Ethiopia is endowed with extensive natural resources such as fertile soil, abundant water resources and favorable climatic condition that make the country suitable for the development of different varieties of flowers, vegetables, fruits and herbs. Despite this, the country has not benefited from the sector as expected.
Lack of adequate attention given to the sector by the government, years of insufficient investment by the private sector, and the absence of skilled human resource and technologies are among the major factors that thwart the country from reaping the benefits of its potential in the sub sector.
To avert the trend, Ethiopia, the second largest flower exporter in Africa after Kenya, recently launched the National Horticulture Development and Transaction Strategy. The strategy highlights the plan to create conducive environment for modernized horticulture development. EBR’s Mikiyas Tesfaye has gone through the document and conversed with major stakeholders to offer this report.
Ethiopia’s horticulture is a classic case of unfulfilled potential, typically mimicking an array of the country’s underdeveloped natural riches. Despite having an ideal climate, fertile soil, abundant water resources, and a geographical comparative advantage of being closer to major market destinations in Europe and the Middle East for horticulture products; productivity, quality and overall gains from the sub-sector are minimal.
Horticulture production, mainly comprising fruits, vegetables, herbs and cut flowers, covers a total of 2.5 million hectares of land currently. The sub-sector, though largely underdeveloped, is a growing source of employment for the country’s burgeoning youth population, with more than 21 million people making a living from the sector in 2015/16, according to data from the Ministry of Agriculture and Natural Resources (MoANR).
The sub-sector is also crucial as a source of export for the hard currency starved economy. In a country where agricultural goods cover over 65Pct of export, Ethiopia’s forex earning from horticulture has been growing year after year reaching USD271million last fiscal year.
Out of the total export earnings from horticulture sub sector, close to 80.4Pct (USD218 million) came from the export of flowers in 2015/16. According to data from the Ethiopian Horticulture Producers Exporters Association, Ethiopia only exported 83 million stems of flowers in 2004/05. In the last fiscal year, this figure grew by almost ten folds to reach 797million stems. Reflective of this dramatic performance improvement, Ethiopia has now become the continent’s second top flower producer and exporter, only next to Kenya. It is also ranked fifth on the global stage.
Export volume of vegetables and fruits also increased from 38,000 tons in 2004/05 to close to 164,000 tons last year. In a similar manner, the export revenue rose to USD53 million from USD16 million during the period. Subsequently, the sub-sector has become among the top five foreign currency generators in Ethiopia.
Ever since the sub sector started to emerge more than a decade ago, 53 local, 71 foreign and 12 joint venture investors have joined in the market. These investments have established flower, vegetable and fruit farms on 13,000 hectares of land and created 180,000 employment opportunities.
Despite the huge potential and some good beginning, there are bottlenecks that thwart the growth of the sub-sector. Aiming to enable the horticulture sector development in Ethiopia to actualize its true potential and sufficiently supply local and global markets with competitive products and also serve as a reliable source for emerging agro-processing industries, the government recently introduced the National Horticulture Development and Transaction Strategy.
“We have been calling for a strategy to guide Ethiopia’s horticulture development and are very happy to see it realized,” Tewodros Zewde, Secretary General of the Ethiopian Horticulture Producer Exporters Association told EBR. The Association was established in 2002 by five companies to promote the export of horticulture and floriculture products in Ethiopia.
According to Tewodros, the strategy, which was prepared through consultations with experts, farmers, researchers as well as NGO’s and other relevant stakeholders, has made critical assessment of the state of horticulture development in the country.
The major bottlenecks that have continued to hinder the sub-sector’s growth have been listed and analyzed in the strategy document. Lack of widespread use of technology and modern methods of production and marketing; poor post-harvest management practices; weak marketing structure; lack of inputs; shortage of skilled human resource; and lack of infrastructure were itemized as major bottlenecks for the development of the sector.
Due to these factors, the sub-sector has also been missing its targets by large and far. For example, during the first phase of the Growth and Transformation Plan (GTP I) period, targets were set to produce 5859 stalks of flower, 559.8 thousand tons of vegetables, and 404.6 thousand tons of fruits. However, performance stood at 12.7Pct for flower, 23.7Pct for vegetables, and 4.3Pct for fruits by the end of the plan period in 2014/15.
On the other hand, it was planned to generate USD1.5 billion by 2014/15 from the sub sector export, but only USD249.7 million or 16.6Pct of the target was achieved during the period.
During GTP II period, which is currently in its third year implementation period, it seems there is a good start with both volumes and revenues showing encouraging growth rates. In fact the sector outperformed many of the planned parameters in boosting productivity and quality in 2015/16. However, the export revenue from the sub sector showed a slight decline last fiscal year.
Dereje Yigezu, director of Small Holder Horticulture Development Directorate at MoANR is hopeful that the strategy will address most of the problems identified. “In Ethiopia, there are very few technologies being introduced with very slow adoption pace by farmers. The strategy is hoped to boost research and development which will introduce new technologies and improve their adoption by practitioners, especially small holder farmers.”
However, experts are not as optimistic as government officials. “Things seem to be improving with horticulture research and development. However, there still remain challenges with financing.” a senior lecturer and researcher in the field at Wolkite University explained to EBR while speaking on conditions of anonymity. There are about a dozen universities in the country currently offering undergraduate programs in horticulture. Haromaya, Jimma and Hawassa Universities have post-graduate studies and research programs in the sub sector. “However, securing funds for research, development and community services in the sector is very difficult and largely under-supplied,” notes the researcher.
