Final Report for WEEMA International
SIPA’s Economic and Political Development Workshop in Development Practice
Improving household livelihoods with modern beekeeping and honey production in Ethiopia
May 9, 2016
Yiyi Dong Kwadwo Frimpong Robel Haile Min Liu Anna Mary Schaffer Lucas Valente da Costa
COLUMBIA UNIVERSITY
SCHOOL OF INTERNATIONAL AND PUBLIC AFFAIRS
Workshop in Development Practice
Professor Eugenia McGill
Spring 2016
Final Report for WEEMA International
“Improving Household Livelihoods with Modern Beekeeping and Honey Production”
May 9, 2016
Team members
Yiyi Dong ([email protected]) Kwadwo Frimpong ([email protected]) Robel Haile ([email protected]) Min Liu ([email protected]) Anna Mary Schaffer ([email protected]) Lucas Valente da Costa ([email protected])
2
ድር ቢያብር አንበሳ ያስር “When spider webs unite, they can tie up a lion”
This is an old Ethiopian proverb that many of our interviewees brought up during our research. In the context of cooperatives, it provides a good
opening for the rationale behind recommending the formation of one.
3 Acknowledgements
The findings on this report were made possible by the School of International and Public Affairs (SIPA), at Columbia University and WEEMA International. The team of graduate students who produced this report would like to extend a heartfelt thanks to SIPA, WEEMA International, Holeta Research Center, Biovision Ethiopia, ACDI/VOCA Ethiopia, SNV Ethiopia, Sasakawa Africa Association (SAA), GIZ Ethiopia, the Ethiopian Apiculture Board (EAB), COMEL Pvt. Ltd. Co, Apimondia, Zenbaba Union, Tutu Honey, Slow Food Foundation and the people of Kololo and Mudula, Ethiopia. We would like to extend additional thanks to the following individuals:
Assefa Amaledegne Jenny McGill Roba Bulga Jilo Beza Hailu Jim Krigbaum Samuel Thomas Ledermann Daniel Gebremeskel Juergen Greiling (Dr.) Scott Martin (Dr.) Daniel Kebede Kahlyn Keilty-Lucas Sintayehu Mengistie Eldad Girma Begashaw Kinfe Mamo Solomon Mengesha Elizabeth McGovern (M.D) Lianna Tabar Tewodros Belachew Eugenia McGill Lulseged Belayhun Wondwosen Tsegaye Gemechis Legesse Negash Bekena Wubishet Hailemariam Ilona Vinklerova Paulos Desalegne Yohannes Tsehai
4 TABLE OF CONTENT LIST OF ACRONYMS ...... 7 TECHNICAL TERMS ...... 8 EXECUTIVE SUMMARY ...... 9 INTRODUCTION ...... 11
Project Rationale ...... 12 Background ...... 12
WEEMA International ...... 12 Political Context ...... 14 Economic Context ...... 15 SNNPR and Kembata Tembaro ...... 15 Honey Production in Ethiopia ...... 16 Major Actors Shaping the Honey Sector ...... 17
Methodology ...... 18
Phase I: Development of initial work plan and research framework ...... 19 Phase II: Desk research and contact sourcing ...... 19 Phase III: January field work ...... 19 Phase IV: Analysis and initial recommendations ...... 20 Phase V: March field work ...... 20 Phase VI: Analysis and final recommendations ...... 20 Limitations and Constraints ...... 20
FINDINGS ...... 22
Honey Production ...... 23
Regions ...... 23 Issues in Honey Production ...... 25
Honey Market ...... 28
Major value chains relating to smallholder beekeepers ...... 28 Demand ...... 31 Market Distortions and Inefficiencies ...... 36 Rural versus Urban Consumer Preferences ...... 38 Other bee products: wax and propolis ...... 39 Shaping the Market ...... 40 Cooperatives ...... 41 5 RECOMMENDATIONS ...... 44
1. Conduct a baseline survey to understand the current production capacity ...... 45 2. Encourage WEEMA to promote market awareness training ...... 46 3. Continue with capacity training for the beekeepers ...... 47 4. Initiate the process of cooperative formation ...... 47 5. Expand relations of the newly formed cooperative to large market players i.e. unions and/or processors ...... 48
CONCLUSION ...... 49 REFERENCES ...... 51 INTERVIEWS CONDUCTED ...... 55 ANNEXES ...... 56
Annex I. Summary of recommendations with idea of timeline ...... 57 Annex II. Details of conducting a baseline survey to understand the current production capacity ...... 58 Annex III. Details of encouraging WEEMA to promote awareness training ...... 61 Annex IV. Details of continuing with capacity training for the beekeepers ...... 63 Annex V. Details of initiating the process of cooperative formation ...... 65 Annex VI. Details of expanding relations of the newly formed cooperative to large market players i.e. unions and/or processors ...... 67 Annex VII. Summary of interviewees’ current use of beeswax ...... 68 Annex VIII. Field trips photo album ...... 69
6 LIST OF ACRONYMS
ACDI/VOCA Agricultural Cooperative Development International/Volunteer In Overseas in Cooperative Assistance ASPIRE Apiculture Scaling-up Program Income for Employment EAB Ethiopian Apiculture Board EPRDF Ethiopian People’s Revolutionary Democratic Front EU European Union FCA Federal Cooperative Agency of Ethiopia FHI Food for Hunger International GDP Gross Domestic Product GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit (German Society for International Cooperation) NGO Non-governmental organization SRFCF Southern Region Farmer's Cooperative Federation SIPA School of International and Public Affairs SNNPR Southern Peoples Nations and Nationalities Region SNV Stichting Nederlandse Vrijwilligers (Foundation of Netherlands Volunteers) FCA Federal Cooperative Agency of Ethiopia USAID United States Agency for International Development WEEMA Water, Education, Economic empowerment, Medical, and Alliance
7 TECHNICAL TERMS
Bee products1
Honey: A thick liquid made after bees collect nectar from flowers and process it in their bodies, when it mixes with enzyme; after a process of regurgitation and evaporation honey is put in the bee comb. Usage: antiseptic and antibacterial, used in medicine with many claimed benefits, including fighting cold, burns, wounds, infantile gastroenteritis and infections.2
Tigray (white) honey: One of the world's most refined honeys and the most praised in Ethiopia, it is bright white, with good consistency and large grains with homogeneity. It has a very intense flavor. Its color comes from the blossom of the labiates family (like sage)
Propolis: A resinous material that bees use to seal small cracks and gaps in the hive (bee wax seals the larger gaps). It’s made when bees collect resin from trees and other sources and mix it with a honey. Usage: antiseptic and antibiotic, used in medicine.
Beeswax: A natural secretion from wax glands on the sides of the body of honey bees and is used primarily as a building block for the bees' honeycomb cells in which the young are raised and honey and pollen are stored. Ethiopia is the top producer in Africa and ranks amongst the top then producers in the world, but only exports 10% of its production.3 Usage: candles, skin care products, furniture polishers.
Tej (Honey wine): It is an alcoholic beverage (7 to 15% alcohol content) made by fermenting honey and mixing it with water and, sometimes, fruits.
Value chain and value chain analysis
Value chain: a set of activities through which value is added to the final output at each step of production.4
Value chain analysis: an analytical tool to identify the activities that create value for the final output and understand how each step can be further improved to deliver better values.
Cooperative or co-op: an organization jointly owned and managed by a group of individuals who share profits of economic activities based on each individual’s contribution.
Union: a confederation of cooperatives who practice joint marketing and profit-sharing activities to reach broader markets.
1 Tan, Ruth. “Benefits of Honey.”; Nordqvist, Joseph. “Honey: Health Benefits and Uses In Medicine.” 2 African Business Magazine. “Honey: Ethiopia's Liquid Gold.” 3 Legesse Yadeta, Gemechis. “Beeswax Production and Marketing in Ethiopia.” 4 The Economic Times. “Definition of ‘value chain’.” 8 WEEMA beekeeper and her son in front of their traditional and transitional hives in Mudula town
EXECUTIVE SUMMARY
9 Ethiopia is the largest producer of honey in Africa. Even so, the country does not produce nearly as much as it potentially could. As honey gains more and more attention from the government, NGOs, and the private sector, efforts are increasingly being devoted to strengthening the honey value chain. On the NGO side, organizations like WEEMA International are working with individual beekeepers, in Mudula and Kololo, to help improve quality and quantity of honey production with more modern techniques, with the ultimate goal of improving incomes and livelihoods.
The workshop project for this SIPA team thus concerns this main objective of helping individual honey producers’ access larger and more lucrative markets, thereby increasing their incomes. In order to be able to produce recommendations for WEEMA, we had to better understand in general how the honey market and honey value chains operate in Ethiopia. In addition, the team learned about the specific context in which the local beekeepers operated. To complement our desk research, we travelled twice to Ethiopia, where we conducted interviews, gathered data, and held focus group discussions.
Through our research, we found honey production capacity within Ethiopia, but also the region in question, is constrained by issues with inputs, technology, management, and climate. Continued efforts to address these constraints will, over time, enable the country to reach its full production potential. On the market side, there are different value chains depending on the situation of the individual beekeeper, as well as the proposed end use of honey produced. Within all these value chains exist issues of market distortions and inefficiencies, including the following: market underdevelopment, inconsistent supply, market fragmentation, information asymmetry, and lack of quality standards and control.
One significant way in which actors are trying to improve market linkages is through cooperatives. This is a strategy that we, too, would also like to recommend to WEEMA, in addition to continued efforts to increase production capacity and the awareness of the benefits of beekeeping as an income-generating activity.
10 Different types of honey for sale in Mercato, in Addis Ababa
INTRODUCTION
11 The following report outlines the final product of a workshop consulting project carried out by a team of SIPA graduate students. The team analyzed a beekeeping and economic livelihoods project of the NGO WEEMA International (“WEEMA”) in the southwest of Ethiopia. The workshop project was conducted over the course of six months. The following sections will outline the direction of the project and conclude with our findings and recommendations.
Project Rationale
Ethiopia has a long history of beekeeping. Despite this fact, the country is still for the most part, using traditional practices, thereby hindering its ability to reach full honey production capacity. Thus, to help local communities improve their honey production quantity and quality and increase household income, WEEMA’s project, “Improving Household Livelihoods with Modern Beekeeping and Honey Production” has provided technical training and equipment to local beekeepers and supported their transition from traditional beekeeping to more modern techniques of beekeeping.
While still in the early stages of the development of this project, WEEMA enlisted the assistance of the Columbia SIPA team to assess, identify, and recommend how best to improve their beekeeping project in order to further create positive and sustainable impact for its beneficiaries. The SIPA team focused on the following main objectives:
1. Market value chain assessment of honey and other bee products in Ethiopia
● Gather and synthesize information regarding the Ethiopian honey value chain and markets that will be relevant for the beekeepers.
2. Mechanisms on Establishing Cooperative(s)
● Identify and gather information on the process of building cooperatives in addition to best practices and lessons learned by other honey cooperative(s).
3. Final Recommendations on Expanding the Project
● Based on the above findings, provide some recommendations on how best to scale up the beekeeping project taking into account short term and long term objectives and any key risks and assumptions. More details of implementation of the recommendations can be found in the annexes.
Background
WEEMA International
WEEMA International, a U.S. based non-profit organization focusing exclusively on Ethiopia, has been working in southwestern Ethiopia since it was founded in 2011. Previously Mudula Water, WEEMA 12 International was founded with a mission of providing clean water for impoverished communities in Mudula, Ethiopia (SNNPR).5 In 2013, WEEMA International expanded its work into areas of education, economic empowerment, and medical services to address issues of poverty in the area.
The name WEEMA is a common term in the local dialect (Tembarsa) – meaning, “hope”. The word WEEMA is also an acronym for the organization's five areas of work: "water, WEEMA’s goal is to work education, economic empowerment, medical services and with local communities to building alliance with local communities". With the goal of create conditions in promoting "economic empowerment", WEEMA International has which people can thrive established 50 women’s self-help groups comprised of 1,000 women, trained 58 potters on how to produce clean cook stoves and dream about a from locally sourced materials, supported the development of a brighter future. “Persons with Disabilities” office within the local government, and trained 70 local beekeepers to improve the quality and quantity of honey production in the region. The latter project is the focus of our working paper.
