Thursday, Jul 18, 2024
Update At 14:00    USD/EUR 0,92  ↑+0.0002        USD/JPY 151,69  ↑+0.174        USD/KRW 1.347,35  ↑+6.1        EUR/JPY 164,16  ↑+0.143        Crude Oil 85,49  ↓-0.76        Asia Dow 3.838,83  ↑+1.8        TSE 1.833,50  ↑+4.5        Japan: Nikkei 225 40.846,59  ↑+448.56        S. Korea: KOSPI 2.756,23  ↓-0.86        China: Shanghai Composite 3.015,74  ↓-15.745        Hong Kong: Hang Seng 16.512,92  ↓-105.4        Singapore: Straits Times 3,27  ↑+0.018        DJIA 22,58  ↓-0.23        Nasdaq Composite 16.315,70  ↓-68.769        S&P 500 5.203,58  ↓-14.61        Russell 2000 2.070,16  ↓-4.0003        Stoxx Euro 50 5.064,18  ↑+19.99        Stoxx Europe 600 511,09  ↑+1.23        Germany: DAX 18.384,35  ↑+123.04        UK: FTSE 100 7.930,96  ↑+13.39        Spain: IBEX 35 10.991,50  ↑+39.3        France: CAC 40 8.184,75  ↑+33.15        

Major changes in agriculture yield big results

Interview - March 28, 2016

Ethiopia’s agricultural sector is in a period of historic transformation, as it shifts from being subsistence based to market oriented, and is employing modern techniques to make dramatic differences in its yields, practices and results. Khalid Bomba, CEO of the Agricultural Transformation Agency (ATA), explains the extent of Ethiopian agriculture’s evolution and vast potential.


Could you please give us a brief overview on Ethiopia’s agriculture sector?

Ethiopia is one of the unique countries where we have over 30 different agro-ecological zones, which allow us to grow a variety of commodities and products. Many countries in Africa, and certainly in Asia, typically rely on a handful of commodities. That's not the case in Ethiopia. Given the fact that we have agro-ecological zones that are at sea level or below, and agro-ecological zones above 3,000 meters over sea level, the types and varieties of products we can produce are quite varied.

That being said, Ethiopia's agriculture sector has historically been and continues to be in many parts of the country, very much subsistence based. That means that most of what a farmer produces is consumed at his/her home. It's only a small percentage that they would then market. The trend has been one of: produce for home consumption, and if there is a surplus, you then look for a buyer.

That dynamic is now beginning to change. Our farmers are seeking to specialize their production based on what their agro-ecosystem is better suited to produce, rather than trying to produce everything that they will consume at home.

Moreover, they have begun to produce based on what the market is demanding. So if they are producing coffee, for example, they will try to get a better sense of in which market they are going to sell their coffee and then produce the quality and variety that that market demands in order to receive the highest price.

Ethiopia's agricultural sector is indeed in a stage of transition and change.


Nowadays, given the downturn in commodities, it is critical to focus on ecological, high quality products in order to market them to buyers that are also willing to pay a premium price.

That is right. We need to look at premium markets and ask ourselves what do those premium markets demand? The other thing I should mention is that if you look at Ethiopian supermarkets, five or 10 years ago most of the finished products were coming from outside the country. What Ethiopia is now trying to do, and its agriculture sector more broadly, is not just focus on the production of raw agricultural products, but how to add value to them. What we’re aiming for is that the products local farmers are producing don't get shipped out of the country, unprocessed, and then come back to the country as corn flakes, or tahini, or hummus. We are rather focused on producing finished products directly in the country.


Could you please discuss ATA’s establishment and what are the main actions taken by the GoE to raise productivity, intensify market-oriented agriculture, and promote private investment in the agriculture sector?

The ATA was formed at the beginning of GTP I to focus on the transformation side of the GTP. The Growth and Transformation Plan has two pillars: it is not just growth, which we certainly have been achieving, but also structurally transforming the economy. For us at ATA, it is more about transforming the agricultural sector. What we mean by that is changing the dynamics of how the sector works so that it is not just producing more, but rather “How are we producing?” and “Are we producing sustainably?”

By sustainably, we are thinking about environmental sustainability, social and gender inclusion, and financial sustainability, by thinking about markets. That is a primary aspect of the production side of the equation. The comparative advantage of specialization that we talked about is another aspect of transformation.

And thirdly, it is the market linkages that are important for this transformation, so that we move our farmers from subsistence farming to commercial and market orientation.

Now, these things do not happen magically. What the ATA has been focused on is thinking about what are the systemic bottlenecks; the two to three big issues within each of the major sub-components of agriculture that we can unlock. By unlocking them, you actually create the momentum to unlock many other things simultaneously.

The way that we work is really in consultation and in collaboration with many partners. We are a problem-solving organization, although in some cases we take on particular projects and try to implement them. Even in those cases, the implementation is done jointly with the Ministry of Agriculture or somebody who will take that project forward in the long term.

Our primary role is to support the Ministry of Agriculture and other partners in effectively executing the specific issues within the Agricultural Transformation Agenda that we have all agreed are important for transformation.

We are also a time-bound organization; we are an organization that will cease to exist 15-20 years after it was founded. It gives us a sense of urgency to get things done within a short window of time and thus not become a bureaucracy that just exists for the sake of existing. We have very specific measurements, timelines, and metrics that we look at on a monthly, quarterly, or annual basis. Our five-year plan, along each one of our deliverables and our programs, is very much results and data driven.


