ABEBE WOLDEGIORGIS
Having upper hand in the nation’s economy, agriculture is a means of living of over 80% of its population and serves as a major supplier of raw materials for the manufacturing industry and plays the lion’s share in hard currency earning.
But the aspiration of ensuring food security and poverty reduction has been still a dominant slogan. Therefore, modernizing the sector must be taken as a sole option and to that end, maximizing the utilization of inputs is essential. The Ethiopian Agricultural Business Corporation, a Public owned entity, is accountable for importation of agricultural machineries and inputs and supplying to the farmers and agricultural enterprises.
While making an interview with the local media, the Chief Executive Officer of the Corporation, Kifle Woldemariam said that the Corporation is established with 2.44 billion birr permitted and 610 million birr paid capital. As the government allowed the corporation to enhance its paid capital from its profit, it could increase the capital to 2.44 billion birr.
As to Kifle, fertilizer is one of the key inputs which plays crucial role in rising agricultural productivity. Earlier to the establishment of the corporation, purchasing of fertilizer from the international market was carried out through brokers and agents and such practice subjected farmers and customers to exploitation. The establishment of the corporation, thus, could shorten the extended chain and enabled to supply the inputs in a reduced price.
The new purchasing system through the direct contact to the producing company enabled the corporation save 3.2 billion birr annually and farmers to buy a quintal of fertilizer with around 382 birr in deducted price that significantly supports their efforts to raise productivity.
In addition, more than one million quintals of selected seeds were supplied to farmers and other agricultural businessmen in the last budget year. Similarly, mechanized services were provided by preparing extensive farms and harvesting products so that reducing products’ wastage was possible.
According to the Officer, the Ethiopian Agricultural Business Corporations was established through merging five organizations with their own entities which include the Ethiopian Selected Seeds Organization, the Natural Gum Production Organization, the Agricultural input supply Organization, the Agricultural Machinery and Technical Service Provision Share Company based on the proclamation number 368/2016.
It was predicted that the corporation could face the 3.03 million birr deficit in the first half of 2021/22 budget year due to the international economic crises, but it increased its input supply such as fertilizers, chemicals, natural gum and transport service provision to customers via changing the hard situation in to opportunity. As a result, it could pay its debt and made profit worth of 60.4 million birr.
In order to meet the market demand, the Corporation reproduced selected seeds qualitatively and quantitatively and supplied to the market and played crucial role for raising productivity at national level. With the effort exerted to obtain land for producing selected seeds, it could secure two hectares of land in Bonga area in South West Ethiopia Region which could be utilized for seed preparation, storage, office and laboratory work. In addition, it obtained more than three thousand hectares land in Kefa zone tamashalo area for selected seed reproduction.
The challenges that the corporation has faced currently among others are the confiscation of the corporation’s qunzila and shalona farm lands and the natural gum farm lands by the regional governments. The scarcity of hard currency in commercial banks which in turn hampers the importation of spare parts ultimately crippled the corporation’s service provision capacity to customers.
Moreover, the recent political turmoil flared up in various parts of the country incurred damages and lootings to the corporation’s property. As the merged organizations that formed the Agricultural Business Corporation are long serving institutions, their machineries are out dated and the scarcity of hard currency inhibited their replacement by new ones.
Though the corporation has come up through achievements and challenges, it courageously prepared itself for better achievements in the coming five years.
According to Kifle, the corporation, as a public enterprise, supports the nation’s development endeavor and as a business entity, it competes in the market to gain profit and in this regard, it has dual purpose crafted in its five years plan.
In its target of operation, the Corporation planned to provide services worth 19.6 billion birr to customers and to gain 1.5 billion birr profit before tax. In addition, it planned to boost its export earning capacity. Formerly, the Corporation exported only natural gum products to foreign market but in the coming five years, it planned to export new value added agricultural products thereby to earn 20.8 million birr.
As mentioned above, the corporation as a public enterprise, has a duty to support the nation’s development endeavor and to meet the goal in the coming five years, it strives to supply 100% of the country’s fertilizer demand and 27.7% of selected seeds’ demand. The corporation has allotted 45 million birr to import two incubation machines for the selected seeds and 32 million birr to import three harvesting machines in order to achieve the plan for enhancing the quality of supplying selected seeds.
To increase supply of selected seeds in quality and quantity, it prepared 3500 hectares of land and to that end, it allocated 159.6 million birr, and for the expansion of irrigation farm, it also allocated 19 million birr. Based on feasibility study and demand assessment, it allocated 48.7 million birr to process the natural gum products, to squeeze fruits and to supply to domestic and foreign market.
As mentioned above, agriculture is the main stay of the economy but the sector’s utilization of modern input is below the average. According to the Ministry of Agriculture, almost 80% of the population derives its income from the sector.
Yet, reaching the farmers with inputs is still in its infancy level. Not only are these, transporting the imported fertilizer from the port of Djibouti to the center is awkward due to the poor quality of roads. Currently, many transport companies lack interest to engage in transporting imported goods because of the deteriorating condition of roads from Port of Djibouti to the Ethiopian border that put the vehicles in critical situation. The unsafe security situation in some regions also critically affected the fertilizer supply.
Besides, due to the economic crises witnessed throughout the world, the price of fertilizer has been skyrocketed so that some farmers are unable to afford. Hence, mitigating the problem as much as possible is essential. Ethiopia, as an endowed nation with abundant natural resources such as vast arable land, surface and underground water and easily trainable human resource, it urgently needs knowledge, investment and technology in order to get rid of aid dependency and to cease importation of food items via modernizing the agriculture sector.
Although the government has tried its level best to attract foreign investment to the sector, the inflow of investors has not reached to the expected level. Critical assessment regarding the provision of license to foreign investment in the agriculture sector is essential as malpractices have been witnessed in several areas. For instance, in the past, some local and foreign companies sold the land they received from regions for investment to the third party and left the sector even without paying back the money they borrowed from banks.
The Gambella region in this regard can be mentioned as the case in point and the region’s officials repeatedly explained their complaint on agricultural companies. Therefore, examining the matter and forwarding solution is essential. Agricultural inputs play pivotal role in enhancing production and productivity. Thus, reaching the farmer particularly with fertilizer and selected seeds input should be a priority agenda, it was underscored.
The Ethiopian Herald April 23/2023