WEEMA International’s head office in the United States is engaged in fundraising and administrative work needed for the sustainability of its projects. The primary funding sources of WEEMA International are generous donations from private foundations and individuals.6 Elizabeth McGovern (M.D.), the founder of the organization is responsible for its overall strategy. Lianna Tabar, Director of Operations and Programs Technical Advisor, leverages her years of experience working in Ethiopia to manage WEEMA’s projects.7 In-country staff in Ethiopia is based in Addis Ababa, the capital of Ethiopia, and Mudula in SNNPR. Tewodros Belachew, from Mudula himself, is the country representative of the organization.
In expanding its efforts at promoting economic empowerment, WEEMA started the project “Improving Household Livelihoods with Modern Beekeeping and Honey Production,” in 2014, in Mudula and Kololo. Kololo and Mudula are small towns located in Kembata Tembaro zone, SNNPR, Ethiopia. To facilitate the launching of the project, WEEMA brought in Kahlyn Keilty-Lucas, a beekeeping expert, to lead the project. She is based in Spain and works on a voluntary basis to train beekeepers. Additionally, Anito Alemu Ayele (Temesgen), a native of Tembaro and a carpenter by training, manages the beekeeping project.
5 WEEMA International. “Brought Clean Water to People Living in Mudula, Ethiopia” 6 WEEMA International. "Clean Water, Education, Economic Opportunity, Health Care.” 7 WEEMA International. “Board Of Directors”
13
Figure 1: Map of Ethiopia, with focus on Mudula and Kololo in Kembata Tembaro, SNNPR . Source: UN-OCHA
Political Context
Ethiopia is a federal republic with a parliamentary system. The Federal Assembly consists of the House of People’s Representatives (lower house; 547 members) and the Council of Federation (upper house; 108 members); the nine regional state councils have limited powers, including that of appointing members of the Council of Federation8. Addis Ababa has been the capital of the nation since 1887 when it was established by King Menelik9.
Currently, the country is led by a coalition of political parties, the Ethiopian People’s Revolutionary Democratic Front (EPRDF). The president of the country has a ceremonial role while the prime minister has executive power. Prime Minister Hailemariam Desalegn was selected to the position by the parliament after the sudden death of Prime Minister Meles Zenawi. In May 2015, Prime Minister Hailemariam Desalegn was officially re-elected to the position with almost 100% of parliament votes.10 The Prime Minister is also the chairman of the ruling party. International organizations such as Freedom House and Human Rights Watch have accused the government of Ethiopia of restricting opposition political parties, freedom of speech and assembly, and other rights.
8 The Economist, Intelligence Unit. 2014. “Ethiopia.” 9 The Editors of Encyclopedia Britannica. “Addis Ababa.” 10 The Economist, Intelligence Unit. 2014. “Ethiopia.” 14 Economic Context
In the last decade, Ethiopia has shown remarkable economic progress. According to the World Bank, between 2003/04 and 2013/14, the country’s economy grew at an average rate of 10.8% per year.11 Rapid economic development decreased extreme poverty rate in the country from 38.7% in 2005 to 29.6% in 2010, measured by income of $0.6 a day or less.12 Ethiopia also increased water access and decreased child mortality in accordance with the Millennium Development Goals. It has also made striking progress in gender parity in primary education and universal primary education.13
Similar to many countries in Sub-Saharan Africa, Ethiopia’s economy is heavily dependent on agriculture, which accounts for 40.2% of its total GDP.14 Over 80% of its population are farmers with a significant number of smallholder farmers. The expansion of the agricultural and service sectors is the main fuel for the country’s recent economic growth. 15 Manufacturing sector performance has been relatively tepid.
To achieve the goal of making Ethiopia a middle-income economy in the next 10 years, the government has pursued “state-led development” policies to achieve phenomenal growth. Government investment in infrastructure, state enterprises and human capital accounts for 19% of the GDP. 16 However, some have questioned the sustainability of this state-led model given the government's financial capacity and the rampant inflation disproportionately hurting the lower-income population. As a result, the government is shifting its focus to the “export-led and labor intensive manufacturing sector,” which includes “processing of agricultural commodities, leather, textiles, tobacco, garment production, beverages, hides and skins.”17
SNNPR and Kembata Tembaro
The SNNPR is home to about 20% of the country’s population and contributes to its growth through agriculture. It is also the most diverse region of the country in terms of language, culture, and ethnic background.18 As of 2011, SNNPR’s poverty ratio falls within the middle range (at 28.9% compared to 31.9% in Tigray and 28.3% in Dire Dawa) relative to other federal regions in the country, according to the World Bank.19
Tembaro is one of the seven districts (Woredas) in the Kembata-Tembaro Zone. Within the district, there are 20 administrative municipalities (Kebeles). Mudula town and Kololo, where WEEMA launched their first project, is located in the center of Tembaro, "approximately 220 miles southwest of the
11 The World Bank, “Ethiopia.” Ethiopia Overview. 12 Ibid. 13 Ibid. 14 African Development Bank. "Ethiopia Economic Outlook." 15 World Bank. "Ethiopia Overview." 16 Looney, Robert. 2015. "Ethiopia’s Economic Miracle Is Running Out of Steam." 17 Olingo, Allan. 2015. "Ethiopia's Five-Year Plan to Grow the Economy." 18 WEEMA International. "Ethiopia and SNNPR." 19 World Bank Group, 2014. “Ethiopia Poverty Assessment 2014.” 15 nation’s capital, five hours in a four-wheel drive vehicle."20 Tembaro encompasses a diverse population of different ethnic groups. The majority of the 130,000 residents in Tembaro rely on agriculture and livestock to sustain livelihoods. Compared to the rest of the country, SNNPR suffers relatively less from drought and food insecurity issues according to Famine Early Warning Systems Network.21 Transportation and electricity infrastructures in the district are underdeveloped. Gravel roads have been built in recent years connecting town centers, which is a beneficial factor that can facilitate beekeepers’ products to reach farther markets at potentially lower costs.22
Honey Production in Ethiopia
Ethiopia is one of the largest producers of honey in the world. As of 2015, the country is the top producer of honey in Africa while ranking amongst the top ten in the world. The country accounts for 23.6% of the continent’s total honey production.23 Honey production is an integral part of Ethiopian culture. It is either consumed as a food supplement or is fermented to make the traditional alcoholic drink (tej). Honey is also an important component of the Ethiopian diet; on average, Ethiopians consume 10kg per year per household. Equally important, a significant amount of honey harvested every year is sold to tej makers. What’s more, with a growing middle class, consumer preferences are changing. As a result, it is expected that the demand for more consumer goods, including table honey and tej, will continue to In 2015, Ethiopia increase.24 produced almost 24% of the honey in Africa, There are a number of favorable conditions that support honey production in Ethiopia including the wealth of plant species and being the number one different climate regions throughout the country. As a result, there are producer in the many varieties of honey harvested from each region of Ethiopia. It is continent. even common to find different flavors of honey within a given region. Generally, Ethiopian honey is known for its low moisture and high nutrition content. But the qualities and prices differ between regions. For instance, Tigray Region honey is known for its highest quality in terms of nutritional benefits and is the most expensive of all varieties. Amhara, Oromia, SNNPR, Gambella and Benishangul-Gumuz region honey varieties have very good qualities and are cheaper than Tigray honey. The types of honeys harvested range from light to dark amber. Honey from SNNPR, our region of focus, is characterized by a blend of flora giving it a distinct taste from other monofloral honey varieties in the country. Oromia, Amhara, SNNPR and Tigray regions of Ethiopia produce 46%, 24%, 22% and 5% of the country’s total production, respectively.25
Despite Ethiopia’s significant position in the world, the honey sector is faced with many issues. Low production capacity, inconsistent production data, changes in weather patterns and poor hive
20 WEEMA International. "Ethiopia and SNNPR." 21 Famine Early Warning Systems Network, 2016 “Large-scale food security emergency projected for 2016.” 22 Bestbridge. "Tembaro District." 23 USAID, 2015 “A Sweet Deal For Ethiopian Honey.” 24 Worku, 2015 “Synopsis, Diet transformation in Ethiopia.” 25 Miklyaev et al. 2014. 16 management are the common challenges. According to a USAID report26, more than 95% of the country’s honey is produced using traditional hives (these types of hives deliver low yields and poor quality of honey). Current honey production per annum represents only 11% of Ethiopia’s honey production potential.27 According to recent government data, only 1% of the honey produced in Ethiopia is exported. But honey exports have grown at an average of 9% per year from 2010 to 2014.The single major importer of Ethiopian honey, both in terms of volume and value is Norway, followed by Sudan and South Sudan.28 Unaccounted amount of honey is smuggled to other countries as well. Most of the honey produced in the country is consumed locally. Local demand has increased significantly in the last few years following Ethiopia’s economic growth.
In the last decade, the government of Ethiopia, along with local and international non-profit organizations and development agencies29, has given a much-needed attention to the honey sector of the country. The government has integrated honey production with national level poverty alleviation mechanisms. Honey is not only seen as a source of supplemental income, but also as a potential principal means of living. From a developmental perspective, honey production is aimed to empower women and vulnerable communities. Furthermore, beekeeping, in line with sustainable land practices, can be a tool for climate change mitigation, which is something the government is interested in as Ethiopia is particularly vulnerable to changing climate patterns.30
Major Actors Shaping the Honey Sector
Cooperative Agency of Ethiopia (FCA)
Through local and regional offices, the Cooperative Agency of Ethiopia has a mandate to assist individuals to form cooperatives and link them to buyers at regional and national levels. The agency assists groups in establishing cooperatives and further development through marketing and market linkages. The agency is part of the government’s initiative to increase agricultural outputs to reduce poverty in rural areas.
Ministry of Livestock and Fisheries
As is true of the Cooperative Agency of Ethiopia, Livestock Offices encourage the formation of cooperatives and assist in the process. Livestock offices teach cooperatives about the different types of honey qualities per market demand. In addition, they help facilitate credit from microfinance institutions while offering technical assistance.
26 USAID. 2012. 27 Central Statistical Agency of Ethiopia. 2011. 28 Miklyaev et al. 2014 29 This is related with the government's initiative to invest more in the honey sector, since there is a lot of cooperation between some development agencies and the government, like is the case of GIZ and USAID. 30 The government has actually launched in 2011 a “Climate Resilient Green Economy Strategy,” in which it highlights the efforts Ethiopia is undertaking in order to create opportunities and combat climate change. Honey production, specifically, was mentioned during our meeting with the Ethiopian Apiculture Board as a good way to mitigate climate change as beekeeping practices help increase pollination and hence forestry. 17 Research Centers
Bee and honey research centers, which are part of the larger, government-run Ethiopian Institute of Agricultural Research, such as the Holeta Beekeeping Research center (Holeta, Ethiopia), have played a significant role in improving honey production, identifying natural constraints and opportunities throughout Ethiopia. Holeta Research Center teams are currently working on mechanisms to mitigate the effects of climate change, which is resulting in disruption of honey production throughout the country. During our interview with Gemechis Lagasa from the research center, he demonstrated willingness to work with WEEMA to provide drought resistant seeds suited for Kembata Tembaro Zone. Additionally, the center has a team of dedicated scientists studying bees to better understand their patterns and increase production.
Ethiopian Apiculture Board (EAB)
Ethiopian Apiculture Board plays a unique role of bringing different stakeholders from the honey sector of Ethiopia on one platform. The multi-stakeholder platform includes government offices, unions, cooperatives, NGOs and private companies. The platform helps each stakeholder identify constraints and work in coherence with one another to improve quantity and quality of honey. Additionally, the board explores potential international markets for promising producers. With continued financial and technical support from donor agencies, most government initiatives such as the Ethiopian Apiculture Board have continued providing services to multiple stakeholders.
Non-Governmental Organizations (NGOs)
NGOs are mainly focused on capacity building. They primarily work to fill in gaps along the honey value chain. A few organizations focus on training and supplying materials needed for beekeeping while others focus on market linkages and provision of information, which is needed to improve both quality and quantity of production. Due to government regulations, NGOs are expected to file reports and renew their licenses at the end of each fiscal year, which can relocate time and resources needed to provide essential services. Nevertheless, this mandatory regulation is in line with the government’s broader economic development agenda-Growth and Transformation Plan.
