Value Chain Analysis and Labour Market Assessment NED

Nurture Education and Development (NED)

Dr. Belete D. W/Gies

Agricultural TVET; Livelihood Improvement of Unemployed/Vulnerable Youth for food Security in Amhara Region (L4W Program)

Value Chain Assessment in Mida Oromo, Merhabete and Menz Gera Woredas, of N/Shewa Zone

June. 2014

Addis Ababa, Ethiopia

1. Executive summary 2. Background of the study and the study area 3. Overview of the sub-sector(s) and VC Selection 4. Value Chain Analysis (to be done for each selected VC) 4.1 Mapping 4.2 Quantification 4.3 Economic analysis 4.4 End market 4.5 Value Chain Constraints 4.6 Market Based Solutions 4.7 Value Chain Governance 5. Value Chain Vision and Mission/Objectives 6. Upgrading strategies 7. Proposed Intervention Programs 8. Foreseen risks and mitigation mechanisms. 9. Action Plan 10. Monitoring and Evaluation

Acronyms

ACSI: Amhara Credit and Saving Institution CLRA: Customs and Land Authority Agency COOP: Cooperative FTCs: Farmer Training Centers IGAs: Income Generating Activities MOA: Ministry of Agriculture MOTI: Ministry of Trade and Industry NED: Nurture Education and Development TVET: Technical and Vocational Education Training WADO: Woreda Agriculture Development Office WCRA: Woreda Customs and Revenue Authority WTVEDO: Woreda Technical and Vocational Enterprises Development Office

I. Executive Summary

Agriculture has always been the backbone of Ethiopia’s economy. Yet, lifting millions of Ethiopians out of poverty requires a transformation from centuries-old subsistence agriculture to dynamic, technology-driven, market-oriented than production oriented production to transform the rural poor from food secured to income secured. This only happen if the market itself functions in such a way as to serve the needs of all concerned.

To improve the livelihood of project beneficiaries, it is highly important to create visible ground that production of marketable agricultural products for the real existence of unsatisfied demand sticks the rural poor with the market. Production of commodities by understanding marketing concept not production concept also play vital role to conceptualise the main actors for both back ward and forward integrations. Understanding of such business environments results half solved problems for the rural poor specially for unemployed youths engagement in demand driven or market sensitive production activities.

Nurture Education and Development (NED is a not-for -profit, charitable organisation officially established in August 1999 and re- registered by the Charities and Societies Agency on 7 October, 2009. The main objectives of the charity are to contribute for the advancement of Food Security and Livelihood improvement, Improved Women and Children nutrition, Education, Youth and women IGA and employment, Sexual and Reproductive Health, and Water, Sanitation and Hygiene, and Institutional and Organizational Capacity Building of local actors.

Currently NED is implementing a project entitled “Agricultural TVET; Livelihood Improvement of Unemployed/Vulnerable Youth for food Security in Amhara Region” being as a lead partner with financial support from L4W Program and Edukans foundation. the project is being implemented by NED (in Mida,Merhabete and Menz Woredas in North Shewa zone), Wabe Children’s Aid and Training (in Debretabor woreda in South Gondar zone), Guhion Development Aid Organization (in Debremarkos Woreda administration in East Gojam zone) and Facilitator for Change (in Bure zuria woreda in Western Gojam zone) in Amhara regional state, Ethiopia.

The project is aimed to equip vulnerable/unemployed youths with market demandable agricultural vocational skills training in close collaboration with Technical Vocational Education and Training (TVET) colleges and private institutions. In order to identify market demandable agricultural vocational courses, value chain identification and analysis is part of the project activities to identify business entry point in the agricultural business on a sustainable basis. Value chain analysis is a means to understand the actors both in input suppliers, producers, consumers, processors, wholesalers, retailers, exporters, brokers, agents and others individuals/institutions that depend on the product buying and selling or processing. Conducting value chain analysis of a particular product of the society will lead to identify both the constraints in procurements of inputs, channelling of market and designing of market territory and missed opportunities in a particular chain. Well addressed or studied analysis results increasing in income and reducing vulnerability of the household.

The Value chain identification and analysis is conducted in Mida Woremo, Merhabete and Menz Gera Woredas of North Shewa Zone by NED in close collaboration with woreda level government offices, TVET colleges and local private enterprises.

II. Background of the study area and Approach

2.1 Background of North Shewa Zone North Shewa is one of the Zones in Amhara Region. The Zone is bordered on the south and the west by the Oromia Region, on the north by South Wollo, on the northeast by the Oromiya Zone of Amhara Region, and on the east by the Afar Region. The highest point in the Zone is Mount Abuye Meda (4012 meters); other prominent peaks include Mount Megezez. Debre Birhan is the capital city of North Shewa Zone located ----- km from Addis Ababa to ------direction of Addis Ababa.

According to North Shewa Zone Finance and Economy Development Department (2014), this Zone has a total population of 2,012,342, of whom 1,016,547 are male and 995,795 with an area of 15,936.13 square kilometers.

