 ).pdf Final( 1 ).pdf 61.– Morrissey, James ( 2008 ). Rural–urban migration in Ethiopia. Forced Mi- 68.– Ibid. gration Review, Issue 31, October. Available from https : / / www.fmreview.org / 69.– Gebre-Selassie, A. and Bekele, T. ( 2012 ). A review of Ethiopian agri- FMRpdfs / FMR31 / 28-29.pdf. culture : roles, policy and small-scale farming systems. In Global Growing 62.– Kassie, M. and other ( 2009 ). Current Situation and Future Outlooks of Casebook. Global Growing Campaign. Available from http : / / global-growing. the Chickpea Sub-sector in Ethiopia. Nairobi : ICRISAT & EIAR. Available org / sites / default / files / GGC _Ethiopia.pdf.. from https : / / www.icrisat.org / TropicalLegumesII / pdfs / Current_Situation.pdf. 70.– Ibid.

[ PULSES IN ETHIOPIA ] 28

Ethiopia’s major agricultural imports include agricultural beans ), whole brown lentils, red kidney beans and green machinery.71 However, the purchase and use of modern mung beans.77 machinery such as tractors and combine harvesters is typically limited to large-scale farms.72 This is because of the Processing high cost and low availability of modern farming machinery for smallholder farmers.73 After the assembly phase comes the processing phase. Processing not only adds value to pulses but also main- Production tains the quality, thereby increasing farmers’ confidence in their product.78 Processing is where the product is cleaned, The next step in the value chain is production. This is mostly sorted and graded ; goes through quality control ; is de- undertaken by small and medium-scale farmers and, to a husked and split for local consumption ; is warehoused at limited extent, by large-scale farmers ( i.e. private and state ECX or EGTE ; packaged, marketed and labelled ; and / or commercial farms ).74 Indeed, Ethiopian smallholders are the transformed. backbone of the agricultural sector. They produce approximately 95 % of pulses and number 8 to 9 million farmers.75 Cleaning Private commercial farms lag far behind, accounting for only 2.5 % of pulse production, and state commercial Most of the agricultural research centres and universities farms account for around 1 % of production. Recent policy that are responsible for breeder seed, pre-basic or even ba- changes are the cause of the near extinction of state com- sic seed production, have seed cleaning facilities.79 Similarly, mercial farms. ESE, the Ethiopian Public Health Institute, Farmer-Based Seed Production and Marketing Schemes, and the Swedish Assembly International Development Cooperation Agency Seed Project have seed processing plants and / or cleaners.80 The assembly stage of the value chain involves the process where the producers ( smallholders and commercial farms ) Sorting and grading sell their product to the Ethiopian Grain Trade Enterprise ( EGTE ), assemblers, brokers, primary cooperatives, local re- The Edget Seed Production and Marketing Union has 15 pri- tailers, local and regional wholesalers, farmers’ unions, and mary seed production and marketing cooperative members processors. One popular place to trade these commodities that operate in three Silte zone woredas ( districts ) ( Silte, is the Ethiopian Commodity Exchange ( ECX ). Lanfro and Sankura ) and three woredas in Gurage zone of The ECX is a relatively new initiative for Ethiopia and the the Southern Nations, Nationalities, and People’s Region first of its kind in Africa. It is an organized marketplace where ( SNNPR ) Sodo, Marako and Meskan ), with six and nine buyers and sellers come together to trade and are assured cooperatives, respectively.81 These 15 cooperatives united of quality, quantity, payment and delivery. ECX is jointly gov- in 2009 to facilitate their access to cleaning, sorting, grading erned by a private – public board of directors.76 and warehousing services, and seed marketing.82 The EGTE most typically purchases and exports white pea beans ( haricot beans ), chickpeas, horse beans ( faba

77.– Ethiopian Grain Trade Enterprise ( 2014 ). Export products. Available 71.– Enterprise Canada Network ( 2015 ). Agricultural Technology and Equip- from https : / / www.egte-ethiopia.com / en / products.html ; for more informa- ment Sector Profile – Ethiopia. Available from https : / / www.enterprisecanad- tion on each see Ethiopian Grain Trade Enterprise ( 2014 ). Pulses. Available anetwork.ca / _uploads / resources / Agricultural-Technology-and-Equipment- from https : / / www.egte-ethiopia.com / en / 2014-04-06-10-45-01 / pulses.html. Sector-Profile-Ethiopia.pdf. 78.– Gebeyehu, G., Dabi, G. and Shaka, G. and Bishaw, Z. ( 2001 ). Focus on 72.– Netherlands African Business Council and FME-CWM ( n.d. ). Business Seed Programs : The Ethiopian Seed. West Asia and North Africa ( WANA ) Opportunity Report : Oilseeds and Pulses. Available from https : / / www.nabc. Seed Network Secretariat, International Center for Agricultural Research in nl / uploads / content / files / BOR %20Oilseeds %20 %26 %20Pulses %20- %20 the Dry Areas ( ICARDA ), Aleppo, Syria. Available from https : / / www.goog- Final( 1 ).pdf le.co.uk / url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=2&ved 73.– For a list of importers of Agricultural machinery and equipment in Ethiopia =0CCcQFjABahUKEwixtoyR_ZnIAhUGjnIKHYW9Cm4&url=https %3A %2 see : Enterprise Canada Network ( 2015 ). Agricultural Technology and Equip- F %2Fapps.icarda.org %2FwsInternet %2FwsInternet.asmx %2FDownload- ment Sector Profile – Ethiopia. Available from https : / / www.enterprisecanad- FileToLocal %3FfilePath %3DResearch_publications_archive %2FSeed_sys- anetwork.ca / _uploads / resources / Agricultural-Technology-and-Equipment- tems %2FSeed_Focus %2FFOCUS-Ethiopia.pdf %26fileName %3DFOCUS- Sector-Profile-Ethiopia.pdf. Ethiopia.pdf&usg=AFQjCNGC5680GVSkW8Ibw-fxLb_Jv28mxw. 74.– Sutton, J. and Kellow, N. ( 2010 ). An Enterprise Map of Ethiopia. London : 79.– Ibid. International Growth Centre. Available from http : / / personal.lse.ac.uk / sutton / 80.– Ibid. Enterprise_Map_Ethiopia_Book.pdf. 81.– Alemu, D. ( 2011 ). Farmer-based seed multiplication in the Ethiopian seed 75.– Netherlands African Business Council and FME-CWM ( n.d. ). Business system : approaches, priorities and performance. Working Paper 036, Fu- Opportunity Report : Oilseeds and Pulses. Available from https : / / www.nabc.nl / ture Agricultures Consortium. Available from https : / / www.future-agricultures. uploads / content / files / BOR %20Oilseeds %20 %26 %20Pulses %20- %20Final org / search-documents / research-and-analysis / working-papers / 1554-farmer- ( 1 ).pdf based-seed-multiplication-in-the-ethiopian-seed-system-approaches-priori- 76.– Ethiopia Commodity Exchange ( 2009 ). Website. Available from http : / / ties-performance / file. www.ecx.com.et / . 82.– Ibid.

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Quality control broken and powdery ones. It is also typically done manually using sieves.89 Quality is the major limiting factor for the export of pulses from Africa. The Asian market generally has quality pulses Warehousing but the availability of these at the grass-roots level is not sufficient. The mechanism of quality certification and standardi- Recommended storage techniques imply that pulses must zation is not very common. Hence, the buyer finds it difficult be stored below 25 degrees Celsius and above the freezing to trust that the supplier understands the quality demanded point. Ethiopia is blessed with highlands where the tempera- and will supply the same. Also, each destination country has ture is naturally within this range and, as a result, storage a different quality expectation. Hence, the supplier needs in these locations can naturally reduce postharvest losses. to understand the buyer’s requirements in terms of qual- Both bag-based storage through warehouses and bulk ity and should have the necessary structure to supply the storage through silos and bins can be used. In Ethiopia, the quality. Buyers in international markets prefer to buy from most common method used is storing produce indoors in transnational companies rather than from exporters in Africa, industrially produced sacks.90 This storage mechanism is because transnationals offer a better assurance of quality. not effective as insect and rodent infestations are common threats.91 Dehusking Depending on the weather conditions in storage areas, storage can happen in different ways : in permanent Dehusking or splitting for local consumption. Pulses are structured warehouses, in refrigerated warehouses or even mainly consumed in the form of dehusked split pulses.83 in the open. In the warehouse-based storage system, pe- Dehusking is a process that reduces the fibre content and riodic checks and spraying of insecticides is important. If improves the appearance, texture, cooking quality, palat- a silo system is used, then silos made from metal sheet ability and digestibility of the pulse.84 or concrete can be used. Proper ventilation to reduce the Emery rollers are typically used to dehusk pulses. temperature is required. Roughly 50 % of pulses are dehusked in a single operation Efficient control of storage pests. The most common ( in one pass ). Dehusked pulses are then split into two parts pest that damages the pulses crop is bruchids, or pulses and are separated by sieving.85 The whole process is re- beetles. There are various types depending on the area. The peated two to three times. major sources are fields, carryover commodities, process- In Ethiopia, however, dehusking is a much more labori- ing plants, re-used sacks or even transportation sources. To ous and time-consuming task completed without modern control this, a proper monitoring, identification and control technology. Dehusking can be performed by the dry method mechanism is required. It will be important for the ware- or the wet method. Traditionally in African and Asian coun- house to carry out regular inspections to detect infestations tries, the dry method involves pounding of the dried grains or potential infestations for proper treatment. The inspection in mortars with pestles or in hand-operated wooden or stone can be visual, by sampling and counting, Detection of latent shellers.86 The wet grinding process for dehusking involves infestation can be done through chemicals, X-rays, sound soaking of the grains before drying.87 The separated husks amplification and use of chemical attractants. Treatment can are removed from the cotyledons by winnowing. Winnowing be done through physical methods or chemical treatments, is also typically done manually, which is time-consuming or by exclusion and sanitation. and laborious.88 Finally, the seeds are separated. This process is used to remove or separate whole grains from split, Transformation

Pulses often go through ‘transformation’ : secondary processing in order to transform the raw dehusked and split 83.– Tamil Nadu Agricultural University Agritech Portal ( 2015 ). Postharvest technology : agriculture : pulses. Available from https : / / www.agritech.tnau. pulse into an edible product. Among the various second- ac.in / postharvest / pht_pulses.html. ary processing methods are roasting, frying and canning. 84.– M. Shafiur Rahman, ed. ( 2007 ). Handbook of Food Preservation. Roasting improves the taste and edibility of pulses and re- Boca Raton : CRC Press. Available from https : / / books.google.co.uk / duces or eliminates anti-nutritional factors. This entails roast- books?id=sKgtq62GB_gC&pg=PA126&lpg=PA126&dq=dehusking +and+splitting+pulses+seeds&source=bl&ots=DGL9_JTEAV&sig ing the pulses on an open frying pan in the presence or =Mjyn2mK7AVIR-h8GWsirk2-4MVY&hl=en&sa=X&ved=0CCAQ6AEwA absence of salts or ash.92 GoVChMIu9DDw9GtyAIVx4ssCh0xhw4N#v=onepage&q=dehusking %20 and %20splitting %20pulses %20seeds&f=false. 85.– Ibid. 89.– Ibid. 86.– Subuola, F., Widodo, Y. and Kehinde, T. ( 2012 ). Processing and utiliza- 90.– Gebre-Selassie, A. and Bekele, T. ( 2012 ). A review of Ethiopian agri- tion of legumes in the tropics. In Trends in Vital Food and Control Engineering, culture : roles, policy and small-scale farming systems. In Global Growing Prof. Ayman Amer Eissa, ed. InTech. Available from http : / / cdn.intechopen. Casebook. Global Growing Campaign. Available from http : / / global-growing. com / pdfs / 35126.pdf. org / sites / default / files / GGC _Ethiopia.pdf. 87.– Ibid. 91.– Ibid. 88.– Ibid. 92.– Subuola, F., Widodo, Y. and Kehinde, T. ( 2012 ). Processing and utiliza-

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

Frying improves the digestibility of pulses and reduces their advantage for exports, mainly due to the relative proximity anti-nutritional factors. For this, several pulses are wet milled to major chickpea importing countries. Specifically, it has and mixed with other ingredients in preparing different local close proximity with the world’s leading four importers : India, or oriental dishes.93 Canning is a sophisticated technology Pakistan, Algeria and the United Arab Emirates ( UAE ). of packaging cooked beans in cans. The packaged beans Trade data demonstrate that in 2014, the biggest im- are usually in brine, sugar or tomato purees. This technology porter of Ethiopian pulses was Pakistan. In terms of vol- allows for year-round availability of the product and for food ume, Pakistan’s imports of pulses went up by 107,672 preservation. However, legumes processed in this form are tons ( 41.02 % ) to 370,181 tons in July–January 2014–2015 expensive.94 Transformation of exported pulses in Ethiopia from 262,509 tons in July–January 2013–2014.96 Pakistan is rare because global demand is for unprocessed pulses. depends on Australia, Myanmar, the United Republic of Tanzania and Ethiopia for its pulses imports to meet about Markets 0.6 million tons of demand for the commodity every year.97 Pakistan is followed by Nicaragua, Sudan and Indonesia as The last step in the value chain is the exporting phase.95 importers of Ethiopian pulses. Appendix II provides further The geographic position of Ethiopia provides a competitive information regarding Ethiopia’s pulses exports.

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. ethiopianexporters.com / pulses.html. 93.– Ibid. 96.– Black Sea Grain ( 2015 ). Pakistan. Pulses import surges to $224.135 94.– Ibid. million, 26 February. Available from https : / / www.blackseagrain.net / novo- 95.– All the pulses exporters of Ethiopia are listed here : Ethiopian Exporters sti / pakistan-pulses-import-surges-to-224-135-million. Institute ( n.d. ). Exported Ethiopian Products. Available from https : / / www. 97.– Ibid.

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STRATEGIC ISSUES AND COMPETITIVE CONSTRAINTS

Limited farmer productivity ( low quantity of output and high cost of production ) stems from : Border-In Issues Border Issues Limited technical skills of farmers and specialists Limited knowledge and application of best agronomic practices Capacity Cost of Development Doing Business Weak extension services

and EntrepreneurshipDevelopinig skills Infrastructure and Regulatory Reform Low capacity utilization on farms Limited development of commercial farms Capacity Trade

Facilitation Diversification 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 ) Poverty Alleviation Market Access and Gender Issues and Policy Reform Lack of irrigation ( no financial means to irrigate, no aw

Regional Development National Promotion areness of what they should be doing ) and Integration and Branding Limited use of appropriate agro-inputs including certified

Environmental Trade SupportServices seeds, pesticides and fertilizers Sustainability and Climate Change Low yields of local seed varieties Limited use of crop rotation. Development Issues Border-Out Issues Value chain segment Production Severity ● ● ● ● ● The traditional approach to strategic planning tends to focus The sector is dominated by fragmented smallholder exclusively on market entry issues such as market access, farms that lack economies of scale. The investment required to boost production ( mechanization, irrigation, trade promotion and export development. This restrictive Highlight fertilization, pesticides ) may not pay off for such small approach can lead to ignoring several important factors in operations. Even so, current levels of production are just a country’s export competitiveness. Effective tools for export enough to satisfy local demand. Expanding exports will strategic planning address a wide set of constraints, includ- require improvements in productivity. ing any factor that limits the ability of firms to supply export PoA reference Operational objectives 1.1 and 1.2 goods and services, the overall quality of the business environment, and the development impact of the country’s trade, which is important to its sustainability. Limited quality of pulses stems from : The schematic above illustrates the four-gear integrated Lack of price incentive ( premium ) for quality approach that has been followed to uncover the main com- Limited access to quality seeds petitiveness constraints of the pulses sector. The four gears Lack of appropriate storage facilities encompass supply-side constraints, business environment Heavy handling by numerous intermediaries constraints, market entry constraints and social and devel- Poor agronomic and postharvest handling practices opmental constraints.98 Weak capacities of processors Low awareness of international standards, including vol- untary standards SUPPLY-SIDE ISSUES Limited awareness of the benefits of adhering to foreign standards Supply-side constraints affect the production capacity of the Reliance on outdated machinery during all segments of sector. These include challenges in areas such as the avail- the value chain ability of appropriate skills and necessary competencies, Limited farmer skills the capacity of the sector to diversify, and the technological Limited use of appropriate inputs content and value added in the sector’s products. Fragmented farming system ( which makes it difficult for farmers to access knowledge and extension services, and results in lack of uniformity ) 98.– This integrated approach is called the four-gear approach, whereby gear Poor waste disposal mechanisms one deals with market entry issues, gear two with supply issues, gear three Lack of guidelines on quality standards and quality con- with the business environment, and gear four with developmental constraints. Overall competitiveness is affected by the four gears. trol mechanisms.