Methodology
Over the course of six months, the SIPA team analyzed market and community organization structures with the objective of bridging the gap between Tembaro beekeepers and the honey markets in adjacent cities or the wider region. We conducted extensive primary and secondary research to map out the honey (and honey byproduct) market landscape and determine market demand, trends, and drivers in the country. We also invested significant time with the local communities to understand current operations and production processes and conducted focus group discussions to explore opportunities of forming a cooperative. Additionally, we met with government officials to understand the role the
18 government plays in increasing honey production and market efficiencies. Throughout the process, we took a hands-on approach in keeping contacts with the client. WEEMA and the SIPA team established a close consulting relationship that enabled us to be in touch with client’s needs and be flexible in changing course if required.
The project can be broken down into six phases: 1) development of initial work plan and research framework, 2) desk research and contact sourcing, 3) January fieldwork, 4) analysis and formulation of initial recommendations, 5) March field work, 6) analysis and final report.
Final Desk Analysis Initial work analysis, research & January and initial March plan and recommend contact fieldwork recommend fieldwork framework ations, and sourcing ations report
Figure 1. Methodology and workflow
Phase I: Development of initial work plan and research framework
In the first phase of the project, our main objective was to establish a sound structural framework underpinned by our overall research question of how to improve the livelihoods of local beekeepers. Through communication with our client, we concluded that our work should focus on three main areas: honey production value chain, honey market assessment, and cooperative formation. We planned to start by gaining a national perspective in each area and then narrow down to the specific region of our focus. During the process, we identified key risks and assumptions on both the country level and the town level.
Phase II: Desk research and contact sourcing
Our desk research surveyed multiple studies of honey value chain analysis within different regions of Ethiopia. We gathered and triangulated key statistics of Ethiopian honey market from various government, NGO, and association reports. In combination with the literature survey, we also identified a list of beekeeping and honey market experts, large honey coops, processors, and exporters, and NGOs with honey projects in Ethiopia. Our research also extended to include some basic knowledge of beekeeping, supplemented with a visit with an organic beekeeper in upstate New York to learn more about the daily practices of beekeeping.
Phase III: January field work
During the January field visit, the team conducted interviews with four key informants in the government and non-profit space and also visited the Mercato market in Addis Ababa and three other local markets near Tembaro. The team gained a preliminary understanding of WEEMA’s project through visits and interviews with the local beekeepers in Mudula and Kololo.
19 Phase IV: Analysis and initial recommendations
The team conducted a stakeholder analysis and constructed a preliminary value chain analysis after aggregating the information gathered from the January field visit to better understand the inter- related dynamics amongst players in the market. The field work granted a more concrete understanding and intimate knowledge of the local honey market dynamics within the country and enabled the team to fill in gaps from preliminary research. We were able to modify our initial assumptions and formulate initial recommendations to WEEMA.
Phase V: March field work
During the March field trip, we gained a deeper understanding of the local, national and international markets building on the experiences of the January visit. We conducted over 20 in-depth interviews with honey producers, processors, unions, cooperatives, middlemen, market experts, consultants, development practitioners, government officials and exporters. We visited three local markets close to Mudula and surveyed honey sellers in Addis Ababa. In SNNPR, we carried out two focus group discussions with beekeepers in the WEEMA program to learn more about their beekeeping business and their sentiments around forming a cooperative. We also implemented a questionnaire survey with a sample of the beekeepers to collect data on their production level, revenue from honey sales, and market linkages.
Phase VI: Analysis and final recommendations
The SIPA team aggregated the WEEMA beekeeper data and ran a simple benchmark analysis against the national averages from previous desk research.31 We gained a deeper understanding of how WEEMA had helped improve the livelihoods of the impacted beneficiaries through honey production. The team also learned some of the key obstacles and challenges the beneficiaries have encountered.
Additionally, we perfected our value chain analysis by understanding how the Kembata Tembaro zone is connected to the national honey market and identifying areas where more value can potentially be captured by the local beekeepers. We were also able to develop an idea of price distribution and honey product offerings (crude, processed, packaged, etc.) within Kembata Tembaro, based on our market visits.
Limitations and Constraints
Due to limitations in both questionnaire design and communication issues, we experienced some challenges gathering formation. The inconsistent sizes of the containers for honey storage made it difficult to quantify the weight (in kilograms) of honey sold and affected the quality of relevant data. The sample of beekeepers who participated in our focus group was not randomized. We selected our sample based on the willingness and availability of beekeepers during particular days (i.e. a “convenience
31 We incorporated this qualitatively into our findings. 20 sample” technique). The two focus groups differed in both gender and location, making them less comparable with one another. Although we triangulated the collected data, we acknowledge that we were working with a small subset of the beekeepers in the program, which might not be representative of the entire population. Nevertheless, the rough data gathered from the focus group participants provided us some useful insights.
We also experienced difficulties collecting pricing data from local markets as our visits often caused some commotion from crowds gathering. As a result, we did not collect as comprehensive and accurate market volume and pricing data as we would have liked. The non-existence of packaging and measurement standards presented another challenge to compare products across markets. However, we see it as a fundamental market characteristic that we will further discuss in the Findings section.
21 Focus group discussion in Kololo. Clay pots used for honey in the foreground.
FINDINGS
22 Through our desk research and two field trips, we gathered significant information from many actors. Important aspects of our findings revolve around honey production, the honey market, and efforts to shape the market.
Honey Production
The story of honey production in Ethiopia is a story of potential. With 1.8 million smallholder beekeepers in the country, managing more than 7.5 million bee colonies in hives, the potential for production is roughly 500,000 tons per year.32 However, actual production is currently at 10% of that at 50,000 tons per year (See Figure 2, below).33 Thus, while Ethiopia is the largest producer of honey in Africa, it has the potential to improve yields and produce more if existing beekeepers are able to overcome significant issues regarding inputs, technical skills, and climate change adaptation.34 In the next section, we will briefly describe the major honey producing regions followed by our analysis of key issues with production, always focusing on the Southeast region (including Mudula and Kololo) of SNNPR.
Figure 2: Honey Production in Ethiopia (tons/year). Source: Central Statistical Agency of Ethiopia
Regions
Depending on the location and the amount of rainfall, beekeepers in Ethiopia can harvest one to three times a year. The biggest harvest is the fall harvest (October-December), which happens after the rainy season ends. Spring harvest (usually in May) brings in less honey, thus resulting in higher prices.
32 Mengesha, Solomon, interview, March 15, 2016, Addis Ababa, Ethiopia; Eyob Assefa, Head of Tutu Honey, interview, March 23, 2016, Addis Ababa, Ethiopia. 33 Miklyaev et al. “Honey Production in Ethiopia: A Cost-Benefit Analysis of Modern vs. Traditional Beekeeping Technologies.”; Central Statistical Agency of Ethiopia. 2011. “Honey production and exports versus domestic consumption, 2007–2011.” 34 Fortunately for Ethiopia there is no issue of the varroa mite, a parasite that attacks bees and is common in other parts of Africa (Apimondia, 2016). 23 While northern regions generally have only one harvest (October-December), southern regions can have at least two (April-May, October-December), making it very attractive to processors to buy honey from. Thus, honey production differs greatly by region. Moreover, the concentration of technical skills, advanced inputs, and honey types differs by region. Next, we will break down the major honey producing regions relevant to our work.
SNNPR southwest (The Honey Belt of Ethiopia)
Through our field research, we learned that most bulk buyers purchase honey directly from the southwest region. This region, often called the honey belt of Ethiopia, is known for its large honey production. It has a perennially green natural forest and high flora. As a result, bees in the area benefit from available flora and do not depend on beekeepers for foraging. Consequently, the region records high levels of production with two to three harvesting seasons.
While most of the beekeepers still remain unorganized, the southwest has relatively strong, well- established coops and unions for honey compared to other regions. They can be found predominately in Kaffa, Benchmaji, Sheka, and Jimma zones. SNNPR is the region Interestingly, even though the bulk of Ethiopian honey comes that produces the most from this region, sellers often do not market it as such. Due to the popularity of honey from the northern regions of the country, many honey in Ethiopia, but companies tend to buy honey from the south and bring it to the north honey from Tigray is for processing and packaging. These firms, which are registered in the the most reputable. north, then label the honey as Tigray or Gojjam honey before supplying to the broader market.
SNNPR southeast
Compared to the southwest of the region, honey production in the southeast (including Kembata Tembaro Zone) is lower and beekeepers are less organized. Production is mainly a secondary activity in the backyard and primarily with traditional hives. We learned from buyers that it is much harder to find large quantities of honey with consistent quality from this area. This is not necessarily a question of poor quality, but rather a question of organization and inputs.
Honey in this region can be multifloral, but when a high flora content is not available, the honey can be primarily monofloral from eucalyptus trees, which is considered to have medicinal qualities.
Tigray Region
Tigray, the most northern region of Ethiopia, is famously known for its clear white honey, with high medicinal benefits.35 Tigray is thus often used as a reference point for other honey producing regions. Compared to other administrative regions, especially those in the south of Ethiopia; Tigray has a comparatively smaller agricultural industry. This makes honey, which can be produced in harsher climates, an important commodity for the region.
35 Although Tigray also has red and yellow honey types, white is the most common and most preferred. 24 The regional administration has put much effort on improving honey production. As a result of increased efforts on inputs, the percentage of transitional and modern beehives in Tigray is 35% of total hives, as compared to 10% in other regions.36 With this higher share of modern hives, Tigray is able to produce relatively more honey despite low levels of flora and inadequate rainfall throughout the region. At the same time, the SNNPR could be considered to be at an advantage compared to Tigray and other northern regions. This is because the region suffers far less than the north from issues of drought.
Issues in Honey Production
Inputs and Materials
For Ethiopian beekeepers, beekeeping is a tradition that is often handed from previous generations. Close to 90% of the country uses techniques from past generations.37 Many of the beekeepers we spoke to in Mudula and Kololo cited that beekeeping was an activity inherited from their parents. Such techniques yield, on average, only five to seven kilograms of honey per hive, per year, which can be of lower quality with impurities such as grains, sticks, and dead bees.38
These cylinder shaped traditional hives are harvested by extracting the entire honeycomb from the hive. Consequently, the beekeeper loses the bee colony, in addition to harvesting lesser quality honey with many impurities. With this hive, it is also difficult to check the quality of honey before harvesting. Efforts to transition to more productive and efficient hives are advancing, albeit at a slower pace. (A section under findings will evaluate those who are shaping the honey value chain.)
Photo 1: Traditional beehives in Mudula
Modern hives, or Kenyan top bar hives, are closer to international standards of honey production and produce a higher volume of honey at around 10 to 20 kilograms per hive per harvest. Nevertheless,
36 Mengesha, Solomon, interview, March 15, 2016, Addis Ababa, Ethiopia. 37 Central Statistical Agency of Ethiopia. 2011. “Honey production and exports versus domestic consumption, 2007–2011.” 38 Tesfaye, interview, March 17, 2016, Durame, Ethiopia. 25 the cost of the hive and materials involved currently make it a less viable option for smallholder beekeepers, like those in Mudula and Kololo. These hives require purchasing beeswax in order to construct the inside frame needed for honey production. In addition, modern hives require skill to manage and are costly to obtain (with prices of new hives ranging from 630 birr in rural areas to 1,800 birr in Addis Ababa).
Photo 2: Modern hives in Angacha co-op, used for communal honey production.
On the other hand, the transitional hive or chafaka hive can be made with locally available materials. It has a production capacity of around 8-10 kilograms per hive per harvest.39 Both transitional and modern hives enable access for quality checks and can produce multiple harvests. Both require the purchase or transfer of a bee colony to the hive (350-500 birr per colony), whereas, bees naturally swarm to traditional hives.40 Many beekeepers surveyed in Mudula noted that a lot of their hives were The Langstroth empty. Many did not have the funds to buy new colonies; instead, they wait until they are able to catch a new swarm. hive
In the United States, the Langstroth hive is the most widely used and the standard in international beekeeping. It was patented in 1852 and has specific dimensions that optimize honey production.
39 Ibid. 40 Price of bee colony from Angacha Cooperative, 2016. 26
Photo 3: Transitional hives
Packaging can also be an issue as it can significantly affect the quality of honey harvested. Food grade containers are difficult or expensive to obtain. As a result, many in rural areas use clay pots. These handmade clay pots vary in size leading to inconsistent measurements. In our discussions with several beekeepers, we learned that they did not properly quantify, in kilograms, their productions. This lack of standardization may mean that they were under calculating their honey to be sold, and thus losing profits.
Photo 4: Honey being sold in clay pots, buckets and 1kg plastic jars in Hadero market.