Merhabete Woreda Merhabete Woreda is located 134 km far from Debre Birhan to the ------direction. The woreda is bordered by Mida Woremo Woreda on the North, by Moret and Jiru Woreda on the south, by Menz Keya on the east, by Oromiya Region on the Northeast, and by Ensaro Woreda to the West direction. The capital city of Merhabete woreda is Alem Ketema. According to the woreda Finance and Economy Development office (2014), the total area of the woreda is 126,000 ha with a total population of 117,169, of whom 59,388 are men and 57781 are women. Mida Woremo Woreda Mida Woremo Woreda is of the 27 woredas of North Shewa Zone. The capital city of Mida Woremo woreda is Meragna which is located at 191 km from Debre Birhan town to the ------direction. Mida Woremo Woreda is bordered by South Wollo Zone on the North and East, by Oromiya Region on the West and by Merhabete woreda on the South directions. According to the woreda Finance and Economy Development office (2014), the population of the woreda is 105,734, of whom 53,070 are men and 52,664 are women. The total area of the woreda is 83,799 ha. Menz Gera Woreda Menz Gera Woreda is located at the eastern edge of the Ethiopian highlands in the North Shewa Zone. Menz Gera is bordered on the south by Menz lalo Midir, on the southwest Menz Keya Gebreal, on the west by the Kechene river which separates it from the South Wollo zone, on the north by Gishe Rabel, on the north east by Antsokiya Gemza, and on the east by Efratana Gidim.

The capital city of Menz Gera Woreda is Mehal Meda which located ---- kms far from Debre Birhan to the ______direction. According to the woreda Finance and Economy Development Office (2014), the woreda population is estimated 88,943, of whom 44,765 are men and 44,179 are women. The total area of the woreda is ------km.

2.2 Approach In the first task the focus was on a 40 hours-training of the program staff of the implementing partners in Value Chain Analysis and Labour Market Assessment. During the training the partners developed their own assignments: which information to collect from whom. The partners also developed the questionnaire, FGD checklists, and reporting template for the assessment during the training in order to keep uniformity of reporting so that the compilation of cluster level assessment report will be easy. Each implementing partners took responsibility of the leading role in conducting the value chain assessment in their respective operational areas, namely; WCAT in Debretabor woreda, FC in Bure Woreda, GDAO in Debremarkos woreda, and NED in Merhabete, Moda Woreo and Menz Gera Woredas. Secondly, each organization conducted the assessment in its respective project woredas by organizing an assessment team composed of professionals/persons from Technical and Vocational Enterprises Development (TVED) Promotion Office, Women Children and Youth Affairs office, TVET colleges, Local private enterprises, CBOs and CSOs in each respective woredas. In the third and last mission the outcomes of the assignments were reviewed and discussed in a final common workshop where they were also translated in action points for the next steps. NED gives special highlighting for the production of marketable agricultural products and thereby to integrate the rural poor and unemployed youths with the market. To carry out the analysis, primary data was collected from knowledgeable actors in the chains and secondary market survey reports were reviewed. The analysis was followed the steps by collecting data at grass root level to prepare the report that serve as an initial document for further intervention. Lastly, ______were selected as focused commodities.

III. Overview of the Sub-sectors

3.1 Economy Similar to other areas of Amhara, livestock possession, particularly oxen holding, and land ownership are the main determinants of wealth in the zone. Lack of plough oxen, money and land hamper further crop production among the poor and very poor, including unemployed youths, while high input prices, insufficient cultivatable land and poor soil fertility hamper the middle and better-off households attempts to increase crop production. Land renting is the prominent arrangement between the poorer and wealthier farmers to overcome their respective problems of a lack of oxen and a lack of land to plough. They enter a crop sharing arrangement where each party takes half the harvest. The very poor do not own sheep and cattle. Eucalyptus tree numbers are another indicator of wealth. All wealth groups grow the same types of crops, except that the very poor do not grow lentils. There are no other major economic activities apart from the crop and livestock production and paid agricultural work in this livelihood zone. Moreover land and household assets are the major and decisive production factor for the farming family. However, the youths do not have access to land where they work to make a living; land reallocation is not there in the region. In cases where the families are willing to provide a plot of land to their children, it has become highly fragmented since one family owns as high as four to seven children. Therefore, the younger generation is running out of the shortage of land and remained jobless. In addition, the farming and farm management practices in the areas are traditional. Because small holders own very fragmented land discourages the use of modern farm implements such as tractors, thresher and other farm machines. The awareness level of the subsistence farmers did not allow them the use of production boosting technologies and farm inputs. This kept agricultural production at lower level.

3.2 Agriculture

3.2.1 Crop Production The zone is mainly depending on the agricultural economy in which livestock rearing makes an important contribution to household incomes. The zone has one season of agricultural rains – the kremt from June to September and one harvest - meher. The soil in most places is black and vertisol, however there is clay loam in a few areas. The area is known for its moderately good productivity and is considered to be self-sufficient in grain. Land preparation uses oxen for traction power. Wheat, teff, barley and beans are the most common crops grown in the area. Teff, beans, wheat and pulses are thus ranked in importance in terms of cash earned from sales. With the exception of land preparation which is done by men, all other agricultural activities are done by both sexes. Aphids, bollworm and rust are the most common crop pests/disease particularly affecting wheat and beans. 3.2.2 Livestock Production

