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Nurture Education and Development (NED)

Dr. Belete D. W/Gies

Agricultural TVET; Livelihood Improvement of Unemployed/Vulnerable Youth

for food Security in Amhara Region (L4W Program)

Value Chain Assessment in Mida Oromo, Merhabete and Menz Gera

Woredas, of N/Shewa Zone

June. 2014

Addis Ababa, Ethiopia

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1. Executive summary

2. Background of the study and the study area

3. Overview of the sub-sector(s) and VC Selection

4. Value Chain Analysis (to be done for each selected VC)

4.1 Mapping

4.2 Quantification

4.3 Economic analysis

4.4 End market

4.5 Value Chain Constraints

4.6 Market Based Solutions

4.7 Value Chain Governance

5. Value Chain Vision and Mission/Objectives

6. Upgrading strategies

7. Proposed Intervention Programs

8. Foreseen risks and mitigation mechanisms.

9. Action Plan

10. Monitoring and Evaluation

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Acronyms

ACSI: Amhara Credit and Saving Institution

CLRA: Customs and Land Authority Agency

COOP: Cooperative

FTCs: Farmer Training Centers

IGAs: Income Generating Activities

MOA: Ministry of Agriculture

MOTI: Ministry of Trade and Industry

NED: Nurture Education and Development

TVET: Technical and Vocational Education Training

WADO: Woreda Agriculture Development Office

WCRA: Woreda Customs and Revenue Authority

WTVEDO: Woreda Technical and Vocational Enterprises Development Office

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I. Executive Summary

Agriculture has always been the backbone of Ethiopia’s economy. Yet, lifting millions of

Ethiopians out of poverty requires a transformation from centuries-old subsistence agriculture to

dynamic, technology-driven, market-oriented than production oriented production to transform

the rural poor from food secured to income secured. This only happen if the market itself

functions in such a way as to serve the needs of all concerned.

To improve the livelihood of project beneficiaries, it is highly important to create visible ground

that production of marketable agricultural products for the real existence of unsatisfied demand

sticks the rural poor with the market. Production of commodities by understanding marketing

concept not production concept also play vital role to conceptualise the main actors for both back

ward and forward integrations. Understanding of such business environments results half solved

problems for the rural poor specially for unemployed youths engagement in demand driven or

market sensitive production activities.

Nurture Education and Development (NED is a not-for -profit, charitable organisation officially

established in August 1999 and re- registered by the Charities and Societies Agency on 7

October, 2009. The main objectives of the charity are to contribute for the advancement of Food

Security and Livelihood improvement, Improved Women and Children nutrition, Education,

Youth and women IGA and employment, Sexual and Reproductive Health, and Water,

Sanitation and Hygiene, and Institutional and Organizational Capacity Building of local actors.

Currently NED is implementing a project entitled “Agricultural TVET; Livelihood Improvement

of Unemployed/Vulnerable Youth for food Security in Amhara Region” being as a lead partner

with financial support from L4W Program and Edukans foundation. the project is being

implemented by NED (in Mida,Merhabete and Menz Woredas in North Shewa zone), Wabe

Children’s Aid and Training (in Debretabor woreda in South Gondar zone), Guhion

Development Aid Organization (in Debremarkos Woreda administration in East Gojam zone)

and Facilitator for Change (in Bure zuria woreda in Western Gojam zone) in Amhara regional

state, Ethiopia.

The project is aimed to equip vulnerable/unemployed youths with market demandable

agricultural vocational skills training in close collaboration with Technical Vocational Education

and Training (TVET) colleges and private institutions. In order to identify market demandable

agricultural vocational courses, value chain identification and analysis is part of the project

activities to identify business entry point in the agricultural business on a sustainable basis.

Value chain analysis is a means to understand the actors both in input suppliers, producers,

consumers, processors, wholesalers, retailers, exporters, brokers, agents and others

individuals/institutions that depend on the product buying and selling or processing. Conducting

value chain analysis of a particular product of the society will lead to identify both the

constraints in procurements of inputs, channelling of market and designing of market territory

and missed opportunities in a particular chain. Well addressed or studied analysis results

increasing in income and reducing vulnerability of the household.

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The Value chain identification and analysis is conducted in Mida Woremo, Merhabete and Menz

Gera Woredas of North Shewa Zone by NED in close collaboration with woreda level

government offices, TVET colleges and local private enterprises.

II. Background of the study area and Approach

2.1 Background of North Shewa Zone

North Shewa is one of the Zones in Amhara Region. The Zone is bordered on the south and the

west by the Oromia Region, on the north by South Wollo, on the northeast by the Oromiya Zone

of Amhara Region, and on the east by the Afar Region. The highest point in the Zone is Mount

Abuye Meda (4012 meters); other prominent peaks include Mount Megezez. Debre Birhan is the

capital city of North Shewa Zone located ----- km from Addis Ababa to ------ direction of Addis

Ababa.

According to North Shewa Zone Finance and Economy Development Department (2014), this

Zone has a total population of 2,012,342, of whom 1,016,547 are male and 995,795 with an area

of 15,936.13 square kilometers.

Merhabete Woreda

Merhabete Woreda is located 134 km far from Debre Birhan to the ------------ direction. The

woreda is bordered by Mida Woremo Woreda on the North, by Moret and Jiru Woreda on the

south, by Menz Keya on the east, by Oromiya Region on the Northeast, and by Ensaro Woreda

to the West direction. The capital city of Merhabete woreda is Alem Ketema. According to the

woreda Finance and Economy Development office (2014), the total area of the woreda is

126,000 ha with a total population of 117,169, of whom 59,388 are men and 57781 are women.

