The horticulture export perspective plan, formulated over the past ten years, was driven with a view of scaling up export performance through expansion of cultivable land and diversification of cool logistics corridors across different river basins of Ethiopia. One of the strategic river basins selected for this purpose was the Tana River Basin. The Bahir Dar horticulture development cluster is part of this river basin, which is noted for its tremendous potential for the cultivation of a wide range of high-value exportable horticultural commodities, including Flower, Blue Berry, Ras Berry, Strawberry Herbs, Asparagus, and Avocado etc.
In Ethiopia, land is government property; the possibility of expansion of cultivable land for scaling up horticulture export has not been a cause of concern for the selected Bahir Dar horticulture development cluster.
As part of its effort to support horticulture foreign trade, Ethiopian Airlines built big perishable cargo terminals and facilities at the Bahir Dar horticulture development cluster in 2006. This terminal facility is designed to handle flowers, herbs fruits and vegetables, which are a major exportable commodity of the basin. The terminal is well equipped with the right technology, like cooling and refrigeration equipment, truck docks, and other features for efficient handling.
According to a previous study, Bahir Dar’s perishable cargo terminal has a capacity of 16,000 tons per year. The Airlines has also 19 Cargo freighters with a capacity to load 50 to 100 tons. This capacity and good number of freighters are pretty significant, as it allows the Bahir Dar Airport to handle a substantial amount of horticultural products and transport it directly to Europe.
This perishable Cargo terminal was basically built with the intention to undertake a direct flight from the Bahir Dar cluster to Europe, particularly Liège, Belgium, one of the largest flower importers’ destinations. The overall attempt of the plan was to reduce unnecessary inland transport costs, which otherwise forced farmers to incur huge amounts of cost to transport horticultural products from Bahir Dar to Bole Airport and thereby to Liège. The core strategy to make this goal happen was to allot the required land to private investors that enabled them to produce a sufficient volume of perishable horticulture required for cargo freighter requirements or to reach out to Liege market destinations.
Despite its importance, the intention of direct flight failed to be materialized. This failure stems from our inability to prepare and allocate adequate farmland for private investors who are supposed to produce a sufficient volume of horticulture products for cargo freighters. Absence of enough volume of product limits the Ethiopian airline’s prospect to carry out and transport a sufficient volume of flowers directly from the Bahir Dar horticultural development cluster to Europe with the least possible cost.
This situation eventually brought disappointment on the part of many value chain actors. On one hand, Ethiopian Airlines feels forfeiture as this expensive and huge perishable cargo terminal, which was built for international commercial purposes, remains idle or underutilized. According to current estimates, roughly 3986 volume (tone) of net horticulture are annually produced by these seven farms.
When we compare the current level of production with the ideal capacity of Bahir Dar’s perishable cargo terminal, the average utilization rate is found to be less than one-fourth. Almost three-fourths of perishable cargo facilities are underutilized. Underutilization of the perishable cargo terminal means the investment or cost of the facilities is spread over fewer units of perishable horticultural products and making the average fixed cost per unit increase. This eventually reduces the profitability of the airlines and potentially makes the air cargo business less competitive.
On the other hand, direct cargo flights from Bahir Dar to Liege are less expensive than direct flights from Addis Ababa, Bole Airport to Liege. As it is well known, Bahir Dar is located at mid-altitude, which is about 1821 above mean sea level (AMSL), whereas Bole International Port is located at high altitude, which is about 2334 AMSL.
Various studies indicate that mid-altitude, a place where Bahir Dar is located, offers several advantages for airplanes: First, it significantly reduces runway length requirements. This is because the air density is higher at middle and lower altitudes than at higher altitudes, like in Addis, providing more lift and requiring less ground speed to achieve takeoff velocity. A similar study reveals that taking off at mid-altitudes can lead to lower fuel consumption than at higher altitudes; shorter runway lengths and lower fuel consumption translate into lower operating costs for airlines.
Besides, this absence of a direct flight from Bahir Dar to Liege has a negative consequence for existing horticultural farms. Due to the absence of a direct flight, farmers are forced to transport their products from Bahir Dar to Bole Air Port Cargo in Addis by using a cold truck. The very long distance which are about 552 km accompanied by unfavourable road conditions. The existence of rough roads and vibrations leads to both mechanical damage and increased exposure to climatic factors that accelerate spoilage and loss. For flowers, it also leads to aesthetic degradations.
In this cluster, the absence of sufficient volume of horticultural products, which is required for cargo freighters to navigate directly from Bahir Dar to Liège, overtime creates a situation where existing farmers could not be able to maximize their export capacity and compete in the same market.
Horticultural companies that are located in Hawassa, Wolkitie, Holeta, Bishofetu, and Sebeta horticultural clusters are more advantageous due to the fact that they are very close to the Bole International Airport Cargo Terminal. On the contrary, companies located in Bahir Dar are required to spend extra costs for land transport in terms of cold truck rental, expenses for fuel and lubricant, cost for maintenance, and expenses for overhead, which is something that the existing flower farmers are not willing to pay for extended time.
This situation in turn led the government to allocate a substantial amount of public budget to subsidize farmers that bring perishable horticultural products from Bahir Dar to Bole Airport. It was in July 2015 that the then Ministry of Finance and Economic Development formulated the Land Transport Subsidy Directive with Directive No. 36/2013, which was planned to serve for 2014. But this subsidy has been rolling for the last 11 years due to the absence of a good number of companies to produce a sufficient amount of product to be transported to Europe by cargo freighters. Since the beginning of 2025, there are around seven farms (5 flower farms and 3 fruit and vegetable farms) in Bahir Dar Horticulture Development Clusters which received transport subsidies annually.
The situation of this cluster seems a cause of collective weakness of will. We all are aware of the need to produce a sufficient volume of horticultural produce by allocating the required land for high-value exportable crops. Because of the collective weakness of will, we are opting to use the land for other ventures. Despite the fact that direct fright from Bahir Dar to Liège is much more profitable, our collective weakness of will coerced us into using inland transport, which is a source of quality deterioration, to continue.
Even though ending government transport subsidy by allocating required horticultural investment is essential to save government budget, our collective weakness of will compel the subsidy to continue for unlimited period of time. Despite full utilization of Bahir Dar Cargo Terminal is critical for profitability of Ethiopian Airline, our collective weakness of will ignore cost saving options that makes Ethiopian cargo wing more competitive.
Many critics argue that to only possible solution for the Bair Dar horticulture development cluster is the allocation of adequate farmland to the private sector, which will directly convey their produce to Liege through the well-equipped Bahir Dar Cargo terminal. Transport subsidies are unnecessary government funding. It was considered as a reckless and wasteful spending.
This requires the regional government’s effort to transfer the already reserved Kunisada Hort Park land, which was estimated not less than 455 hectares, to private flower producers and exporters as planned, to cluster allocate 1100 hectares of land for private entrepreneurs who have a credible reputation in the sector, financial capacity, market access, and technology capabilities to produce and export high-value horticultural crops, including summer, rose-rooted, and unrooted cuttings.
Bringing Bahir Dar horticultural development cluster into more robust production and logistic hub with a short period of time and starting direct fright to Liège means transforming the Ethiopian export sector, particularly flowers, into a more competitive, reliable, and sustainable venture.
Mekonnen Solomon is working in Ethiopian Ministry of Agriculture
He can be reach at ehdaplan@gmail.com
BY MEKONNEN SOLOMON
THE ETHIOPIAN HERALD SUNDAY EDITION 4 MAY 2025