Sheep, cattle, poultry and a few goats and equines are the livestock kept in the area. The source of animal feed is pasture and crop residues. Livestock and butter, eggs and skins are sold in the area. Boys and girls are responsible for looking after shoats, whilst men help them with cattle and equines. Women manage chickens. Oxen are replaced by purchase and from within the herd while cows are replaced mainly from within the herd. Common livestock diseases are blackleg, pasteurellosis and sheep pox. Other important in cash income generating activities particularly for poorer wealth groups are paid work in local agriculture (weeding and harvesting), sale of firewood and work migration – this last being rather small scale and to neighboring areas like Debre Zeit, Addis Ababa and Nazareth for urban and agricultural labor. Firewood collection and sale in nearby towns is done by both men and women. 3.3 Market Access to market is generally good. This is attributed to the zone’s proximity to the main roads and towns. There are many road networks beyond the Addis – Dessie main high way. Main markets are in Debre Berhan, Ankober and Enewari. Teff, pulses and wheat are moved here from the local rural markets with Debre Berhan as the final collecting market for the major trade down to Addis Ababa. Similarly sheep and cattle are sold from main markets Ankober, Chacha, Enewari and Deneba directly to Addis Ababa. The main staple food purchased are maize and sorghum, which is brought in from Addis Ababa when local stocks are depleted (some having been sold to Addis Ababa in the first place). According to the woredas Technical and Vocational Enterprises Development Promotion (TVEDP) Offices, Credit has been available from Amhara Credit and Saving Institute (ACSI), food security and cooperatives. Available credit packages include: sheep husbandry, improved inputs (eg fertilizer and seeds), and livestock fattening. The interest rate for the ACSI is 18% and that of food security is 10%. The repayment period is 3 years. 3.4 Youth Unemployment According to the labour statistics compiled by the woredas Technical Vocational Enterprises Development offices, significant number of rural youths is unemployed. The number of youths dropped out from school at various educational levels, and those who do not get the opportunity to be enrolled to tertiary education is high. These youths do not have other options and remain burden to their families who still have a hand-to-mouth income. The Ethiopian government has recognized the issue of youth unemployment and formulated a youth development package for supporting to working towards resolving the problem. Yet the problem remained appalling, and this becomes the major pushing factor for human trafficking and youth migration to the major cities, neighboring regions and to abroad.

Population and number of unemployed youths in Mida Woremo, Merhabete, and Merhabete Woredas

No. Name of Woreda Population No. of un employed youths

Male Female Total Male Female Total 1 Mida Woremo 53,071 52,665 105,736 3,456 1,363 4,789 2 Merhabete 59,388 57,781 117,169 2,656 739 3,395 3 Menz Gera 44,765 44,179 88,943 1,967 818 2,785 Source: Technical and Vocational Enterprises Development Promotion (TVEDP) Offices of Mida Woremo, Merhabete and Menz Gera woredas (June, 2014) TVET colleges charge high cost to offer vocational skills trainings which the youths from poor households cannot afford. In cases where they manage to, the quality of the training they receive is too low to compete for remunerative jobs. Hence the youth remain unskilled or incompetent job seekers. This forces them to migrate to other countries mainly illegally where they face significant socioeconomic problems. Therefore, skill gaps among the youth have become one of the major causes for migration of the youth to abroad, mainly to the Arab Countries which in turn resulted in other social and economic problems. Particularly, as female youths go far from family supervision, they are exposed to various forms of abuses including sexual, psychological, physical and economic exploitations. The fact that more than 150,000 Ethiopian youths were repatriated from Saudi Arabia only in 2013/14 is a reflection of this.

3.5 TVET Institutions There are 2 TVET colleges in the project target woredas namely Almaz Bohem TVET College in Merhabete woreda and Mehal Meda TVET College in Menz Gera Woreda. Woreda Technical and Vocational Enterprises Development Promotion (TVEDP) offices of the woredas also provides short term vocational skills trainings, however they do not have sufficient human, material and technical capacities to serve the needs of the youths in delivering market demandable short term courses. The workshops in TVEDP offices and TVET colleges do not have the required agricultural tools and machines both in terms of number and quality. However there is market opportunities for starting new viable enterprises in the informal agricultural production sector, the TVET providers failed to provide short term vocational skills trainings on a predefined on-farm ventures. This is due to limited capacity of researching and identification on the viability of vocational skills trainings on agriculture sector. In addition, most of the TVET providers in the targeted woredas have limited experience in providing agricultural skills trainings with poorly equipped training workshops.

IV. Value Chain Selection Value chain analysis is an excellent tool that aimed at to increase the income of households by identifying marketable commodities and integrating them with effective marketing channels and innovative actors, has steps and stages to design and implement particular locally produced commodity by considering both vertical and horizontal linkages. When the investigation was doing, each step has been followed thoroughly. Steps or stages were seriously exercised to avoid overstated mistakes. The results are explicitly discussed as follows based on the steps.

4.1 Decide on the selection criteria To arrive on conclusions about the selected commodities, developing selection criteria provide a clue. Based on such fact, the analysis was discussed in depth which criteria will better match and address the woredas’ potential. Lastly among the many criteria, the following have been taken for the commodities selected.

 Unmet market demand and growth potential  Potential for increase in productivity  Reaches large numbers of micro/small businesses of unemployed youths The selected criteria are in priority of their weight. Based on such factors each commodity has weighted and will be analysed further.

4.2 Information on each selection criteria. We identified potential commodities that are really in maximum production with oscillating demand, we have been chosen based on the selection criteria unmet market demand, potential for increase in productivity, reaches large numbers/small businesses of unemployed youths.

4.2.1 Growth Potential and Market Demand Sheep and cattle breeding and poultry production among the main source of income to meet the household’s immediate cash needs and they protect other household assets in Mida Woremo, Merhabete, and Menz Gera Woreda. Farmers produce sheep and poultry primarily for sale and occasional slaughter at home for household consumption and cattle are used for crop production, for example, for plaguing and threshing and for sale. Hotels and restaurants in the woredas have also higher demand for poultry products, sheep, and fattened bull since woredas are among tourist attractive parts of the region.