Mida Woremo Woreda

Mida Woremo Woreda is of the 27 woredas of North Shewa Zone. The capital city of Mida

Woremo woreda is Meragna which is located at 191 km from Debre Birhan town to the ------

direction. Mida Woremo Woreda is bordered by South Wollo Zone on the North and East, by

Oromiya Region on the West and by Merhabete woreda on the South directions. According to

the woreda Finance and Economy Development office (2014), the population of the woreda is

105,734, of whom 53,070 are men and 52,664 are women. The total area of the woreda is 83,799

ha.

Menz Gera Woreda

Menz Gera Woreda is located at the eastern edge of the Ethiopian highlands in the North Shewa

Zone. Menz Gera is bordered on the south by Menz lalo Midir, on the southwest Menz Keya

Gebreal, on the west by the Kechene river which separates it from the South Wollo zone, on the

north by Gishe Rabel, on the north east by Antsokiya Gemza, and on the east by Efratana Gidim.

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The capital city of Menz Gera Woreda is Mehal Meda which located ---- kms far from Debre

Birhan to the _______ direction. According to the woreda Finance and Economy Development

Office (2014), the woreda population is estimated 88,943, of whom 44,765 are men and 44,179

are women. The total area of the woreda is --------- km.

2.2 Approach

In the first task the focus was on a 40 hours-training of the program staff of the implementing

partners in Value Chain Analysis and Labour Market Assessment. During the training the

partners developed their own assignments: which information to collect from whom. The partners

also developed the questionnaire, FGD checklists, and reporting template for the assessment

during the training in order to keep uniformity of reporting so that the compilation of cluster

level assessment report will be easy. Each implementing partners took responsibility of the

leading role in conducting the value chain assessment in their respective operational areas,

namely; WCAT in Debretabor woreda, FC in Bure Woreda, GDAO in Debremarkos woreda, and

NED in Merhabete, Moda Woreo and Menz Gera Woredas.

Secondly, each organization conducted the assessment in its respective project woredas by

organizing an assessment team composed of professionals/persons from Technical and

Vocational Enterprises Development (TVED) Promotion Office, Women Children and Youth

Affairs office, TVET colleges, Local private enterprises, CBOs and CSOs in each respective

woredas. In the third and last mission the outcomes of the assignments were reviewed and

discussed in a final common workshop where they were also translated in action points for the

next steps.

NED gives special highlighting for the production of marketable agricultural products and

thereby to integrate the rural poor and unemployed youths with the market. To carry out the

analysis, primary data was collected from knowledgeable actors in the chains and secondary

market survey reports were reviewed. The analysis was followed the steps by collecting data at

grass root level to prepare the report that serve as an initial document for further intervention.

Lastly, _________________________ were selected as focused commodities.

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III. Overview of the Sub-sectors

3.1 Economy

Similar to other areas of Amhara, livestock possession, particularly oxen holding, and land

ownership are the main determinants of wealth in the zone. Lack of plough oxen, money and

land hamper further crop production among the poor and very poor, including unemployed

youths, while high input prices, insufficient cultivatable land and poor soil fertility hamper the

middle and better-off households attempts to increase crop production. Land renting is the

prominent arrangement between the poorer and wealthier farmers to overcome their respective

problems of a lack of oxen and a lack of land to plough. They enter a crop sharing arrangement

where each party takes half the harvest. The very poor do not own sheep and cattle. Eucalyptus

tree numbers are another indicator of wealth. All wealth groups grow the same types of crops,

except that the very poor do not grow lentils. There are no other major economic activities apart

from the crop and livestock production and paid agricultural work in this livelihood zone.

Moreover land and household assets are the major and decisive production factor for the farming

family. However, the youths do not have access to land where they work to make a living; land

reallocation is not there in the region. In cases where the families are willing to provide a plot of

land to their children, it has become highly fragmented since one family owns as high as four to

seven children. Therefore, the younger generation is running out of the shortage of land and

remained jobless.

In addition, the farming and farm management practices in the areas are traditional. Because

small holders own very fragmented land discourages the use of modern farm implements such as

tractors, thresher and other farm machines. The awareness level of the subsistence farmers did

not allow them the use of production boosting technologies and farm inputs. This kept

agricultural production at lower level.

3.2 Agriculture

3.2.1 Crop Production

The zone is mainly depending on the agricultural economy in which livestock rearing makes an

important contribution to household incomes. The zone has one season of agricultural rains – the

kremt from June to September and one harvest - meher. The soil in most places is black and

vertisol, however there is clay loam in a few areas. The area is known for its moderately good

productivity and is considered to be self-sufficient in grain. Land preparation uses oxen for

traction power. Wheat, teff, barley and beans are the most common crops grown in the area.

Teff, beans, wheat and pulses are thus ranked in importance in terms of cash earned from sales.

With the exception of land preparation which is done by men, all other agricultural activities are

done by both sexes. Aphids, bollworm and rust are the most common crop pests/disease

particularly affecting wheat and beans.

3.2.2 Livestock Production

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Sheep, cattle, poultry and a few goats and equines are the livestock kept in the area. The source

of animal feed is pasture and crop residues. Livestock and butter, eggs and skins are sold in the

area. Boys and girls are responsible for looking after shoats, whilst men help them with cattle

and equines. Women manage chickens. Oxen are replaced by purchase and from within the herd

while cows are replaced mainly from within the herd. Common livestock diseases are blackleg,

pasteurellosis and sheep pox.

