Private Sector Investments Create Sustainable Markets for Ethiopia’s Food-Insecure Households

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Addis Ababa, 12 May 2014 - Private-sector investments can create more sustainable markets for farmers as well as build food security for households, reports SNV, a Dutch development organisation.

At the international “Multi-Stakeholder Conference on Agriculture Investments, Gender, and Land in Africa” held in South Africa, Nicholas Nyathi of SNV Ethiopia said private sector investments in training, quality inputs, and leadership development are helping farmers grow better quality produce and expand their markets. Combined with technology, farmers are better able to understand and access markets.

“Initiatives by SNV and its collaborators have increased farmer access to technology so they better understand and can access reliable markets, thus creating greater demand for their produce,” Nyathi said.

According to a press release Agricultural Communication Coordinator of  SNV sent to WIC,  an estimated 8 million Ethiopians live in chronic food insecurity with most of them located in rural areas and dependent on rain-fed agriculture. Production is hampered by lack of access to technology and inputs, financial services, market information, and sustainable markets. Gender inequities and limited opportunities to generate income from other businesses are also barriers to food security.

These households are heavily reliant on subsistence farming where yields are too low to facilitate their graduation to food security.

In response, the U.S. Agency for International Development (USAID) created “Graduation with Resilience to Achieve Sustainable Development” (GRAD).

In addition to SNV, the GRAD collaboration includes CARE, Agri Service Ethiopia, Catholic Relief Service in Oromia, Organization for Rehabilitation and Development in Amhara, and the Relief Society of Tigray. GRAD has also worked closely with Ethiopia’s Household Asset Building Program, agricultural extension offices, and national and woreda cooperative agencies.

Through the years, some prejudices have formed towards woredas (or districts) which are third-level administrative divisions of Ethiopia. They are composed of a number of wards or neighbourhood associations, which are the smallest unit of local government. There are about 670 rural and about 100 urban woredas.

In an effort to change the attitude towards these woredas and attract the private sector into these areas, SNV Ethiopia brought together private sector actors; uncovered the market potentials of GRAD woredas; and devised contextual, market-based solutions. The effort resulted in improvements in honey, livestock, malt barely, potato, legume, and red pepper production and marketing.

GRAD helps farmers learn more about on-farm quality, negotiations, market dynamics, and general business skills to meet market demands. GRAD engages the private sector to provide agro-services such as seeds and fertilizers; link farmers to markets and other value chain actors such as food processors; and innovate or develop appropriate business models up and down the food chain.