The main finding on livestock marketing was that the demand for sheep, bulls and poultry products is good. Actors higher up in the VC find the supply insufficient to provide for Addis

Ababa market. The due attention given by the government for livestock production is a good opportunity to increase productivity. The Agriculture Development offices, animal health centres, TVEDP offices, and credit service institutions play a vital role to support the engagement of unemployed and vulnerable youths on small scale agricultural businesses.

4.2.2 Potential Increase in Productivity Rural and Agricultural Development policies embarked on the production of marketable agricultural commodities. Thus, rural people have got access to credit to relay on targeted and marketable agricultural production. To the extreme, they have also technical support in their on- farm and off-farm activities, and from this sheep and bull fattening and poultry production are among these activities. The provision of inputs that support the sheep and bull fattening and poultry production are facilitated by the Agriculture development and TVEDP offices, and cooperatives of the respective woredas to maximize their output. Trainings and technical support have been conducted periodically to achieve goals stated on policies even at kebeles, youth groups and individual producer level.

4.2.3 Reaches large numbers of micro/small businesses of unemployed youths Agribusiness is the major area that needs the involvement of small, large business and individuals for input supply, production, processing, wholesaling, retailing, brokerage, agent, import export of inputs and outputs. Input suppliers play a role by providing inputs and equipment timely for producers directly or through their established marketing system. Producers are the origins of the product but the second party on the production system of agribusiness. In the marketing channel, wholesalers, retailers, brokerage, and agents have their own pressure on the selling, pricing and channelling of the product in the market. In addition to this conduit of market create potential buyers to have access for the commodity by applying their own selling strategy. Sheep, bull and poultry products are parts and parcels of the agribusiness commodities. It needs its own input and activity feet input procurement. Suppliers of such inputs are businesses whether they are large or small in their size. The regional and woreda governments pay due attention for youth employment in rural areas. Organizing the unemployed youths in form of small business groups is one of the ways to embark them on viable on-farm activities. A large number of unemployed and vulnerable youths can be engaged on the small scale viable agricultural activities by taking the opportunities of being organized in different forms of producers, access to credit, and technical support from the Agriculture and TVEDP offices, financial and technical support from NGOs, and the market demand for these agricultural commodities from traders and hotels. Hence, these agricultural activities have a potential to reach a large number of poor.

4.3 Market survey and initial listing of Potential Value Chains At woreda level, there is no available research document so far undertaken on value chain. Therefore, we focused on to collect primary data and valuable information from different knowledgeable participants drawn from woreda professionals from Agriculture Development and TVEDP offices, agricultural enterprises owners, program beneficiary youths and other knowledgeable persons. As mentioned in step one, we identified three criteria via. Unmet market demand and growth potential, potential for increase in productivity, reaches large numbers of micro/small businesses of unemployed youths in priority order. We have focused on major commodities of the woredas and lastly reached on three commodities. Therefore, ____ agricultural commodities are identified as tabulated as follows.

List of selected commodities and problems Vs suggested solutions

No. Commodity Major problems Suggested Solutions type 1. Honey  Using traditional way  Doing extension works at grass root  Gap on Quality level  Absence of processing  Using local processing and packing packing and machine machine  All production are not come  Create awareness by continuous to market education 2. Poultry  Incidence of poultry disease is  Working with close linkage with animal high health centres  Improved varieties cannot  Using hybrid of local improved breeds adapt the environment of poultry  Shortage of poultry feed  Taking agreements with cooperatives to  Market fluctuation (during supply poultry feed fasting days)  Technical support to producers to prepare feeds at local level 3. Highland fruit  Limited awareness on it  Continues extension work  Long duration to deliver  Identify and using fast variety production  Expand the intervention  Limited production quantity  Using merely household consumption 4. Fish  Lower demand by the local  Trying to build manmade water ponds communities  Limited experiences of the woredas  Lower amount of productivity professionals to provide technical  Seasonality of production support on fishery

5. Bull  Higher initial cost  Linking with micro finance institutions  Poor supply of livestock feed  Technical support to producers to  Lack of working land prepare improved livestock feeds at local level  Taking agreements with cooperatives to supply poultry feed  Linking with the towns’ municipality to provide working land for organized youths 6. Milk  Lack of market  Producing butter for sale  Absence of milk processing  Try to organize milk processing firms cooperative 7. Vegetables  Pest and disease  Using IPM (integrated Pest  Mostly sown by irrigation Management)  Attack by wild animal  Continues extension work 8. Lentils  Pest  using IPM  Weeding  continues extension work  Absence of continues plough 9. Sheep  Forage shortage  Controlling free grazing and using  Disease incidence improved forage development  Housing  Expand medical service  Focus on quantity instead of  Separate man and animal shelter quality  Educate to give emphasis for quality  Absence of improved variety  Engaged on variety improvement and hybrid

4.4 Short-listing of Value Chain Commodities using Matrix

To identify potential marketable commodities, shortlisting of selected potential value chains was undertaken to identify the best agricultural commodity among the mentioned. Using the matrix, all commodities were evaluated against competitiveness in the market and their potential to reach a large number of unemployed and vulnerable rural youths.

Competitiveness  Highland fruit  Sheep  Honey  Poultry  Bull

 Vegetables  Lentils  Fish  Milk

Target youths

According to the evaluating criteria, the assessment team and FGD participants selected five top commodities namely sheep, bull, poultry, highland fruits and honey for further analysis.

4.5 Ranking of Shortlisted commodities using scoring grid

The value chain assessment team and FGD participants were agreed to select a maximum of top three commodities for further promotion and value chain actors empowerment. The five commodities were ranked using scoring grid method to identify the top three commodities. A total of four criteria namely unmet market demand, potential for increase in productivity, and potential to reach large numbers of micro/small businesses of unemployed youths were used to select the top three commodities.