Other important in cash income generating activities particularly for poorer wealth groups are

paid work in local agriculture (weeding and harvesting), sale of firewood and work migration –

this last being rather small scale and to neighboring areas like Debre Zeit, Addis Ababa and

Nazareth for urban and agricultural labor. Firewood collection and sale in nearby towns is done

by both men and women.

3.3 Market

Access to market is generally good. This is attributed to the zone’s proximity to the main roads

and towns. There are many road networks beyond the Addis – Dessie main high way. Main

markets are in Debre Berhan, Ankober and Enewari. Teff, pulses and wheat are moved here from

the local rural markets with Debre Berhan as the final collecting market for the major trade down

to Addis Ababa. Similarly sheep and cattle are sold from main markets Ankober, Chacha,

Enewari and Deneba directly to Addis Ababa. The main staple food purchased are maize and

sorghum, which is brought in from Addis Ababa when local stocks are depleted (some having

been sold to Addis Ababa in the first place).

According to the woredas Technical and Vocational Enterprises Development Promotion

(TVEDP) Offices, Credit has been available from Amhara Credit and Saving Institute (ACSI),

food security and cooperatives. Available credit packages include: sheep husbandry, improved

inputs (eg fertilizer and seeds), and livestock fattening. The interest rate for the ACSI is 18% and

that of food security is 10%. The repayment period is 3 years.

3.4 Youth Unemployment

According to the labour statistics compiled by the woredas Technical Vocational Enterprises

Development offices, significant number of rural youths is unemployed. The number of youths

dropped out from school at various educational levels, and those who do not get the opportunity

to be enrolled to tertiary education is high. These youths do not have other options and remain

burden to their families who still have a hand-to-mouth income. The Ethiopian government has

recognized the issue of youth unemployment and formulated a youth development package for

supporting to working towards resolving the problem. Yet the problem remained appalling, and

this becomes the major pushing factor for human trafficking and youth migration to the major

cities, neighboring regions and to abroad.

Population and number of unemployed youths in Mida Woremo, Merhabete, and Merhabete

Woredas

No. Name of Woreda Population No. of un employed youths

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Male Female Total Male Female Total

1 Mida Woremo 53,071 52,665 105,736 3,456 1,363 4,789

2 Merhabete 59,388 57,781 117,169 2,656 739 3,395

3 Menz Gera 44,765 44,179 88,943 1,967 818 2,785

Source: Technical and Vocational Enterprises Development Promotion (TVEDP) Offices of

Mida Woremo, Merhabete and Menz Gera woredas (June, 2014)

TVET colleges charge high cost to offer vocational skills trainings which the youths from poor

households cannot afford. In cases where they manage to, the quality of the training they receive

is too low to compete for remunerative jobs. Hence the youth remain unskilled or incompetent

job seekers. This forces them to migrate to other countries mainly illegally where they face

significant socioeconomic problems. Therefore, skill gaps among the youth have become one of

the major causes for migration of the youth to abroad, mainly to the Arab Countries which in

turn resulted in other social and economic problems. Particularly, as female youths go far from

family supervision, they are exposed to various forms of abuses including sexual, psychological,

physical and economic exploitations. The fact that more than 150,000 Ethiopian youths were

repatriated from Saudi Arabia only in 2013/14 is a reflection of this.

3.5 TVET Institutions

There are 2 TVET colleges in the project target woredas namely Almaz Bohem TVET College in

Merhabete woreda and Mehal Meda TVET College in Menz Gera Woreda. Woreda Technical

and Vocational Enterprises Development Promotion (TVEDP) offices of the woredas also

provides short term vocational skills trainings, however they do not have sufficient human,

material and technical capacities to serve the needs of the youths in delivering market

demandable short term courses. The workshops in TVEDP offices and TVET colleges do not

have the required agricultural tools and machines both in terms of number and quality.

However there is market opportunities for starting new viable enterprises in the informal

agricultural production sector, the TVET providers failed to provide short term vocational skills

trainings on a predefined on-farm ventures. This is due to limited capacity of researching and

identification on the viability of vocational skills trainings on agriculture sector. In addition,

most of the TVET providers in the targeted woredas have limited experience in providing

agricultural skills trainings with poorly equipped training workshops.

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IV. Value Chain Selection

Value chain analysis is an excellent tool that aimed at to increase the income of households by

identifying marketable commodities and integrating them with effective marketing channels and

innovative actors, has steps and stages to design and implement particular locally produced

commodity by considering both vertical and horizontal linkages. When the investigation was

doing, each step has been followed thoroughly. Steps or stages were seriously exercised to avoid

overstated mistakes. The results are explicitly discussed as follows based on the steps.

4.1 Decide on the selection criteria

To arrive on conclusions about the selected commodities, developing selection criteria provide a

clue. Based on such fact, the analysis was discussed in depth which criteria will better match and

address the woredas’ potential. Lastly among the many criteria, the following have been taken

for the commodities selected.

Unmet market demand and growth potential

Potential for increase in productivity

Reaches large numbers of micro/small businesses of unemployed youths

The selected criteria are in priority of their weight. Based on such factors each commodity has

weighted and will be analysed further.