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Value chain Limited value addition stems from reliance on outdated ma- segment All segments chinery, limited use of trade intelligence, and poor sourcing Severity ● ● ● ● ● practices. Quality management is neglected due to limited Value chain knowledge among farmers and management of Highlight segment Inputs, processing processing companies. Stakeholders lack knowledge of both modern practices and market requirements. Severity ● ● ● ● ● PoA reference Operational objective 1.3 The combination of obsolete equipment and poor knowledge of agronomic practices diminishes Highlight productivity and hinders value addition. The limited Limited use of quality inputs stems from : value addition reduces competitiveness in international An inefficient supply chain markets. The rural dispersion of fragmented stallholder farmers PoA reference Activity 1.3.6 Limited access to finance Weak extension services Postharvest losses and quality degradation stem from : Limited knowledge of best practices and their benefits Lack of adequate warehouse space, both domestically Weak research and development capacities to produce and in destination countries improved inputs Poor warehouse management skills Limited availability of improved seed varieties Improper storage practices that lead to infestation Adulteration / mixture of seed varieties on delivery ( both Poor ventilation, moisture, sunlight exposure and tem- intentional and unintentional ). perature management Inadequate sanitation of premises. Value chain segment Inputs Value chain Severity ● ● ● ● ● segment Processing Most pulses in Ethiopia are grown from the seeds Severity ● ● ● ● ● Highlight local farmers retain from their produce.1 This leads to Recommended storage techniques imply that pulses decreased crop quality due to low genetic potential.2 must be stored below 25 degree Celsius and above freezing point. Ethiopia is blessed with highlands where PoA reference Activities 1.1.4, 1.3.2 and 1.3.6 Highlight the temperature is naturally within this range and, as a result, storage in these locations can naturally reduce Limited alignment of goods with international demand postharvest losses. stems from : PoA reference Activity 1.3.5 Lack of business skills among farmers, assemblers, cooperatives and exporters Limited capacities for sector coordination stem from : The presence of middlemen that put space between pro- The long supply channel ducers and final buyers Smallholder farmers dispersed over large distances Limited trade intelligence and poor awareness about cus- Many middlemen in the value chain tomer requirements Weak domestic and international market linkages Limited exposure to export markets The prevalence of short-term business relationships Poorly developed market research departments at small Limited information sharing and medium-sized enterprises and support institutions. Limited use of information and communications technology tools Value chain Weak institutional strength segment All segments Lack of a platform for dialogue between stakeholders Severity ● ● ● ● ● Limited value chain integration. Most farmers, cooperatives and assemblers do not have a market-driven approach to their customers. Value chain Highlight Instead, farmers are production driven, looking to supply segment All segments assemblers with their pulses regardless of market trends Severity ● ● ● ● ● and requirements. Stakeholders lack the necessary trust among themselves PoA reference Activities 1.3.2, 1.3.3, 2.1.4 and 2.2.7 Highlight to be able to find ways to work together for the betterment of the sector. PoA reference Operational objective 2.1

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BUSINESS ENVIRONMENT Value chain CONSTRAINTS segment All segments Severity ● ● ● ● ● Business environment constraints influence transaction Basic services such as letters of credit are expensive costs, such as regulatory environment, administrative proce- ( 3 % for import letters of credit and 2 % for export letters of credit as opposed to 1 % in China ), and the National dures and documentation, infrastructure bottlenecks, certifi- Highlight Bank charges a 1.5 % foreign exchange commission cation costs, Internet access and cost of support services. for the dollars required to purchase inputs. As such, manufacturers looking to import materials must pay a total Weak institutional capacities stem from limited expertise of 4.5 %. in areas such as policy advocacy, market intelligence, trade PoA reference Activities 1.1.4 and 2.2.1 promotion, and quality management among other issues ; and inadequate financial resources. Poor contract enforcement stems from the lack of arbitra- tion mechanisms ; conflicts between exporters and import- Value chain ers for price and quality defaults ; inadequately developed segment All segments futures contracts ; and an inadequately developed legal Severity ● ● ● ● ● framework for contract farming. Institutions are unable to effectively coordinate sector participants. This lack of coordination is a key roadblock Value chain Highlight to sectoral development, as it would allow for group segment All segments bargaining and the consolidation of orders to flexibly Severity ● ● ● ● ● meet larger orders. It is not unusual for exporters to default on international PoA reference Operational objective 2.1 Highlight buyers and vice versa. PoA reference Activities 2.1.5 and 2.1.6 Weak quality management infrastructure is a result of the lack of international accreditation of the Ethiopian National Expensive and unreliable transportation network stems from : Accreditation Office (ENAO ) ; lack of laboratory capacities to Ethiopia’s status as a landlocked country perform relevant tests ; lack of third-party consulting services High port handling fees in Djibouti related to quality and certification issues ; and the lack of an Poor road and rail infrastructure, particularly in rural areas institution for food safety dealing with aflotoxins. Limited transportation services in rural areas An inadequate number of trucks Value chain Lack of competition in the trucking industry segment All segments Limited quality of vehicles Severity ● ● ● ● ● Lack of financing for road construction and maintenance. ENAO is responsible for accrediting all conformity assessment bodies in Ethiopia. Nevertheless, its Value chain accreditation is only valid at the national level, as it is not segment All segments yet recognized by International Laboratory Accreditation Severity ● ● ● ● ● Cooperation and the International Accreditation Forum. Highlight The test results of Ethiopian conformity assessment Transportation costs are so high that, under the right bodies, such as laboratories, are therefore not conditions, they can almost nullify Ethiopia’s other recognized internationally. This means that even where competitive advantages ; it costs 60 % more to ship enterprises are able to produce goods of adequate through Djibouti to the United States of America and the Highlight quality, they are unable to prove compliance without EU than it does to ship from China. The Government is resorting to expensive foreign testing. building a new railway to Djibouti which is expected to reduce transport costs by 25 %. In addition, a new road PoA reference Activity 1.3.1 and rail corridor is being built in conjunction with Kenya. Expensive and inaccessible financial services stem from : PoA reference Activity 2.2.3 Lack of skills at financial institutions for loan and risk analysis and generally weak capacities at banks The inefficient and unreliable Customs system stems from : Shortage of foreign exchange Weak information technology infrastructure Limited credit registry and bureau coverage Inadequately trained Customs agents, particularly regarding Low depth of credit information their knowledge of international standards for commodities Inadequate financial / legal framework Burdensome document requirements Stringent collateral requirements Limited opportunities for interaction between firms and Frequent delays in processing financial transactions Customs agents Lack of online banking Lack of a fast-track system for reputable importers /ex- Single borrower limit ( no entity can borrow more than porters US $ 22 million ). Lack of updated prices at Customs posts.

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Value chain Value chain segment Inputs, distribution segment All segments Severity ● ● ● ● ● Severity ● ● ● ● ● According to the World Bank’s Doing Business Report Ethiopia enjoys preferential market access to the United 2015, it takes 44 days to export or import from Ethiopia, States under the African Growth and Opportunity Act Highlight significantly longer than the 30.5 and 37.6 days it takes ( AGOA ), to the EU under the Everything But Arms to export and import respectively from the average sub- initiative, and to the Common Market for Eastern and Saharan country. Southern Africa ( COMESA ) by virtue of its membership. As a result, many pulses can enter duty-free to some of PoA reference Activity 2.2.6 Highlight 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 Weak communications infrastructure stems from the lack constraint on export expansion is limited understanding of competition in the telecom space, and low fixed line of the opportunities offered by these markets and the penetration. requirements of entry. PoA reference Activities 2.1.2, 2.2.4 and 2.2.5 Value chain segment All segments Severity ● ● ● ● ● Limited branding and sales capacities due to : The absence of a coherent ‘voice’ for the sector Although mobile communications and high speed Internet are not available in all areas of the country ( and Limited attention from the Government / absence of strategy can be unreliable outside of major urban areas ), the Poor market information and limited knowledge of export Government is committed to investing heavily in the Highlight markets and their requirements information and communications technology sector. Poor product quality that has damaged the sector’s repu- Improvements would help improve price dissemination and logistical services, and increase value chain tation cooperation. Weak product presentation PoA reference Activity 2.1.2 Limited marketing and sales skills High marketing costs.

Value chain MARKET ENTRY CONSTRAINTS segment Marketing and distribution Severity ● ● ● ● ● Market entry constraints are external to the country but Europeans perceive Ethiopia to be food insecure, leading manifested internally. These include issues related to market to a lack of confidence from international buyers. This image is further hindered by high rates of default and access, development and diversification, as well as export Highlight the inconsistent quality of pulses coming from Ethiopia. promotion. As long as these negative perceptions persist, they will continue to present roadblocks to market expansion and Limited access to and use of trade intelligence stems investment promotion. from : PoA reference Activities 2.1.1, 2.1.2 and 2.2.4 The multilayer value chain dominated by middlemen ( these do not serve as information conduits and simply Inadequate trade promotion capacities stem from : put space between producers and final markets ) Limited skills of small and medium-sized enterprises in Limited availability of information and advisory services marketing, promotion and strategy development The high cost of data from the private sector Insufficiently prepared managers Limited availability of relevant public services Inadequate university curricula Weak extension services Limited exposure to foreign markets Limited skills at small and medium-sized enterprises, as- Lack of trade intelligence sociations and institutions in analysis and use of trade Absence of in-market support from institutions and intelligence. Government Weak financial and technical capacities at institutions Lack of support from embassies and trade attachés.

Value chain segment Distribution Severity ● ● ● ● ● The recently formed Ethiopian Export Promotion Agency Highlight also lacks adequate capacities, and it engages in limited and unstructured participation in trade fairs. PoA reference Activities 2.2.4 and 2.2.5

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Photo: (CC BY-SA 2.0) Rod Waddington (CC BY-SA 2.0), Sifting Peas.jpg Limited foreign direct investment ( FDI ) promotion stems The sector’s strategic development is hindered by the from lack of skills in relevant agencies to identify, approach lack of a strategy and Government support ; the prevalence and engage with potential investors ; and limited coordina- of short-term export relationships ; short-term thinking ; lack tion among actors. of coordination within the sector ; and lack of a customer- oriented mentality. Value chain segment All segments Value chain Severity ● ● ● ● ● segment All segments In addition to the federal Government’s investment Severity ● ● ● ● ● commission, each region has its own investment Highlight Less than 50 % of export relationships survive the first promotion agency. As such, there is little coordination year, significantly worse than the roughly 70 % one-year among agencies. survival rate of its competitors. This is the result of a PoA reference Activity 2.2.2 variety of factors, and while the prevalence of short-term relationships is a result of underlying challenges, it also Highlight represents a challenge in and of itself : more stable Limited incentives to export stem from an imbalance be- relationships would lead to longer-term thinking and a shift towards a strategic development mentality. In tween domestic costs and international prices. During some addition, stronger partnerships with buyers can serve to months of the year the domestic price of pulses is higher facilitate a customer-oriented mentality. than the international one. PoA reference Activity 2.2.7

Value chain segment All segments Severity ● ● ● ● ● 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 Highlight 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. PoA reference Operational objective 1.2

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SOCIOECONOMIC AND –– Population growth DEVELOPMENTAL CONSTRAINTS –– Inappropriate land policy –– Limited application of best agronomic practices, Socioeconomic constraints include issues related to pov- including crop rotation that would aid soil fertility erty reduction, gender equity, youth development, environ- management in the cereal belts mental sustainability and regional integration. –– Poor rural infrastructure –– Low levels of technology Gender-specific challenges stem from : –– Poor waste disposal mechanisms and an inappropri- Women’s limited access to productive resources ( credit, ate reject product / grain management system. markets, market information ) 2. Water pollution : Restrictive social norms –– Limited awareness of the benefits that might come Inadequate implementation of equality laws from more sustainable processes Limited mobility ( the opportunity cost of leaving children –– Limited application of best agronomic practices. to tend land and access markets ) 3. Large-scale farming : Limited land tenure rights. –– Lack of appropriate environmental impact assessments Value chain –– Land in national parks has been turned over to farm- segment Production ing operations. Severity ● ● ● ● ● ‘Social norms restrict women from tiling land and Value chain female-headed households are forced to enter into segment Production Highlight share-cropping arrangements, asking male relatives to Severity ● ● ● ● ● till the land for them, in return for sharing half of the crops produced on their small plot’.* Corporate social responsibility is becoming a core requirement for many of the world’s most important PoA reference Operational objective 3.1 buyers. Should these buyers believe that a part of the Highlight pulses value chain regularly benefits from environmentally * Global Water Initiative (2013). Valuing women in rural agriculture, unfriendly practices, the sector’s growth potential may be 24 September. Available from http://www.gwieastafrica.org/valuing- imperilled as buyers look for more socially woment-in-rural-agrticulture/; Ethiopian Institute of Agricultural responsible suppliers. Research. Available from http://www.eiar.gov.et/16-featured-articles/ 185-enhancing-women-s-engagement-in-chickpea-production. PoA reference Operational objective 3.2

Limited entrance of youth into the pulses sector stems Potential violations of indigenous rights stem from an ex- from lack of access to agricultural land and other resources pansion of farming in fertile agricultural lands traditionally oc- ( capital, skills and inputs ) ; migration from rural to urban cupied by indigenous peoples ; lack of proper consultations areas ; and limited interest in pursuing farming and other with indigenous peoples and reports of forced evictions ; agricultural activities. and lack of proper environmental impact assessments.

Value chain Value chain segment Production segment Production Severity ● ● ● ● ● Severity ● ● ● ● ● The majority of the youth in Ethiopia live in rural The SNNPR is home to 26.3 % of pulse farmers. This areas where farming has traditionally been the main region includes the Lower Valley of the Omo, the home source of livelihood.* However, the participation of of many of Ethiopia’s indigenous people and a United Highlight youth in the pulses sector is very low. They generally Nations Educational, Scientific and Cultural Organization Highlight lack representation and leadership roles in farmers’ world heritage site. As such, every effort should be made organizations. Only 9 % of the rural youth in the south of to ensure that impacts to its ecosystems and cultural Ethiopia plan to pursue agriculture as their livelihood.** landscape are adequately assessed and considered before the implementation of large-scale projects. PoA reference Operational objective 3.1 PoA reference Operational objective 3.1 * 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/ Thus, as explained in detail above, the four gear diagnostic article/pii/S0305750X14001727. shows that there are seven pressing supply-side constraints, ** Ibid. seven business environment constraints, six market entry constraints, and four socioeconomic and development con- Potential for environmental harm stems from : straints that are holding Ethiopia back from becoming a global i. Land degradation : competitor in the pulses sector. What follows is a brief descrip- –– Deforestation ( estimated at 62,000-150,000 ha per year ) tion of the format and context in which the competitive con- –– Overgrazing straint issues will be addressed and resolved in this roadmap.

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STRATEGIC IMPLICATIONS FOR THE VALUE CHAIN ROADMAP

To sum up, the previous sections and related appendices –– Limited fertilizer use. This issue is due to the lack of have identified a series of issues in the Ethiopian pulses availability and affordability of quality fertilizers. It is sector.99 Given the scope of this strategic roadmap, not all also due to farmers’ lack of best practices knowledge. the issues identified so far in the document are going to be The PoA addresses this in section 1.2.6. addressed in the same manner by the PoA. All of the is- –– Lack of crop rotation. In short, this issue is due to the sues identified can, however, be qualified under at least one lack of best practices knowledge. The PoA addresses of the three overarching types of issues that fall within the this in sections 1.2.2 and 1.2.3. scope of this roadmap. This section provides a description –– Low-yielding seeds. This is due largely to the lack of the three types of issues, i.e. production issues, inter- of quality seeds and limited seed variety available to mediation issues and developmental issues. Then it briefly farmers. This is addressed in section 1.2.4 of the PoA. addresses the sub-issues that lie within each of these types. –– Lack of mechanization. This is due to the lack of knowledge about, and limited availability and afford- Production issues ability of, modern machinery. The PoA addresses this in section 1.2.5. Production issues encompass three overarching problems causing the low productivity in Ethiopia’s pulse sec- Low pulse quality. This refers particularly to the lack of tor. Specifically, (1 ) the high cost of local pulse production, uniformity in the colour, size and weight of the pulses. ( 2 ) low crop yields and ( 3 ) the low quality of pulse yields. The quality of the pulses is low and suffers from issues Together, the combination of these three issues causes the related to the production and distribution stages of the sector’s low productivity. value chain. –– Lack of a quality diagnostic. There is often a lack of The main production issues can be summarized as follows. uniformity in bean size, quality and weight due to the High cost of production. The following four sub-issues lack of quality standards and control mechanisms. are the main causes of the high cost of local production. The PoA addresses this in section 1.3.1. –– Small average farm size. Smallholders encompass –– Low seed quality. There is low awareness of interna- 95 % of Ethiopian pulse production. This leads to a tional standards regarding pulse quality and a lack number of issues including production fragmentation. of access to quality seeds. The latter is due in large The PoA addresses this in section 1.1.1. part to poorly developed seed systems. This issue is –– Limited affordability and availability of necessary addressed in section 1.3.2 of the PoA. seeds. This is an issue most African countries face, –– Absence of quality incentives, e.g. quality-linked including Ethiopia. The PoA addresses this in sections pricing. This is due to the limited attention by traders 1.1.2 and 1.1.3. to pay a premium price for high-quality products. The –– Excessive cost of finance. In summary, this is due to PoA addresses this in section 1.3.3. the lack of financial systems that cater to the agricul- –– Lack of technical skills. Quality management is tural sector. The PoA addresses this in section 1.1.4. neglected due to limited knowledge among farmers –– Poor production mechanization and postharvest of both modern practices and market requirements. techniques. There is a lack of adequate warehouse The fragmented farming system makes it difficult for space ( i.e. with proper ventilation, moisture, sunlight, farmers to access knowledge and extension services temperature, sanitation ) and storage practices ( i.e. that would improve such techniques. This issue is ad- management, pesticide use ). This is addressed in dressed in section 1.3.4 of the PoA. section 1.1.5 of the PoA. –– Poor postharvest techniques. This limits the quality at the production stage and is due to the lack of stor- Low smallholder production output. age facilities and poor agronomic and postharvest –– Limited pesticide use. This issue is because of the handling practices. The PoA addresses this in section lack of availability and affordability of quality pesti- 1.3.5. cides, and farmers’ lack of best practices knowledge. –– Unskilled labour and outdated machinery. Local The PoA addresses this in section 1.2.1. farmers’ low skill levels, together with outdated machinery, limit value addition and diminish the profitability of the sector. These factors are largely due to the lack of technology that enables the development 99.– The current value chain, strategic issues and competitive advantages, of value added products. The PoA addresses this in appendix I : Ethiopia’s production of pulses, appendix II : Ethiopia’s exports of pulses, and appendix III : Policy environment and trade agreements. section 1.3.6.