Criteria Weight Honey Poultry Bull Highland Sheep fruit rate score rate score rate score rate score rate score Unmet market 3 4 12 4 12 4 12 3 9 4 12 demand Potential for 2 2 4 3 6 4 8 3 6 4 8 increase in productivity Potential to 3 2 6 4 8 2 6 2 6 3 9 reach large numbers of micro/small businesses of unemployed youths Total 40 22 26 26 21 29 weighted score Rating: 1=poor, 2=fair, 3=good, 4=very good, 5=excellent

Lastly, sheep, poultry and bull have got the highest score to be marketable commodity of Mida Woremo, Merhabete and Menz Gera woredas for further analysis. Based on our plan we consider on these three commodities so for next step of analysis.

V. Value Chain Analysis of Sheep, Poultry and Bull in Mida Woremo, Merhabete and Menz Gera Woredas

To link the rural poor product to market or prospective buyers, market analysis of the selected product is mandatory. Understanding the product’s situation of the past, present, and future market conditions results half solved problem for the later market channel analysis and demand launching.

Value Chain analysis of the commodity considers the market environment and channels, through which the product flows to arrive on final customers, supply (production) and demand of the product, price analysis of the commodity across all actors and identifying the marketing costs, margins generated by market actors and the price variations that set by those involved in the marketing system of a specific product. Not only these but also the market infrastructure that participants use to store, transport, and their individual market places should be analyzed. In the production side of the product, the supply of inputs is also considered in the study. The major marketing challenges, possible solutions, and value chain governance will be analyzed in the study.

5.1 Market Channel

Marketing of commodities passes through different actors in the market until its consumption. These channels themselves play role for the distribution of the product and attract potential buyers by applying their own selling strategies for the intention of profit maximization. Through which these commodities passes is discussed below.

5.1.1.1 Market Channel of Sheep

While we are identifying the possible channels in which sheep market pass through, the following channels acting on the market be it formally or informally. Smallholders in Merhabete woreda provides their majority of their products for hotels and individuals in Alem Ketema and the remaining to Lemi, Chancho, Enewari and Addis Ababa Merkets. Smallholders in Menz Gera woreda also provide their sheep to hotels and individuals in Mehal Meda town, and part of their products goes to Deneba and Jirru markets. Sheep production is the main source of income to meet the household’s immediate cash needs and they protect other household assets. Farmers produce sheep primarily for sale and occasional slaughter at home for household consumption. Sheep in Menz Gera have higher demand in Addis Ababa and other markets relative to other areas. Products in each woreda pass to another markets outside their woredas through traders who collects products in each villages and towns and then they took such collections to markets in other markets outside their towns. Graphically;

Consumers Producers (individuals & (Smallhold hotels in ers each respective towns woreda) of woredas)

Consumers Producers Traders (individuals & hotels (Smallhold (in in respective towns ers each respective of woredas and woreda) woredas) Addis Ababa)

Retailers (in Consumers (in Producers Traders Lemi, Chancho, Lemi, Chancho, (Smallhold (in each Enewari, Jirru, Enewari, Jirru, ers each woreda) Deneba and Deneba and woreda) Addis Ababa) Addis Ababa)

5.1.1.2 Market Channel of Poultry

In the context of target woredas poultry production is known by farmers for the past years. The production is more traditional and mostly women are benefiting from it. Small holders in the respective woredas provide their chickens in their respective towns of the woredas mostly for individuals in their woredas. Traders also collect chickens from local markets and provide for Addis Ababa Market. Graphically;

Consumers Producers (individuals (Smallhold respective ers each towns of woreda) woredas)

Producers (Smallhold Traders Consumers ers each (in (in Addis woreda) respective Ababa) woredas)

5.1.1.3 Market Channel of Bulls

The production of bulls in Mida Woremo, Merhabete and Menz Gera Woredas is traditional and practiced aside to crop production. Mostly animals are going to be used in for reproductive use and crop production purpose. Part of livestock goes to different markets outside the targeted woredas. The Marketing of oxen from Merhabete outside the woreda goes to Addis Ababa Market. The same to this, oxen from Mida Woremo provided for Alem Ketema and Addis Ababa’s market by traders. Besides these, some hotels in Meragna and Alem Ketema buys fattened oxen. Individuals’ consumption is high in holidays like in Easter, Christmas, and New Year. Graphically;

Consumers Producers (individuals and (Smallhold hotels in ers each respective towns woreda) of woredas)

Consumers Producers Traders (in Alem (Smallhold (in Ketema and ers each respective Addis Ababa) woreda) woredas)

5.2 Value Chain Mapping

Value Chain Mapping is the process of indicating flow direction of products and services starting from input supplier to their end market/buyer. Map of the three selected agricultural products is provided below with a specific business channels. The maps grasp the whole picture of the markets in chosen channels which provides overall information about the market and identifies participants and actors in the value chain at all levels.