27 Drought and Harsh Climate Conditions
Drought and extreme climate variation also pose an issue to honey production. Beekeepers in Mudula and Kololo cited issues such as bees absconding and leaving hives empty as a major challenge. They also noted that deforestation, lack of flowers and water, and hot weather were also part of the problem. While it is difficult to operate in a harsh environment or drought, beekeepers can take certain steps to help mitigate the effects of weather. According to a University of Texas at Austin report, rainfall variability will potentially decrease poverty reduction by 3 to 4% over 2011 to 2015.41 SNNPR ranks as the region least vulnerable to climate change while Tigray is subjected to higher frequency of drought and flooding. The disproportionate impacts of climate change on the northern and southern regions may provide a comparative advantage to SNNPR in honey production.
Technical Skills and Management
Per discussions with representatives from coops, unions, and processing/exporting companies, we learned that the capacity of participating beekeepers was a major issue. Beekeepers should have a certain breadth and depth of knowledge in regards to beekeeping, which includes: building transitional hives and catching bees, selecting an apiary site, ensuring security of the colony, harvesting, processing, and switching from traditional to transitional hives.
In regards to mitigating the effects of weather, successful beekeepers should be able to recognize a problem in their hive and handle it themselves. This can include creating shelter with available materials to protect bees from heavy rain, wind, and sun. If bees need to travel farther than four or five km to find water or flowers, they will most likely abscond. Beekeepers who provided water for their bees (even just a bowl of water next to the hive) and proper bee forage (flowers through gardening) were able to avoid the disruption of honey production. Honey Market
Major value chains relating to smallholder beekeepers
The honey market in Ethiopia can be classified into different categories based on location or end use of the honey sold. Features of each market vary as well as the target customers served whose preferences may vary. There are a number of players involved in the honey production and distribution process. Due to available resources, players have developed different business models to share profits in the market. For example, producers in urban areas (e.g. Addis Ababa) with sufficient initial capital and distribution channels can afford to acquire modern beehives and sell directly to supermarkets in big cities at premium prices.
Beekeepers in rural areas with weaker market linkage, on the other hand, may only use traditional beehives to produce limited quantities of honey and sell locally at a lower price. As for
41 Aragie. 2013. “Climate Change, Growth and Poverty in Ethiopia.” 28 smallholder beekeepers, two value chain options based on immediate buyers are most relevant and most frequently adopted in their production and distribution of honey, as we will see in the coming sections.
Figure 3: Smallholder Honey Value Chain in Ethiopia
In the first value chain, beekeepers are responsible for honey production. Once they harvest, they sell honey to middlemen in local markets (markets such as in Mudula or Hadero). Some middlemen process honey before selling, while others sell raw honey. Depending on the quality and quantity of honey purchased, retailers/wholesalers would determine whether to sell the raw honey to tej houses or further process it and sell to retail customers in markets like Mercato in Addis Ababa. As for the transactions with processors/exporters (mainly international trading companies), instead of processing raw honey themselves, middlemen would sell fresh honey collected from beekeepers in bulk to processors/exporters directly. Processors/exporters then process the raw honey with reference to international standards and export to foreign countries, such as the United States, European countries, and the Middle East.
In the sub-value chain with retailers/wholesalers, retailers and wholesalers sell directly to end customers, thereby determining the price while reaping high profits. Normally, retailers or wholesalers maintain a long-term relationship with certain middlemen from different areas across Ethiopia to ensure continuous supply of honey to diversify the risk of buying solely from one location. Similarly, processors/exporters also keep closed relationships with certain middlemen who help them source honey on a regular basis and beekeepers do not have much bargaining power to negotiate the selling prices.
Even though processors/exporters determine the purchase price from middlemen, they also face fierce competition in international markets and are generally price-takers. Beekeepers, however, generally do not develop relationships with middlemen and sell to customers in local markets as honey is currently in high demand (convenience). On the other hand, middlemen, who are usually from large cities source from several markets to take advantage of better prices and thus are not very committed to one specific market. Such lack of mutual commitment between beekeepers and middlemen shape the interactions between the two in low-level honey markets.
29
Photo 5: Honey in Mudula market.
Unlike the previous value chains above where individual beekeepers work on their own, with the promotion of cooperatives by the government, some beekeepers take the initiative to form cooperatives to gain greater market power. By establishing cooperatives, beekeepers can gather their output together and gain the assistance of members designated to work on marketing intelligence in the cooperatives to help them negotiate better selling prices. Some unions may buy directly from cooperatives if the supply of the cooperatives can meet quantity and quality requirements of the unions. Then unions, in turn, build linkage with national retailers/wholesalers and exporters/processors to market all the honey collected. There are successful examples identified in the market (Angacha for cooperatives and Zenbaba for unions) who help their beekeeper members improve market access and increase The value chain with co- their income level. Retailers/wholesalers and ops seems more desirable exporters/processors would further process, if necessary, before they deliver honey to both domestic and international end since it makes a wider consumers. range of interactions
In this value chain, since the interests of the possible and increases the cooperatives and unions are in alignment with those of collective bargaining beekeepers, the two parties will usually help the beekeepers power of beekeepers obtain fair market prices. Consequently, the beekeepers benefit and are not taken advantage over by middlemen as in other value chains.
Actually it is implicit in the above analysis that the major value chains involving small beekeepers in the honey market are shaped by other more powerful players rather than beekeepers. This is an issue that will be explored more in the following sections. Whether the beekeepers are working in the first value chain or the second one depends on various factors. For example, if some beekeepers are
30 located in remote areas with limited transportation options to larger towns or cities without additional support from international donors, they may end up producing only for the local market and will rely on middlemen to sell their honey. On the contrary, when support from the government and NGOs who promote the idea of co-ops is more readily available, there is a higher likelihood that the beekeepers will form these coops. For all existing co-ops, the majority of them were established as part of the development projects of NGOs’ and/or the government.
Consequently, such co-ops are often well organized and the beekeepers are taken better care of compared to their transactions with middlemen. However, the honey market is dynamic and constantly evolving. When there are external forces, such as the efforts of exporters and the poverty reduction goals of the government, the value chain with co-ops seems more desirable. This is because it makes a wider range of interactions possible and increases the collective bargaining power of beekeepers to obtain higher selling prices resulting in increased income.
In analyzing the honey market in Ethiopia, we are not benchmarking to other honey markets in Africa. This is because Ethiopia is actually the top performer or model in Africa compared to other neighboring countries, according to Mulufird Ashagrie, Africa’s Representative for Apimondia (an international federation of the beekeepers’ associations). While other countries, notably Kenya, have strong honey markets, Ethiopia is one of the few African countries that does not suffer from parasitic bee diseases. This currently gives Ethiopia an advantage relative to other honey producers on the continent.
Demand
The overall picture of the demand of honey in Ethiopia is very positive. As it will be seen in more detail below, honey consumption has been increasing from only in special occasions or as medicine to an everyday product. In fact, the domestic demand has been growing so much that the producers and processors are still far from supplying the necessary amount of honey to meet this demand throughout the country. The domestic market, as a matter of fact, has been more profitable to producers than the international market. There is, therefore, a large market opportunity for producers, either small or large, to meet this growing domestic demand.
The current demand for honey can be divided into three main categories: domestic table consumption (23% of all honey produced), tej houses (75% of all honey produced) and large processors/exporters for international consumers (2% of all honey produced). Through our research we anticipate a faster increase in the demand of domestic table honey consumption. As the GDP continues to increase and the middle class continues to grow, purchasing power will further increase among consumers, resulting in a greater demand for table honey and tej. As will be seen, our recommendations focus on the domestic market because all our interviewees mentioned difficulties gaining profitability in the international markets. Costs to comply to international standards currently outweigh revenue made internationally. On top of this, domestic prices are comparatively higher. For these reasons, the domestic market still remains a hot market. What’s more, as Ethiopia does not import honey, the price is determined mostly by the domestic consumption patterns and domestic supply.
31 Domestic Table Consumption
Table honey is still mostly used as a gift given on special occasions, notably weddings, but also used for medicinal purposes. Its use as an everyday food, however, is still relatively small in rural and poorer areas of the country, including Mudula, where Mr. Adore, from the Livestock Office, estimates that only around 10% of the households in the five kebeles consume honey every day.42 This means that an estimated 90% of the honey in Mudula is only consumed on special occasions or as medicine or also to make tej or briz, a non-alcoholic drink made of honey and water. The demand for table honey, however, has been increasing, even in Mudula, mostly driven by the expanding middle class and changing consumer preferences.
The final consumer, however, is the most affected by the price fluctuations due to the drops in supply in between harvests. As demand is always high, honey is placed on the market and sold immediately after it is harvested. If a final consumer in Mudula wants to buy honey in March or April, for example, they will have to pay a higher price, because only very few producers are able to stock honey to sell later at a higher price. The honey producers in Mudula live mostly on a subsistence basis and therefore sell their honey The demand for very cheaply as soon as they can harvest. This is because they need processed table honey in immediate funds to complement their household budgets. Higher- level honey sellers with sufficient cash reserves (e.g. retailers or Mudula has been wholesaler) can afford to store honey to wait and sell when the increasing, but crude price increases during low-supply periods.
honey still represents The honey demanded in Mudula is still mostly crude, thick most of the consumption. honey, with wax, bee parts, and other impurities. This is the most common form of honey offered in markets in the region. This is because this honey is seen as pure and demonstrates it has not been modified or diluted in water. Processed honey can be found in very small quantities, but even those still contain considerable amounts of impurities; the demand for this honey is more common in the urban settings (e.g. Hadero or Hawassa). But, as previously mentioned, it represents only a small portion of the honey demanded, as just around 10% of households in the five kebeles consume honey on daily basis. 43
42 The share is higher in urban Mudula compared to rural 43 Though this percentage is expected to increase with increases in income level. 32
Photo 6: Crude honey sold in clay pot in Mudula market.
With rough estimates of honey consumption in Mudula based on an interview with the Mudula Livestock Office, we estimate that locals consume around 3,700kg per year of honey. 44 This represents only about 10% of the population, since the vast majority do not consume honey on a regular and daily basis.
In Addis Ababa, however, the situation is very different, with large quantities of honey found year-round in the main supermarkets with stable prices for both processed and crude varieties. This is only possible because the large processors that supply supermarkets have enough capital to stock and continue supplying for supermarkets year-round, even when the producers may have run out.
In regional larger cities, like Hossaena and Hawassa, honey can still be found year-round in the markets because these are more accessible markets to middlemen. Middlemen are able to buy honey from different producers, large and small, across the region and have the means to sell honey in these markets, which are more profitable than more rural markets in Mudula and Hadero, for example.
In the local market, however, prices change considerably when honey is sought between harvests. Because only the few beekeepers that stockpile are able to sell at a later date, they can set the price higher than right after the harvest, when all beekeepers reach the market to sell and the prices go down due to the increased supply. Most of the honey sold is crude, which is compatible with the largest demand segment, but there is one person who can process honey in Mudula and they can set the price higher for people willing to pay for better quality honey.
Beekeepers from WEEMA are not yet at this level due to their lower production and need for the immediate funds. These beekeepers live on subsistence and when they are able to sell their honey, they almost immediately spend it on consumer goods, like school materials or clothes.
44 We assume here locals consume around two to three teaspoons of honey per day. 33 Tej Houses
Tej houses are the stakeholders that buy the majority of honey in the country; in Mudula, however, the situation is a bit different. In the town there are only two tej houses but they are not major buyers of local honey, the majority being for table consumption. The type of honey these two tej houses buy is crude honey, but of an inferior quality than the crude honey bought for table consumption.
Photo 7: Tej house in Hossaena. Photo 8: Raw honey used to produce tej in Hossaena.
We visited a tej house in Hossaena, which was likely to be representative of the tej house situation throughout the country. There, the quantity of honey demanded is so large that the managers of the tej house need to have honey delivered from Addis Ababa, at an average of 600 kg of honey per month (7,200 kg per year). The honey they buy is in large quantities but of lower quality, with a lot of other elements other than honey (thus much cheaper) than the processed honey or even other types of crude honey.45 This type of honey does not bring much profit to producers, since there is very little value added. In Hossaena, for example, they pay only 37 birr per kilo of crude honey, as compared to more than double that in the Mudula market itself. The difference in prices among these types of honey come from cleaner and better harvesting techniques and processing methods. These techniques can be as simple as letting the honey sit so that the lighter wax rises to the top and the liquid honey remains at the bottom of the pot.