4.2 Information on each selection criteria.

We identified potential commodities that are really in maximum production with oscillating

demand, we have been chosen based on the selection criteria unmet market demand, potential for

increase in productivity, reaches large numbers/small businesses of unemployed youths.

4.2.1 Growth Potential and Market Demand

Sheep and cattle breeding and poultry production among the main source of income to meet the

household’s immediate cash needs and they protect other household assets in Mida Woremo,

Merhabete, and Menz Gera Woreda. Farmers produce sheep and poultry primarily for sale and

occasional slaughter at home for household consumption and cattle are used for crop production,

for example, for plaguing and threshing and for sale. Hotels and restaurants in the woredas have

also higher demand for poultry products, sheep, and fattened bull since woredas are among

tourist attractive parts of the region.

The main finding on livestock marketing was that the demand for sheep, bulls and poultry

products is good. Actors higher up in the VC find the supply insufficient to provide for Addis

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Ababa market. The due attention given by the government for livestock production is a good

opportunity to increase productivity. The Agriculture Development offices, animal health

centres, TVEDP offices, and credit service institutions play a vital role to support the

engagement of unemployed and vulnerable youths on small scale agricultural businesses.

4.2.2 Potential Increase in Productivity

Rural and Agricultural Development policies embarked on the production of marketable

agricultural commodities. Thus, rural people have got access to credit to relay on targeted and

marketable agricultural production. To the extreme, they have also technical support in their on-

farm and off-farm activities, and from this sheep and bull fattening and poultry production are

among these activities.

The provision of inputs that support the sheep and bull fattening and poultry production are

facilitated by the Agriculture development and TVEDP offices, and cooperatives of the

respective woredas to maximize their output. Trainings and technical support have been

conducted periodically to achieve goals stated on policies even at kebeles, youth groups and

individual producer level.

4.2.3 Reaches large numbers of micro/small businesses of unemployed

youths

Agribusiness is the major area that needs the involvement of small, large business and

individuals for input supply, production, processing, wholesaling, retailing, brokerage, agent,

import export of inputs and outputs. Input suppliers play a role by providing inputs and

equipment timely for producers directly or through their established marketing system. Producers

are the origins of the product but the second party on the production system of agribusiness. In

the marketing channel, wholesalers, retailers, brokerage, and agents have their own pressure on

the selling, pricing and channelling of the product in the market. In addition to this conduit of

market create potential buyers to have access for the commodity by applying their own selling

strategy.

Sheep, bull and poultry products are parts and parcels of the agribusiness commodities. It needs

its own input and activity feet input procurement. Suppliers of such inputs are businesses

whether they are large or small in their size. The regional and woreda governments pay due

attention for youth employment in rural areas. Organizing the unemployed youths in form of

small business groups is one of the ways to embark them on viable on-farm activities.

A large number of unemployed and vulnerable youths can be engaged on the small scale viable

agricultural activities by taking the opportunities of being organized in different forms of

producers, access to credit, and technical support from the Agriculture and TVEDP offices,

financial and technical support from NGOs, and the market demand for these agricultural

commodities from traders and hotels. Hence, these agricultural activities have a potential to

reach a large number of poor.

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4.3 Market survey and initial listing of Potential Value Chains

At woreda level, there is no available research document so far undertaken on value chain.

Therefore, we focused on to collect primary data and valuable information from different

knowledgeable participants drawn from woreda professionals from Agriculture Development

and TVEDP offices, agricultural enterprises owners, program beneficiary youths and other

knowledgeable persons.

As mentioned in step one, we identified three criteria via. Unmet market demand and growth

potential, potential for increase in productivity, reaches large numbers of micro/small businesses

of unemployed youths in priority order.

We have focused on major commodities of the woredas and lastly reached on three commodities.

Therefore, ____ agricultural commodities are identified as tabulated as follows.

List of selected commodities and problems Vs suggested solutions

No. Commodity

type

Major problems Suggested Solutions

1. Honey Using traditional way

Gap on Quality

Absence of processing

packing and machine

All production are not come

to market

Doing extension works at grass root

level

Using local processing and packing

machine

Create awareness by continuous

education

2. Poultry Incidence of poultry disease is

high

Improved varieties cannot

adapt the environment

Shortage of poultry feed

Market fluctuation (during

fasting days)

Working with close linkage with animal

health centres

Using hybrid of local improved breeds

of poultry

Taking agreements with cooperatives to

supply poultry feed

Technical support to producers to

prepare feeds at local level

3. Highland fruit Limited awareness on it

Long duration to deliver

production

Limited production quantity

Using merely household

consumption

Continues extension work

Identify and using fast variety

Expand the intervention

4. Fish Lower demand by the local

communities

Lower amount of productivity

Seasonality of production

Trying to build manmade water ponds

Limited experiences of the woredas

professionals to provide technical

support on fishery

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5. Bull Higher initial cost

Poor supply of livestock feed

Lack of working land

Linking with micro finance institutions

Technical support to producers to

prepare improved livestock feeds at

local level

Taking agreements with cooperatives to

supply poultry feed

Linking with the towns’ municipality to

provide working land for organized

youths

6. Milk Lack of market

Absence of milk processing

firms

Producing butter for sale

Try to organize milk processing

cooperative

7. Vegetables Pest and disease

Mostly sown by irrigation

Attack by wild animal

Using IPM (integrated Pest

Management)

Continues extension work

8. Lentils Pest

Weeding

Absence of continues plough

using IPM

continues extension work

9. Sheep Forage shortage

Disease incidence

Housing

Focus on quantity instead of

quality

Absence of improved variety

Controlling free grazing and using

improved forage development

Expand medical service

Separate man and animal shelter

Educate to give emphasis for quality

Engaged on variety improvement and

hybrid

4.4 Short-listing of Value Chain Commodities using Matrix

To identify potential marketable commodities, shortlisting of selected potential value chains was

undertaken to identify the best agricultural commodity among the mentioned. Using the matrix,

all commodities were evaluated against competitiveness in the market and their potential to reach

a large number of unemployed and vulnerable rural youths.