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The combined effect of the production issues is that –– Underinvestment. There is a serious problem with the pulses sector struggles to produce what the market underinvestment, especially among Indian suppliers. demands. The current growth model of the pulses sector This can be explained by the absence of good pro- shows important signs of exhaustion. Ethiopia’s pulses sec- cessing companies, which impedes the sector’s abil- tor has yet to realize its full potential, as sales are heavily ity to exploit these opportunities. This is addressed in concentrated among a few product categories of fairly low section 2.2.2 of the PoA ; value addition and market diversification is limited. Despite –– Costly transportation and logistics. The cost of the increase in FDI and governmental support in recent transportation and logistics is high and there is a lack years, all five stages of the value chain remain underdevel- of storage for international trade. This is addressed in oped. Productivity meanwhile continues to suffer as a result section 2.2.3 of the PoA ; of limited skills in the workforce, weak management capaci- –– Inadequate sources of market intelligence. This is ties and reliance on old equipment, among other factors. In due to the lack of competency of trade and invest- addition, remaining problems in the business environment ment support institutions. The PoA addresses this in create unnecessary cost burdens and delays. section 2.2.4. –– Weak trade promotion. This is partially due to limited Intermediation issues participation in trade fairs. This is addressed in sections 2.2.5 and 2.2.6 of the PoA. Intermediation issues refer to the sector’s poor internal or- –– Overall lack of adequate business skills. This is ad- ganization, its competitiveness in existing markets, and the dressed in section 2.2.7 of the PoA. sector’s ability to enter new markets. The combined effect of these intermediation issues is a Poor internal organization. This refers to the capacity poor flow of information along the value chain. Exporters of the sector to undertake initiatives in its favour and to are not capable of sending the correct signals to farmers. ensure the effective flow of information along the value This information refers to pricing, volumes, characteristics, chain. etc. Concurrently, local farmers are incapable of interpreting –– Lack of institutional organization and sector repre- market signals. Together, these issues cause the market and sentation. This is due to the large number of unorgan- the production sides of the value chain to be dissociated. ized smallholder farmers. This is addressed in section 2.1.1 of the PoA. Developmental issues –– Lack of necessary information. This is due to lack of an effective forum for information sharing and gather- Developmental issues include those that impede the sec- ing. This is addressed in sections 2.1.2 & 2.1.3 of the tor from maximizing its socioeconomic impact through the PoA. protection of the environment and inclusiveness of women –– Agents’ misaligned price expectations. This is and youth. largely due to the lack of business orientation among farmers. The PoA addresses this in section 2.1.4. Unskilled labour, particularly among women and youth. –– Excessive quantity of mediators and brokers in The participation of women and youth in the pulses sec- value chain. This is due to the overload of intermedi- tor is relatively low as a result of land access restrictions aries in the value chain, which results in a decrease as well as constraining social norms. in product quality. The PoA addresses this in section –– Land access restrictions. The lack of access to ag- 2.1.5. ricultural land limits the involvement of women and –– Limited and flawed use of contracts. Smallholders’ youth. Specifically, this results in the discouragement limited and flawed use of contracts is due, in large of youth from farming pulses and prevents the emer- part, to the lack of contract enforceability. In turn, gence of a new generation of entrepreneurs. This is this diminishes the effectiveness of legally binding addressed in sections 3.1.1, 3.1.2 and 3.1.3 of the PoA. agreements and often leads to market defaults. This –– Social norms. Social restrictions limit women’s and is addressed in section 2.1.6 of the PoA. youth’s access to arable land. This is addressed in section 3.1.4 of the PoA. Limited competitiveness in existing markets and inability to enter new markets. This refers to the capacity of Risks of environmental harm. There is a risk that the the sector to ensure its profitability in domestic and inter- development of the pulses sector could cause environ- national markets. mental harm. –– Inadequate financial support for international trade. –– Low crop rotation awareness. There is low aware- This results in difficulty in remaining in existing mar- ness of optimizing rotational cropping of pulses for kets and entering new ones. The PoA addresses this soil fertility management in the cereal belts. This is in section 2.2.1. addressed in sections 3.2.1 and 3.2.3 of the PoA.

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

) SSSSSSSSSSSSSS Y-SA 2.0 SS, MMMM CC B MMMMMMM The combined effect of the developmental issues is that to: ( MMMM Pho MMM MMM the long-term sustainability of the sector could be af- MMMM fected. As shown in the four gears analysis, the sector’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 policies. It is for this reason that a comprehensive roadmap becomes all the more necessary : individual stakeholders, and even small groups of stakeholders, will not be able to adequately deal with the constraints on their own. It is only through strategic cooperation that the most effective results will be achieved. The identification and acceptance of these issues allows for the roadmap’s proposed solutions to tackle them in a strategic 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 roadblocks to competitiveness. What is more, because a continued increase of FDI is critical for the sector’s development, the Government ought to more effectively target 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 The realization of the stakeholders’ vision will not be an easy meetings ) it was evident that there were four overarching task. However, following the roadmap’s suggestions in an goals that were important to all sector stakeholders. This is organized and united manner will ensure that Ethiopia’s shown in figure 6. These include : ( 1 ) improvement of agri- pulses sector becomes internationally competitive and sup- cultural technology, ( 2 ) increase the generation of local in- ports Ethiopia’s development. come, ( 3 ) increase the quality of inputs and outputs, and ( 4 ) increase the overall competitiveness of the pulses sector. The following section explains the strategic and operational objectives for the sector. This will act as the framework that The stakeholders’ vision is to build an internationally com- will guide the implementation of the roadmap. It will focus on petitive sector that supports Ethiopia’s development. This three main objectives : ( 1 ) boosting productivity and quality will be done through the adoption of innovative agricultural through incentives ; ( 2 ) improving export competitiveness technology and the use of quality inputs, which will lead to by strengthening the connection between intermediaries the production and global sale of high-quality pulses and and producers in the value chain ; and ( 3 ) maximizing the the increase of local income. This, in turn, will result in the developmental dividend of the sector through environmental movement of the pulses sector in Ethiopia’s GDP from num- protection and inclusiveness. ber two to number one.

THE STRATEGIC OBJECTIVES

The realization of the vision for the sector will be achieved The PoA is organized around the three strategic objectives through three strategic objectives that will take place over and the corresponding operational objectives. The three a period of five years. Each strategic objective provides a strategic objectives are : ( 1 ) boost productivity and quality ; major area that the roadmap will address in greater detail. ( 2 ) improve intermediation ; and ( 3 ) maximize the devel- Each of the strategic objectives is further broken down into opmental dividend. two or three operational objectives.

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Strategic objective 1 : Boost productivity Improve the overall quality of the pulses that are produced. and quality by using public and market-led This will be achieved through a three-layered approach that helps build farmers’ capacity to produce quality pulses. incentives. The approach includes : ( 1 ) availability of improved seed varieties ; ( 2 ) pre- and post-harvest techniques ; and ( 3 ) This strategic objective aims to bring the current pulse sup- increased awareness of quality standards and market ply to the level required by international markets. Because requirements. of this, only the supply side of the pulses sector is dealt Availability of improved seed varieties. This concen- with. The supply side includes : operating costs of pulse trates on securing sufficient improved varieties of seeds production, total sector output, pulse quality and sector for production, particularly those with higher demand in productivity. target markets. Pre- and post-harvest techniques. This focuses on pro- A description of the operational objectives follows. moting the use of new technologies and quality controls, and on improving planting, agro-techniques and posthar- Lower the average cost of producing pulses. vest management. For this, training and skill upgrading To achieve this, a group of purpose-designed activities will programmes should be created to strengthen farmers’ be undertaken. First, incentives that help increase the aver- and assemblers’ capacity to effectively deal with various age size of pulse farms must be created. This is necessary postharvest challenges. Improving postharvest manage- because large-scale farms operate under lower average ment and ensuring that the crop is handled and stored cost structures. Second, it is necessary to facilitate com- properly is essential across all the activities in this opera- mercial farms and smallholder farmers’ access to sufficient tional objective.101 amounts of affordable seeds and establish a seed bank that Increased awareness of quality standards and market guarantees farmers’ access to seeds when needed. These requirements. Issues related to quality standards will be two initiatives are necessary because seed-related issues addressed by a gap map of Ethiopian pulses. This will are very prominent in the cost. Third, smallholder farmers’ focus on the quality standards and requirements of po- access to finance must be facilitated. This is likely to reduce tential target markets. Another area that will be improved the cost of inputs and other production services. Finally, is international accreditation and quality infrastructure. existing technical solutions that can sustainably lower pro- Ethiopian farmers should be able to certify their produc- duction costs should be exploited. Access to finance issues tion to the relevant standards of their target markets. To related to international trade will be addressed in the second support these changes, key regulations must be adjusted strategic objective. so as to streamline the sector’s functioning.

Expand the production of pulses. For this, a two-pillar approach is proposed. This is based Strategic objective 2 : Improve export on the use of modern agricultural practices and better in- competitiveness by strengthening the connection puts. The use of crop rotation should increase total pulse production without increasing the amount of land used.100 between producers and the intermediaries Improving the availability and use of quality inputs such as in the value chain. biofertilizers, pesticides and modern mechanization should increase the sector’s output. The use of new high-yielding This strategic objective aims both to increase exports and to pulse seed varieties should also raise yields. obtain information necessary to channel to producers. This Extending seed supply will also likely increase pulse pro- then simultaneously targets both the demand and the sup- duction. This will require identifying and developing varieties ply sides. A description of the operational objectives follows. of pulses that are suitable for each region and that are in line with international market requirements. In addition, a plan to Strengthen the organization of the sector to ensure make these publicly available must be created. This could the exchange of information between producers include piloting farm initiatives for production and harvest- and international markets. ing. Farmers’ associations and private sector stakeholders This operational objective aims to strengthen the sector’s should be involved in the distribution of the improved seeds. organization to ensure an effective exchange of information between farmers, international markets and all of the intermediary value chain stakeholders. For this, the sector

100.– A nationwide crop rotation plan can only be completed after an agro- 101.– The Supporting Indian Trade and Investment in Africa project intends nomic assessment of the land has taken place, and the potential for differ- to collaborate with the Government to improve the use of existing collection ent types of pulses has been assessed. Logistical considerations, storage centres and warehouses by the pulses sector. New storage facilities should infrastructure, market structure and trading practices will also be taken into also be created where a need has been identified. This network of ware- consideration in order to obtain a clear picture of the pulses industry. houses will help develop a structured national wholesale market for pulses.

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Photo: (CC BY-SA 2.0) Swathi Sridharan, Securing incomes for women in Ethiopia.jpg must be united. This will enable it to speak to the authorities Improve the capacity of the sector to enter new markets and with one voice, to act as the focal point for issues affect- to remain competitive in existing ones. ing the sector, and to promote the overall development of The activities included in this operational objective are in- the sector in Ethiopia and abroad. This shall be achieved tended to promote exports and market development.103 by the creation of a ‘national pulses platform’ that, together The strategic objective includes crucial activities designed with the Ethiopian Pulses, Oilseeds and Spices Processors- to provide adequate access to finance for those involved in Exporters Association ( EPOSPEA ), should coordinate the international trade ( e.g. importers of inputs and exporters implementation of the activities and recommendations in- of pulses ) and to ensure that the sector has the capacity cluded in this roadmap. to absorb international investment and deliver on the ad- In addition, the working modalities between farmers, ditional exports. In this regard, some efforts exist to make processors and exporters in the value chain must improve. the operational environment more suitable, including trade In particular, the degree of transparency with which infor- facilitation issues involving Customs and the development mation is exchanged along the value chain must increase. of business skills. An Internet-based platform providing real-time and up-to- An important component of export promotion is devel- date information relevant to all the stakeholders of the pulses oping the capacity of commercial attachés in selected dip- value chain will enable this improvement.102 In parallel, the lomatic missions to promote Ethiopian pulses and related capacities of each linkage in the value chain must be in- processed products abroad. This will be accompanied creased to ensure that the information is used to increase by other initiatives to help promote the participation of the crop and market diversification. The sector should discuss pulses sector in international trade fairs and exhibitions, and whether there could be some room for ECX to provide trans- branding strategies : for example, developing pilot activities parency to pricing practices. with key foreign organizations, piloting a market entry pro- Ensuring that the sector abides by the rule of law is an- gramme with India and organizing regular trade missions to other central aspect of this operational objective. Farmers, selected target markets. Given the importance of the Indian farmers’ organizations and assemblers are expected to be pulses market, fostering knowledge-sharing and business trained on the use of contract farming and similar contrac- connections between Ethiopian and Indian pulses produc- tual arrangements to avoid market defaults. This is should ers would benefit the sector by providing a better under- help streamline the number of intermediaries in the pulses standing of Indian market requirements. Several activities sector and change their roles to better serve various stake- factor this in through field trips. holder needs. This should also positively affect potential Another central component is the use of market in- investors’ perception of the sector. centives to facilitate access to financial resources for processors and exporters. Facilitating exporters’ access to

102.– Trade information, market reports, trade intelligence, trade deals, pulses finance should help them better cope with cash flow issues 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 103.– There is much diversification scope for the pulses sector in terms of continuous growth and global reach of the sector. markets and products.

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generated by international transactions. Strengthening the activities in this section are geared towards enhancing the business skills of farmers, assemblers and exporters will be capacity of youth and women to participate in the value add- achieved by teaching a group of trainers on international ing segments of the value chain. Tackling land access for trade issues. These trainers will then be expected to repli- women is one of the most pressing issues in this regard. cate the training. Although Ethiopia enjoys a large workforce, it still re- This operational objective requires developing transpor- quires extensive training and specialization in a wide range tation and logistics services as well as dealing with the most of areas for full agricultural development. Developing the pressing trade facilitation issues.104 The emphasis of this skills of the sector’s stakeholders will ensure that the sector’s activity is on infrastructure services. While the Supporting growth is supported by an adequate labour supply. This Indian Trade and Investment in Africa ( SITA ) project will not implicates farmers and managers alike. directly contribute to the development of transport infrastruc- Developing the skills of stakeholders in the pulses sec- ture, it may play a key role in improving services based on tor will be achieved through developing the knowledge and existing infrastructure and creating awareness of important skills of key market actors, with a particular focus on seed infrastructure deficits. It may also leverage resources and production, storage, testing and certification. These actors, strongly advocate for improved road and rail networks and who are instrumental in relaying information at grass-roots cheaper transport to the port. level, will be trained regularly to keep them abreast with the The investment absorption capacity of the sector will be latest technology and practices. Trainings will also cover ele- increased by creating incentives that help retain existing in- ments such as sowing and harvesting techniques, posthar- vestors and attract new ones. Particularly, Indian FDI could vest handling and market opportunities. be mobilized for product upgrading, e.g. processed food containing pulses.105 To become more attractive for foreign Ensure that the development of the pulses sector does not investors, Ethiopia should also incorporate specific policies jeopardize the preservation of the environment. for FDI in the production and processing of pulses. This To not jeopardize the environment, the activities that are involves creating incentives for foreign enterprises. foreseen promote management and agricultural practices that environmentally neutral, e.g. promoting the use of Strategic objective 3 : Maximize the develop pulse crops to replenish soil fertility in non-pulse crops.106 mental dividend of a booming pulses sector Pulses add nitrogen and also a significant amount of organic residues to the soil in the form of root biomass and by ensuring the protection of the environment leaf litter. Roots and leaf litter, being rich in nitrogen, fa- and inclusiveness. cilitate the decomposition of crop residues in soil and increase microbial activity.107 This strategic objective aims to ensure that the benefits of This operational objective has been designed with the the sector’s future growth will be passed through to sensi- additional objective of ensuring the sustainability of the agri- tive segments of the population such as women and youth cultural development of Ethiopia by putting the pulses sector while protecting the environment. This strategic objective at the forefront of the promotion of most sustainable prac- targets medium-to-long-term conditions that need to im- tices. To achieve this, a position paper describing the overall prove in order to ensure both the country’s and the sector’s benefits that the pulses sector can bring to the preservation sustainable development. A description of the operational of the environment and the economic development of the objectives follows. country will be developed.