Large Processors / Exporters
Large processors or exporters' demand behavior differs from that of the previous two stakeholders because they mainly buy honey from several different producers, even in different regions
45 By definition, honey should be only the liquid that the bees produce. If it's mixed with wax or any other solid particles, it's not considered pure honey anymore. In Ethiopia, however, this definition is much looser. In this report we consider processed honey as the honey with the least amount of wax, whereas crude for table consumption being next and crude for tej houses as the honey with the most amount of wax, earth, bees and other impurities. 34 of the country. This reflects their high capacity and high quality, which can go to as much as 200 tons a year, as is the case of Tutu Honey and Apinec (each), for example.
From the main processors we talked to (Comel Honey, Tutu Honey, Apinec), all buy honey solely from co-ops or unions. The reason is that they can lower their transaction costs by spreading them across the higher volumes of co-ops and unions versus dealing with hundreds of individual beekeepers. Buying honey from co-ops and unions also helps them to meet certain quantity minimums and quality standards.
Photo 8: Honey being sold in Shoa supermarket in Addis Ababa
They buy crude and semi-processed honey and process it themselves in their processing center. Interestingly, nearly all of them buy honey from the "honey belt" in SNNPR where harvesting can happen more frequently than the northern parts (at two to three times a year). However, if the processing center and the company itself is registered in Tigray, the honey is sold as being "honey from Tigray", which increases the final price of the product due to the reputation of the honey from the north.
However, even with training and buying from established and strong co-ops, the large honey processors complain that it is hard to meet the demand. Eyob Assefa, from Tutu Honey, one of the largest honey exporters in Ethiopia said that, "they have only been getting half of the quantity they want from the co-ops" and that "honey exporters are collapsing because they don’t have enough input to fulfill the contracts." Daniel Gebremeskel, from Comel Honey, said that the processor is in the middle of the value chain and cannot set the price, being a hostage of both co-ops and international buyers, who determine the buying price. In this sense, he added that co-ops have strong bargaining power.
Mr. Assefa and Mr. Gebremeskel added that the international market is not paying as much as it used to because of the heated competition in the market and large quantity at relatively low prices supplied by China. Furthermore, the domestic market for table honey has increased so much that is more advantageous to sell domestically. However, because the sunk costs to become major exporters are too high, after having met the quality standards and already having a fixed market in Europe, they keep 35 exporting to hold their market position in the hope that prices will eventually increase abroad while keeping an important market position.
Comparing the features of the three main types of end consumers and their requirements in honey quantity and quality, domestic table honey may be the best target market to focus on since the tej houses’ quantity requirements are beyond WEEMA beekeepers’ current production capacity and international quality standards are extremely high to meet for export. Moreover, the perspective of growing domestic demand is positive and Ethiopia is unlikely to saturate its demand for honey in the medium term.
Market Distortions and Inefficiencies
Market underdevelopment
The honey market is largely incomplete and underdeveloped. Even though there is a wide variety of honey within Ethiopia, outside of the specialty white honey from the Northern Tigray region, product differentiation among honey in light to dark amber is largely nonexistent due to their homogeneity and lack of brand recognition of honey from the southern region. As we have seen, sellers tend to label their honey based on the company’s place of incorporation (such as Tigray in the north to take advantage of the good-quality reputation) rather than the origins of the honey.
There is a lot of room for product development in the national market as latent demand does exist. B Honey is one of the companies that took advantage of the market vacuum and made a successful business by creating a new honey product that had not existed in Ethiopia before. The company produces pure and infused honey packaged in glass jars46, initially positioned for export in the US or EU market.47 However, the unique product quickly carved out a niche in the upper-income, urban domestic market and quickly gained popularity. To ensure the quality and supply of its honey, B Honey vertically integrated through all levels of the value chain, from beekeeping to retailing, in order to better control its production. The rapid expansion of B Honey testifies to the vast space of unfilled demand in Ethiopia that could be developed with the right product developments.
Inconsistent supply
Honey processors or exporters experience supply chain shortage issues. It is difficult for them to secure stable input of quality honey from beekeepers. The high sourcing costs and uncertainties of establishing relationships with multiple small honey producers have caused considerable strain on honey export businesses as they hinder their ability to fulfill large contracts and limit the competitiveness of Ethiopian honey in the international market.
46 B Honey glass jars are bought from an importer that buys them from China. So far, only one size is available, 300g, which makes it a far from sustainable business practice for B Honey. 47 B Honey infuse honey with a variety of other foodstuffs and plants by unique approaches. The flavors include coffee, lavender, ginger, etc. 36 Many large processors are seeking to shorten the supply chain by partnering with cooperatives. However, the fundamental cause of supply shortage lies in low productivity as previously explained in the honey production section. As over 90% of the beehives are still traditional with low yields, establishing direct relationships with honey farmers alleviates but does not solve the root problem of honey supply.
Tutu Honey, one of the largest honey exporters in Ethiopia with 200 tons of exports to the EU each year, complained that they have only been getting half of the quantity they desire from co-ops they work with, and the average output has been low, at five kg per hive. Comel’s Welela Honey, a smaller player than Tutu, with production around 40 tons a year, faces similar problems as they look for cooperatives with over six tons of capacity. There is ample room to improve production efficiency with technological “ The honey value chain is very advancements and modernized practices, as Ethiopia’s saturated; there are too many current honey production is well under its potential. From middlemen, too many people the vantage point of producers, working directly with involved, which increases the price processors often means higher margins as the middle layer and decreases quality.” of the value chain is eliminated. However, this requires Eyob Assefa, Tutu Honey Processor producers to have considerable scale to be able to work and negotiate with multiple processors.
Market fragmentation and information asymmetry
Market fragmentation is another inefficiency faced by the honey sector in Ethiopia. Most producers are small-scale who only operate in local informal markets. The resources required to access larger markets are unattainable to most individual beekeepers without a sufficient production level and marketing expertise. As a result, market linkages among different geographies are poor and information asymmetry takes place as beekeepers are shut out from market intelligence. Middlemen take advantage of the spot market landscape and saturate the value chain. The opportunistic nature of middlemen distorts prices and provides little value added to the industry.
Market fragmentation is closely connected to the supply chain problem above. Government projects such as ASPIRE48 are putting much effort into increasing market linkages by creating awareness and providing technical training to local beekeepers. Being in touch with market prices and trends is crucial for producers to understand their positions and get a fair price for their offerings. Once producers scale up, they are able to gain access to larger markets and obtain more leverage to increase their profit margins.
Lack of Quality Control
48 ASPIRE is a government initiative to help beekeepers build capacity through providing technical training with the Holeta research center. It also serves to link beekeepers with resources that may be of use to them in the larger markets. 37 Honey quality is another problem the sector is grappling with as it develops. Adulteration, premature harvest, and bad processing practices all contribute to the decline of honey quality. Even though the government provides some guidelines on standards of honey, there is no enforcement. License requirements for selling honey are lax and annual inspections very weak. Some middlemen, who are only selling in local markets, are often unaccountable due to their lack of long term customer relationships and traceability, which incentivizes them to sell low quality adulterated honey. As quality issues become rampant in the market, consumers may lose trust and decrease their demand for honey. This lack of quality control can deter the overall health and growth of the honey sector.
Rural versus Urban Consumer Preferences
Packaging Consumption Patterns Preferences
Rural Often packaged in clay pots Not consumed regularly as it Prefer crude unprocessed is more of a luxury good honey Lack of knowledge on consumed during special specific volume occasions i.e. for weddings or Bees flying around granting as gifts and/or impurities (wax,
bee parts) in the honey Vast majority is sold to tej makers and/or middlemen are perceived as high quality; therefore local sellers provide this type of honey to meet the demand preferences
Urban Usually packed in plastic jars An increasing demand for Tend to prefer more or large sacks in bulk i.e. table honey due to a growing semi-processed honey which is very common in middle class and increasing but preferences for more locations such as in Addis knowledge of the nutritional processed honey are Ababa value increasing Glass jars are also used for Tigray honey in the North packaging differentiation commands the largest Prefer to buy from people although this commands a consumption due to its they know/trusted more premium price and is premium brand and medicinal sources versus from the targeted to wealthier qualities, followed by honey supermarkets. consumers from the Kaffa region.
According to the World Bank, Ethiopia’s GDP per capita has risen to $573 as of 201449. This may not seem that high but it is almost a three-fold increase from where it was eight years prior, in 2006 ($194). This increase in wealth and disposable income held by an expanding Ethiopian middle class can
49 The World Bank, GDP: Ethiopia. The GNI per capita in terms of PPP is $1,500 (2014) also according to The World Bank. 38 partly account for the rising demand for table honey in the country. Meanwhile, overall GDP grew to approximately $55 billion in 2014 from just $15 billion in 2006. As income per capita levels continue to rise along with general macroeconomic expansion, we can expect to see continued trickle down effects, boosting economic livelihoods also at the rural consumer level. As public awareness of the nutritional benefits of honey expand, coupled with rising urban and rural income levels, the demand for domestic honey will continue to grow.
Other bee products: wax and propolis
Honey is not the only product that bees can produce. In fact, all other bee products - mostly beeswax and propolis - are more valuable than honey. During our field assessment, our focus was mostly to sense the market for beeswax, since we considered propolis to be too much of a niche market to be viable in Mudula.
In Mudula there is effectively no production of wax or propolis, despite efforts from the government in trying to incentivize wax production. The Livestock Office already mobilized beekeepers to produce wax but those who engaged in producing it could not find a market for the product.
Therefore, despite beeswax being expensive and in high demand, especially internationally (EU, Canada, China), there is no perceived value of it in Mudula, which is precisely what the Livestock Office is trying to address, arguing that it can be sold for 600 birr per kilo in the market at Hawassa. Even with this positive and promising outlook, we do not think that the beekeepers in Mudula should presently engage in its production. It is preferred to focus efforts on increased honey production and co-op strengthening, rather than include production of a good where there is no perceived local value and beekeepers have no knowledge of producing.
Nevertheless, Ethiopia produces around 5,000 tons of beeswax per year, which is 10% of the worldwide production of beeswax50. From the 5,000 tons produced annually, only 402 tons were exported in 2003. Such high production capacity comes from the fact that most of the honey produced in the country comes from traditional hives, which yield a greater amount of beeswax per kilo of honey (8 to 10% of the honey yield) than the modern or transitional beehives.
To conclude, there is in fact a huge production potential for beeswax in Ethiopia, with increasing demand domestically and internationally. However, even big honey processors do not enter this market and only use wax in their own modern beehives. This is mainly due to lack of information along the value chain and the need to balance both high honey production and wax. One has to take particular care with wax to avoid it being destroyed by the wax moth before it is sold.
In Mudula, specifically, there is no interest in producing wax because there is no big market for candle or other products made out of wax. If it were the case for it to be sold elsewhere, like in the Hossaena market, production would have to be high enough to justify the costs for the beekeepers to go
50 Legesse. 2014 39 there themselves or for a middleman to go to Mudula and buy in bulk to sell in other markets. An overview of our interviewees’ current usages in wax can be found in Annex VII.
Shaping the Market
Quality standards
Unlike the well-developed international honey market, there are no universal quality standards adopted across the domestic honey market in Ethiopia. In fact, honey is far from being established as a product for commodity exchange within Ethiopia.51 There may be several reasons for this:
● Despite a long history of honey production and consumption, the market is just in its early development stage. So producers have no sense to label the ingredients on the package of honey. And, the majority of consumers may not have the mindset to refer to unified standards when they select honey. On the other hand, the government has only recently realized the potential of the honey market and may not have yet sufficiently developed such standards.
● Customer preferences about honey are as diversified in the country as explained above. The standards that serve rural consumers may not be appropriate for urban buyers.
● There are different uses of honey in Ethiopia: to produce tej; table honey for daily consumption; or for medicinal purposes; etc. Different quality standards may be developed for all kinds of functions and it may take a longer time to formalize these.
Once the quality standards are developed, enforcement can be another challenge. On the one hand, market players need to honor the standards and have quality control procedures to meet the requirements. On the other hand, government officers who monitor the honey quality from specific producers should follow the protocol during annual quality checks before granting renewed business licenses to honey producers.
For processors or exporters who would like to gain share in the international market, they have to follow the quality standards of import countries. Currently, the United States, EU, Middle East, and Sudan are the main honey trading partners with Ethiopia; thus, their quality standards are adopted by companies which export to those destinations. In general, the standards in the United States and the EU are stricter than those in Middle East and the quality requirements in Sudan are relatively lower compared to the above three areas. Companies choose which region to export to based on the type of honey they source from and the quality standards of that region.
