Ethiopia: Edible Oil Value Chain Enhancement
Ethiopia has huge potential for scaling up its production of edible oil: favorable agro-climatic conditions for increased oilseed cultivation, the labor-intensive nature of the sub-sector, a conducive business environment, the willingness of oilseed crushers to work at full capacity and the huge local demand.
Despite this potential, however, the edible oil processing industry remains underdeveloped. Main constraints are: low production, poor quality of seeds, inadequate trading infrastructure and poor agro-processing facilities, weak business development services for upgrading the processors and limited access to local and international markets. Weak linkages among the chain’s actors and a lack of working capital also constitute major obstacles.
The Joint Programme piloted a model to increase the productivity and competitiveness of oilseed producers, boost the capacity for processing edible oilseeds and improve access to local and international markets. This was achieved by integrating the private sector into the entire edible oilseed production value chain.
Main achievements included:
- The productivity and competitiveness of oilseed production was enhanced for the farmers involved in the programme (four large processing plants, 92 SMEs and four farmer units) and for their related primary cooperatives.
- The programme significantly contributed to the capacity and competitiveness of the stakeholders for processing edible oilseeds (1,535 small farmers). Processors of oilseeds have a renewed confidence in the sector due to linkages within the processing component of the value chain, and up and down the value chain (but particularly with seed growers and their related cooperatives and cooperative unions). These linkages, which function within the cluster arrangement of the sector, are the strongest indicator from the programme of the necessary future directions both for a potential scale-up of the initiative and for the development of the sector nationwide.
- The establishment in both the Amhara and Oromia regions of joint processing facilities was an exemplary demonstration of a public-private partnership, and set the stage for potentially significant developments in the sector.
- The programme made a strong contribution to increasing access to local and international markets for edible oil producers. The most important aspect of the programme’s success in this area was the development of vertical linkages within the value chain that contributed to an improved marketing framework for seed growers, cooperatives and processors.
Click for more detailed results from the Joint Programmes in Ethiopia.