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 106.– Crop rotation involving pulses is beneficial to soil structure and stability. developed for these two segments of the population. The 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 104.– Transportation, logistics and trade facilitation have also been identi- the rhizosphere is directly responsible for the improved soil structure in crop fied as major obstacles for trade, highlighting a crucial need for support to rotations involving pulses. Pulse crops have the ability to reduce the pH of the address these bottlenecks. soil in the rhizosphere and make the micro-environment favourable for nutrient 105.– Following an export ban on processed pulses imposed by India since availability. Since pulses acquire a greater part of their nitrogen requirement 2006, Indian investors have established processing plants abroad to be able from the air as diatomic nitrogen rather than from the soil as NO3, their net to continue to supply the large South Asian diaspora across the world. Indian effect is to lower the pH of soil. Chickpea reduces the pH most, followed by FDI has targeted countries like Nepal, Myanmar and the UAE. African coun- pea and pigeon pea. This reduction in pH of the soil helps to create a favour- tries – including Ethiopia – could also take advantage of this market oppor- able soil environment, especially in neutral and alkaline soil environments, tunity and become a preferred destination for pulse processors from India. 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 2.1. Strengthen the organization of the sector to ensure for the sector. The ultimate objective is to improve the per- the exchange of information between producers and formance of the sector by raising productivity, improving the international markets. organization of the sector, and preserving the environment 2.2. Improve the capacity of the sector to enter new and the developmental dividend of the sector. markets and to remain competitive in existing ones. The numbers in the chart correspond to the following strategic and operational objectives. 3. Maximize the developmental dividend of a booming pulses sector by ensuring the protection of the en- 1. Boost productivity and quality by using public and vironment and inclusiveness. This strategic objective market-led incentives. This operational objective ulti- aims to ensure that the benefits of the future growth of mately aims to adapt the current offer of pulses to what the sector will be passed through to sensitive segments the international market demands. of the population such as women and youth, while at 1.1. Lower the average cost of producing pulses. the same time protecting the environment. This strategic 1.2. Expand the production of pulses. objective targets the medium-to-long-term conditions 1.3. Improve the overall quality of the pulses that are that need to improve in order to ensure the sustainable produced. development of the sector and the country. 3.1. Strengthen the training and skills of the youngest 2. Improve export competitiveness by strengthening the actors in the pulses value chain and ensure that connection between producers and the intermediar- gender-sensitive issues are addressed. ies in the value chain. This strategic objective has the 3.2. Ensure that the development of the pulses sec- double aim of increasing exports and obtaining infor- tor does not jeopardize the preservation of the mation that needs to be channelled to producers. This environment. simultaneously targets both the demand and the supply sides of the sector.

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FDI AND SOUTH–SOUTH COOPERATION

Ethiopia has a significant advantage in the production of controversial failures of large-scale pulse farming projects pulses, which still has considerable room to grow in terms of by Indian investors ; and the difficulty South Asian buyers ex- both acreage and yield. However, the country’s pulse export perience in obtaining the short-term visas needed to inspect ban on foreign traders denies FDI its most advantageous pulses prior to purchase and shipment. entry point, and the challenges upstream and downstream The activities of a company successfully investing in a of trading leave investors looking at the United Republic foreign country tend to follow a typical evolutionary path, of Tanzania and Kenya as better places to invest. Ethiopia depending on the product and sector. For a commodity could improve its position through certain policy meas- such as pulses, one might expect to see foreign investors ures, most notably lifting the trading ban and completion first establishing buying offices for the procurement and of agroprocessing-focused export processing zones. Even export of raw supply, then investing in basic processing, without these measures, Ethiopia is attractive to providers then in increasingly diverse product lines and value added of agribusiness services and suppliers of agricultural inputs, processing. This allows investors to secure supply of inputs, making them viable targets for Ethiopia’s FDI promoters. learn the particularities of doing business in a new location, and establish marketing channels before committing larger Target FDI source countries amounts of capital. The Ethiopian ban on raw pulse exports by foreign traders India is the world’s largest producer of pulses. Among the is, therefore, a major impediment to the sector’s attraction of six countries ( India, Pakistan, Canada, Myanmar, Australia FDI and its market-organizing, efficiency-promoting benefits, and the United States ) that dominate global production, such as contract farming arrangements and connectivity to there are only two net importers : India and Pakistan. India export markets. An investor might choose to enter the mar- is both the largest producer and importer, accounting for ket further downstream, but a company venturing into un- 26 % of the global import market. Pakistan is the second- familiar territory for the first time is unlikely to risk skipping largest producer and seventh largest importer, accounting the earlier steps in that evolutionary path in favour of more for 3.5 % of the global import market. With high consumer sophisticated, more capital-intensive steps, especially where demand and expertise in the production and marketing of competitors have not already demonstrated the possibility of pulses, India and Pakistan are the two most likely sources success. This added risk and the higher level of industrializa- of FDI in the pulses sector. tion in a competitor such as Kenya makes Ethiopia relatively Medium-sized pulse processors and distributors ( 20–50 uncompetitive for the attraction of FDI in pulse processing. tons per day ) in India and Pakistan, who had been importing Another alternative for market entry is to enter upstream, pulses from East Africa, have begun exploring the possibil- in primary production. With competitive land leases avail- ity of setting up trading offices in the region. The United able in Ethiopia, a number of Indian companies have estab- Republic of Tanzania has won the most attention thanks to lished large-scale farms to produce pulses and other crops its high pulse volumes and established trading networks but with mixed success and a degree of controversy. Most with India. This appears to be further stimulated by the com- notable is the case of Karuturi, which leased 300,000 ha of petitive threat of the giant Export Trading Group expanding land in Gambela but has struggled to produce at more than from Africa-based trading alone into processing and dis- a low percentage of targets and to service loans of several tribution in its South Asian markets. As such, South Asian million dollars from Ethiopian banks. investors are under competitive pressure to cut out middle- Other modes of investment and engagement with do- men and directly source their inputs. These investors pre- mestic stakeholders, including those that are more funda- sent very immediate opportunities for investment generation mental to the sector’s development ( e.g. contract farming, in the pulses sector and could be targeted for investment collateral management ) and those that promise higher value promotion, backed by sector-strengthening public policies added ( e.g. packaged food manufacturing ) will be linked to to increase Ethiopia’s competitiveness with alternatives like government action to improve pulse quality and supply, as the United Republic of Tanzania and Myanmar. described in the four gears and PoA sections of this road- In the past few years, Ethiopia has seen so much inter- map. Top actions relate to the improvement of inputs ( seeds, est from Indian buyers and investors that the Export–Import fertilizer and pesticides ), better-organized pulse markets at Bank of India has sought to facilitate business by opening the farm-gate level, better access to financing for small farm- an Ethiopian branch – one of only seven foreign branches ers, and more widespread farm mechanization. and only the second one in Africa after the one in South FDI would both follow these improvements and play a Africa. However, Ethiopia presents several obstacles to in- role in achieving them. For example, a few early successes in vestors which competing locations do not and which seri- attracting contract farmers or foreign development of seeds ously threaten to neutralize its advantages. These include a would make it easier for other investors to follow. In this way, ban on raw pulse exports by foreign traders ; high-profile and FDI is both a means and an objective of sector development.

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The market for FDI in pulses and agribusiness Traders and processors with experience in contract farming arrangements could have a large effect on total production As the global population grows and concern over food se- and, importantly, on the organization of the Ethiopian mar- curity with it, the fact that 60 % of the world’s uncultivated ket. By guaranteeing prices to farmers and committing them arable land is in Africa is earning the continent considerable to predetermined volumes, such arrangements add visibility attention as a source of food commodities and agribusiness on market volumes and prices, which is sorely lacking for investment opportunities. The African population itself is pulses in Ethiopia today. projected to double between 2010 and 2050, many of whom will represent a new middle class, as six of the world’s 10 Agribusiness inputs and services fastest growing economies are in Africa. As a consequence of these trends, Africa’s food market is projected to grow Perhaps the most attractive investments in the pulse sector from US $ 313 billion in 2010 to US $ 1 trillion in 2030, with a are those that go beyond pulses specifically and have much corresponding boom in investment. larger markets in agribusiness generally, such as seeds, A US $ 500 million investment announced by Syngenta farm machinery and agrochemicals. Approximately 80 % of across multiple African countries is an example of the sort Ethiopians depend on agriculture in one way or another for of large-scale investment which is becoming possible and their livelihoods, yet agriculture is largely conducted by small- which Ethiopia could be targeting. Syngenta plans to make holder farmers who make little use of the most modern inputs. the investment over 10 years in local production, logistics, Table 3 presents the value chain segments where FDI distribution channel development, recruitment and training is both needed and viable, along with leading sources of for seed and crop protection products. such FDI and competing locations in the region where investors are active. Where a company is already present in Pulse trading and basic processing Ethiopia, it may not yet be active in the product lines of most benefit to the pulses sector ( e.g. seed pulses, pulse-specific In the short term, trading in pulses is the main opportunity herbicides, pulse cultivation machinery, pulse processing likely to attract foreign investors. Medium-sized pulse pro- technology ). cessors and distributors ( 20–50 tons per day ) in India and Ethiopia’s investment promoters and sector stakehold- Pakistan who had been importing pulses from East Africa ers should work to present proven investors with Ethiopia’s have begun exploring the possibility of setting up trading investment opportunities and, simultaneously, to advocate offices in the region, with the United Republic of Tanzania’s investment climate reforms that will enhance Ethiopia’s high pulse volumes and established trading networks with attractiveness. Table 3 presents the group of companies India winning it the most attention. which collectively control large majorities of the global mar- If the export ban on foreign traders were lifted, these kets in their given fields. These are not the only potential investors would present very immediate opportunities for investors, and smaller regional companies may be better investment generation and could be targeted for investment poised to move quickly into Ethiopia given their proximity promotion. Although trading itself is a low value added activ- and knowledge of the country. However, world-leading com- ity, FDI in this area would strengthen Ethiopia’s competitive- panies wanting to retain that leadership are likely to con- ness with alternatives like Myanmar, the United Republic of sider expansion into Africa more and more as the continent Tanzania and Kenya, assuring higher volumes of low value is given increasing importance in global food strategies. added FDI, attracting more FDI to critical agribusiness ser- Conversely, realizing full potential for agribusiness is more vices, and laying the groundwork for higher value added likely if the world’s leading players are involved in the scaling food processing in the longer term. up of its production. Primary production of pulses on a large scale has not Furthermore, most of the companies in Table 3 already historically been an activity to attract FDI ; however, there have presences in the region. Future investment projects is significant investment opportunity for existing domestic in Ethiopia might originate with headquarters or with these farmers to expand pulse yields and quantities, including regional affiliates. For the companies with no presence cur- through contract farming arrangements with foreign traders rently in Ethiopia, a first venture would likely take the form and processors. Although Ethiopia is already a global leader of a sales office. Although this does not create the jobs, in pulse production, there remains significant room for ex- technology spillovers or skill spillovers of a manufacturing panded production, especially considering the suitability project, for example, the possibility of a sales office should of pulses as an intercrop with several of Ethiopia’s major not be dismissed by investment promoters as being of low food crops : teff, wheat, barley, maize, sorghum and millet. value. A first sales office is an opportunity for a foreign com- At the same time, global demand for pulses as a heart- pany to make tentative entry into a new market, learning the healthy food is growing and may be boosted further by the business landscape and achieving a level of comfort. Of United Nations designation of 2016 as the International Year more immediate importance, it can provide Ethiopia’s pulses of Pulses. sector with valuable access to more affordable, high-quality inputs that are essential to the strengthening of the sector.

[ ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES ] 47

Table 3 : Value chain segments needing FDI and likely sources

Leading companies Value chain segments where FDI is with foreign affiliates in Eastern and Southern African countries Source country needed and viable Eastern and Southern with an existing affiliate Africa BASF Germany South Africa Bayer CropScience Germany Mozambique, South Africa, Sudan, Zambia, Zimbabwe Dow AgroSciences United States South Africa Seeds, fertilizers and pesticides Ethiopia, Kenya, South Africa, the United Republic of – sales, distribution, manufacturing, DuPont ( Pioneer ) United States Tanzania, Zambia, Zimbabwe and research and development KWS Saat ( seeds ) Germany Kenya, South Africa, Sudan Monsanto United States Kenya, Malawi, South Africa, Zimbabwe Ethiopia, Kenya, Mozambique, South Africa, Sudan, the Syngenta Switzerland United Republic of Tanzania, Zambia, Zimbabwe AGCO United States None CLAAS Germany None

Farm machinery and equipment CNH Netherlands South Africa – sales, distribution, manufacturing, John Deere United States South Africa operation, maintenance and repair Kenya, Madagascar, Mozambique, South Africa, the United Kubota Japan Republic of Tanzania, Uganda SAME Deutz-Fahr Italy None Brasil Foods Brazil None Cargill United States Kenya, Mozambique, South Africa, Zambia, Zimbabwe Animal feed – manufacturing, Charoen Pokphand Thailand None and research and development New Hope Group China None Tyson Foods United States None Vertically integrated trading, Archer Daniels Midland United States None including warehousing, Bunge United States Kenya, South Africa transportation, and risk management ( as well as agricultural Cargill United States Kenya, Mozambique, South Africa, Zambia, Zimbabwe consulting and manufacturing of biofuels and animal feed in some cases ) Louis Dreyfus Commodities Netherlands Kenya, South Africa Cotecna Switzerland South Africa Djibouti, Kenya, Mozambique, South Africa, the United Intertek United Kingdom Republic of Tanzania, Uganda NSF United States South Africa Quality testing and certification SCS United States None ( Only Ghana in Africa )

Burundi, Djibouti, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Mozambique, South Africa, United Republic of SGS Switzerland Tanzania, Uganda, Zambia, Zimbabwe

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

[ THE WAY FORWARD ] 48

Furthermore, most of the companies in Table 3 already outranks Myanmar. With respect to the United Republic of have presences in the region. Future investment projects Tanzania and Kenya, Ethiopia ranks significantly worse in in Ethiopia might originate with headquarters or with these terms of economic freedom and level of industrialization regional affiliates. For the companies with no presence cur- ( United Nations Industrial Development Organization ), al- rently in Ethiopia, a first venture would likely take the form though it does better in terms of the perception of corrup- of a sales office. Although this does not create the jobs, tion. In terms of the ‘set of institutions, policies and factors technology spillovers or skill spillovers of a manufacturing that determine the level of productivity of a country’ ( WEF ), project, for example, the possibility of a sales office should Kenya does significantly better than Ethiopia. not be dismissed by investment promoters as being of low Perhaps more important than the position of Ethiopia’s value. A first sales office is an opportunity for a foreign com- investment climate is its trajectory. Its impressive eco- pany to make tentative entry into a new market, learning the nomic growth of the last several years ( 6 %–12 % per year, business landscape and achieving a level of comfort. Of depending on the data source ) and recent reforms have more immediate importance, it can provide Ethiopia’s pulses helped Ethiopia achieve significant positive buzz in inves- sector with valuable access to more affordable, high-quality tor circles as a rapidly emerging economy. Underlying the inputs that are essential to the strengthening of the sector. Government’s business environment reforms is its national development plan, the GTP. The GTP targets Ethiopia achieving middle-income sta- THE ETHIOPIAN BUSINESS tus by 2025, with enhanced productivity in manufacturing ENVIRONMENT FOR THE PULSES SECTOR as a key driver. Public expenditures and domestic savings are far from adequate to the task, so foreign investment is The national investment climate cited as crucial to realization of the GTP. Anecdotal evidence suggests that investors generally view Ethiopia’s high-level Table 4 presents several indicators of the attractiveness government commitment to FDI in certain sectors as being of Ethiopia’s business environment, particularly as it com- deep and meaningful, with investors being given ‘red carpet’ pares with those of other likely destinations for pulse FDI. treatment, including direct access to the Prime Minister and In terms of the ease of doing business, Ethiopia is in the other officials. Agroprocessing is one of the GTP’s eight sec- same ballpark as India, Pakistan, the United Republic of toral priorities and well-organized sector stakeholders with Tanzania and Kenya. Myanmar, which is the source of 90 % a clear vision of the sector’s development potential would, of India’s imports of pulses, lags significantly, giving East in principle, receive the same practical commitments from African countries a relative selling point among Indian and the Government. Pakistani investors. Chief among the Government’s business environment Based on interviews with sector experts, it appears reforms have been large public investment in infrastructure that Myanmar, the United Republic of Tanzania, and Kenya and power generation ; creation of industrial zones with dedi- are Ethiopia’s closest competitors for Indian and Pakistani cated infrastructure and special incentives ; and streamlining investment in pulse trading and basic processing. By the of Government procedures through clarification of the com- investment climate measures below, Ethiopia consistently mercial code and setting up of an effective one-stop shop.

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

United Republic International benchmark India Pakistan Kenya Bangladesh Ethiopia Myanmar of Tanzania 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

[ ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES ] 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

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

Sector specifics The Ethiopian Agricultural Transfor mation Agency ( ATA ) is implementing 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 agribusiness 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 factory and manufacturing warehouse schemes Various non-fiscal incentives for exporters.