According to Mulufird Ashagrie, Africa Representative in Apimondia (an international federation of beekeepers’ associations), the government may refer to the quality standards adopted internationally or by the EU to facilitate the development of national honey standards. Take the standards
51 A commodity exchange is an organized efficient market space for buyers and sellers to trade certain products. This implies that the product is standardized and easily exchangeable. For more information visit www.ecx.com.et. 40 used in the EU for example; they cover the requirements for water content, hygiene, sanitation and packaging etc. Solomon Mengesha, Senior Advisor in honey value chain efforts at GIZ, mentioned that GIZ was helping beekeepers to produce honey that can meet EU quality standards so that they can sell the honey to exporters at higher prices and increase their income. Usually, such facilitation starts with awareness creation among beekeepers so that they understand the importance and benefits to produce high-quality honey and then trainings will be provided to improve and tailor their production techniques. GIZ, as a development agency itself, does not keep records of the origin of honey or conduct tests of honey. Honey exporters are the ones who are responsible for making sure the quality standards are met before they sell to destination countries.
Cooperatives
A lot of effort from NGOs, governmental organizations, and private sector companies is going into the improvement of the honey market. Establishing and strengthening cooperatives is one of the major modes by which these actors are doing so.
Co-ops serve multiple functions. They can serve as a space for beekeepers to learn from one another. They can also provide a space for honey collection, processing, and storage. Within this space, Cooperative honey can be properly stored and even stockpiled to anticipate price is a business or organization increases. Additionally, they provide greater opportunities for owned and run jointly by its women to engage in income generating activities. Finally, they help members, with profits or link beekeepers with buyers, including those in larger markets. Thus, benefits shared among them. the co-op is important to stabilize the market because without co-ops, middlemen may dominate the market and leave little room to bargain for price. With co-ops beekeepers are not simply price takers.
Through our field study, we learned that the model of a co-op, specifically within the honey sector in SNNPR, varies. Even in size, cooperatives can range from 14 to 2,000 individuals. Cooperatives can serve multiple objectives. Ultimately, the success of the cooperative depends on its location and accessibility to beekeepers, as well as the nature of the business the members wish to pursue. The ability to secure resources for the initial start-up is crucial as well.
Production-oriented model
The production-oriented cooperative focuses on collaborative beekeeping and honey production. Hives are onsite at the co-op and beekeepers share time in their management. Like other cooperatives, this model is also structured around a committee that manages daily operations. The time put in by each member is quantified and translates to a certain share of profits they can receive after sales. In order to
41 manage the ongoing functions of the co-op, members are generally asked to contribute a small fee52 either each month, or at a set interval. Others may contribute a start-up fee, after which, they are not required to make the monthly contribution; these practices ultimately depend on what each respective co-op decides on. The nature of co-ops requires a lot of dedication and combined effort on the part of the members and needs to be embedded in strong relations of reciprocity and trust as well as high cooperative governance standards.
Marketing-oriented model
Through our interviews with cooperative experts within the government and various NGOs, we learned there is a more positive outlook towards marketing cooperatives. A marketing co-op serves as a collection center for honey to be sold in larger quantities. Individual beekeepers work on their own to produce their own honey. At harvest times, they gather their honey in the cooperative. In some cases the cooperative will buy honey up-front from beekeepers at an agreed-upon market price. From our discussions with the co-op office in Mudula and at the Angacha cooperative, we learned that members generally will receive 90% of their initial revenue. The remaining 10% is then pooled collectively in a cooperative bank account and used to cover costs of the cooperative, including those related to administration, transportation, packaging, etc.53 The honey is then ideally taken to a larger market where it can command a larger price. Any profits made from this sale of honey will go back to beekeepers, as well as any of the remaining initial 10% that was used to cover cooperative costs.
In other cases, the collection center can simply serve to collect honey to be sold directly to buyers in larger quantities. All dividends would then be shared among members. For both cases, the share of profit beekeepers will receive is determined by the amount of honey they contribute, as well as any extra time they contribute to the functioning of the cooperative. Other functions may be processing, packaging, storing, and selling activities, as well as committee functions. These are the most common marketing- oriented models that we discovered. Nevertheless, the details of the model ultimately will be worked out by the committee and members.
Mixed model
Other cooperative models, like that of the Angacha cooperative, focus primarily on marketing, but also have some collaborative production components. Member contribution to the cooperative can be in the form of in-kind contributions of honey, time, labor, and inputs. Individuals have the opportunity to produce their own honey off-site, but members can also participate in the upkeep of communal beehives and land management, as well as co-op operations.54
52 During our interview in the Mudula Co-op Office, we were told that the fee ranges from 5 to 100 birr per month, depending on the type of co-op. The 100 birr is the highest amount they have on record, for a savings co-op. The Office discourages very low fees because they do not keep the members motivated. 53 Some cooperatives may decide to use their pool of funds for credit activities; but ultimately this is up to the discretion of each co- op. 54 Co-op operations include recordkeeping, accounting, honey extracting and storing, assessing market, marketing, selling. 42 In the case of Angacha, individual beekeepers turn in their honey and get 90% back of the local market price, with the remaining 10% going into the co-op bank account for operation costs of the co-op with any unused balance distributed in July.55 As for the communal beehives, the co-op will harvest the honey and also sell it in the market. The income is then also saved in the bank account until July. Once all the honey is sold after the second harvest, some of the extra profits will go to the cooperative and the rest will be divided among co-op members. 56 The local government in Angacha works closely with the cooperative by buying honey directly from the cooperative, but also by finding fairs and bazaars where the cooperative can sell.
Challenges in cooperative formation
Through our field research we learned that co-op establishment is relatively easy; however, long term management of the co-op is ultimately the biggest challenge to the co-op’s success. Behavioral change can take time, especially when beekeepers are not accustomed to working together. Furthermore issues regarding participation, accountability, transparency, and group governance will play a key role in the cooperative’s success.57
Beekeepers might resist forming a cooperative because they are forced to sell their products to a cooperative, when they may think they can secure a better price on their own. During focus group discussions, one successful beekeeper voiced her concern over how profits would be shared. This comment demonstrates many beekeepers’ uncertainty that they will not receive all their earned profits. Some may not want to or will find it difficult to contribute monthly fees, which is a standard practice in the region to keep the members motivated. Those who are not fully committed may jeopardize decision- making processes or the motivation of others.
55 This amount is generally determined by the head committee member based on the going local market rate. Generally, the goal will to be to sell the bulk of the honey outside of the local market, thus co-op members will ultimately receive a greater amount than the local market rate. 56 It’s up to the committee to decide how much of the extra profits, after the initial 10%, should go to the coop’s bank account. 57 Dayananda, R., 2013. 43 View from Mudula region, taken from the school in Kololo
RECOMMENDATIONS
44 Based on our findings from field work and desktop research, we have proposed the following five recommendations for WEEMA’s beekeeping project to promote the adoption of modern beekeeping techniques and improve the livelihood of local beekeepers. Further details of implementation can be found in the annexes.
1. Conduct a baseline survey to understand the current production capacity Short Term 2. Encourage WEEMA to promote awareness training 3. Continue with capacity training for the beekeepers
4. WEEMA begin cooperative formation process for beekeepers Medium Term 5. Expand relations of the newly formed cooperative to large market players i.e. unions and/or processors Long Term
1. Conduct a baseline survey to understand the current production capacity
We recommend that WEEMA should conduct a baseline survey with all existing beekeepers to have a better understanding about their current production capacity. The baseline survey is very critical for two reasons. Firstly, the baseline survey can serve as the benchmark for comparison when WEEMA monitors the progress of the beekeeping project over time. Among all projects organized by WEEMA in local community, the ultimate goal of economic empowerment projects is to increase the income level for all beneficiaries. The starting points are actually important for continuous monitoring and evaluation. Secondly, the survey can also provide WEEMA with some general ideas about the project's current performance and explore the viability of different options based on current production capacity. For beekeepers, they may develop the sense of record keeping and understand their own position through the survey.
The baseline survey can be conducted as the supplementary session for any general assembly where beneficiaries are gathered to discuss major issues. The survey should cover aspects such as the number of each type of beehives beekeepers currently maintain and how much is produced from each beehive. More detailed coverage of questions is provided in Annex II.
With data collected from the baseline survey, WEEMA is recommended to follow up with beekeepers after each harvest to keep track of their progress. Ideally, this can be an activity that beekeepers eventually adopt themselves. We therefore encourage initial and constant input from the beekeepers regarding how to measure their capacity. A simple message can be sent through phones by beekeepers to report the quantity of harvest and number of hives in use. However, the level of mobile phone penetration might pose an obstacle for information collection.58 Nevertheless, the integration of telecommunication in the follow-up activities can minimize the time and human resources consumed. As discussed in previous sections, the containers used by beekeepers in Mudula are not standardized and the fact that they do not know the capacity of the containers places them in a disadvantaged position in
58 In 2013, only 25% of people owned mobile phones in Ethiopia compared to a 70% average in Africa. The Economist. 2013. "Telecoms in Ethiopia: Out of Reach." 45 bargaining. Therefore, WEEMA may consider standardizing the size of clay pots used to store honey. With a known weight of honey in clay pots, it is easier to negotiate prices with buyers.
Apart from the honey production data, other quantitative information such as the proportion of household income contributed by honey sales and the average labor and time spent on beekeeping versus other activities, or qualitative information (such as the beekeepers’ perception of whether modernization of beekeeping techniques helps them generate more income and whether their life is better off from working with WEEMA staff) may also be collected so that we can have a more comprehensive picture about how beekeeping fits into the livelihood of beekeepers. A comprehensive understanding about individual beekeepers’ income portfolio is important for not only tracking the positive effects from economic empowerment and income generation activities, but also to help them plan their resources efficiently to minimize any negative impacts. Such information is becoming even more critical as beekeepers try to scale up and conduct a cost-benefit analysis to decide how to balance beekeeping and other agricultural activities to diversify risk and maximize income.
2. Encourage WEEMA to promote market awareness training
Awareness training is a sustainable method to motivate beekeepers and give them incentives to drive their own future. Because of the high information asymmetry in the honey market, many smallholder beekeepers do not recognize the potential their honey production could bring. The goal is to demonstrate what success looks like and to motivate beekeepers towards a new objective.
A training of this sort would demonstrate the honey market’s potential by providing information on prices in larger markets, as well as showcasing successful honey enterprises. Beekeepers can begin to see increased honey production as a method to diversify their economic activities. Showing what prices are like in larger regional markets, like Hawassa and Addis, or even international markets, gives beekeepers a sense of where they could be. Here, the objective is to encourage beekeepers to focus on increasing quantity and quality in order to reach larger markets.
There are multiple actors who can help in awareness trainings. One major role of local governments is to provide these trainings, with the objective that beekeepers will organize into a cooperative. Private sector companies, like Tutu, are also interested in promoting the value of table honey because it can directly help their business activities. What’s more, research centers, like Holeta, and NGOs (included in annex III) expressed their interest and support to engage in this area. Many of these actors want to shed light on the potential of honey, but also to promote cooperatives, as well as change perspectives on the value of crude versus processed honey which will be beneficial for all parties in the long run. WEEMA can also fulfill a special role in awareness training by highlighting successful individuals and the potential of honey as a major source of income.
46 3. Continue with capacity training for the beekeepers
WEEMA should continue to focus on increasing the production capacity of local beekeepers through training, as it is one of the key issues to solving the market access issues that beekeepers face. WEEMA’s hive building initiative has been successful in helping beekeepers’ transition from traditional beehives to transitional ones and WEEMA can facilitate further progress of the beekeepers. More comprehensive technical trainings should be provided to complement the increased level of inputs. Seasonable trainings that are tailored to the timeline of beekeeping activities will be more effective in driving beekeepers’ capacity rather than one-off training sessions. These trainings could be arranged by engaging government resources and private sector players.
By checking-in and providing advice and expertise at every stage of the production process throughout the year, local communities will be more motivated to promptly deal with problems as they arise. This support system serves to reinforce awareness creation among beekeepers and encourage them to put more effort into developing beekeeping as a sustainable livelihood. It also helps strengthen community bonds by fostering information exchange and trust building among beekeepers.