5.2.1 Map of Sheep Value Chain with specific business channel (Mida Woremo and Menz Gera Woredas)

M Consumers (in Lemi, Farmers (in Mida Traders (in Mida Chancho, Enewari, I Input Provider Woremo and Menz Woremo and Menz Jirru, Deneba and Gera WOredas) Gera WOredas) C Addis Ababa) R

O TVET Colleges ACSI branches Farmers’ Integrated COOPs WADO and FTCs M WCLRO

E WADOs and FTCs S TVET Colleges O ACSI branches Woreda Land Administration WTVEDO

M Research TVET Agency CLRA Admin/NBE A Research MOA and MOTI C Admin/NBE MOA & COOP’s

R Promotion Research O Agency Admin/NBE

5.2.2 Map of Poultry Value Chain with specific business channel (Mida Woremo, Merhabete and Menz Gera Woredas)

M Farmers (in Mida Traders (in Mida Consumers (local and Input Provider E Woremo and Menz Woremo and Menz at Addis Ababa) S Gera Woredas) Gera WOredas) O

Animal Health ACSI branches M Centers A WCLRO WADO and FTCs C WADOs and FTCs

R Transport Service TVET Colleges O ACSI branches Providers

Woreda Land WTVEDO Administration

Research TVET Agency CLRA M Admin/NBE I MOA and MOTI Research

C Admin/NBE MOA R Research

O Admin/NBE

5.2.3 Map of Bull Value Chain with specific business channel (Mida Woremo, Merhabete and Menz Gera Woredas)

I Farmers (in Mida Traders (in Mida Consumers (in Alem C Input Provider Woremo and Menz Woremo and Menz Ketema Addis Ababa) Gera WOredas) Gera WOredas) R O

TVET Colleges ACSI branches Farmers’ Integrated COOPs Animal Health Centers M WCLRO

E WADOs and FTCs WADO and FTCs

S Transport Service O ACSI branches TVET Colleges Providers

WTVEDO Woreda Land Administration

M Research TVET Agency CLRA Admin/NBE A Research MOA and MOTI C Admin/NBE MOA & COOP’s

R Promotion Research O Agency Admin/NBE

5.3 Value Chain Quantification

Value Chain quantification indicates the number of actors involved at different levels and the volume or quantity of product transacted with in the chain which helps understanding of which actor and channel matters in the value chain. Quantities in the quantification are indicated in absolute or proportion. The value chain quantification is provided for each of selected products as shown below.

5.3.1 Sheep Value Chain Quantification (Mida Woremo and Menz Gera Woredas)

Farmers Woreda Almaz Bohem and integrated Agriculture Agricultural ACSI Mehal Meda Coops Input Supply Offices (2) Research (1) branches (2) TVET colleges

> 95% of farmers Small Enterprises Production in the two (25-40) woredas

10% 70% 15% 30% 75% Trading 10% Local consumers Traders (15 – (hotels and 30/woreda) individuals) 90% Retailing

Consumers (in Lemi, Chancho, Enewari, Jirru, Deneba and Addis Ababa)

5.3.2 Poultry Value Chain Quantification (Mida Woremo and Menz Gera Woredas)

Almaz Bohem and Woreda ACSI Woreda Mehal Meda Farmers TVED Input Supply Agriculture branches integrated Agricultural TVET offices Offices (3) (3) Research (1) colleges Coops (3) (3)

> 80% of farmers in Production Small Enterprises the three woredas (35-50) (>85% women) 10%

10% 40% 25% 50% 65% 5% Local consumers Traders (25 – Trading (hotels and 40/woreda) individuals) 95%

Consumers (in local and Retailing Addis Ababa markets)

5.3.3 Bull Value Chain Quantification (Mida Woremo and Merhabete Woredas)

Woreda

Woreda Farmers TVED Input Supply Agriculture integrated ACSI branches Almaz Bohem offices Offices (2) Coops (3) (2) TVET College (2)

> 65% of farmers in Production Small Enterprises the two woredas (10-15) (mainly better-off) 5%

5% 55% 15% 40% 80% 10% Local consumers Traders (25 – Trading (hotels and 40/woreda) individuals) 90%

Consumers (in Alem Ketema Retailing and mainly in Addis Ababa)

5.4 Economic Analysis

Economic analysis of selected value chains is examined which shows value additions along the value chain, contribution of chain segments to total value, profitability of each chain actors. It also indicates benchmarking with important value chain parameters compared with others using unit cost of production, labour and other factor productivities, and comparative advantages.

5.4.1 Economic Analysis of Sheep Value chain with specific channel (Mida Woremo and Menz Gera Woredas)

Sheep (for meat) Economic Analysis/sheep (2014)

Production Trading Retailing Consumption

Sales 1,600.00 2,000.00 2,350.00 Price/sheep Cost of inputs (including cost of unattended sheep, drug, man power) 760 1617 2175

Materials cost (feeding materials, rope...) 15 5 7

Net Value Added 825.00 378.00 168.00

% V. Added 60% 28% 12%

Operational cost (transport, tax, shelter rent, loading/unloading...) 15 68 25

Total Cost 790 1690 2207

Operational Benefit 810.00 310.00 143.00

Operational Margin 51% 16% 6%

Farmers Traders Retailers

5.4.2 Economic Analysis of Poultry Value chain with specific channel (Mida Woremo, Merhabete and Menz Gera Woredas)

Poultry (Chicken) Economic Analysis/Chicken (2014)

Production Trading and Consumption Retailing

Sales 80.00 120.00 Price/sheep

Cost of inputs (including cost of egg, hen, drug, man power, shelter) 36.5 95

Materials cost (feeding materials, rope...) 5 2

Net Value Added 38.50 23.00

% V. Added 63% 37%

Operational cost (shelter rent, loading/unloading, transport...) 1 5

Total Cost 42.5 102

Operational Benefit 37.50 18.00

Operational Margin 47% 15%

Farmers Traders/ Retailers

5.4.3 Economic Analysis of Bull (ox) Value chain with specific channel (Merhabete and Menz Gera Woredas)

BUll (for meat) Economic Analysis/Ox (2014)

