BY ABEBE WOLDEGIORGIS
Ethiopia has vast arable land which can advance crop production and could be used as input for agro-industry. In the same way, there are abundant livestock resources which can be processed as beef, dairy and leather.
Yet, due to the absence of sufficient capital and technology, the nation has not yet benefited from the sector as desired.
Both in the highland and lowland parts, cattle owners do not have access to sufficient forage and water. And as result, they move from place to place in search of basic needs. The lowland part of the country, which is highly vulnerable to drought and diseases, makes it inconvenient for the pastoralist community to sustain their cattle in good conduction.
Demis Chanyalew(PhD) is an agricultural economist. He told The Ethiopian Herald that Ethiopia is rich in cattle population mainly in terms of numbers. But the traditional way of cattle rearing hindered the development of the sector.
Currently, the number of cattle per household is reduced due to various factors. The conversion of grazing lands into farmlands and the expansion of sugar and cotton plantation in the southern Omo zone of Southern Nations, Nationalists and Peoples regional states (SNNP) and in Afar regional state has been shrinking the areas of grazing lands.
The fact that livestock production sites are located in remote areas is also a challenge in expanding market access to livestock products. This intern forces cattle owners to find their way to the neighboring countries in illegal trade.
In the highland part of the country, oxen are used more for energy than meat and other production and the agricultural growth witnessed in the last two decades attributed to the animal’s labor.
The average meat and milk per capita consumption in Ethiopia is very low even by the sub-Saharan standard and it is time to modernize the sector for raising productivity.
As to him milk and meat are byproducts of livestock hence to supply the product to consumers, first, due attention must be given to improving the wellbeing of the livestock population. Currently, in various urban centers dairy farms are flourishing but due to the short supply of milk from farmers, they do not function in their full capacity.
Engagement in animal husbandry needs sufficient forage, water and medical facility. These again need sufficient investment and technology. Hence, businesspersons, they resort to engaging in dairy farm than looking for modern cattle farming assuming that they obtain milk from small scale farmers. Such endeavor is simply bringing the cart before the horse.
Though there are ample opportunities in the agroforestry sector, the contribution of the sector to the GDP is less than 10 percent mainly due to the unavailability of technology and capital.
Hence to engage aggressively, the private sector should be encouraged to take part in the sector.
As to Demis, the government shows interest to reform the country’s political landscape and the progress thus far is encouraging. In a similar fashion, due attention needs to be given to reforming the economic sector. And such an initiative will have its own positive impact on the development of agribusiness.
Since recent times, foreign investors are also showing interest to engage in the sector. But, since they faced a bureaucratic hurdle in getting license, land and finance, withdrew their investment and returned back to their country. Hence accommodating such investors in proper manner is essential to attract FDI to the sector and improve its productivity.
Currently, the government established industry parks for the agro-processing sub-sector in some parts of the country. But some complain that the establishment process has been undertaken without undertaking sufficient study.
Asked his reflection in this regard, Demis said that the park established in the Burea town of Amhara regional state is very sophisticated and can be utilized for processing both livestock and crop products.
The compounds are furnished with asphalt road, water for sanitation and electric lights but the construction of the parks was carried out without taking the consultation of agricultural scientists as an input. This can be taken as the weakness of the initiative.
The supply of incentive to the local investors to import churning machine duty-free is encouraging but the machine must be affordable to small and medium-size entrepreneurs. Otherwise, they have to be able to access credit, he added.
According to Ethiopian Agricultural Transformation Agency to address the bottlenecks related to the lack of infrastructure and working capital amongst agribusinesses with a specific focus on private sector storage, cooperative and unions have been taking various measures though it is still not enough.
Currently, agribusinesses and cooperatives experience lack of access to finance, working capital and management and customer relationship management skills.
Therefore, support agribusinesses and cooperatives to boost their capacity in terms of equipment such as storage facilities and increase the level of value addition within the cluster is crucial.
Regarding other development, the recent establishment of the Fibela agro-industry, which produces edible oil in Amhara region with the capital of 4.5 billion birr can attract other investors to involve in the sector. The industry, in addition to edible oil, produces soap, vegetable butter and cartoon used for packing.
The factory utilizes sesame produced by local farmers creating a market linkage between farmers and industry. The factory can produce 1.5 million litter oil per day.
During the inauguration, Belayneh Kinde, owner of the industry said it took six years to finalize the construction and the industry mainly produces palm and soft oil. It began by producing 1500 tons of palm oil per day. The supplementary industry also works on refining activities.
According to the state minister of Trade and Industry Eshete Asfaw, annually the nation, with the government subsidy, imports 40 million litter of edible oil.
Hence, in addition to substituting the imports, the production of oil locally creates job opportunities for thousands, stabilizes the market and prevents illegal trade. In addition, it also facilitates technology and knowledge transfer.
As to the deputy minister, the government supports producing industries which serve the import substitution ambition by providing sufficient energy, raw materials and foreign currency.
Currently the industry does not meet its raw material demand from the local market. As a result, the government has given due attention to ensure sustainable access to hard currency so that the importation of the inputs are not interrupted. When the company starts to produce with full capacity, it will create jobs 300 citizens.
The Ethiopian Herald January 28/2021