Since provision of training requires a large amount of human capital and resources and can be costly, we recommend WEEMA establish long term relations with local governments and fully utilize the resources and continuous support they offer to local communities. With the government’s recent focus on the honey sector to engage more beekeepers and improve quality and quantity, standardized training programs are developed with specialized local honey experts at the Livestock Office operating on the kebele level. In addition, WEEMA should also leverage possible partnerships with private players who are eager to provide support to local beekeepers for better input sources.
4. Initiate the process of cooperative formation
To form a government recognized cooperative, WEEMA should first encourage beekeepers in the program to self-select into a group. After bringing together at least 14 motivated individuals (the minimum needed to form a cooperative), they should be encouraged to again select group leaders who will be responsible for administration, finance, and marketing roles. The next step should be to adopt and adapt where possible the official government governance proclamation to the context of the cooperative. The last process is an important step in receiving formal recognition by the government of Ethiopia (through local offices). In addition, a primary cooperative is expected to have at least 20% of its operating capital at the time of establishment. The amount can be collected either from members or NGOs. Establishing a cooperative can take a long time depending on group dynamic, each member’s commitment, and capital. WEEMA may provide further support, such as funding for the extractors or packing materials, if necessary.
Once a primary cooperative is established, it has a multitude of benefits if properly and transparently managed. Once established, members: can apply for loans to expand honey production; are able to request a plot of land from the local government office; can work with unions to sell products for a
47 higher price; can sell in markets of other towns and cities with a certificate or support letter from the co- op office; and can participate in trade fairs and bazaars.
As mentioned above, the government of Ethiopia is working to improve both quantity and quality of honey production. The potential of the honey sector is slowly being realized. Especially in recent years, the government of Ethiopia has used the sector to improve incomes of rural communities. Such initiatives are part of the Growth and Transformation Policy of the country. Honey production and cooperative formation is facilitated and implemented by the Cooperative Agency of Ethiopia and regional cooperative offices. These offices help groups form cooperatives, and assist through trainings and workshops. The government of Ethiopia continues to put much focus at the national level to help improve the capacity of cooperatives and increase production.
Letting a co-op grow naturally and run its course is a safer bet than forcing members to form quickly. Strong leadership and effective management can help this process, as well as organizing people from similar backgrounds with shared interests into a co-op. Moreover, mechanisms need to be in place within the co-op structure to ensure the equal weight in decision making between female and male members. Furthermore, beekeepers need to be aware of the benefits a cooperative can bring them; this can help incentivize them to fully participate. The objective of the co-op is not to sell in the vicinity of the production, but rather to be able to sell in other farther markets. Cooperatives should not be narrow- minded in their strategy. Rather, they should focus on increasing quantity to lower production costs and gain access to larger markets. Thus, the ability to produce substantial quantities of good quality honey can be a big factor for a co-op’s success. With better and more honey, co-ops can sell to higher level buyers in the value chain rather than to only middlemen or tej houses. In Annex V, a more detailed step by step co-op formation guide is explained.
5. Expand relations of the newly formed cooperative to large market players i.e. unions and/or processors
In the long term, after the cooperative has reached significant scale in terms of number of members and production capacity, WEEMA can consider partnering with a larger union or cooperative federation of unions. Through the extensive scale and distribution networks of these larger bodies, the beekeepers will be better positioned to satisfy the high volume demands and quality standard requirements of large honey processors and exporters and can subsequently sell their products directly to a wide range of purchasers. Through these proven and widespread coop-union business models, the beneficiaries will be able to not only deepen their market penetration and bargaining power in the Ethiopian and foreign markets, but will also benefit from ancillary support across the full value chain (from pre to post-harvesting), as well as fair trade certification. What’s more, key industry players such as the Ethiopian Apiculture Board and NGOs such as ACDI/VOCA can help to facilitate these relationships.
48 Modern beehive with shelter belonging to the cooperative in Angacha
CONCLUSION
49 In line with the main project objective of improving beekeepers’ livelihoods by increasing their market linkages, we focused on constructing the honey value chain involving key stakeholders, understanding constraints and issues related to production, and identifying overall honey market trends and drivers. Following our established research framework, we determined cooperative formation as the main method to address issues of capacity, market fragmentation, and quality. We explored different models of cooperatives and the establishment processes, met with government officials, and learned the sentiments of the local beekeepers. As a result, we recommend forming two separate cooperatives with beekeepers in Mudula and Kololo.
With forming cooperatives as our central approach to increase the income levels of local beekeepers, we developed more detailed actionable recommendations that should be implemented in sequenced time frames, as one builds on the previous. If these actions are carried out by WEEMA, we believe that the beekeepers will be able to expand honey production and ultimately increase their income and living conditions.
50 Honey being sold by the road next to Hadero market, in Kembata Tembaro
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54 INTERVIEWS CONDUCTED
Name Organization Sector Date Location Solomie Wasie B Honey Private March 23 Addis Ababa Daniel Gebremeskel Comel Honey Private March 16 Telephone Tesfaye Trader Private March 17 Durame Eyob Assefa Tutu Honey Private March 23 Addis Ababa Wubshet Apinec Private March 23 Addis Ababa Temesgen Esradu Angacha coop Coop March 19 Angacha Zenbaba SIntayehu Zenbaba Union March 21 Addis Ababa Mengiste Mulufird Ashagrie Apimondia Private March 24 Addis Ababa Assefa Amaledegne Consultant Private March 24 Addis Ababa January 12 Abdella Abdulalim Mesaf plc Private March 21 Addis Ababa Paulos Desalegn Consultant Private March 19 Addis Ababa Roba Bulga Jilo Slow Food NGO March 23 Addis Ababa Foundation Berecha Sasakawa NGO March 18 Addis Ababa Yalemzewde Teshome Sasakawa NGO March 18 Addis Ababa Solomon Mengesha GIZ NGO March 15 Addis Ababa Kinfe Mamo GIZ NGO March 15 Addis Ababa Ermias Mochona Co-op Office Government March 17 Mudula Gobobe Adore Livestock Office Government March 17 Mudula Nagash EAB Government March 14 Addis Ababa Goamamo EAB Government March 16 Hawassa Gemechis Lagasa Holeeta Bee Government January 10 Holeeta Research Center Lulseged Belayhun Biovision NGO January 11 Addis Ababa Eldad Girma Begashaw SNV NGO January 11 Addis Ababa
55 Street in Mudula town that leads to the market
ANNEXES
56 Annex I. Summary of recommendations with idea of timeline
57 Annex II. Details of conducting a baseline survey to understand the current production capacity (Recommendation 1)
As discussed in the recommendation section, a baseline survey with all beekeepers may facilitate both WEEMA and the beekeepers to understand the current production capacity. There is no need to call for a separate gathering session particularly for data collection. WEEMA may ask the beekeepers to fill in questionnaires after any general assembly for beekeeping training or honey market awareness creation (see recommendation #2).
The design of questionnaires is critical for not only efficiently and effectively collecting information but also for gathering higher quality data. The questions should be drafted in a clear and straightforward manner and before beekeepers fill in the questionnaires, WEEMA social workers should explain every question and make sure the beekeepers interpret the questions correctly. The survey can start with simple questions and the database will be further built up with more data input from the beekeepers over time. The most important and relevant areas are as follows:
Information about beehives
The number and the type of beehives are the foundation and starting point to understand the ability to produce honey. There are two dimensions to be covered in this question. One is the type of beehives (traditional, transitional or modern) while the other is whether the beehives are empty or with bees (this data is of particular importance during drought season and can help design the relevant training program for beehive risk management). The time should also be specified in the questionnaire. For simplicity, we can specify the time to be the moment when beekeepers fill in questionnaires (how many hives they have when they fill in the questionnaires). After data collection, WEEMA should process the information as soon as possible to ensure the accuracy of data and develop the baseline survey findings. The table below summarizes the key points to be covered in this question and it can be used as a template.
Time: Date for filling in questionnaire
Traditional beehives Transitional beehives Modern beehives
With bees
Empty Follow-up activities are also very important to make sure all the records are kept up to date. When there are major changes happening with regard to the number of beehives, information should be passed to WEEMA (or data management representatives elected by the community). Such major changes include but are not limited to the following events: 1) construction of new beehives (empty ones) and increase in total number of beehives; 2) increase in previously empty beehives that are now filled by bees 58 (report if all empty beehives have bees or every three beehives are filled whichever event happens earlier); and 3) bees absconding (report if all beehives are empty or every three beehives become empty whichever event happens earlier). By using regular check-ins to account for all the movements in number of beehives, the accuracy of the data on record can be more adequately verified. WEEMA (data management representatives) should reach out to beekeepers every three months (the frequency depends on the frequency of changes in beehives) to confirm the record is consistent with beekeepers’ current situations and make any necessary updates when there are variances.
Information about productivity of beehives
During harvest season, data about how much honey produced per beehive can be collected. To quantify the production of honey, standardization of containers may be the first step. If conditions permit, beekeepers are recommended to use the standard-sized clay pots in three sizes: big, medium and small (i.e. three sizes are available as listed but all big clay pots should have the same size).
WEEMA or beekeepers can weigh the clay pots when the pots are empty and record the weight. When beekeepers are filling honey into the pots, they are suggested to fill honey up to the very top of the pots for standardization purpose. After weighing some of the full pots, the average weight when pots are full of honey can be calculated. Deducting the weight of the pot itself, WEEMA can have a reasonable estimate about the average weight of honey in the pots which can be used as a benchmark for future honey weight measurement. If the sizes of clay pots are difficult to standardize, beekeepers are suggested to weigh the pots before and after they fill it with honey. To facilitate this, WEEMA may provide scales to be shared in the community. If the weight is too difficult to measure or there are limited scales available in the community, WEEMA may consider measuring the volume of containers using water. When we know how many liters of water can fit in the pots, the weight convertor between water and honey can be used (e.g. the density of water is 1 while the density of honey is 2). Then, if the pot can contain 10 kilograms of water, then the same-volume honey will weigh 20 kilograms to estimate the weight of the honey in the pots.
In the process of follow-up data reporting about number of beehives or quantity produced, telecommunication tools can help to minimize the time and human resources consumed. Beekeepers can just text WEEMA (or data management representatives) on a voluntary basis about the change in beehives and the number of kilos they collect during each harvest together with the number of beehives used in that harvest. A reporting deadline should be set in advance and WEEMA (or data management representatives) need to reach out to beekeepers to collect the data. Such follow-up data reporting is important not only for WEEMA to keep track of changes in production, but also to keep the beekeepers motivated throughout the year, thereby improving beekeeping management.
Overall, the baseline survey is recommended to start early. When the harvest season is coming, the ideal approach to take is to collect all information about the number of beehives before the harvest and collect the harvest info during the harvest. Then WEEMA will have a fresh idea about the overall production capacity at present.
59 Other quantitative information, like the proportion of income contributed by honey sales and the average labor and time spent on beekeeping, should be included in the baseline questionnaire for comparison purposes. The same logic applies to the qualitative information, such as the beekeepers’ perception of whether the modernized beekeeping techniques have helped them generate more income and whether their lives have improved from working with WEEMA staff. Over time, with the increase in production capacity and income from honey selling, we expect a positive change in their attitudes towards beekeeping and a willingness to devote more time to beekeeping.
60 Annex III. Details of encouraging WEEMA to promote awareness training (Recommendation 2)
As outlined in the recommendation section, awareness trainings can help eliminate information asymmetry and also motivate and incentivize beekeepers towards greater organization and honey production. There are a number of themes to be covered in the awareness training:
● What are the different options beekeepers have to distribute their honey? Currently, they are mainly selling in local markets since they do not have a sense of larger markets. So with a deeper understanding of different distribution channels (local market, tej house and co-op etc.), they can decide what works best for them. ● What is the honey market like? WEEMA’s existing beekeepers focus only on local markets where the honey is sold at quite low prices at present. If the beekeepers can be equipped with more knowledge about how the profit is shared throughout each level of the value chain (e.g. retailers/wholesalers retain majority of the profit through relationship with middlemen who are the price makers in the transactions with beekeepers), they may realize that by moving up in the value chain, there is more room for them to improve their income from honey. ● What co-ops can provide for beekeepers and how co-ops work? As one of the options available for beekeepers, before formally adopting the idea to form a co-op, beekeepers need to have a clear idea about what a co-op is and how it works. With all information available, they can decide whether they want to form a co-op or work by themselves individually.
There are a number of actors who can help to promote awareness training. We recommend that WEEMA prioritize utilizing the existing resources available. During our field trip and discussions with interviewees we found there are many actors who are interested and willing to support WEEMA’s beekeepers. Engaging with these actors is a matter of communicating and establishing relationships with them.