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Highland fruit

Honey

Sheep

Poultry

Bull

Vegetables

Lentils

Fish

Milk

According to the evaluating criteria, the assessment team and FGD participants selected five top

commodities namely sheep, bull, poultry, highland fruits and honey for further analysis.

4.5 Ranking of Shortlisted commodities using scoring grid

The value chain assessment team and FGD participants were agreed to select a maximum of top

three commodities for further promotion and value chain actors empowerment. The five

commodities were ranked using scoring grid method to identify the top three commodities. A

total of four criteria namely unmet market demand, potential for increase in productivity, and

potential to reach large numbers of micro/small businesses of unemployed youths were used to

select the top three commodities.

Competitiveness

Target youths

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Criteria Weight Honey Poultry Bull Highland

fruit

Sheep

rate score rate score rate score rate score rate score

Unmet market

demand

3 4 12 4 12 4 12 3 9 4 12

Potential for

increase in

productivity

2 2 4 3 6 4 8 3 6 4 8

Potential to

reach large

numbers of

micro/small

businesses of

unemployed

youths

3 2 6 4 8 2 6 2 6 3 9

Total

weighted

score

40 22 26 26 21 29

Rating: 1=poor, 2=fair, 3=good, 4=very good, 5=excellent

Lastly, sheep, poultry and bull have got the highest score to be marketable commodity of Mida

Woremo, Merhabete and Menz Gera woredas for further analysis. Based on our plan we consider

on these three commodities so for next step of analysis.

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V. Value Chain Analysis of Sheep, Poultry and Bull in Mida Woremo,

Merhabete and Menz Gera Woredas

To link the rural poor product to market or prospective buyers, market analysis of the selected

product is mandatory. Understanding the product’s situation of the past, present, and future

market conditions results half solved problem for the later market channel analysis and demand

launching.

Value Chain analysis of the commodity considers the market environment and channels, through

which the product flows to arrive on final customers, supply (production) and demand of the

product, price analysis of the commodity across all actors and identifying the marketing costs,

margins generated by market actors and the price variations that set by those involved in the

marketing system of a specific product. Not only these but also the market infrastructure that

participants use to store, transport, and their individual market places should be analyzed. In the

production side of the product, the supply of inputs is also considered in the study. The major

marketing challenges, possible solutions, and value chain governance will be analyzed in the

study.

5.1 Market Channel

Marketing of commodities passes through different actors in the market until its consumption.

These channels themselves play role for the distribution of the product and attract potential

buyers by applying their own selling strategies for the intention of profit maximization. Through

which these commodities passes is discussed below.

5.1.1.1 Market Channel of Sheep

While we are identifying the possible channels in which sheep market pass through, the

following channels acting on the market be it formally or informally. Smallholders in Merhabete

woreda provides their majority of their products for hotels and individuals in Alem Ketema and

the remaining to Lemi, Chancho, Enewari and Addis Ababa Merkets. Smallholders in Menz

Gera woreda also provide their sheep to hotels and individuals in Mehal Meda town, and part of

their products goes to Deneba and Jirru markets. Sheep production is the main source of income

to meet the household’s immediate cash needs and they protect other household assets. Farmers

produce sheep primarily for sale and occasional slaughter at home for household consumption.

Sheep in Menz Gera have higher demand in Addis Ababa and other markets relative to other

areas. Products in each woreda pass to another markets outside their woredas through traders

who collects products in each villages and towns and then they took such collections to markets

in other markets outside their towns. Graphically;

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5.1.1.2 Market Channel of Poultry

In the context of target woredas poultry production is known by farmers for the past years. The

production is more traditional and mostly women are benefiting from it. Small holders in the

respective woredas provide their chickens in their respective towns of the woredas mostly for

individuals in their woredas. Traders also collect chickens from local markets and provide for

Addis Ababa Market. Graphically;

Producers (Smallhold

ers each

woreda)

Traders (in each

woreda)

Consumers (in

Lemi, Chancho,

Enewari, Jirru,

Deneba and

Addis Ababa)

Retailers (in

Lemi, Chancho,

Enewari, Jirru,

Deneba and

Addis Ababa)

Producers (Smallhold

ers each

woreda)

Consumers (individuals &

hotels in

respective towns

of woredas)

Producers (Smallhold

ers each

woreda)

Traders (in

respective

woredas)

Consumers

(individuals & hotels

in respective towns

of woredas and

Addis Ababa)

Producers (Smallhold

ers each

woreda)

Consumers (individuals

respective

towns of

woredas)

Producers (Smallhold

ers each

woreda)

Traders (in

respective

woredas)

Consumers

(in Addis

Ababa)

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5.1.1.3 Market Channel of Bulls

The production of bulls in Mida Woremo, Merhabete and Menz Gera Woredas is traditional and practiced

aside to crop production. Mostly animals are going to be used in for reproductive use and crop

production purpose. Part of livestock goes to different markets outside the targeted woredas. The

