BY GETACHEW MINAS
Horticulture production is not a new activity in Ethiopia. There have been producers growing a small range of vegetables for the local and regional export market. The sector comprises farms supplying fruits and vegetables to the local and export markets. However, these are mainly supplied to the local markets.
Yet, there are only a few private companies involved in the commercial production of fruits and vegetables for export. The total area under fruit and vegetable cultivation in the country comprises only a small fraction of the total land under cultivation. This calls for a strategy that encourages export-oriented horticulture with a parallel focus on domestic horticulture market that is weak.
The reason for low demand for horticultural produce in the country is low consumption. F. Joosten noted that the average consumption of fruit, for example, amounts to only 1.3kg/person/year; the mean vegetable consumption is around 25 kg/person/year.
These figures are well below the WHO recommendations, reflecting insufficient production and consumption. As a result, the horticultural exports comprise only a few products such as tropical fruits, tomatoes, onions and cabbage. On the other hand, there is little domestic market demand for produces that do not meet the high export quality standards.
Entering the international market with one or several quality products and a minimum of logistical infrastructure was not easy until recently. The EU became an attractive market for many Sub-Saharan African countries, including Ethiopia. It is reported that currently, the market access situation has altered considerably.
With regards to horticultural products, supplying the EU market now requires a “license to deliver” based on scientific production, logistics and risk management. The responsibility for food safety and quality risks has been moved to the source of the supply chain.
In other words, the burden of proof for quality lies with the farmer who is responsible for all risks. The farmer has to demonstrate that all possible risks have been identified, analyzed, controlled and reduced.
In Africa, only a few countries have succeeded to pass through all the hurdles in supplying vegetables to the EU markets. These countries have the comparative advantage of transporting their produce by road, while other African suppliers lack this facility. They are not in a position of having synergy in logistics between flowers and fresh vegetables all exported to the same market.
The traditional focus on off-season supplies and low production costs are overtaken by market developments and production technology in the EU itself. Ethiopia lacks the coordination of exports of horticulture with other exports to the same destination.
These exports have a specific line of transportation without coordination, as they are exported to different destinations using different modalities.
Competitive suppliers: In Africa, there are a few countries that are large vegetable suppliers to the EU. They are cheap alternatives to European production of horticulture. The comparative advantage of these countries is that their products can be directly transported to Europe.
Next, they enjoy a combined logistics for export of both flowers and fresh vegetables. They also have the advantage of the “presence” of a number of European farms within their locality. Also, the quick adoption of market requirements is an advantage. They meet requirements such as pre-packing of vegetables. They fulfill quality standards approved by the International Standards Organization (ISO).
Compared to these countries, Ethiopian exports of fruits and vegetables to the EU market have been “limited” and mainly restricted to a few produce. The export of green beans has accounted for large supplies of Ethiopian export. Also, small quantities of strawberries, cherry, tomatoes and fresh herbs have been exported to Europe.
According to Joosten negligible amounts of high-quality fruits and vegetables have been exported to countries in the Middle East. However, in the informal sector which is dominated by smallholder growers and small scale traders and transporters, considerable amounts of citrus fruits, onions, tomatoes, potatoes, garlic and other vegetables are exported to neighboring countries and from “there” to other countries in the Middle Eastern region.
In general, vegetables provide more market opportunities for African producers than fruits. This is caused by more demand for vegetables than for fruits in the EU markets. Also, the fruits imported into the EU are costly as they require “efficient” production and distribution systems than vegetables.
Vegetables that are exported consist of fresh onions, tomatoes, cabbage and potatoes destined mainly to neighboring countries, from where they are re-exported to the Middle East destinations. Vegetables are exported in bulk without any value addition and tend to have a relatively low value, price and quality. Due to a general lack of care and proper facilities during transportation, however, produces often arrive in “poor” condition.
The produces are transported by trucks and trains moving to the international harbors in neighboring countries. These vegetables are grown in the various Rift valley lakes where vegetables are produced on small plots.
The farmers tend to sell “all” their produce to middlemen and traders who pick it up from the roadside in small open trucks and bring it to neighboring countries for further export. The supply of vegetables for the European market is more diversified, including peas and asparagus. However, the share of these latter crops has declined over the past decade, while the export of green beans has been growing.