Production Trading Retailing Consumption

Sales 13,000.00 18,000.00 2,250.00 Price/sheep Cost of inputs (including cost of un fattened sheep, drug, man power) 6481 13200 18662 Materials cost (Feeding materials, rope...) 50 25 25

Net Value Added 6,469.00 4,775.00 3,813.00

% V. Added 43% 32% 25%

Operational cost (transport, tax, shelter rent, loading/unloading...) 25 125 125

Total Cost 6556 13350 18812

Operational Benefit 6,444.00 4,650.00 3,688.00

Operational Margin 50% 26% 16%

Farmers Traders Retailers

5.5 End Market Analysis

5.5.1 Sheep

Local butcheries slaughter sheep and supply for domestic consumption in the form of raw/ roasted meat. Hotels and restaurants slaughter sheep mainly to prepare dishes indifferent forms. Sheep are consumed by domestic consumers either in the form of processed meat from hotels/butchers and at home. The main channel is that sheep transported to Addis Ababa butchers, supermarkets and consumer markets and some sheep slaughtered at Modjo export abattoirs. Sheep from the targeted woredas are also provided for Chancho, Enewari, Jirru and Deneba markets which are relatively near to Addis Ababa and have higher selling price since there is relatively high number of traders. Sheep from the targeted woredas have higher market demand in Addis Ababa with market good will.

5.5.2 Poultry

The main channel of chickens marketing is that producers provide their products to individuals at the local market for reproductive household consumption purpose. Some part of poultry products are also channeled to Addis Ababa market by traders who collect chickens from local markets and provide to Addis Ababa market.

5.5.3 Bull

Fattened oxen marketing is mainly channeled to Addis Ababa market by small traders who usually uses on foot transport and big traders who uses vehicles to provide to Addis Ababa Market. However it is seasonal, oxen have demand by the local communities for consumption especially in holidays like Easter, Christmas, and New Year. Local communities also buy bulls for reproduction and crop production purpose.

5.6 Value Chain Constraints

Value chain constraints are factors which bottlenecks of the market channels of selected commodities (sheep, poultry and bulls) and which helps to show recommendation for future intervention. The factors are mainly categorized from the view of technology or product development, market access, organization and management, finance, input supply for primary production and infrastructure.

The value chain constraints for the selected agricultural commodities are provided below in summarized form of table.

Factors Sheep Value Chain Poultry Value Chain Bull Value Chain

Technology/product - Small scale farmers lack -producers have no -Farmers lack knowledge and development technical skill to produce experience to use incubators skills of improved forage improved varieties which which yield more within a development reach to slaughter relatively in short period of time a short period of time

-Farmers lack knowledge and skills of improved forage development

Market Access - farmers lack access to big - Weak bargaining power of - farmers lack access to big buyers buyers that reduces their sales producers that reduces their sales potential, potential, - Farmers Lack of up-to-date - Farmers Lack of up-to-date market information that reduces market information that their bargaining capacity for reduces their bargaining better sales. capacity for better sales. - Lack of strong marketing - Lack of strong marketing organizations and supply chain organizations and supply facilitation limits market out lets chain facilitation limits market of smallholders, out lets of smallholders,

Organization & management - Inability of - Most of smallholders - Inability of smallholders to smallholders to (specially men) do not organize for economies of organize for give attention for poultry scale limits their economies of scale production opportunities to access higher limits their value markets, opportunities to access - Poor quality of poultry higher value markets, houses - Smallholders lack of capacity to develop business plan - Smallholders lack of decreases their potential of capacity to develop sales business plan decreases their - Smallholders lack of capacity potential of sales and time to do accounting increases their cost. - Smallholders lack of capacity and time to do accounting increases their cost.

Finance - Inability of farmers to - - Inability of farmers to pre-finance improved provide adequate collateral inputs, resulting in reduces their access to reduced yields, working capital loan,

- Youths are not able to - Youths are not able to engaged on bull engaged on bull fattening due fattening due to lack of to lack of starting capital starting capital - It’s obligatory to have own - It’s obligatory to have

own contribution to contribution to get loans get loans

Input supply - Limited availability of - Limited availability of - Limited access to improved improved varieties, improved varieties, animal feed reduces productivity of reduces productivity of smallholders smallholders - Low access to veterinary services - No access to poultry feed

Infrastructure - poor roads and other - poor roads and other - poor roads and other facilities facilities increase the facilities increase the increase the price of final price of final products price of final products products and makes and makes competing and makes competing competing with imported with imported with imported commodities difficult, commodities difficult, commodities difficult, - Lack of appropriate - Lack of appropriate - Lack of appropriate information source and information source and information source and limited access, reduces limited access, reduces limited access, reduces farmers awareness on market farmers awareness on farmers awareness on situation and the possibility market situation and market situation and the to capture market the possibility to possibility to capture opportunities. capture market market opportunities. opportunities.

5.7 Market Based Solutions for the Value Chains constraints

 Organizing unemployed youths in producers cooperatives/for sheep, poultry and bull/ and promote producer cooperatives.  Timely provision of market information from various sources by enabling the youths to use/access internet.  Publicizing market information consistently for all farmers.  Integrating farmers/youths and their cooperative to market.  Identifying potential markets capable enough to take up the production through branding of the product.  Provide loan for youths by linking with rural micro financial institutions  Provide technical trainings on sheep, poultry and bull production for youths  Organize youths on cooperative forms to increase their bargaining power  Provide training on basic business planning and management  Organize producers to jointly transport their products using vehicle

VI. Vision/Mission/Objectives of Value Chains

Vision: to see well-structured Value chains of Sheep, Poultry and Bull for equal and mutual benefits of actors in the channels.