Marketing of oxen from Merhabete outside the woreda goes to Addis Ababa Market. The same to this,

oxen from Mida Woremo provided for Alem Ketema and Addis Ababa’s market by traders. Besides

these, some hotels in Meragna and Alem Ketema buys fattened oxen. Individuals’ consumption is high in

holidays like in Easter, Christmas, and New Year. Graphically;

Producers (Smallhold

ers each

woreda)

Consumers (individuals and

hotels in

respective towns

of woredas)

Producers (Smallhold

ers each

woreda)

Traders (in

respective

woredas)

Consumers

(in Alem

Ketema and

Addis Ababa)

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5.2 Value Chain Mapping

Value Chain Mapping is the process of indicating flow direction of products and services starting from

input supplier to their end market/buyer. Map of the three selected agricultural products is provided below

with a specific business channels. The maps grasp the whole picture of the markets in chosen channels

which provides overall information about the market and identifies participants and actors in the value

chain at all levels.

5.2.1 Map of Sheep Value Chain with specific business channel (Mida Woremo and

Menz Gera Woredas)

M

I

C

R

O

M

E

S

O

M

A

C

R

O

Input Provider Farmers (in Mida

Woremo and Menz

Gera WOredas)

Traders (in Mida

Woremo and Menz

Gera WOredas)

Consumers (in Lemi,

Chancho, Enewari,

Jirru, Deneba and

Addis Ababa)

Farmers’ Integrated

COOPs

WADOs and FTCs

ACSI branches

WTVEDO

TVET Colleges

WADO and FTCs

TVET Colleges

Woreda Land

Administration

ACSI branches

WCLRO

Research

Admin/NBE

MOA & COOP’s

Promotion

Agency

TVET Agency

MOA and MOTI

Research

Admin/NBE

CLRA

Research

Admin/NBE

20

5.2.2 Map of Poultry Value Chain with specific business channel (Mida Woremo,

Merhabete and Menz Gera Woredas)

M

I

C

R

O

M

E

S

O

M

A

C

R

O

Input Provider Farmers (in Mida

Woremo and Menz

Gera Woredas)

Traders (in Mida

Woremo and Menz

Gera WOredas)

Consumers (local and

at Addis Ababa)

WADOs and FTCs

ACSI branches

WTVEDO

Animal Health

Centers

WADO and FTCs

TVET Colleges

Woreda Land

Administration

ACSI branches

WCLRO

Research

Admin/NBE

MOA

TVET Agency

MOA and MOTI

Research

Admin/NBE

CLRA

Research

Admin/NBE

Transport Service

Providers

21

5.2.3 Map of Bull Value Chain with specific business channel (Mida Woremo,

Merhabete and Menz Gera Woredas)

M

E

S

O

M

A

C

R

O

Input Provider Farmers (in Mida

Woremo and Menz

Gera WOredas)

Traders (in Mida

Woremo and Menz

Gera WOredas)

Consumers (in Alem

Ketema Addis Ababa)

Farmers’ Integrated

COOPs

WADOs and FTCs

ACSI branches

WTVEDO

TVET Colleges

WADO and FTCs

TVET Colleges

Woreda Land

Administration

ACSI branches

WCLRO

Research

Admin/NBE

MOA & COOP’s

Promotion

Agency

TVET Agency

MOA and MOTI

Research

Admin/NBE

CLRA

Research

Admin/NBE

M

I

C

R

O

Transport Service

Providers

Animal Health

Centers

22

5.3 Value Chain Quantification

Value Chain quantification indicates the number of actors involved at different levels and the

volume or quantity of product transacted with in the chain which helps understanding of which

actor and channel matters in the value chain. Quantities in the quantification are indicated in

absolute or proportion. The value chain quantification is provided for each of selected products

as shown below.

5.3.1 Sheep Value Chain Quantification (Mida Woremo and Menz Gera Woredas)

Input Supply

Production

Trading

Retailing

Woreda

Agriculture

Offices (2)

Agricultural

Research (1) ACSI

branches (2)

> 95% of farmers

in the two

woredas

Small Enterprises

(25-40)

Consumers (in Lemi,

Chancho, Enewari, Jirru,

Deneba and Addis Ababa)

Local consumers

(hotels and

individuals)

Traders (15 –

30/woreda)

30% 70%

10%

90%

75% 15% 10%

Farmers

integrated

Coops

Almaz Bohem and

Mehal Meda

TVET colleges

23

5.3.2 Poultry Value Chain Quantification (Mida Woremo and Menz Gera Woredas)

Farmers

integrated

Coops (3)

Trading

Retailing

ACSI

branches

(3)

> 80% of farmers in

the three woredas

(>85% women)

Small Enterprises

(35-50)

Consumers (in local and

Addis Ababa markets)

Local consumers

(hotels and

individuals)

Traders (25 –

40/woreda)

50% 40%

5%

95%

65% 25% 10%

Agricultural

Research (1)

Woreda

Agriculture

Offices (3)

Input Supply

Production

Almaz

Bohem and

Mehal Meda

TVET

colleges

Woreda

TVED

offices

(3)

10%

24

5.3.3 Bull Value Chain Quantification (Mida Woremo and Merhabete Woredas)

Farmers

integrated

Coops (3)

Trading

Retailing

ACSI branches

(2)

> 65% of farmers in

the two woredas

(mainly better-off)

Small Enterprises

(10-15)

Consumers (in Alem Ketema

and mainly in Addis Ababa)

Local consumers

(hotels and

individuals)

Traders (25 –

40/woreda)

40% 55%

10%

90%

80% 15% 5%

Woreda

Agriculture

Offices (2)

Input Supply

Production

Almaz Bohem

TVET College

Woreda

TVED

offices

(2)

5%

25

5.4 Economic Analysis

Economic analysis of selected value chains is examined which shows value additions along the value chain, contribution of chain

segments to total value, profitability of each chain actors. It also indicates benchmarking with important value chain parameters

compared with others using unit cost of production, labour and other factor productivities, and comparative advantages.