What were the bottlenecks you identified and how are you working to remove them?

If you look at our Progress Report for the past five years, what it will highlight is that we have been working during GTP I on 16 program areas with 84 deliverables. Each one of these 84 deliverables unlocks a particular issue. Let me mention three examples.

The first one is in the teff value chain. Teff is native to the country and it is one of the most important commodities for Ethiopia. It is grown by over 6.5 million farmers and it is the staple food of the country as well.

The yield of teff, when the GTP I began, was 1.2 tons per hectare. The ATA was asked to identify a technology that could increase the yield of farmers. Although many people were really worried that we were going to introduce biotechnology and GM approaches, what we found was that a very simple technology, which changed the way farmers grow teff, can increase their yield by about 70%-80%. This technology was essentially planting the teff seed in rows and reducing the amount of seed that farmers were using by 90%; so from 30-50 kilos of seeds per hectare down to 3-5 kilos instead.

In our first year of operations, only two farmers were willing to work with us. But last year we reached a milestone of 6.5 million farmers trained. Of those, nearly 2 million farmers are actually using the technology.

During the GTP I, what we have seen is over a 40% increase in the national yield of teff, from 1.2 tons per hectare to over 1.6 tons per hectare.  Many individual farmers using the technology are actually achieving yields of 2.5 and 3 tons per hectare. This has been one of our most successful interventions, because it has directly affected the yield of over 2 million farmers and improved their incomes and their livelihoods.

The second example is in the fertilizer industry. Ethiopia had been using the same two types of fertilizer for 30 years. We did an analysis and came up with a new project called EthioSIS, which stands for Ethiopian Soil Information System. This project has allowed us to map the soil fertility of the entire country’s agricultural lands using remote sensing and satellite technology, as well as collecting field samples from across the country. In 2016, we will finish mapping the entire country. We have already finished mapping 65%-70% of the country and provided new fertilizer recommendations. So farmers are no longer just using the old fertilizers of DAP and urea, but they are now using NPS, and other fertilizers that include magnesium, calcium and sulphur. For example, nobody knew that 96% of the agricultural land in Ethiopia had been deficient in sulphur.

The last one that I would mention is a project called Direct Seed Marketing. Ethiopia in the past has used its cooperative system to distribute seed and fertilizer to farmers. These cooperatives are essentially given directions from the government, through a very centralized process, for how much seed and how much fertilizer to distribute.

We made a recommendation to the government that by introducing a private sector element to seed distribution we could get better efficiency, better distribution of seeds, and ultimately lower prices for farmers. What started with only a handful of woredas, last year grew to over 400 private seed distributors in over 100 districts of the country working on seed distribution, something that the country has never had before.


What is the impact you are seeing in the small-scale irrigation SSI projects that the Ministry of Agriculture is implementing?

That is the direction that we ultimately want to go across the whole country, to become less reliant on rain. Irrigation is certainly one of the major ways of insuring that. What we have been working on together with the Ministry of Agriculture is the groundwater mapping; understanding how much water is under the soil, how deep it is, and how fast it recharges so that we don't deplete it very quickly.

In addition to that, what we’re trying to do is to create a supply chain of irrigation pumps so that we are not just distributing pumps without anybody providing maintenance or spare parts. For example, we are training auto mechanics to also be able to maintain irrigation pumps, and training well drillers in local communities to go and drill these wells, instead of having international companies come and do this.


How would you describe the collaboration between the different stakeholders?

The engagement with investors has improved over time, but certainly, more can be done. The Ethiopian Investment Agency is now an Investment Commission that reports to the Prime Minister. That has been a very good and positive change, ensuring that there is one entity that is coordinating and supporting investors coming into the country. That being said, the federal and regional level issues still have some additional challenges to be resolved. The one-stop shop that existed at the Ethiopian Investment Commission has to be strengthened. Some of the regulations and policies that the government is creating to support private sector investors also have to be streamlined. These are the things that the government is working on at the moment. The collaboration between different government partners has improved as well, but certainly more can be done.


Which investment opportunities would you like to highlight to investors in the UK, for example?

Since I work in the agriculture sector, of course I am going to focus on agriculture as the opportunities that are probably best placed for UK investors. I think one of the most important is on the sourcing side of the equation. For UK supermarkets to source fresh fruits and vegetables from Ethiopia, I think it's a prime opportunity. But beyond fresh fruits and vegetables, there are also commodities such as the gluten-free teff that the UK market is becoming more informed about and which we can supply. So there is that kind of relationship that I think we can certainly strengthen.

But there are also opportunities for UK businesses to come to Ethiopia, similar to what Diageo & Pittards have done, and invest. Because we do have the raw materials to be able to process, add value, and export, not only to the UK but also to many regional and international markets.


In the five years leading the agency, what has been the biggest challenge you have encountered and how did you overcome it?

The biggest challenge we have encountered at the ATA is the fact that we are a new and different kind of organization that nobody had ever heard of; nobody had ever seen this kind of organization before. So there was a lot of education and building confidence and trust that we had to do with our partners.

The only thing that has allowed us to do that effectively is the space and support that we were given by the Prime Minister, the Minister of Agriculture, and other senior government partners, to engage us and give us the time to build that confidence.