In Ethiopia, agricultural wages are approximately US $ 55 per The percentage of agricultural land that is irrigated is month, and electricity is US $ 0.02–0.05. This is much more very low and comparable to the percentages in Myanmar competitive than in either the United Republic of Tanzania and Kenya, though lower than in the United Republic of or Kenya ( see table 5 ). However, the agricultural value add- Tanzania. In terms of the average application rate of fer- ed per worker ( in constant 2005 US $ ) in Ethiopia ( 269 ) is tilizer ( in kilograms / ha / year ), Ethiopia’s ( 14 ) is more lower than in both the United Republic of Tanzania ( 310 ) than the United Republic of Tanzania’s ( 5 ) but less than and Kenya ( 390 ). Kenya’s0 ( 3 ).

[ THE WAY FORWARD ] 50

FUTURE VALUE CHAIN

Figure 8 : The future pulses value chain

Input Production Assembly Processing Markets

State International Irrigation Commercial Consumer 20% Farms 1-2% (Very few left) • India Cleaning • China Skilled Labor • Egypt Private International • Pakistan Transporter Commercial • Bangladesh Farms <2.5% ECX Sorting & Grading UK Quality (Very big) • Seeds EGTE • Italy ESE • Spain • Algeria Assemblers Quality Control • Other Quality Customs Fertilizers Brokers Primary Cooperatives National Consumer Dehusking & 50% Quality Splitting Pesticide & Local Insecticide Retailers • Urban Warehousing supermarket (Processors, ECX, Smallholder & Exporters • National Local Medum-sized Local EGTE, ESE) (40 Adama) Wholesalers Consumer Land Producers

>95% (8 to 9 Million) Regional Packaging Wholesalers Modern Machinery Marketing & labeling Farmers’ Unions

Transformation Subsistence Needs 30% Processors

National Component International Component

Unlocking the potential of the pulses sector will require Of the segments depicted in the future value chain, FDI will transformations throughout the value chain. These adjust- be the sector’s main engine of growth over the next several ments, as reflected in the future value chain schematic ( fig- years. Realizing a future value chain with the aforementioned ure 9 ), are the result of the targeted efforts detailed in the characteristics depends heavily on the ability of the sector PoA that address the constraints identified in the four gears stakeholders to : analysis. The future value chain will be characterized by : i. Create linkages between FDI and domestic producers i. Greater use of quality inputs including quality irrigation ii. Quickly address the infrastructural, bureaucratic systems, skilled labour, quality seeds, quality fertilizers, and logistical constraints that harm Ethiopia’s global quality pesticides / insecticides, land and modern farm competitiveness machinery ( e.g. planters, sprayers ) ; iii. Proactively develop smallholders’ agricultural skills and ii. An increased percentage of medium-sized farms and a knowledge of agricultural best practices. decrease in smallholder producers ; iii. Increased transparency and support services between FDI in support services and industrial zone development all stakeholders during the assembly phase ; would closely follow. Also, as the quality and quantity of do- iv. Development and promotion of quality standards and mestic pulse production increases, a greater supply of FDI increased use of modern machinery during the process- may flow to integrate processing systems, thereby further ing phase ; reinforcing the national value chain. v. Increased markets, i.e. India, and strengthened ties to current ones.

[ ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES ] 51

Inputs Assembly a. Rainwater  irrigation. Smallholders and mid-sized a. ECX potentially includes pulses under its trading umbrella. farmers move from exclusively relying on rainwater to b. ESE potentially acts as a seed bank. It also has vis- understanding the benefits that various alternative or ual dictionary on file for the benefit of all value chain complementary types of irrigation can bring. stakeholders. b. Unskilled labour  skilled labour. Part of the labour c. Local retailers, regional and local wholesalers, and force acquires important skills through their participation farmers’ unions begin working together. There is effec- in crop rotation, planting and postharvest programmes, tive information exchange between these. There is also and their increased exposure to sector specialists.108 an Internet-based platform that provides real-time and c. Seeds  quality seeds. A quality standards gap map up-to-date information that is relevant to pulses value of Ethiopian pulses is developed, use of improved seed chain stakeholders. varieties is promoted, and quality seeds are cheaper and readily accessible from ESE.109 d. Fertilizers  quality fertilizers. Quality fertilizers are Processing affordable and accessible, and classes are available to understand and implement the proper use of these. This a. Quality control. Quality standard requirements are de- leads to increased production.110 veloped, promoted and implemented by stakeholders in e. Pesticides & insecticides  quality pesticides & the processing phase. insecticides. Quality pesticides and insecticides are b. Dehusking and splitting. Modern machinery is pur- affordable and accessible, and classes are available to chased and used for dehusking and splitting pulses. understand and implement the proper use of them. This c. Warehousing. Educational programmes and increased leads to increased production.111 skills have led to the use of pesticides during storage f. Farm equipment  modern machinery. Appropriate and the use of better storage units. farm mechanization technologies have been identified i.e. raw planters, combine harvesters and threshers are purchased and are being used. This leads to significant Leveraging market opportunities reductions in farmers’ production costs.112 Customs. Customs processes are modified to reduce both the amount of time needed to clear Customs and the Production amount of paperwork to export pulses. In order to take advantage of existing and future market a. Smallholder farms  smallholder & medium-sized opportunities, Ethiopia should continue to deepen trade of producers. The average size of private commercial unprocessed pulses and simultaneously develop an indus- farms increases. A plan to increase the average size of try of processed pulses. pulse farms is implemented. This includes trainings on The move towards gluten-free diets is promoting the use the use of contract farming, which leads to the increase of pulses. The last few years have seen important changes in private commercial farms.113 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- 108.– This would be achieved as a result of the implementation of the activities 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. ucts is not easy. Pulses, such as yellow peas, lentils and 109.– The PoA targets this area in sections 1.1.2, 1.1.3, 1.3.1 and 1.3.2. chickpeas, are already gaining recognition as the ‘new and 110.– 1.2.6 Increase production through better use of biofertilizers and similar improved’ heart of healthy foods. The high-quality protein in inputs and agronomic practices. dry pea, lentil and chickpea flour makes for a perfect amino 111.– 1.2.1 Increase production through increased and responsible use of acid offering when blended with other gluten-free grains pesticides. such as rice flour. What is more, these pulses deliver quan- 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- tity as well as quality : Dry pea, lentil and chickpea flours tee plan involving commercial banks, microfinance institutions, donors and contain 22 %–25 % protein, are high in lysine and listed as the public sector. The beneficiaries of the fund would have to first graduate both a vegetable and protein. This is pushing the demand 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. for pulses from non-traditional consuming countries. 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 114.– Gluten is comprised of proteins ( e.g. gliadin, glutenin ) predominantly to streamline the number of intermediaries in the pulses sector. found in cereal grains such as wheat, rye and barley.

[ THE WAY FORWARD ] 52

Pulses are increasingly being used for products like noo- pulses, even processed pulses, have been banned. This dles, pasta and chips, and as ingredients in other processed has led to some structural changes, and processing plants foods as an alternative to animal protein. The rise in the mid- are being relocated to places like Dubai and Singapore, in dle class in non-traditional markets like the Africa and Asian part because raw materials for processing are readily avail- markets, followed by the rise in supermarket culture, has led able to Indian processors in these locations. Also, the cost to an increase in demand for processed foods. The types of of processing is low and exporting is less competitive. In pulses that are seeing an increase in use by the processing addition, transnational companies have started to dominate industry overseas are chickpeas and dry peas. These are value chains. With a big regional market for dhal, the ben- precisely the types that are grown in Ethiopia. efits of agreements like AGOA and Everything But Arms cre- The opportunity for Ethiopia is further increased due to ate opportunities for Ethiopia to attract FDI. some structural changes that have taken place in recent Processing is an option in the short term given the low times in India – the largest consuming and importing coun- cost of processing pulses in Ethiopia. However, processing try. Traditionally the large South Asian diaspora across the for other products like pasta and chips may take some more world imported processed dhal from India and other neigh- time. Box 1 illustrates the matrix of product and market op- bouring countries. However, since 2006 Indian exports of portunities available to the sector.

Box 1 : Ethiopia’s product and market opportunities

Existing pulses New pulses Deepen the market Product development Haricot beans, pea beans, horse beans, chickpeas and lentils : Processed dhal to the regional market, Existing Gulf States ( Saudi Arabia, Yemen, Israel ) the United States and the United Kingdom markets EU Processed pulse flours to the UAE and the EU Asian countries ( mainly Pakistan ) Neighbouring African countries Market development Diversification New Mung beans and lentils to India Pigeon peas to India markets New varieties of chickpeas to India, Pakistan and the UAE

MOVING TO ACTION

The development of the future value chain for the pulses These actions aim to enable the implementation of the road- sector is a five-year project defined through a consultative map’s PoA in a coordinated and transparent manner. Pulses process between public and private sector stakeholders in being an emerging sector, a large share of value chain de- the country. Achieving the future value chain of the pulses velopment will fall under the responsibility of the private sector depends heavily on the ability of sector stakeholders sector as key drivers and beneficiaries. By enabling and to implement the activities defined in the roadmap. For this supporting private sector operators to develop the sector, reason, it is recommended that the following key areas of policymakers will be able to contribute to its overall national intervention be implemented with priority in order to facilitate development goals. 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 technical 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.

[ ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES ] ROADMAP PLAN OF ACTION

The following PoA provides the overall framework that will guide the implementation of the strategic 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 )

- TL III

future

) /

)

) on chickpea

funded by the ITC ICRISAT

FAO Tropical Legumes Legumes Tropical International donor agencies, International Research Crops Institute for the Semi-Arid Tropics III project ( III project ( Bill and Melinda Gates Founda tion on No project pigeon pea ICRISAT, International Centre Trade ( ( Ongoing development programmes + international partners - - - - ),

- ),

- )

EIAR

RARIs

BoA MoA

), ATA

FCA

Leading national institution and possible implementing partners Seed companies MoA, ICRISAT, ESE EIAR Agricul - Regional In tural Research Ethiopian Invest - ment Agency Ministry of Agri - stitutes ( of Agri Bureau culture ( MoA, Federal Co operative Agency ( - Edget Seed Pro duction and Mar keting Union culture culture ( Ministry of Finance and Eco nomic Develop ment, Ethiopian Institute of Agricultural Research ( seed enterprises )

Seed bank established or the of ESE redefined role Number of seeds identified Number of stocks available Eight woredas in four regions in four regions Eight woredas ( Amhara – omia – three, – one, SNNPR Tigray three, – one Start with 600 ha under each variety Five extension officers and 50 farmers in each woreda trained Increase in the average Increase farm size during the implementation of the roadmap in the number of Increase farms dedicated large-scale to pulses Number of pulses clusters established Number of pulses varieties provided Number of beneficiaries varieties improved Number of implements adopted and introduced, distributed to users

Target measures Target • • • • • • • • • • • • 2020

X X 2019

X X X 2018

X X 2017

X Starting period 2016 3 3 1 Priority 3=low 1=high 2=med - ; -

affordable ge :

educe the cost of production while educe the cost of production :

;

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

) for farms to integrate or mer

) most commonly used to r

ebates ;

;

Strategic objective 1 ). The aim of these clusters would be to

and should be

four

average size of pulse farms. This activity is divided in two parts. In the short term, it i.e. tax incentives, temporary r

) and mung beans (

two

), pigeon peas (

Store seeds as a source for planting or multiplication in case seed reserves elsewhere are destroyed. Ensure availability of Ensure destroyed. are elsewhere for planting or multiplication in case seed reserves seeds as a source Store strategic to Ethiopia, and for biodiversity reasons. pulse varieties that are Maintain stocks of certified seeds for farmers. This function should operate under a system of quotas Organize smallholder farmers for collecting production Organize second-hand acquisition and imports, mechanization services through to guarantee access appropriate resources Pool among other initiatives and testing of new machinery, for pulses appropriate adopt and pilot new farm machinery for ploughing, planting, harvesting threshing Introduce, Allow farms to enjoy the benefits of size under a loose form integration testing the introduction, in demand through seed varieties of pulses that are improved Supply the market with affordable and multiplication of seeds. The use of fiscal incentives ( The use of integration incentives such as mandatory minimum volumes market mechanisms. of land rental The promotion ( seed varieties that are Identify the improved level of quality. ensuring the required among farmers on the cost advantages of identified varieties. Exporters should get involved. awareness Create that enables the supply of sufficient seeds. Farmers’ associations will play a Develop a seed multiplication programme in distributing the seeds. role Experience- and knowledge-sharing between Indian Ethiopian farmers. Develop a package of best practices for profitably. pulses crops producing farmer training centres. demonstrations through and organizing production of extension personnel, and promoting Training

four

Develop a plan to increase the 1.1.1 Develop a plan to increase and materialize some of the benefits integra that allows farms to pool resources consists of piloting a clustering approach tion in a loose form. In the medium-to-long term, activity consists of making use fiscal incentives to encourage pulse farms to gain size. of 10 clusters pulse farms dealing with chickpeas will seek to establish a group In the short term, the clustering approach Activity The seed bank aims to lower the cost of inputs while ensuring the long-term sustainability of the pulses sector. The seed bank aims to lower the cost of inputs while ensuring long-term sustainability pulses sector. In the medium-to-long term, the fiscal approach would seek the formation and consolidation of large-scale farms through farms through would seek the formation and consolidation of large-scale In the medium-to-long term, fiscal approach in a better position to exploit economies of scale They are farms operate under lower average cost structures. Large-scale costly investments in irrigation and mechanization. This activity should be developed parallel derived from and synergies to 2.1.6 on contracting. and feedback. Collect and incorporate farmer preferences 1.1.3 Establish a seed bank that guarantees farmers’ access to seeds they need when them. This activity will of ESE, which is the institution with a mandate that closest to seed bank. The main func the role focus on relaunching tions of the bank would include following. • • seeds. The focus of this activity is on seed multiplication. elaboration the plan would take into consideration some the following elements. ( • • • • • include the following incentives. Some of the incentives that could be considered appropriate • • • farms’ and smallholder farmers’ access to sufficient amounts of 1.1.2 Develop a plan that facilitates commercial • • • • • - 1.1 Lower the aver age cost of producing pulses. Operational objective

[ ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES ] 55 future

Multinational financial institu - tions Ongoing development programmes + international partners - - farmers’

Govern

Leading national institution and possible implementing partners ment Melkassa Agri - cultural Research Centre, Agricul - Debrezeit tural Research model Centre, Non-government - organiza Non-government organizations Microfinance institutions, com banks, mercial SITA tions farmers organizations Mechanization core team Mechanization core formed in site visits Participation technologies At least three identified Credit guarantee plan Credit established Number of financial institutions participating Fund established Number of farmers who have access to credit

Target measures Target • • • • • • • 2020

X 2019

X 2018

X X 2017

X X Starting period 2016 1 2 Priority 3=low 1=high 2=med - ) that

eshers y appropriate y appropriate ginal one. ) to identif

they will have a dedicated

) a mar

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

raw planters, combine harvesters and thr

technologies ( Strategic objective 1 involving commercial banks, microfinance institutions, donors and the banks, microfinance involving commercial ticipation in trade fairs and on-site visits of Indian partners par

ticipate with a small percentage of the total amount of funds and to provide or finance the of the total amount funds and to provide ticipate with a small percentage ). Some of the most immediate actions would include following.