Some local government offices are mandated to focus on cooperative establishment, as well as training to prepare beekeepers for cooperatives. The co-op agency in Mudula has a duty to provide awareness training on the benefits of co-ops. Similarly, the local Ministry of Livestock office works to educate beekeepers on the value of honey, particularly processed honey. Their goal, as mandated by the federal government, is to teach the importance of processed over crude honey as a means for potential increase in income. Ultimately, the government wishes to shift towards greater processed honey production domestically and these efforts must begin at the local level. Additionally, research centers, like the Holeta Bee Research Center, have expressed a willingness to assist with trainings. Holeta, in partnership with other actors provides a 15 day comprehensive training that includes awareness trainings.
Many NGOs are also engaged in awareness training activities and have also expressed support in helping WEEMA’s beekeepers. First, GIZ uses awareness trainings to help beekeepers understand honey as a liquid free of anything like wax or other bee products. Secondly, they are accustomed to explaining how beeswax is more expensive than honey and residual free wax is very expensive and in high demand. 61 Thirdly, SNV in partnership with the Ethiopian Apiculture Board, and two private companies, Enclude and Profound, is working on a project, ASPIRE, that will support the whole honey sector. Through ASPIRE, participants encourage beekeepers to form co-ops, as well as participate in technical training.
Next, private sector companies also wish to support beekeepers’ awareness. Doing so can directly benefit their position as honey buyers. Here the goal is to demonstrate to beekeepers the prices honey can have in larger markets, as well as the large demand both domestically and internationally. For example, the head of Tutu, Eyob Assefa, said he often shares his export invoices with beekeepers in addition to bringing them to Addis to visit supermarkets. Moreover, he expressed an interest in meeting with WEEMA beekeepers.
Finally, individual beekeepers can be potential models for beekeepers in Mudula and Kololo. Members of the Angacha cooperative can share their successes and difficulties with WEEMA beekeepers. What’s more, selecting a successful WEEMA beekeeper may provide beekeepers in Mudula and Kololo with an individual that can demonstrate what success is and can become a model for other beekeepers. Finally, one entrepreneurial beekeeper, Tesfaye, we met in Durame could also be a potentially strong role model to demonstrate success to WEEMA beekeepers.
In organizing awareness trainings, priority can be placed on local government officials, as this is their mandate. The second priority should be on NGOs or private companies who are willing to help. A later phase, once beekeepers are more organized can involve additional sessions from individual successful beekeepers.
In-site trainings, with invited facilitators, can be organized in Mudula and Kololo with beekeepers. This will involve networking and relationship-building with all these various actors. One option is to hold an awareness training session during the General Assembly. This can be the same General Assembly where beekeepers ultimately self-identify as members who want to take the lead in forming the co-op. Once beekeepers are organized and on the path to a cooperative, further awareness training can be done that focuses more specifically on honey production. Here Holeta Research Center, as well as NGOs and private companies can be an asset.
62 Annex IV. Details of continuing with capacity training for the beekeepers (Recommendation 3)
WEEMA should coincide the training cycle with the production cycle. Sessions on apiary site selection, colony catching and multiplication, transfer of bees from traditional to transitional hives, harvest, processing, and marketing would be valuable when beekeepers are in the middle of these activities.
● During October, January, and June harvest, WEEMA can arrange training on harvesting techniques. This includes sessions on how to determine whether the honey is ripe, what are the proper extraction methods to lower the risk of colony absconding, and what are the appropriate ways to store and preserve harvested honey. ● September and February are good times to transfer bee colonies as the hives are empty during these months after harvest, which makes bees less aggressive and protective of their hives. WEEMA would be able to provide trainings on how to transfer bees from traditional to transitional hives to help beekeepers expand colonies and better manage existing hives. ● November and July are swarm seasons. There is high risk of bees absconding after harvest as honey is taken out of the hives. Training on swarm prevention can prepare beekeepers for preserving existing colonies.
It is also important to provide support and bring in expertise during unexpected events and disruptions to prepare beekeepers for potential risks. Beekeepers in the Southern region have been severely affected by the drought as honey yield drops and bees abscond. WEEMA can support trainings on drought resistance techniques to protect colonies from extreme weather conditions in such cases. These techniques can be as simple as covering the hives or providing a small amount of water close to the hives. Connecting with the local agricultural office for updated weather forecasts can also help better prepare beekeepers for drastic climate events.
As it would be costly to provide the trainings and support mentioned afore, we recommend WEEMA leverage all the external resources available while also creating synergies within the communities to augment the benefits of training as detailed in Annex II. We discovered much under- utilized government services provided by the local Cooperative office and the Livestock and Fishery Office. The government assigns every three Kebeles one beekeeping expert to work with the local communities. The ASPIRE program set up by the government provides a 15-day technical training through the Holeta research center, focusing on beekeeping technologies and market linkage. WEEMA can connect its beekeepers with the expert for continuing training sessions. We believe it is important to connect beekeepers with local experts who understand the specifics of climate conditions and communities in Mudula and Kololo, as the trainings provided by them are more effective and long lasting.
Besides government support, WEEMA can also partner with large processors or exporters to provide training sessions, inputs necessary, and other expertise as they are eager to establish direct relationships with local beekeepers and procure sustainable source of quality honey. Tutu Honey was one 63 such processor that expressed willingness to work together with the WEEMA beekeepers. In this sense, having a local experienced beekeeper expert can be a complement to the work done by Kahlyn. This would create more links with the community, generate more context-appropriate techniques, and the beekeepers will be able to refer to him/her in a fast pace in case of problems.
In addition, other NGOs with agricultural or cooperative expertise can be valuable resources for WEEMA as well. Sasakawa Africa Association, a nonprofit focusing on improving agricultural productivity through technical transfer, mentioned during our interviews the possibility of partnering with WEEMA.
To create stronger bonds within the community, WEEMA can hold monthly or quarterly gatherings with beekeepers to share their expertise with each other. A mentorship system can be established where successful beekeepers help other low production beekeepers increase quantity. A proper incentive program can be put in place to ensure beekeepers are benefiting as much as possible from trainings and reach maximum production within the co-op.
64 Annex V. Details of initiating the process of cooperative formation (Recommendation 4)
The Federal Cooperative Agency (FCA) of Ethiopia facilitates the establishment of cooperatives throughout Ethiopia. The agency has at least one representative at each Woreda (district) level in the nine regions of the country. Before approaching a local representative, WEEMA beekeepers should decide collectively whether to establish a cooperative or work individually. The beneficiaries must be willing and motivated to form a cooperative to ensure its continuity. During such process, the agency has a mandate to send a representative to teach potential members about the objectives of cooperatives, share best practices from the region and beyond, and present financial, economic and social benefits of working as a group. At least 14 of the 70 beekeepers under WEEMA’s current project should self-select as founding members (the government encourages females to participate in co-ops).
After paying a 60 birr registration fee, an official co-op certificate will be issued. The co-op office issues a proclamation as the founding document of cooperatives and helps them develop bylaws to specify the structure and ground rules of daily operations. If the group cannot meet all the requirements during establishment, they can pay 30 birr to obtain a temporary certificate which allows them to operate as an official co-op for one year. Within this year, if the temporary co-op manages to fulfill all the requirements, by paying the remaining 30 birr, they can transfer their legal status from a temporary co-op to a permanent one.
During the application process, the local FCA office will also provide assistance in the following areas:
● Leadership and management skills: members will learn to follow legal procedures needed to establish a cooperative and form a committee of leaders. ● Technical skills in accounting and finance: members will learn about proper book keeping and balancing budget managing external loans. ● Technical training in beekeeping (through local livestock office): members will learn skills they need to produce higher quality and quantity of honey.
The local agency will assess and link cooperatives to local markets. In addition, it will monitor, supervise and regulate the activities of a cooperative to ensure it is in line with the federal government’s requirements.
Additional Benefits
Establishing cooperatives has a multitude of benefits that extend beyond market access and linkages. The following three are the most relevant of the benefits:
Cooperatives can request a plot of land needed for business activities. The following steps must be taken for the application process.
● Representatives from the cooperative will formally request the local FCA office for a plot of land (official certificate can be shown to verify the legality of the cooperative).
65 ● Local FCA will then ask the local livestock office for justification of providing a plot of land. ● The livestock office will send representatives to sites to access feasibility of activities in a given plot of land. ● After a specific location is chosen, an approval letter will be presented to Kebele administrators. ● Kebele Administrators are responsible for giving final approval and distribution of land. ● The cooperative agency will issue a letter to support the above process.
Legally established cooperatives can apply for external loans from regional microcredit institutions. Cooperatives have the option of applying for loans needed to supplement activities that are in line with short-term and long-term goals. Loans can be used to establish additional income generating activities such as seed production and clay production.
With the certificate issued by the co-op office, honey produced by co-op members can be sold in other markets where the prices and profits are higher compared to local markets. The certificate helps to establish relationships with customers in other markets by providing credibility and traceability of the co- op.
Possible challenges
If managed well, cooperatives can bring benefits to members and their respective communities alike. But establishing a successful cooperative can be challenging and time consuming. Most cooperatives throughout Ethiopia are faced with management and leadership problems, improper accounting of expenses and revenues and mistrust between members. Cooperative members lack technical skills resulting in loss of interest. At times, a few members of the community take control of a cooperative excluding others. Most cooperatives start off well, but due to the aforementioned issues, they remain symbolic without providing their essential services.
66 Annex VI. Details of expanding relations of the newly formed cooperative to large market players i.e. unions and/or processors (Recommendation 5)
In the long term, once the co-op has been established and has had time to mature and develop their operations, they should begin building relationships with unions and honey processors directly and/or through the networks of NGO’s, the EAB and other key government entities. Further, once they have reached the necessary scale and capacity requirements (usually 6 to 10 tons), they should formally partner with any combination of unions and or honey processors that makes the most sense.
Unions/Cooperative Networks
Key unions and cooperative networks worth considering are Zenbaba Cooperative Union and the Southern Region Farmer’s Cooperative Federation (SRFCF). Zenbaba is the largest single cooperative union in Ethiopia, working with approximately 23 cooperatives (average size 600-4,000 members/co-op) and over 20,000 beekeepers selling to both domestic and foreign markets. Additionally, the SRFCF, located in Hawassa, is one of the leading regional cooperative bodies in the Southern region and is comprised of 20 cooperative unions and three primary cooperatives and roughly over 16,000 beekeepers. It would be advantageous for WEEMA to explore relationships with SRFCF and its member unions given the strategic location of the federation in the South.
Honey Processors/Buyers
Further, key private players to consider are Tutu Honey and Comel Honey which have all expressed an interest in working with and potentially sourcing from WEEMA as the beekeepers they build up their capacity. Tutu Honey is an exporter working with about nine co-ops through one union in the North West and five co-ops in the South West mainly based in Kaffa. Comel Honey, based in Tigray, sells its organically certified “Welela Honey” to both the domestic and international market. Domestically, it sources its honey from co-ops based in SNNPR and, internationally, it sources from Tigray.
67 Annex VII. Summary of interviewees’ current use of beeswax
In order to further clarify the issue about beeswax, we have compiled here a brief summary of the responses of our main interviewees when asked about it:
● Comel Honey and Zenbaba: after processing, they sell back to the beekeepers to use in the modern beehives; ● Tutu Honey and Apinec: there is high level of adulteration and the market is very fragmented, that is why they don't venture into the market; they only sell to their own co-op to be used in the hives ● Tej House in Hossaena: They sell wax to traders from Addis Ababa or Hossaena, usually at 55 birr per kilo, which is way below the market price, but they don't seem to be aware of its high value. ● Angacha co-op: they sell wax at 160-180 birr per kilo back to the beekeepers, who use it in the modern beehives. Total production after the October 2015 harvest was of 637 kg. In Angacha (see section XXX for more details) propolis was also produced last year, with a production of 7kg sold at 240 birr each kilo to middlemen from Addis Ababa.
68 Annex VIII. Field trips photo album
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Columbia University School of International and Public Affairs
420 W 118th Street420 W 118th Street New York, NY, 10027 sipa.columbia.edu Photos used in this report: Lucas Valente da Costa
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Columbia University School of International and Public Affairs 420 W 118th Street New York, NY, 10027 sipa.columbia.edu
Photos used in this report: Lucas Valente da Costa