The supply is limited to a relatively short export season. Europe does not produce fresh beans in winter season and production in countries that are major suppliers can be “unreliable.” Main importers and distributors in Europe wish to “spread” their sources of vegetables, and this provides a market opportunity for Ethiopia. But, this opportunity is not exploited as the export supply chain of vegetables lacks value addition.
The produce is usually exported either for “direct” supply to supermarket chains or for repacking and sale by international traders. Due to the fact that the crop is perishable and a route by sea takes far too long, all green beans are exported by air making them expensive or uncompetitive.
Destination of horticulture export: The main destinations of Ethiopianhorticulture exports are the European countries. The vegetables for the EU markets are cleared in one or two European countries and then transported to destinations where they are partly “repacked” into small size packets based on the client’s requirements.
After repacking, the produces are distributed throughout the EU markets. They are then re-exported to the final consumers. Private investors in vegetables for export have slowly but steadily dominate the produce. There is also an important vegetable seeds production for the expansion of the produce. Existing private exporters are expected to start production in a joint venture with renowned European vegetable producers and importers.
The private exporters of vegetables have made “outgrowing” arrangements with farmers in their vicinity. These outgrowing farmers rely on surface or furrow irrigation, which is a cheap but very “labour-intensive” and water inefficient method.
Yet, it requires “machinery” for proper leveling of the fields for drip irrigation. There is a growing investment in drip irrigation, which has several advantages compared to surface irrigation. It efficiently uses water and reduces waterlogging if fields are not properly leveled. It reduces the spread of water-borne diseases and allows better germination of seeds.
In the past, the Ethiopian state farms used to grow and export a wide variety of crops. These export items included asparagus, peas, peppers and tomatoes. The current trend in production for export to the export market is away from a wide range of exports towards exports of narrow ones, focusing on green beans.
The export of horticulture is reduced in range over the past years, leaving the land for floriculture. Some experiments and trials are undertaken by private firms for the production and expansion of peas, tomatoes and asparagus for export to the EU market. Studies show that the export volume and value of fruits has always been substantially “lower” than vegetables.
Vegetables are mainly exported, as mentioned earlier, to the Middle East while exports of fruits to Europe are negligible. The main fruits produced and exported are bananas, citrus, grapes, mangoes, papaya and avocadoes. Most of the citrus production is a limited one with the productivity of orchards on the decline.
The production of mangoes is to a large extent scattered and unproductive. Its variety and quality tend to be low and unfit for further processing compared to those in competing countries. Regarding apples, they have been growing in the highlands of Southern Ethiopia. Apples have been grown for decades by small farmers. Apple production is expected to go up in the near future. Similarly, pineapple production is scattered and has been unstable over the past year.
The export of fruits to the Middle East has to compete with domestic production in those countries. Fruit production has increased notably in some importing countries, but demand for fresh fruits appears to be growing as well.
This implies that domestic producers cannot fulfil the demand, thereby leaving a market for Ethiopian produce. Fruit production in Ethiopia tends to be dominated by the eastern part of the country. Poor grading, handling and transport facilities have led to a general impression that Ethiopian produce has a bad quality and the fruits are therefore only sold cheaply.
A group of individual exporters are engaged in the export of low-value fruits to the neighboring countries. Currently, efforts are made to produce high-value fruits for export to more attractive markets.
Conclusions:
The Ethiopian flower and horticulture export has shown improved performance in the past few years. It has managed to become a reliable supplier with a significant share of the global market. With more land devoted to the production of flowers, fruits and vegetables the sector will be a major source of foreign exchange.
The availability of skilled and experienced workers both for the supervision and operation of horticulture development is of the essence. This helps to capture and expand markets abroad and to meet demand in a competitive manner.
Strengthening the current competitive position in the global market requires constant attention to quality and pricing. Primary attention has to be given to efficiency in production and transportation, linking input supplies and technical services including vocational and in-service training. Research support services and technical consultancy services have to be strengthened.
Editor’s Note: The views entertained in this article do not necessarily reflect the stance of The Ethiopian Herald
The Ethiopian Herald January 21/2021