) willing to par

funding and credit guarantee plan Identify the financial institutions that would take part in the scheme. donors and the Government. The private sector would the private sector, Negotiate the specific allocation of funds from and donor( have to assume most of the initial capital, public sector a small percentage, Identify a donor( conditional capacity-building. that will be required. training programmes Identify the capacity-building seed multiplication, technology development, to support, including seed development research, Decide the priority areas and processors. infrastructure Identify the eligibility conditions for pulses value chain stakeholders, i.e. farmers, companies, individual entrepreneurs and cooperatives. Choose decision-making criteria and rules for the functioning of fund. team Form a mechanization core ( Conduct desk and field research farm mechanization technologies along with Demonstrate the identified mechanization equipment at farms in collaboration with farmers’ organizations, training of technologies and equipment in the pulses sector. Develop good practices for the introduction

Identify and pilot appropriate f arm1.1.5 Identify mechanization and pilot appropriate 1.1.4 Set up a public sector. The beneficiaries of the fund would have to first graduate from the credit guarantee mechanism to later tap into the credit The beneficiaries of the fund would have to first graduate from public sector. guarantee would be with high impact potential. Credit capital-intensive projects the funds that would be intended for more on capital and the unconditional capacitation of against a combination of factors, including the ‘expected’ return provided Activity Facilitating smallholder farmer access to finance is expected to help them reduce the cost of inputs and other production the cost of inputs and other production Facilitating smallholder farmer access to finance is expected help them reduce and quality re production opportunities for others in the value chain to increase services. It is also expected to create to operational objectives 1.1, 1.2 and 1.3. duce the overall cost of pulses. This activity is cross-cutting costs. technical solutions that can sustainably lower production affordable are This activity intends to demonstrate that there cost it should be developed in parallel to 1.1.1. for it not to raise production In order beneficiaries. The scheme would be open to all stakeholders of the value chain except exporters ( mechanism under 2.2 • • • • • • • technologies and equipment that costs. This should include mature in farmers’ production can lead to significant reductions cost. The actions would consist of the following of farmers at reasonable groups can be easily made available to large • • • • - 1.1 Lower the aver age cost of producing pulses. Operational objective

[ ROADMAP PLAN OF ACTION ] 56 future

TL III on chickpea on No project pigeon pea ITC ICRISAT, TL III project on TL III project chickpea on No project pigeon pea ITC ICRISAT, Ongoing development programmes + international partners Leading national institution and possible implementing partners EIAR RARIs, BoA, MoA, FCA, ATA MoA MoA EIAR, RARIs, BoA, FCA ease in ease in % incr

% incr

At least 8 5 production, per year for chickpea area onwards year three from At least 1,000 ha under pigeon pea exporting at least 750 tons Mapping of the regions with Mapping of the regions rotation potential for crop done Number of packages developed completed project Pilot At least one herbicide identified, tested and registered of trainers trained in A group IPM practice Five extension officers and 50 farmers in each woreda trained per year in IPM One piece of equipment identified Number of farmers using pest management systems Number of IPM tools to farmers introduced

Target measures Target • • • • • • • • • • • 2020

X X X 2019

X X X 2018

X X X 2017

X X Starting period 2016 1 2 2 Priority 3=low 1=high 2=med - :

;

ol pre- and post-harvest pests diseases by ol pre- : Boost productivity and quality by using public market-led incentives.

alternative weed control mechanisms and pesticides, alternative weed control operational objective 1.3

, several initiatives for promoting chickpeas are already already chickpeas are , several initiatives for promoting Tsehay ) practices to contr

IPM

Strategic objective 1 by integrating the production systems of the pulses and production area by integrating the ;

Map out the main plagues and diseases and the most suitable pesticides to address them Map out the main plagues and diseases most suitable pesticides to address sustainable development of the sector Identify soil characteristics and the type quantity of fertilizers and the maximum amount of pesticides for use of pesticides among farmers, using bulk Develop a mechanism to disseminate information on the responsible use of alternative ways to make farmers conscious of the importance of responsible text messages and radio. Explore pesticides. – – – Increase the area under production by promoting crop rotation with chickpea and intercropping with pigeon pea. with chickpea and intercropping rotation crop by promoting under production the area Increase harvesting, threshing Improve supplemental irrigation, especially in semi-arid areas. by providing productivity Improve and transporting. The ‘Desi’ these crops. with the potential to grow of chickpea and pigeon pea in non-traditional areas production Promote new product a relatively peas are variety of chickpea is quite common, but the ‘Kabuli’ one new to Ethiopia. Pigeon Adama and Lume like Becho Woliso, to Ethiopia. In areas being developed and should be taken into account. Map the regions and the matching crops with the highest potential for crop rotation. The exact cropping pattern can only The exact cropping rotation. with the highest potential for crop and the matching crops Map the regions testing of the land and logistical considerations have been taken into account, e.g. suitable be defined after agronomic storage. of The package should specify a group agroecologies. package and practice suitable to different rotation Develop a crop pilot regions. of farms that will pilot the initiative. Select the group of the pilot project. Assess the results Decide on whether extension of the pilot is desirable. Identify, test and promoting the use of herbicides that affect chickpeas. test and promoting Identify, Management ( the use of Integrated Pest Promote training and capacity-building. the cost of weeding, harvesting and threshing. tools and machines that can reduce Identify and promoting the use of pesticides for pest management. Promote Develop a plan to facilitate farmers’ access pesticides. This could include some of the following actions – – –

Pilot a programme of expansion the a programme 1.2.3 Pilot sectors. This activity would include the following actions. cereal programme that encourages the use of this agricultural practice among local farmers. The actions a crop rotation programme 1.2.2 Pilot for this activity consist of the following. Increase production through increased and responsible use of and responsible increased through production 1.2.1 Increase practices. The actions for this activity would consist of the following. agronomic Activity This activity would have the additional positive effect of boosting production without increasing the surface of land dedicated without increasing This activity would have the additional positive effect of boosting production sustainability. is a link with activity 3.2.1 on environmental to agricultural uses. There Crop rotation involving pulses is beneficial to soil structure and stability. Pulses add nitrogen and also a significant amount add nitrogen Pulses and stability. involving pulses is beneficial to soil structure rotation Crop facilitate being rich in nitrogen, and leaf litter, Roots biomass and leaf litter. to the soil in form of root residues of organic This activity is intended to have an impact on rais activity. microbial in soil and increase residues the decomposition of crop ing productivity. Improving the capacity of the sector to deal with pests is intended to boost the production of all current pulses but will also of all current the capacity of sector to deal with pests is intended boost production Improving • • • • • • • • • • • • • the quality of pulses ( have a significant impact on improving - 1.2 Expand the pro duction of pulses. Operational objective

[ ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES ] 57 future

ITC TL III on chickpea on No project pigeon pea ITC ICRISAT, ICRISAT Ongoing development programmes + international partners - ESE,

)

- ;

Leading national institution and possible implementing partners MoA EIAR MoA . MoA - Agricultural Re Institutes search EIAR, coop eratives, seed EIAR RARIs, BoA, FCA enterprises ( seed regional enterprises - Edget Seed Pro duction and Mar keting Union Inventory of fertilizers used completed At least five fertilizers identified, tested and registered of trainers trained in A group biofertilizer practices Five extension officers and 50 farmers in each woreda trained per year One piece of equipment identified Number of farmers using biofertilizers fertilizers A plan to introduce developed Assessment on mechanization completed Assessment on packaging completed of spare Plan for provision parts developed Indian distributors Visit from organized Amount of seed supply and number of varieties conducted programme Pilot

Target measures Target • • • • • • • • • • • • • 2020

X 2019

X X X 2018

X X X 2017

X Starting period 2016 3 3 2 Priority 3=low 1=high 2=med - operational

, Japan, China i.e. packaging

. The actions for this i.e. Brazil, Italy

higher yielding varieties.

tilizers against affordable alternatives tilizers against affordable mechanization dable : Boost productivity and quality by using public market-led incentives.

or affor

) of the identified fer

in the country. This would include the following seed varieties in the country. Strategic objective 1 biofertilizers practices. The actions for inputs and agronomic and related -based seed multiplication model, preferably with cooperatives that have their own -based seed multiplication model, preferably egister market-demanded legume varieties. r

oductivity, impact on the environment oductivity, ganic and non-organic. i.e. pr

or community

: or

Increase production of pulses through better use of available and of pulses through production Increase Make an inventory of the most common types of fertilizers currently used. Fertilizers should be grouped according to two according used. FertilizersMake an inventory of the most common types fertilizers should be grouped currently categories broad ( the properties Test pulse growing among the different in the market. This study should be done taking into consideration soil differences regions. points and make the main conclusions available to farmers input providers the previous Document the lessons from in the value chain. involving a limited number of farmers. a pilot exercise the use of identified fertilizers through Promote fertilizers. Develop a plan to supply the farming community with required Take stock of existing registered varieties that have not been commercialized. MoA has a database of all registered seeds. MoA has a database of all registered varieties that have not been commercialized. stock of existing registered Take a private and Pilot farming land for seed multiplication. ICRISAT could also play a role. and exporters. seed users, processors for basic seeds, seed producers, centres Facilitate dialogue among research within and outside the country that have worked. best practices from Share institutes. will be conducted by research new types of seeds. Trials Explore Develop a number of demonstration plots for farmers to understand the benefits hybrid Facilitate interaction between seed companies, exporters, farmers and ICRISAT. test and release Introduce, and certified seeds of these legume varieties. basic, pre-basic Multiply breeder, Conduct an assessment of farmers’ mechanization needs for the next five years. Emphasis should be placed on irrigation, such as tools and machines that reduce and equipment that can be used for pulses other crops, light infrastructure the cost of weeding, planting, harvesting and threshing. Conduct an assessment of assemblers, and assemblers’ mechanization needs for the next five years ( equipment support parts services. and affordable the availability of spare Define a plan to ensure face to with farmers. and distributers in the region Bring Indian equipment manufacturers alternative to India that can offer similar value for money ( sources opportunities from Explore and Viet Nam

Increase production through better use of through production 1.2.6 Increase this activity will involve the following. actions. Fast track the introduction of new high-yielding pulse 1.2.4 Fast track the introduction Activity 1.2.5 This activity intends to increase production through more effective use of fertilizers. Although in the short more term it could have through production This activity intends to increase This activity is intended to provide high-yielding, market-demand-driven improved varieties and inputs of targeted pulse varieties and inputs of targeted high-yielding, market-demand-driven improved This activity is intended to provide commodities for smallholders. • • • • • cost of pulses ( a cost implication, in the medium term it will also contribute to lowering average production objective 1.2 • • • • • • • • • • • • • • modern mechanization and to connect potential beneficiaries of equip the use of more This activity is intended to promote ment to its providers. activity consist of the following. - 1.2 Expand the pro duction of pulses. Operational objective

[ ROADMAP PLAN OF ACTION ] 58 future

ITC–SITA, ITC TL III on chickpea on No project pigeon pea ITC ICRISAT, Ongoing development programmes + international partners - Leading national institution and possible implementing partners MoA EIAR, EPOSPEA MoA EIAR, seeds en terprises EIAR EPOSPEA, ENAO EIAR RARIs, BoA, MoA, ATA, Ethiopian Stand - Agency, ards Ethiopian Con - formity Assess - ment Enterprise, EPOSPEA %

% fr

Number of trainees visits Number of exposure Export rejections reduced to reduced Export rejections 5 12 om the current Number of varieties and promoted introduced Number of documents

Target measures Target • • • • • 2020

X X X 2019

X X X 2018

X X X X 2017

X X X X Starting period 2016 X 2 3 2 1 Priority 3=low 1=high 2=med :

, Ethiopian ; however

). Attention should be paid to high-quality

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

ting, size sorting, etc. by target market. The actions for this activity consist of by target Strategic objective 1 colour sor

quality standard requirements of seeds for production per market requirement. The actions for this activity per market requirement. improved varieties of seeds for production :

Train 100 model farmers from each cluster in 1.1 on pre-harvest, planting, handling and management agro-techniques. each cluster in 1.1 on pre-harvest, 100 model farmers from Train development agents, agricultural experts the Farmers’ Cooperative Union. and cooperative experts from Train sort seeds prior to planting. and farmers on the need to properly among seed producers Raise awareness value addition ( Identify the varieties that require price. with a premium products visit to India for farmers, traders and exporters. a knowledge-sharing and exposure Organize Forming clusters of production areas targeting specific variety and quality as required by the target market by the target specific variety and quality as required targeting areas Forming clusters of production markets of target cleaning and grading technologies to meet the grades standards Developing and promoting price with quality quality pulses by linking purchase to produce Incentivizing producers extension officers and buyers on grades standards Training for pulses Developing a module on international quality standards a training workshop on quality standards. Organizing Identifying improved varieties for quality Identifying improved varieties and adopting the improved Introducing varieties Multiplication and scaling up of the improved Mapping out seed varieties to destination markets of 1.3.1, matching the quality gaps to most suitable seeds per region. Based on the results Create awareness of quality standards among farmers. of quality standards awareness Create Identify in quality has been the size of the gaps in quality of pulses for export, e.g. one of the major problems in the ‘Desi’ variety chickpeas. The major consuming markets look for grain size of 8-10 millimetres Also, the colour of pulses is often a quality impediment. a bit smaller. chickpeas are quality in 1.3.2. Benchmark existing quality against the desired Develop collaboration between ENAO and Indian institutions for mutual recognition. and conformity assessment bodies. agreements with ENAO to develop a network of mutual recognition Work

Develop and promote 1.3.3 Develop and promote Promote the use of 1.3.2 Promote 1.3.4 Develop pre-harvest capacities for farmers, traders and exporters. The actions for this activity consist of the following 1.3.1 Develop a quality standards gap map for Ethiopian pulses. The actions this activity would consist of the following. Activity The fragmented nature of the farming system makes it difficult for farmers to access knowledge and extension services The fragmented nature their techniques. This activity aims to make the necessary training available. In addition, is that would improve of occur at the moment buyers and suppliers that currently market defaults from expected to have an impact on reducing delivery due to adulteration of pulses. A benchmarking study that will develop a matrix of the quality required and produced is needed. and produced A benchmarking study that will develop a matrix of the quality required The market requirement referred to is related to varieties that the markets prefer. For example, in India the variety of chickpea to varieties that the markets prefer. to is related referred The market requirement yellow in colour. is a bit bigger in size and more that is preferred This activity is intended to focus on quality issues in production. This activity is intended to focus on quality issues in production. • • • • • will consist of • • • • • • • • • • • • • • • • - 1.3 Improve the over the pulses of quality all that are produced. Operational objective

[ ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES ] 59 future

TL III on chickpea on No project pigeon pea ITC ICRISAT, Ongoing development programmes + international partners )

) -

- SNV

deliver training

Leading national institution and possible implementing partners EIAR MoA, broadcast ing services MoA Private suppliers, EIAR, RARIs, BoA, MoA, FCA, ATA Netherlands Development Or ganization ( ( om the %

% fr

%–30

Number of promotional Number of promotional air time materials produced, covered for promotion Number of postharvest handling structures Number of trainees losses are Postharvest to 15 reduced current 20

Target measures Target • • • • 2020

X X 2019

X X 2018

X X 2017

X X Starting period 2016 X 1 3 Priority 3=low 1=high 2=med - posthar :

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

on walls Strategic objective 1 and quality controls. This activity would require the following actions This activity would require and quality controls. ehouse management. Exporters and processors should also take partehouse management. Exporters in this training. This and processors new technologies cemented floor and corrugated ir

unions on war

unions (

Promote the use of existing storage infrastructure and systems. Improper storage may lead to infestation and loss due and systems. Improper the use of existing storage infrastructure Promote important aspects that need to be to sunlight are exposure and controlling ventilation, temperature Proper to moisture. management to pests, and rodent exposure Sanitation of the premises, maintained in developing storage infrastructure. critical. are under cost- warehouses of affordable needed. This will consider the rental Develop additional storage capacity where at primary For example, a pilot warehouse sharing schemes and public–private partnership cooperation structures. cooperatives farmers on storage, Train on postharvest management techniques for farmers and aggregators. capacity-building Provide and cooperatives impurities. machinery and the use of grading to reduce pre-cleaning would include, among other areas, damage pulses during their storage. The of storage pests. Insects and microorganisms efficient control Provide Celsius and above the freezing below 25 degrees storage techniques imply that the pulses must be stored recommended point. Assess technological needs Diagnostic of innovation capacity mass media and other communication materials. to quality assurance and specifications through of production Promotion

Strengthen the capacity of farmers and assemblers to deal effectively with challenges associated 1.3.5 Strengthen Activity This activity is intended to focus on quality issues that originate postharvest. There is a common understanding among the This activity is intended to focus on quality issues that originate postharvest. There the price of pulses is high enough. stakeholders that farmers can assume the postharvest activities, provided This activity is intended to focus on the long-term determinants of productivity. Promote the use of 1.3.6 Promote • • • • • • • vest linkages of the value chain. The actions for this activity consist following. - 1.3 Improve the over the pulses of quality all that are produced. Operational objective

[ ROADMAP PLAN OF ACTION ] 60 - - future

International do nor agencies ITC International do nor agencies ITC–SITA team SNV Ongoing development programmes + international partners ------& Sec

to be de

) and EIAR.

trade at

)

Leading national institution and possible implementing partners toral Associations, ECX, FCA ernments and other from representatives the private sector tween EPOSPEA, a academic relevant EPOSPEA ATA, EIAR, MoA, ECX, all other relevant stakeholders such pro as researchers, ducers, traders, county gov Ministry of Foreign Collaboration be Affairs ( tachés EPOSPEA, ATA, EIAR, MoA, BoA, Ethiopian Chamber of Commerce institution ( termined Identified academic Schools institution’s Trade of Languages, Establishment of the national pulses platform Composition of the public and private sector members determined Definition of concrete governance rules Definition of specific for terms of reference its members Establishment of the system At least 2,000 beneficiaries accessing the the information from platform One web portal upgraded Dictionary published

Target measures Target • • • • • • • •

2020

2019 2018

X X 2017

X X Starting period 2016 X X 3 1 1 Priority 3=low 1=high 2=med - - - - i.e.

: meeting

relevant to the stakeholders information relevant ) to manage and maintain the information system.

t competitiveness by strengthening the connection between producers and intermediaries in value chain. EPOSPEA and others

: Improve expor

that acts as the focal point of the sector. The main functions of the platform are to repre The main functions of the platform are that acts as the focal point of sector. ).

