As a nation dreams to achieve middle income status by 2025, the Ethiopian Government is committed to expand industries especially that consume agricultural products as input. Since long ago, the agricultural sector has served as a core to the performance of the Ethiopian economy. The sector is directly supporting 85 percent of the population and almost the entire population of the country depends on this sector for basic food items. Besides, 80 percent of export earnings are derived from it. Consequently, agriculture has remained central to the government’s structural transformation and poverty reduction efforts, the reality on the ground indicates.
However, in order to realize the economic transformation, making it industrialized is the timely need. Hopefully, Ethiopia also aims to be the leading manufacturing hub in Africa by 2025. To this end, modernizing the agriculture sector and linking it with industry through the expansion of agro-industry is a duty of all time. In this regard, different measures are undertaken by the government and concerned organs to realize this vision.
Commendably, the development of Industrial Parks (IPs) and integrated agro-industrial parks have become the major priorities of the government. The roles of integrated agro-industrial parks are not underestimated towards reaching higher levels of industrialization, and ensuring the creation of inclusive and sustainable jobs through linkages between the parks and local Small and Medium Enterprises (SMEs), particularly youth and women-led businesses. Integrated Agro-Industrial Parks (IAIPs) present a strong option to transform the Ethiopian agricultural production from its current fragmented and outdated nature to cluster and mechanized form carrying out supply-driven practices through becoming organized, safe, and demand-led and quality oriented.
Apart from speeding up the country’s economic transformation to industrialization, the integrated agro-industrial parks sought to be a major source of job opportunities to numerous youths graduated from universities and contribute a lot in transforming the lives of farmers.
Moreover, scaling up the performance of integrated agro-industrial parks will play a remarkable role in attracting the global market to the country’s food and agricultural products.
According to the Food and Agricultural Organization (FAO) agricultural commodity markets report 2020, emerging and developing countries have become active participants in global markets. They account for about one-third of global food and agricultural products trade. Technological advancements contributed to transforming production and trade processes, which has, in turn, enabled global value chains in food and agriculture to emerge. Markets are key factors for development and yet in many developing countries farmers have limited access to them. However, many smallholder farmers face significant constraints to access markets.
Ayalneh Abawa, Coordination Director of Integrated Agro-Industrial Parks Development at the Ministry of Trade and Industry told The Ethiopian Herald that the integrated agro-industrial parks will play an important role in the country’s structural transformation from the outdated agricultural led to industrial-led economy. Beyond this, these industrial parks are creating plenty of job opportunities for many, bringing about latest technology transfer, and continue being a major contributor to the country’s overall prosperity.
“Following the reform undertaken some three years ago, the government has given due priority to the development of integrated agro-processing industrial park projects. The government is keen to ensure that the parks are completed as soon as possible keeping environmental safety. It has set up a national committee to monitor the construction process and evaluate production and productivity performances. Various stakeholders have also actively supported the parks completion and will continue contributing their part. As a result, changes have been made in the overall construction and manufacturing process. The parks are being given priority to alleviate the foreign exchange problem,” he remarked.
He further stated that currently, the integrated agro-industrial parks are one of the biggest projects that the government is undertaking. The integrated agro-industrial parks are also witnessing a tangible role in improving the productivity and livelihood of farmers and pastoralists across the country.
Bulbula, Bure, and Yirgalem Integrated Agro-Industrial Parks are among the leading agro-industrial parks inaugurated last Ethiopian budget year. The three agro-industrial parks are installed in their respective proper locations to maintain sustainable integrity of agricultural inputs and outputs. The integrated agro-industrial parks are registering promising results through linking the agriculture sector with the industry sector. Numerous multinational investors are also attracted by the agro-industrial parks investment as Ethiopia is chosen to be one of the conducive for doing business.
Bure Integrated Agro-Industrial Park seating on 260.35 hectares is one of Ethiopia’s public industrial parks that specialize in agro-processing. The presence of well integrated agro-industrial park in the country gives impetus to stimulate business oriented agricultural system in the country and benefits all stakeholders in the long-run.
Furthermore, the business model of the IAIPs clearly promotes efficiency of the commercial food supply chain in the country and beyond the country. The most important tasks for the Agro-Industrial Park is an increase in the share of agriculture in total GDP, provision of food security and improve in the life of the rural community by creating additional jobs and stimulating the development of small and medium-size businesses, the director said.
Accordingly, adding he said that increasing farmers’ participation and interactions with the integrated agro-industrial parks expands their choices in markets through promoting household’s income. Markets allow farmers to decide how and what to produce and how to invest in their farms, their families and themselves. This can lead to livelihood improvements in agriculture or other economic sectors.
In addition, as to the director, the farmers will shift from primitive means of agricultural practices into modern agricultural systems. This includes contract farming, cash crop farming, and wide-scheme mechanized irrigation farming, among others.
Currently, contract farming has gained acceptance in the world. It can help farmers to increase their participation in markets and modern value chains. A number of studies show that contract farming can help farmers access markets and increase their incomes significantly often by up to 50 percent. The parks will also open new opportunities to incorporate companies engaged in exporting value-added agricultural products to the world market.
BY TEWODROS KASSA
THE ETHIOPIAN HERALD SEPTEMBER 8/ 2021