Mission: NED works to strengthen the Sheep, Poultry, and Bull value chains by promoting unemployed youth engagement in the production process, and linking the local markets to regional markets.

Objectives of the Value Chains:

NED wants to achieve the following objectives in close collaboration with governmental, private institutions and development partners with in the value chains of sheep, poultry and bull in Mida Woremo, Merhabete and Menz Gera Woredas of N/Shewa zones.

 To promote production and productivity of sheep, poultry and bull yields  To build the skills of unemployed and vulnerable rural youths on improved agricultural productions and business management  To build the capacities of TVET institutions to deliver quality short term trainings for vulnerable and unemployed youths  To increase rural youths access to quality short term vocational skills trainings  To strengthen the Public Private Partnership for a sustained youths employment on agricultural vocational sector  To strengthen flow of market information among rural smallholders

 To establish contractual basis transactions of selected commodities among actors in the selected value chains  To increase the benefit of value chain actors reasonably based on their share on the chain

VII. Proposed Intervention Programs

Recognizing the problem of youth unemployment and their dependency on their parents, NED is implementing this project in close collaboration with Almaz Bohem and Mehal Meda TVET colleges, Technical and Vocational Enterprises Development offices, Women Children and Youths Affairs offices, and small scale private enterprises in Mida Woremo, Merhabete, and Menz Gera woredas and F-FARM PLC. With regard to the project contribution to the value chains of selected commodities, NED intended to strengthen the value chains for the benefit of rural poor specifically for the targeted unemployed and vulnerable youths.

Provision of short term agricultural vocational skills trainings: In close collaboration with Almaz Bohem and Mehal Meda TVET colleges; NED has signed project agreement to provide market oriented short term agricultural vocational skills trainings for a total of 300 unemployed and vulnerable rural youths to enable them engaged on viable small scale agricultural income gaining activities.

Strengthening the capacities of TVET institutions: The project has also a capacity building component for TVET colleges to deliver short term and flexible market demandable agricultural courses for rural youths who have no access to TVET. The main actions under this component are; strengthening TVET institutions agricultural workshops by equipping with necessary materials, trainers capacity building through training and experience sharing, and linking with public and private institutions to provide trainings on joint basis.

Engage the youth on viable agricultural IGAs: After the successful completion of the short term agricultural courses, the next step is that youths will be organized to start small scale agricultural businesses. The woreda TVED offices will be responsible to support the youths on the preparation of business plans and follow up.

Strengthening market linkages: The project will also strengthen flow of market information and create linkage with potential buyers by searching big traders at Addis Ababa with appropriate prices. In addition a web-site will be developed which will have full information of the project and its approaches.

VIII. Monitoring and Evaluation

It is relevant to monitor and evaluate the project towards the improvement of selected value chain and we need to set indicators to measure the performance of value chains. The monitoring and evaluation process helps to determine the progress towards goals of value chains (to prove); make necessary revisions of programs based on lessons learnt from past experiences (to improve) and also it is important to report relevant stakeholders/donors. The monitoring and evaluation of value chains should be done jointly with all concerned stakeholders and actors in the chain.

Model of the Value chains development

Outputs Outcomes Impacts

Food Security Sustainable Improved ensured Activities Market MSME among rural of the Based solution performance youths project

Performance Indicators;

 Number of rural unemployed youths engaged on small scale agricultural businesses  The capacity of TVET intuitions to provide market demandable flexible agricultural courses  The level of partnership among private and public institutions for the provision of viable agricultural vocational trainings  The level of income that the chain added to the unemployed and vulnerable youths  The level of youth employment on agricultural business  Role of farmers/producers in the economic activity  Flow of information among chain actors

IX. Conclusion

 The engagement of farmers on animal fattening and poultry production increases year to year. This on-farm activity is taken by most of farmers to boost the number of income generating performance however it is performed in a very traditional way.  Farmers have different customers for their products. The most buyers of their products are local communities and traders but no relation with cooperative.  Youths encountered problems in animal production and fattening to improve their operation scale. From these tribulations lack of capital, limited skills of production, and lack of working land were the three major ones.  Youths are facing problems of accessing credit services due to complication of requirements from micro financial institutions to borrow.  Most of rural youths have no vocational skills and they have lower access to flexible agricultural vocational skills trainings  Most of TVET institutions have no experience in providing agricultural vocational skills trainings and their courses lack flexibility  TVET institutions have poor linkage with private and public institutions  Most of rural youths have no capacity to cover costs of trainings for TVETs  The roads from Mida Woremo, Merhabete, and Mehal meda needs improvement for better market linkages with Addis Ababa and other regional markets

X. Recommendations

 To improve the production and productivity of sheep, poultry and bull, there is a very huge space to increase unemployed youth training on short term vocational skills trainings and engage them on production on an organized form which needs a collaborative efforts of CSOs, government, and private firms and TVET institutions.  To increase rural vulnerable and unemployed youths’ access to marketable agricultural skills trainings, it is the best way that to introduce mobile trainings which can provide the trainings by moving from kebele to kebele.  Woreda level TVED offices also need capacity building to expand their activities to all youths to support and follow up their businesses.  TVET institutions capacity also should be improved to deliver quality short term agricultural courses by equipping their agricultural workshops with relevant materials, books and kits; capacitating trainers, and linking them with private and public sectors.