5.4.1 Economic Analysis of Sheep Value chain with specific channel (Mida Woremo and Menz Gera Woredas)

Sheep (for meat) Economic Analysis/sheep (2014)

Sales Price/sheep

Cost of inputs (including cost of unattended sheep, drug, man power) 760 1617 2175

Materials cost (feeding materials, rope...) 15 5 7

Net Value Added 825.00 378.00 168.00

% V. Added 60% 28% 12%

Production Trading Retailing Consumption

1,600.00 2,000.00 2,350.00

26

Operational cost (transport, tax, shelter rent, loading/unloading...) 15 68 25

Total Cost 790 1690 2207

Operational Benefit 810.00 310.00 143.00

Operational Margin 51% 16% 6%

Farmers Traders Retailers

27

5.4.2 Economic Analysis of Poultry Value chain with specific channel (Mida Woremo, Merhabete and Menz Gera

Woredas)

Poultry (Chicken) Economic Analysis/Chicken (2014)

Sales Price/sheep

Cost of inputs (including cost of egg, hen, drug, man power, shelter) 36.5 95

Materials cost (feeding materials, rope...) 5 2

Net Value Added 38.50 23.00

% V. Added 63% 37%

Operational cost (shelter rent, loading/unloading, transport...) 1 5

Total Cost 42.5 102

Production Trading and

Retailing

Consumption

80.00 120.00

28

Operational Benefit 37.50 18.00

Operational Margin 47% 15%

5.4.3 Economic Analysis of Bull (ox) Value chain with specific channel (Merhabete and Menz Gera Woredas)

BUll (for meat) Economic Analysis/Ox (2014)

Sales Price/sheep

Cost of inputs (including cost of un fattened sheep, drug, man power) 6481 13200 18662

Materials cost (Feeding materials, rope...) 50 25 25

Net Value Added 6,469.00 4,775.00 3,813.00

Farmers Traders/ Retailers

Production Trading Retailing Consumption

13,000.00 18,000.00 2,250.00

29

% V. Added 43% 32% 25%

Operational cost (transport, tax, shelter rent, loading/unloading...) 25 125 125

Total Cost 6556 13350 18812

Operational Benefit 6,444.00 4,650.00 3,688.00

Operational Margin 50% 26% 16%

Farmers Traders Retailers

30

5.5 End Market Analysis

5.5.1 Sheep

Local butcheries slaughter sheep and supply for domestic consumption in the form of raw/

roasted meat. Hotels and restaurants slaughter sheep mainly to prepare dishes indifferent forms.

Sheep are consumed by domestic consumers either in the form of processed meat from

hotels/butchers and at home. The main channel is that sheep transported to Addis Ababa

butchers, supermarkets and consumer markets and some sheep slaughtered at Modjo export

abattoirs. Sheep from the targeted woredas are also provided for Chancho, Enewari, Jirru and

Deneba markets which are relatively near to Addis Ababa and have higher selling price since

there is relatively high number of traders. Sheep from the targeted woredas have higher market

demand in Addis Ababa with market good will.

5.5.2 Poultry

The main channel of chickens marketing is that producers provide their products to individuals at

the local market for reproductive household consumption purpose. Some part of poultry products

are also channeled to Addis Ababa market by traders who collect chickens from local markets

and provide to Addis Ababa market.

5.5.3 Bull

Fattened oxen marketing is mainly channeled to Addis Ababa market by small traders who

usually uses on foot transport and big traders who uses vehicles to provide to Addis Ababa

Market. However it is seasonal, oxen have demand by the local communities for consumption

especially in holidays like Easter, Christmas, and New Year. Local communities also buy bulls

for reproduction and crop production purpose.

5.6 Value Chain Constraints

Value chain constraints are factors which bottlenecks of the market channels of selected

commodities (sheep, poultry and bulls) and which helps to show recommendation for future

intervention. The factors are mainly categorized from the view of technology or product

development, market access, organization and management, finance, input supply for primary

production and infrastructure.

The value chain constraints for the selected agricultural commodities are provided below in

summarized form of table.

31

Factors Sheep Value Chain Poultry Value Chain Bull Value Chain

Technology/product

development

- Small scale farmers lack

technical skill to produce

improved varieties which

reach to slaughter relatively in

a short period of time

-Farmers lack knowledge and

skills of improved forage

development

-producers have no

experience to use incubators

which yield more within a

short period of time

-Farmers lack knowledge and

skills of improved forage

development

Market Access - farmers lack access to big

buyers that reduces their sales

potential,

- Farmers Lack of up-to-date

market information that

reduces their bargaining

capacity for better sales.

- Lack of strong marketing

organizations and supply

chain facilitation limits market

out lets of smallholders,

- Weak bargaining power of

producers

- farmers lack access to big buyers

that reduces their sales potential,

- Farmers Lack of up-to-date

market information that reduces

their bargaining capacity for

better sales.

