SNV supported cooperatives in bridging the gap between the edible oil demand and supply in Ethiopia.
Ethiopia’s potential to grow oilseeds is enormous unlike its capacity to process and produce edible oil. According to the Central Statistics Agency of Ethiopia 2016, the country has annual potential of producing more than 784,809 tonnes of oil seeds. However, Ethiopia is importing more than 350 million metric tons of subsidised palm oil per annum mainly due to challenges in the oil value chain in the country.
Most of the Oil seeds in the country are produced in subsistence farming for local consumption. This has created bias towards providing extension and research support and access to improved oil seed. The poor market linkage of farmer with oil processing companies led to unreliable oilseed supply for processors.
“The domestic edible oil processing capacity is dominated by small-scale and micro oil processing factories in rural and urban areas are selling crude oil. There are more than 1000 small and micro oil processing facilities while there are 27 large and medium scale oil processers” said Abedella Muhammed, Market Linkage expert, SNV Ethiopia. According to the assessment made in South and North Gondar zone Amhara by SNV, most of these facilities are operating under capacity 10-20%.
Realising the gravity of the market gap in the oil value chain, SNV provided support to the agricultural cooperatives and unions to enable them improve the whole oilseed value chain. Cooperatives for Change (C4C) provided training for more than 2500 model farmers under Tsehay union and Amedber Primary cooperative on good agronomic practice and postharvest management to improve the quality and quantity of Niger seed. Complementing on this initiative, the project has enhanced advisory service on the significance of oil processing facilities for the union and cooperative management and employees. Following the capacity enhancement support, C4C facilitated business-to-business linkage to help the unions and cooperatives secure sustainable Niger seed raw material supply.
This support has motivated Amedber cooperative, in Amhara region, to upgrade the obsolete crude oil crushing small-scale machine installed in 2007 to a medium scale machine. The new machine has daily processing capacity of 1500 litres and provides refining and packaging services.
Learning from Amedber, Tsehay union is engaging in edible oil production with an investment capital of ETB 50 million and a daily processing capacity of 10,000 litters. To help the union gets sustainable oil seeds supply SNV facilitated a business to business linkage with other union. Research institutes, Bureau of Agriculture, regional Cooperative Promotion Agency and unions have participated in the event. This process enabled Tsehay Union to collect more than 5.6 tone of various types of oil seeds from five cooperative unions when the factory starts production with its full capacity.
The oil value chain actors vowed to support the union. “The factory is an asset for the country. All of us has a responsibility to in making this factor become functional and sustainably produce oil to minimise edible oil supply limitation” said regional Cooperative Promotion Agency Deputy Director, Haileleul Tesfa.
Bureau of Agriculture and Natural Resources will strengthen extension service providers on oil seeds through Development Agents and extension providers and farmers while research centres closely work with the union to disseminate improved seeds. The union has reached into decision to hire an extension service provider who will promote oil seeds, create awareness on quality product supply and enhance farmers’ capacity in production and supply of quality raw materials for the factory.