Strategic objective 2 Define the relationship between EPOSPEA and the platform. In principle, the platform should be sponsored by EPOSPEA ( between EPOSPEA and the platform. In principle, platform should be sponsored Define the relationship of meetings facilitation and organization policy issues and the stakeholders address a stakeholder platform where the experience of honey sector to create from Learn best practices in a similar platform. SNV and ITC also have ample experiences on types of bodies. Build existing share initiatives and adapt them to the pulses sector. Generate and disseminate competitive intelligence. A similar initiative already of pulses on the ground. within MoA that focuses on boosting the production Establish a task force level. should act at regional exists at the federal level. This task force pulses policy. the sector and to influence relevant Determine effective ways to promote Identify the data and informational needs of the different value chain actors. Information on domestic and international prices Identify the data and informational needs of different market outlook, information on demand trends, types of pulses should be made available. In addition, relevant for the different etc. could also be made available. inputs, requirements, exported quantity, for the information required. sources Determine the most reliable Decide the most desirable way to make information available, i.e. setting up adequate text message and interactive voice information-sharing systems. response web portal is upgraded for effective information dissemination. that its current this activity with EPOSPEA to ensure Coordinate ( organizations Enhance the capacity of relevant on setting a and farmers’ organizations Capacitate the users of platform on use information, e.g. coach processors pricing mechanism. transparent academic institution that can carry out the bulk of task with a relevant Partnering types of pulses that will be included in the dictionary of the different Obtaining pictures Obtaining the scientific names as well their most common name in English Obtaining equivalent names in other languages used by trading partners and disseminating it among stakeholders. a short publication with the results Producing

Prepare a visual dictionary pic of pulses for the benefit all stakeholders in value chain. The dictionary will present 2.1.3 Prepare countries. This will include the scientific types of pulses accompanied by their most common names in different of the different tures Establish an Internet-based knowledge platform that provides real-time and up-to-date real-time 2.1.2 Establish an Internet-based knowledge platform that provides of the pulses value chain. The information should be made accessible to all stakeholders. following would most immed i ate actions. sent the interests of the sector and to coordinate all the efforts of the stakeholders in value chain. The platform should comprise of the sector and to coordinate sent the interests Its actions should be the following. both the public and private sector. from representatives Activity 2.1.1 Establish a national pulses platform This activity will enhance the capacity of value chain actors to access information and enhance transparency in the sector. Informa in the sector. This activity will enhance the capacity of value chain actors to access information and transparency 2.2 could also be eventually disseminated under this activity. tion from of those in the value chain with some international exposure. problem a practical solution to frequent This activity aims to provide a lack of common understanding the product Discussions between exporters, investors, negotiators, etc. very often suffer from at hand. • • • • • Funding required the development of pulses sector in Ethiopia and abroad. The national pulses platform should promote the which the participantsfacilities that should be supported originate must be willing to share by its members. The institutions from costs. • • • • • • languages. The actions for this activity will consist of name as well the common in different • • • • • Operational objective 2.1 Strengthen the organization of the sector to ensure the exchange of information between producers and international markets.

[ ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES ] 61 future

ITC, Export– Import Bank of India ITC Ongoing development programmes + international partners ITC–SITA - law

)

Leading national institution and possible implementing partners velopment EPOSPEA ECX Ministry of Trade Cooperatives EPOSPEA Ministry of Finance and Economic De University ( faculty Information exchange mechanism created missions Trade conducted The possibility that major exporters’ ECX is trade through analysed Farmers trained programme Pilot conducted Investment in facilities processing Amount of credit received Number of capacity- building programmes

Target measures Target • • • • • • • • 2020

X X 2019

X X 2018

X X X 2017

X Starting period 2016 2 2 3 2 Priority 3=low 1=high 2=med - - ).

rade missions umbrella. The ac umbrella. ). T

e preferred by Ethiopian e preferred ECX trading ) and ar

ope, India, China, etc. Eur

contract farming and similar contractual arrangements to esearch institutes, farmers and exporters esearch ting in red kidney beans, size sorting of chickpeas, quality seeds ting in red t competitiveness by strengthening the connection between producers and intermediaries in value chain. between farmers, processors and exporters in the working modalities between farmers, processors colour sor

: Improve expor

the team should include r

: for processors for international markets and exporters through the use of market incentives. The for international markets and exporters through for processors

Strategic objective 2 Design and pilot an information exchange mechanism to align the price expectations of farmers, assemblers, processors and Design and pilot an information exchange mechanism to align the price expectations of farmers, assemblers, processors exporters. demanded in international markets ( Identify the pulse varieties that are chickpeas, in Ethiopia are produced and are market share and exporters. The major pulses that have an increasing producers lentils, dry peas and pigeon peas. markets ( a joint mission to target Organize on both sides – visiting buyers and exporters. should be organized Develop a cost-sharing scheme for companies to pitch in testing and seed multiplication costs. Analysing the potential impact that this solution would have on reducing of the number actors in value chain. Analysing the potential impact that this solution would have on reducing of ECX to deal with pulses. Discussing the potential necessary expansion and strengthening Building a consensus among stakeholders. Developing an action plan with specific timelines. Sponsoring the necessary legal changes. Assessment of the incentives for all parties to default on contracts under existing contractual practices. default issues. Analysis of alternative contractual solutions available that would address attention will be of farmers, assemblers and exporters to test contracting under new forms of contracts. Particular a group Train paid to defaults in quality or specifications of pulses ( counsel to be provided. the contract farming schemes in selected cooperatives. Legal Pilot of the training. team for effective follow-up Set up an agronomic of farmers, an exporter and Indian importers. between a group a trial contract farming agreement Pilot Government donor assistance plus a budgetary allocation from will be a fund set up through Set up a fund for exporters. There public and pre-identified and subsidized access to finance. This component will be implemented through refinancing to provide for loans inputs. guarantees and refinancing credit private banks. The assistance will be for providing machinery from of acquiring processing the provision technology transfer through to improve Develop the capacity of processors the Export–Import from Bank of India. lines of credit India through easy terms of finance for exporters, including establishment of an export and introduce pulses as a strategic crop Promote development fund.

Train farmers, farmers’ organizations and assemblers on the use of farmers, farmers’ organizations 2.1.6 Train The actions for this activity will consist of the number of intermediaries in pulses sector. avoid market defaults and to streamline the following. Activity 2.1.4 Develop and pilot effective information exchange value chain. The actions will be the following. actions for this activity will include the following elements. 2.2.1 Facilitate access to finance This activity intends to align the expectations of farmers and exporters by piloting a seed multiplication mechanism of selected varie ties of pulses. There is a link to 1.1.2, which deals with developing effective seed multiplication schemes. ties of pulses. There This activity is intended to provide transparency to pricing practices. transparency This activity is intended to provide a common position on alternative intermediation methods. the rule of law in sector and to prepare This activity intends to ensure investors. It would have the additional benefit of levelling playing field for foreign Facilitating exporters’ access to finance should help them and those linkages of the value chain closest international markets cope better with cash flow issues generated by international transactions. Discuss with ECX and all the relevant stakeholders the possibility of including pulses under 2.1.5 Discuss with ECX and all the relevant • • • • tions for this activity will consist of • • • • • • • • • • • • • • Operational objective 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.

[ ROADMAP PLAN OF ACTION ] 62 future

ITC, ITC–SITA ITC, ITC–SITA Ongoing development programmes + international partners - Leading national institution and possible implementing partners Ministry of Foreign Ministry of Foreign Affairs EPOSPEA, Ethiopian Investment Agency, to Ministry of Trade be involved Ministry of Transport Ethiopian Revenues and Customs Au thority Ministry of Foreign Affairs EPOSPEA Number of signed agreements Number of investors of Reduction transportation costs Number of diplomatic missions involved

Target measures Target • • • • 2020

X 2019

X X X 2018

X X X 2017

X X Starting period 2016 2 3 2 Priority 3=low 1=high 2=med - t competitiveness by strengthening the connection between producers and intermediaries in value chain. ocedures for container consolidation. Different pulses from different different pulses from for container consolidation. Different ocedures ) pr

; and (

t preparing shipments in Ethiopia as opposed to Djibouti. When containers are shipments in Ethiopia as opposed to Djibouti. When containers are t preparing : Improve expor

) star

: (

to promote Ethiopian pulses abroad. The actions for this activity will consist of Ethiopian pulses abroad. diplomatic missions to promote Strategic objective 2 transportation This is intended to be achieved by provid and logistics services necessary to support the sector. capacity of the sector by creating incentives to retain existing investors and to attract new incentives to retain investment absorption capacity of the sector by creating Promote technology transfer for investors to access technology for processing and packaging. technology transfer for investors to access processing Promote potential. foods with greatest Identify the pulses-based processed technology suppliers to investors. Develop a mechanism for introducing and Ethiopian investors. with international processors joint ventures Promote for Ethiopia’s pulses sector. Develop an investment profile plants in in establishing processing identify Indian investors interested Map out all existing and potential investors. Particularly, Ethiopia. investment opportunities for new markets, products to explore countries for investment promotion visits to foreign Organize and new business partners. of business-to-business missions. the organization FDI attraction through Promoting pulses. Attract Indian investment, taking advantage of the ban on exports of processed Map the existing providers of logistics and transportation services. Special attention will be paid to all the companies offering road of logistics and transportation services. Special attention will be paid to all the companies offering road Map the existing providers transportation services to Djibouti. between the transportation companies vis--vis informing a negotiation process of road Assess the cost and pricing structure sector and service providers. of the sector and transportation and logistics services providers. a public–private consultation between representatives Organize transportation of the cost of road to reduce on specific measures As part of this meeting a negotiation should take place to agree pulses to Djibouti. for the sector to on a way forward Agree in Djibouti it takes longer and costs more prepared companies to be shipped in compartments of the same container. Identify specific storage needs for export operations, e.g. cold storage for particular types of pulses. needs of transportationIdentify companies. the long-term infrastructure Design a pilot Assess, together with Customs officials, the main impediments that slow down pulse exports at the border. for the sector. the procedures to streamline programme of pilot countries for the initiative. India would be among this list. Identify a group with them the scope of their involvement. missions, and agree Identify and contacting the relevant and samples. the necessary sales and dissemination literature Produce personnel in diplomatic missions to carry out the task. Train Assess the overall impact of initiative and take a decision on whether to extend it new countries.

ing incentives to service providers to lower the cost and increase the effectiveness of the transportation needs of the sector. This the effectiveness of transportation needs of the sector. to lower the cost and increase ing incentives to service providers activity will include the following actions. 2.2.3 Develop the ones. This activity will include the following actions. Activity the 2.2.2 Improve This activity aims to reduce the cost of transportation competitive. The main transportation and logistics to make exportsThis activity aims to reduce cost is more of this cost, as well scope for reduction parts is a large of Ethiopia to the port different transportation of Djibouti. There from for road shipments in Ethiopia rather than Djibouti. potential for consolidating shipments and preparing as great earnings and market diversification. In addition, the diplomatic missions reserve This activity should lead to the generation of foreign is a link with activity 2.2.5 on trade fairs. trade fairs. There would obtain information on relevant 2.2.4 Develop the capacities of the following. • • • • • • • • • • • • • • • • • • • • • Operational objective 2.2 Improve the capacity of the sector to enter new markets and to remain competitive in existing ones.

[ ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES ] 63 future

)

Enterprise

SITA TL III on chick - pea on No project pigeon pea ITC, ICRISAT, ATA ITC ITC–SITA Ongoing development programmes + international partners ITC ( Competitiveness section - - - & Sectoral

VOCA

Leading national institution and possible implementing partners Ministry of Trade EPOSPEA, Ethiopian Chamber of Com EIAR and federal Regional seed enterprises, BoA, farmers’ coop eratives, ATA MoA, traders and coopera processors, tives, exporters ATA, ECX, SNV, merce Associations ACDI variety

variety

or trade fairs

Number of exhibitions and Number of trade fairs attended Database of foreign associations of pulses farmers established Discussion on branding takes place At least two varieties of chickpea and two varieties of pigeon pea identified tons of Three breeder seed produced Sixty tons of certified seed produced by 600 ha covered each variety Number of contracts Number of trainers trained Number of courses given

Target measures Target • • • • • • • • • • • 2020

X 2019

X X X 2018

X X 2017

X X Starting period 2016 X 2 1 2 Priority 3=low 1=high 2=med - build on existing initiatives of

each of the organizations, their past work on pulses each of the organizations, ).

oduction, marketing, finance and market linkages. t competitiveness by strengthening the connection between producers and intermediaries in value chain. : pr

trade fairs and exhibitions. The actions for this activity consist of the ; and evaluating the r

for example, Gulfood

: Improve expor

;

of farmers, assemblers and exporters by training a small group of trainers in the sector. The ac of trainers in the sector. of farmers, assemblers and exporters by training a small group Strategic objective 2 ).

business skills Identify suitable trade fairs. This involves determining those that will maximize the chances of establishing contacts with relevant Identify suitable trade fairs. This involves determining those that will maximize the chances of establishing contacts with relevant technology companies and investors ( processors, of Pulses. to 2016 being the International Year participation in global events, especially those related Promote an international trade fair in Ethiopia which global buyers of pulses would be invited to take Study the feasibility of organizing part. of the key This would involve detailed identification and profiling Foster cooperation with overseas pulse farmers’ organizations. operating in countries such as India farmers’ organizations value chains, and their best practices discussion on branding issues. value of the ‘Ethiopia brand’ for pulses. This should lead to a sector-wide Assess the current Improve farmers’ access to the chickpea and pigeon pea seed varieties that are preferred by the Indian market. The chickpea variety preferred farmers’ access to the chickpea and pigeon pea seed varieties that are Improve variety of pigeon The preferred a size between 8 and 10 millimetres. that is most common in India called Desi. requires Myanmar. that is mostly imported from Tur pea is the Lemon Indian importers and identify and Ethiopian exporters visit ICRISAT headquarters in Hyderabad to define their requirements varieties that meet their requirements. and and private seed enterprises. This includes developing breeder national, regional through Develop a certified seed programme foundation seeds for the identified varieties. between Indian importers and Ethiopian farmers. contract farming agreements Promote Evaluate the potential to extend pilot other countries. the pilot international contract farming experience in India. Assess the lessons learned from of Indian importers of the ‘Ethiopian brand’ for pulses. Evaluate the perception businesses. the training. The training should focus on management skills for competitive of facilitators to provide Identify a group of the public sector should also officials and representatives It should be customized for farmers, assemblers and exporters. Public take part in the training. of the trainings ( of farmer cooperatives that can pilot the replication Identify a small group developing partners Develop the curricula of training. Some topics will include

Strengthen the 2.2.7 Strengthen Pilot a market entry with India. The actions for this activity will consist of the following. programme 2.2.6 Pilot following. Activity participation of the pulses sector in international 2.2.5 Promote This activity is geared towards promoting Ethiopian pulses abroad and developing pilot activities with key foreign organizations. There There organizations. and developing pilot activities with key foreign Ethiopian pulses abroad promoting towards This activity is geared is a link between this activity and 3.1. This activity should generate foreign reserve earnings. reserve This activity should generate foreign tions for this activity will consist of the following. • • • • • • • • • • • • • • • value chain. the entire This activity aims to build capacities effectively manage a business across Operational objective 2.2 Improve the capacity of the sector to enter new markets and to remain competitive in existing ones.

[ ROADMAP PLAN OF ACTION ] 64 future

ITC ITC–SITA ICRISAT TL III on chickpea on pigeon No project pea ITC ICRISAT, TL III on chickpea on pigeon No project pea ITC ICRISAT, Ongoing development programmes + international partners - s. All organizations MoA and EIAR, India Pulses Grain Association EIAR RARIs, BoA, MoA, FCA, ATA International Livestock Institute is Research to working, refer already their documents Indian Institute of Pulses could be a po Research tential partner Leading national institution and possible implementing partners EIAR RARIs, BoA, MoA, FCA, ATA %

% incr

% in the use

:1 ratio

Consultation organized A 10 in women and youth ease participating in the value chain Number of trainees the cereal Reduce to legume crop ratio by 20 the current from 6 of A reduction 20 of chemicals for pest control published Paper

Target measures Target • • • • • • 2020

X X X X 2019

X X X X 2018

X X X 2017

X X X X Starting period 2016 2 2 3 2 2 Priority 3=low 1=high 2=med :

- - The actions for this environment. :

soil fertility This activity depends on the completion of in non-pulse crops. ).