Despite this fact, the experiences of horticulture producing countries globally reveal that research and development activities go hand in hand with the development of the sub sector. For instance, Brazil, the world’s third largest producer of horticultural products, especially fruits and vegetables, has been making large investment on research and development in the sector. The government, in collaboration with the private sector, has enhanced supply of improved seedlings; widened market outreaches and linkages for horticulture products. It finances the supply of inputs such as irrigation equipments. It invested heavily on infrastructure including airports, railways, roads and electricity; and engages in capacity building to improve the sub-sector’s productivity.
In addition, through a strong private public partnership schemes, Brazil has made it possible for most of its horticulture farmers to be certified with Global Good Agricultural Practices (GAP) that allows their products to easily penetrate major international markets. This is not the case in Ethiopia. In fact, “one of the major shortfalls identified by the strategy is the barrier that Ethiopian horticulture farmers face to penetrate European markets because they do not have proper certifications,” says Tewodros. “But, I am optimist that the strategy will address this critical issue.”
An action plan is still under preparation to implement the strategy and is expected to be finalized by February 2018. With a detailed action plan, the seven strategic pillars outlined including research and extension interventions, agronomy, input supply and distribution, post-harvest handling and processing, human resources and capacity building issues will have a better shot at being properly addressed.
Setting in place a road map for the coming decade, the strategy envisions satisfying local demand as well as penetrating in to the international market to make the country a major exporter of horticulture commodities at the global level.
To this end, the implementation of the strategy is divided into three. The strategy has a three-year short term implementation period, to be followed by a seven-year intermediate period. At the tenth year mark, the concluding monitoring and evaluation activity will be conducted.
Well cognizant of the huge potential that still remains unfulfilled, Ethiopia aims to ensure food security, boost export earnings and realize a functioning local sourcing capacity for domestic agro-processing plants.
Tewodros is confident that by improving existing government support for investors engaged in the sub-sector such as policy framework development, investment incentives like access to land, credit services, tax holidays and lifting of tariffs on imported capital goods, the country’s true potential in horticulture can be developed.
The lecturer at Wolkite University also underscores that “while it’s very critical step to train students in horticulture education in several universities, emphasis should be given to improve delivery of quality education for the students.”
In this regard, Tewodros believes that learning from the best is essential. In neighboring Kenya, pupils as young as elementary students receive education in horticulture. As a result, the East African country does not have a critical shortage of skilled manpower. But in Ethiopia, “we still rely on foreign experts for certain tasks in our farms because there are quite a few experts in the field,” he complained.
“There is so much we have learnt from Brazil and Kenya in horticulture development.” underscored Dereje. “In Kenya, for example, the role of cooperatives and unions in the transaction of the commodity is significant to ensure that farmers in particular get an equitable share of the profit. We want unions and cooperatives in Ethiopia to play [similar] role in the marketing of horticulture products.”
According to FAO, Kenya cultivated 605,057 hectares of land where farmers harvested 7.88 million tons of horticulture goods in 2014. The country made USD840 million exporting 220,000 tons of produce. Kenya also supplies the global market with pre-packed, mixed-pack and complete packed, and frozen and fried packed fruits and vegetables. Ethiopia in contrast only exports pre-packed horticulture commodities.
Ethiopia’s main horticulture produce remains limited in terms of types. Major fruit production involves strawberries, bananas, mangos, citrus fruits, grapes, papayas and avocados. French beans, peas, cabbage, onions, carrots, tomatoes, zucchinis and pepper make the country’s vegetable items, while potato is the main roots item.
Globally, largely Latin American countries satisfy the demand of fruits in European markets. In 2014 alone, USD11.7 billion worth of fruits were exported to Europe from Costa Rica, Colombia, Ecuador, Argentina and Brazil.
Ethiopia, on the other hand, exports small portion of the harvested horticulture products. Data from the Central Statistics Agency shows that the country exported only 1.57Pct of the total 7.4 million quintals of vegetables produced in 2015/16. On the other hand, only 1Pct of the fruits produced in the same year were exported to Djibouti, the Sudan, the Netherlands, Germany and Italy, with almost 90Pct of the exported goods ending up in Djibouti.
In contrast the country’s import bill for horticulture goods, particularly fruits and vegetables is on a sharp rise. Six years ago, Ethiopia imported 19,352 tons of fruits and vegetables worth USD8.9 million, while two years ago this figure grew to 94,216.7 tons worth USD28.7 million, according to Ethiopian Revenues and Customs Authority.
Dereje stresses that the sub sector has very low productivity especially among small holder farmers despite the fact that cultivated land is on the rise. “An open pollination tomato variety has a yield of 180 quintal per hectare on farmers’ plot, while the yield goes up to 250 quintal on commercial farms. Research centers have even greater yields with 500 quintal per hectare.”
“Integrating all the actors in the value chain is very important to improve quality, quantity and types of horticultural goods. A system-wide overhaul is also needed.” Dereje underscored.
To increase productivity, the strategy has outlined interventions where a strong bond between importers of seedlings, fertilizers and other chemicals will supply their goods based on the needs of farmers. And farmers will produce market-oriented products that have high market value.
“The strategy has clear interventions for improved provision of inputs, technologies, and extension services, equitable distribution of wealth across the value chain and integration of the actors’ activities to boost horticulture productivity.” Dereje is optimist.
“Logistics is a huge issue in horticulture.” Tewodros noted. The government should invest heavily on infrastructure that ensures these highly perishable goods to make it from the farm to the buyers table while still fresh.”
Ethiopia is making efforts to modernize the production and marketing of horticulture products. The introduction of the strategy is a step in the right direction. Similar encouraging moves by the state should also be replicated in investments that promote this particular endeavor.
6th Year . December 2017 . No.56