: Maximize the developmental dividend of a booming pulses sector by ensuring protection environment and inclusivenes

ticular ;

capacity to participate in the value chain. The actions for this activity will consist of fol Strategic objective 3 :

access to arable land in par

Organize a stakeholder consultation with women’s associations and representatives, and technical vocational education associations and representatives, a stakeholder consultation with women’s Organize training stakeholders. all the segments in Map the specific ways in which legal system might be impeding participation of women across value chain ( issues in a consultative body of women that lobbies for changes to impeding laws and advocates on gender-sensitive Organize the pulses sector. addressed issues are that gender-sensitive the skills of youngest actors in pulses value chain and ensure Strengthen value chain. along the entire This should include in the sector. and leadership roles the capacity of women and youth to assume representation Strengthen and Grain ensuring that women and youth participate in marketing, business networking and training with the India Pulses Association. techniques for the pulses sector. production training to women and youth on productivity-enhancing Provide based on pulses. of value added products training to women and youth on processing Provide training to women and youth on international trade. Provide Developing marketing and best practices dissemination materials for farmers in other sectors of other sectors a yearly seminar with the participation of government officials and representatives Organizing of discussions about soil fertility in the country pulses at the centre Putting of pulses as intercrops. production farmers’ meetings to promote Organizing by the use of specific that can be provoked of the damaging impact on public health and environment awareness Creating chemicals and agricultural practices their support for the sector. issues and requesting all the stakeholders in Ethiopia who have a say on environmental Approaching and potential nutritional benefits of pulses for the population The current and ecological aspects of pulses The positive environmental The positive socioeconomic benefits of the sector as a generator employment and revenue the sector. The main challenges ahead and specific needs to strengthen

for the development of agent farmers and agriculture experts. The actions for this activity skills capacity-building for the development of agent farmers and agriculture 3.1.2 Provide will consist of the following. This paper will 3.2.3 Write a position paper that describes the overall benefits pulses sector can bring to country. Promote management and agricultural practices that are as neutral possible on the management and agricultural practices that are 3.2.2 Promote This activity aims to ensure equitable access to the opportunities offered by the sector by raising awareness of women’s and youth of women’s by the sector raising awareness equitable access to the opportunities offered This activity aims to ensure is a link with activity 2.1.1 on the national pulses platform. issues. There the capacity of women and youth to engage in highest value adding segments pulses This activity aims to strengthen value chain. the sustainability of agricultural development Ethiopia by putting pulses sector at fore This activity aims to ensure of most sustainable practices. of the promotion front practitioners. environmental This activity aims to obtain support for the sector from document. roadmap the current heavily from The paper should borrow • • • • • 1.2.1 and 1.2.2. The actions for this activity will consist of • • • • activity will consist of • • that the paper should tackle include The main areas focus on the sector. later be used to lobby the Government for an increased • • • • • • • Promote the use of pulse crops to replenish to replenish the use of pulse crops 3.2.1 Promote Activities Enhance youth and women’s 3.1.1 Enhance youth and women’s lowing. 3.2 Ensure that the development of the pulses sector does not jeopardize the preservation of the environment. Operational objective 3.1 Strengthen the training and skills of the youngest actors in the pulses value chain, and ensure that gender-sensitive issues are addressed.

[ ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES ] 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 development 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 productivity through new seeds, research and technology. To this end, the Government allocates 10 % of its annual national budget to delivering enhanced production technologies 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 accounts 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 ).pdf 122.– 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.

[ ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES ] 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 approximately 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

Area : Size of holding ( ha ) pulses / Term Total temp > 0.1 0.10–0.5 0.51–1.00 1.01–2.00 2.01–5.00 5.01–10.00 10.01+ crop No. holders 12 710 825 14 % 614 683 3 230 400 3 168 362 3 524 811 1 992 137 169 358 11 073 2008 / 2009 Share ( % ) 5 25 25 28 16 1 0 No. holders 12 647 843 12 % 609 960 3 040 419 3 166 745 3 516 654 2 120 428 179 099 14 537 2009 / 2010 Share ( % ) 5 24 25 28 17 1 0 No. holders 13 909 361 11 % 891 008 3 695 894 3 455 009 3 498 910 2 099 754 241 672 27 114 2010 / 2011 Share ( % ) 6 27 25 25 15 2 0 No. holders 13 931 157 13 % 832 419 3 617 757 3 297 838 3 578 761 2 350 266 227 136 26 980 2011 / 2012 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 sector, 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. ). Busi- ness Opportunity Report : Oilseeds and Pulses. Available from https : / / www.nabc.nl / uploads / content / files / BOR %20Oilseeds %20 %26 %20 Pulses %20- %20Final( 1 ).pdf. 127.– In the Harmonized System classification these varieties will fall under broad beans, dried beans, dried peas and chickpeas respectively.

[ APPENDICES ] 68

Area : Size of holding ( ha ) pulses / Term Total temp > 0.1 0.10–0.5 0.51–1.00 1.01–2.00 2.01–5.00 5.01–10.00 10.01+ crop CAGR 3 % 11 % 4 % 1 % 1 % 6 % 10 % 35 % No. holders 24 214 182 12 % Pulse 2014 / 2015 holders 7 931 562 Share ( % ) 33

S ources: 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 Belg 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.

[ ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES ] 69

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 negative 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’ include : ‘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’ ( 0 7 1 3 9 0 ).

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 / statistics / 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.

[ APPENDICES ] 70

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

Area harvested (Ha) Production (Tonnes) Yield (Hg/Ha)

3.000.000 120.000

2.500.000 100.000

2.000.000 80.000

1.500.000 60.000

1.000.000 40.000 Area and Production axe 500.000 20.000

- - 1993 1995 1996 1997 1998 1999 2000 2001 2002 2003 2005 2006 2007 2008 2009 2010 2011 2012 2013 1994 2004

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

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

1.000.000

900.000

800.000

700.000

600.000

500.000

400.000 Production (Tonnes) Production (Tonnes) 300.000

200.000

100.000

- 19931994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

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

[ ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES ] 71

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

700.000

600.000

500.000 Broad beans… Peas, dry 400.000 Beans, dry

Chick peas 300.000 Vetches Area Harvested (Ha)

200.000 Lentils

Pulses, nes 100.000

- 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 1993 1994 1995 1996 1997 1998 1999

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

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

25.000

20.000 Chick peas

Vetches 15.000 Pulses, nes

Broad beans, … 10.000 Yield (Hg/Ha) Yield Peas, dry

Lentils

5.000 Beans, dry

- 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

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

[ APPENDICES ] 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 inefficient 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

Improved seed Total crop Irrigated Pesticide applied Fertilizer applied 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 - -

S ource: 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 makers. 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.

[ ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES ] 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

70.000

60.000 Barbados

Belgium 50.000 Cyprus

40.000 Egypt

Namibia 30.000 Cameroon 20.000 Ghana

10.000 South Africa Ethiopia 0 2000 2001 2002 2003 2005 2006 2007 2008 2009 2010 2011 2012 2013 2004

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

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 / filename / 8107.pdf. 145.– Ethiopia, Agricultural Transformation Agency ( 2015 ). Assessment of Systemic Interventions Pulses and Oilseeds.

[ APPENDICES ] 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 postharvest 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 )

Benishangul- Variety Tigray Afar Amhara Oromia Somali SNNPR Gambela Gumuz 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.

S ource: 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.

[ ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES ] 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

350.000 3,0%

300.000 2,5% 250.000 2,0% 200.000 1,5% 150.000 1,0% 100.000 50.000 0,5% 0 0,0%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Ethiopia's pulse exports (USD thousands, lhs) Ethiopia's share of global pulse exports (%, rhs)

S ource: International Trade Centre ( 2015 ).

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 (1 1 % ). 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 0India ( 5 % ) 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.

[ APPENDICES ] 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 )

Romania

Belgium

Netherlands

Bulgaria

Kenya

United Arab Emirates

Russian Federation

India

Sudan (North + South)

Pakistan

- 5.000 10.000 15.000 20.000 25.000 30.000 35.000 40.000 45.000

Exports in 2009 Exports in 2014

S ource: International Trade Centre ( 2015 ).

Table 9 : Ethiopia’s top 20 markets for pulses

Average CAGR CAGR CAGR Share Country 2013–2014 ( 2004–2008 ) ( 2009–2014 ) ( 2004–2014 ) Average Average ( US $ thousands ) ( % ) ( % ) ( % ) 2008–2009 ( % ) 2013–2014 ( % ) 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

[ ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES ] 77

Average CAGR CAGR CAGR Share Country 2013–2014 ( 2004–2008 ) ( 2009–2014 ) ( 2004–2014 ) Average Average ( US $ thousands ) ( % ) ( % ) ( % ) 2008–2009 ( % ) 2013–2014 ( % ) 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

S ource: International Trade Centre ( 2015 ). N o t e : ( 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 )

80.000 70.000 South Asia 60.000 Latin America & Caribbean 50.000 Sub-Saharan Africa 40.000 East Asia & Pacific 30.000 20.000 Middle East & North Africa 10.000 Europe & Central Asia 0 North America

2001 2003 2005 2007 2009 2011 2013

S ource: International Trade Centre ( 2015 ).

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 buyers. 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.

[ APPENDICES ] 78

Box 2 : Opportunities to leverage preferential market access

Ethiopia benefits from the United States’ AGOA,* a prefer- a non-reciprocal basis, zero tariffs or reduced rates to ential duty programme, and the United States Agency for least developed countries’ goods. While not all countries International Development ( USAID )** programmes for trade apply preferences to all pulses, data indicates that there development in the East African region. Similarly, the EU are countries applying zero Customs duties to products grants preferential access to Ethiopia in the framework of exported by Ethiopia, such as ‘Peas dried...’ ( 071310 ). its programme Everything But Arms. Some of these markets remain untapped by Ethiopian firms. Appendix V summarizes the list of countries providing Moreover, as a least developed country Ethiopia receives non-reciprocal preferential duties to Ethiopia, and presents preferential market access to other developed countries and an example of tariffs applied to Ethiopia by geographical to most emerging and frontier markets. In fact, about 22 distribution.*** countries ( the EU is counted as a single entity ) grant, on

* 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 )

350.000 Lentils dried, shelled, whether or not skinned or split 300.000 Dried, shelled Pigeon peas 250.000 Peas dried, shelled, whether or not 200.000 skinned or split

150.000 Beans,small red (Adzuki) dried,shelled,whether or not skinned 100.000 or split Urd,mung,black/green gram beans 50.000 drid shelld,whether/not skinnd/split Beans dried, shelled, whether or not 0 skinned or split, nes 2001 2002 2003 2007 2008 2009 2010 2011 2012 2013 2005 2006 2014 2004

S ource: International Trade Centre ( 2015 ).

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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 ( % )

12% Peas dried, shelled, whether or not skinned or split

10% Kidney beans&white pea beans drid shelld,whether o not skinnd o split

8% Lentils dried, shelled, whether or not skinned or split

6% Urd,mung,black/green gram beans drid shelld,whether/not skinnd/split

4% Chickpeas, dried, shelled, whether or not skinned or split

Broad beans&horse beans 2% dried,shelled,whether or not skinned or split Beans dried, shelled, whether or not 0% skinned or split, nes

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

S ource: International Trade Centre ( 2015 ).

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.

[ APPENDICES ] 80

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 environment 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 economic 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 commercialization 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 recommended fertilizer application rates and crop protection practices, and the promotion 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 / policy %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 objectives that are relevant for the pulses sector : i. ‘Enhance productivity and production of smallholder farmers and pastoralists ii. Strengthen marketing systems iii. Improve participation and engagement of the private sector iv. Expand the amount of land under irrigation v. 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 registration 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 registered in another country, or two seasons for varieties not framework with laws and regulations in nine other countries yet registered elsewhere. The impact of these controls will de- observed that: pend on whether MoA accepts information from companies’ own tests and on how reliable MoA is to approve varieties that Ethiopia’s private seed industry has been held back by limits companies want to introduce. The draft Regulations do not on private variety introductions and absence of a seed retail clarify if seed certification is compulsory for any class of seed market through thousands of (non-existent) private dealers. and, if so, for what classes. Article 23 of draft Regulations Ethiopia’s new 2013 Seed Proclamation is flexible, allowing could be interpreted to allow truthfully labelled seed. One Regulations and directives to fit various policy orientations; objective of the new regulatory framework is to share re- draft Regulations are more detailed, outlining a pattern of sponsibility with regional authorities. The Ministry has sole government controls that could either continue or significantly authority to register varieties. Both the Ministry and regional relax long-standing barriers to the development of Ethiopia’s authorities are expected to issue certificates of competence private seed industry. What will happen depends on what allowing people to start seed-related businesses. Regional MoA does with the authority it gets from the Regulations. authorities are solely responsible to certify seed in domestic For example, the Proclamation requires variety registration trade. This design roughly parallels practices in the US and for all crops, but does not say how this is to be done. Draft India, where central governments and states share authority Regulations ask for one season of [Value for Cultivation and to regulate seed trade. Use, and Distinctness, Uniformity, Stability] tests for varieties

(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.

[ APPENDICES ] 82

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 coordination 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 policies ) : 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 enabling environment that stimulates international trade and strengthens domestic marketing 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 between 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.

[ APPENDICES ] 84

Box 5 : Ethiopia and COMESA seed trade harmonization

‘Heads of State of COMESA member countries are a COMESA Variety Catalogue, which would include varie- expected to consider and approve COMESA Seed Trade ties registered in at least two member states. All COMESA Harmonization Regulations later this year. Harmonization countries are to accept all varieties in the Catalogue. is expected to “encourage investment in seed business” Ethiopia’s Seed Proclamation is sufficiently flexible to allow and to “stimulate the breeding and availability of improved MoA to accept varieties in a COMESA Variety Catalogue. seed varieties resulting in increased variety choices for all However, Ethiopia’s current draft Seed Regulations specifi- farmers” (quoted from the draft Regulations). cally require at least one season of [Value for Cultivation and Use, and Distinctness, Uniformity, Stability] tests for Ethiopia is well-situated to benefit from COMESA harmoni- varieties registered in another country; this would have to be zation due to its large population and seed market, the suit- revised to accommodate COMESA harmonization.’ (United ability of its climate to produce healthy seed, and the avail- States Agency for International Development / Ethiopia ability of breeders and others with skills in seed production. Agriculture Growth Programme – Agribusiness and Market COMESA seed trade harmonization would require at least Development (AGP-AMDe) Project (2013). Comparative one small but significant change in Ethiopia’s current draft Analysis of Ethiopia’s 2013 Seed Proclamation and Draft Regulations. Specifically, harmonization proposes to create 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 preferences 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 awareness 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 import 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 documentation 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 strategy 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 / policy %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.

[ APPENDICES ] 86

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 destinations 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

S ource: EPOSPEA

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

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 neighbouring 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.

[ APPENDICES ] 88

APPENDIX V : PREFERENTIAL ACCESS AND TARIFFS

Table 11 : Countries granting preferential schemes to least developed countries

Next most favourable scheme Preferences provider Preferential scheme Since or regime Australian System of Tariff Preferences for Least Australia Developed Countries 1966 Australian System of Tariff Preferences Belarus Least Developed Countries scheme n.a. Developing Countries scheme 1974 / 1983 Canada Least Developed Countries Tariffs / 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 Generalized Scheme of Preferences ( GSP ), 27 EU Member Sates 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 AGOA IV and textile / apparel articles GSP for Least Developed Countries AGOA : AGOA IV and textile / apparel articles ( least developed beneficiary developing 2000 / 2006 GSP for developing countries United States countries ) GSP : 1976 ( beneficiary developing countries )

S ource: 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.

[ ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES ] 89

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.

Figure 19 : Geographical distribution for tariffs applied

S ource: International Trade Centre ( 2015 ). 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.

[ APPENDICES ] 90

APPENDIX VI : VARIETIES OF PULSES AND YIELDS

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

Benishangul- Variety Tigray Afar Amhara Oromia Somali SNNPR Gambela Total Gumuz 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 %

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

Figure 20 : Comparative yields 2012 ( hectograms / ha )

20.000 18.000 16.000 14.000 12.000 10.000 8.000 6.000 4.000 2.000 0 Beans, dry Broad beans, Peas, dry Chick peas Lentils Vetches Pulses, nes horse beans, dry

Ethiopia yield World yield East Africa yield

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

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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 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 applied Percentage of pulses area irrigated 2008/ 2009/ 2010/ 2011/ 2008/ 2009/ 2010/ 2011/ 2009 2010 2011 2012 2009 2010 2011 2012 PULSES 0.94 0.87 0.51 0.55 PULSES 0.42 0.53 - 0.00 Horse beans 0.14 0.86 0.23 0.32 Horse beans 0.28 0.39 0.22 0.00 Field peas 0.19 0.89 - Field peas 0.11 -- 0.00 Haricot beans 3.18 1.44 0.82 1.31 Haricot beans 0.78 - 0.92 1.00 Chickpeas 0.86 0.96 0.63 0.68 Chickpeas 0.89 0.92 1.06 0.00 Lentils 2.75 - 2.75 0.56 Lentils 0.19 0.3 -- Grass pea/vetch ---- Grass pea/vetch 0.21 -- 1.00 Soya beans 4.65 2.03 -- Soya beans ---- Fenugreek ---- Fenugreek 0.65 -- 1.00 Gibto ---- Gibto -- Percentage of pulses area with pesticide applied Percentage of pulses area with fertilizer applied 2008/ 2009/ 2010/ 2011/ 2008/ 2009/ 2010/ 2011/ 2009 2010 2011 2012 2009 2010 2011 2012 PULSES 2.69 9.63 3.83 5.0 PULSES 6.56 7.53 2.66 - Horse beans 1.12 9.54 2.89 4.0 Horse beans 7.55 6.01 2.21 - Field peas 2.27 10.08 4.29 4.0 Field peas 11.11 7.45 4.27 - Haricot beans 2.37 6.08 1.7 5.0 Haricot beans 12.34 2.64 3.79 - Chickpeas 2.37 12.79 6.65 7.0 Chickpeas 0.41 13.56 0.64 - Lentils - 7.97 9.81 11.0 Lentils 1.8 14.72 5.92 - Grass pea/vetch - 14.92 -- Grass pea/vetch - 9.17 0.25 - Soya beans ---- Soya beans - 0.63 8.12 - Fenugreek - 2.77 - 0.0 Fenugreek 2.05 3.97 6.81 - Gibto ---- Gibto 0.98 ---

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

[ APPENDICES ] 92

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

[ ETHIOPIA VALUE CHAIN ROADMAP FOR PULSES ] 93

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

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

[ APPENDICES ] 94

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