- Lack of strong marketing

organizations and supply chain

facilitation limits market out lets

of smallholders,

32

Organization & management - Inability of

smallholders to

organize for

economies of scale

limits their

opportunities to access

higher value markets,

- Smallholders lack of

capacity to develop

business plan

decreases their

potential of sales

- Smallholders lack of

capacity and time to

do accounting

increases their cost.

- Most of smallholders

(specially men) do not

give attention for poultry

production

- Poor quality of poultry

houses

- Inability of smallholders to

organize for economies of

scale limits their

opportunities to access higher

value markets,

- Smallholders lack of capacity

to develop business plan

decreases their potential of

sales

- Smallholders lack of capacity

and time to do accounting

increases their cost.

Finance

- Inability of farmers to

pre-finance improved

inputs, resulting in

reduced yields,

- Youths are not able to

engaged on bull

fattening due to lack of

starting capital

- It’s obligatory to have

- - Inability of farmers to

provide adequate collateral

reduces their access to

working capital loan,

- Youths are not able to

engaged on bull fattening due

to lack of starting capital

- It’s obligatory to have own

33

own contribution to

get loans

contribution to get loans

Input supply

- Limited availability of

improved varieties,

reduces productivity of

smallholders

- Limited availability of

improved varieties,

reduces productivity of

smallholders

- No access to poultry

feed

- Limited access to improved

animal feed

- Low access to veterinary

services

Infrastructure

- poor roads and other

facilities increase the

price of final products

and makes competing

with imported

commodities difficult,

- Lack of appropriate

information source and

limited access, reduces

farmers awareness on

market situation and

the possibility to

capture market

opportunities.

- poor roads and other

facilities increase the

price of final products

and makes competing

with imported

commodities difficult,

- Lack of appropriate

information source and

limited access, reduces

farmers awareness on

market situation and the

possibility to capture

market opportunities.

- poor roads and other facilities

increase the price of final

products and makes

competing with imported

commodities difficult,

- Lack of appropriate

information source and

limited access, reduces

farmers awareness on market

situation and the possibility

to capture market

opportunities.

34

5.7 Market Based Solutions for the Value Chains constraints

Organizing unemployed youths in producers cooperatives/for sheep, poultry and bull/ and

promote producer cooperatives.

Timely provision of market information from various sources by enabling the youths to

use/access internet.

Publicizing market information consistently for all farmers.

Integrating farmers/youths and their cooperative to market.

Identifying potential markets capable enough to take up the production through branding

of the product.

Provide loan for youths by linking with rural micro financial institutions

Provide technical trainings on sheep, poultry and bull production for youths

Organize youths on cooperative forms to increase their bargaining power

Provide training on basic business planning and management

Organize producers to jointly transport their products using vehicle

VI. Vision/Mission/Objectives of Value Chains

Vision: to see well-structured Value chains of Sheep, Poultry and Bull for equal and mutual

benefits of actors in the channels.

Mission: NED works to strengthen the Sheep, Poultry, and Bull value chains by promoting

unemployed youth engagement in the production process, and linking the local markets to

regional markets.

Objectives of the Value Chains:

NED wants to achieve the following objectives in close collaboration with governmental, private

institutions and development partners with in the value chains of sheep, poultry and bull in Mida

Woremo, Merhabete and Menz Gera Woredas of N/Shewa zones.

To promote production and productivity of sheep, poultry and bull yields

To build the skills of unemployed and vulnerable rural youths on improved agricultural

productions and business management

To build the capacities of TVET institutions to deliver quality short term trainings for

vulnerable and unemployed youths

To increase rural youths access to quality short term vocational skills trainings

To strengthen the Public Private Partnership for a sustained youths employment on

agricultural vocational sector

To strengthen flow of market information among rural smallholders

35

To establish contractual basis transactions of selected commodities among actors in the

selected value chains

To increase the benefit of value chain actors reasonably based on their share on the chain

VII. Proposed Intervention Programs

Currently NED is implementing a project entitled “Agricultural TVET; Livelihood Improvement

of Unemployed/Vulnerable Youth for food Security in Amhara Region” being as a lead partner

with financial support from L4W Program and Edukans foundation. the project is being

implemented by NED (in Mida,Merhabete and Menz Woredas in North Shewa zone), Wabe

Children’s Aid and Training (in Debretabor woreda in South Gondar zone), Guhion

Development Aid Organization (in Debremarkos Woreda administration in East Gojam zone)

and Facilitator for Change (in Bure zuria woreda in Western Gojam zone) in Amhara regional

state, Ethiopia.

Recognizing the problem of youth unemployment and their dependency on their parents, NED is

implementing this project in close collaboration with Almaz Bohem and Mehal Meda TVET

colleges, Technical and Vocational Enterprises Development offices, Women Children and

Youths Affairs offices, and small scale private enterprises in Mida Woremo, Merhabete, and

Menz Gera woredas and F-FARM PLC. With regard to the project contribution to the value

chains of selected commodities, NED intended to strengthen the value chains for the benefit of

rural poor specifically for the targeted unemployed and vulnerable youths.

Provision of short term agricultural vocational skills trainings: In close collaboration with

Almaz Bohem and Mehal Meda TVET colleges; NED has signed project agreement to provide

market oriented short term agricultural vocational skills trainings for a total of 300 unemployed

and vulnerable rural youths to enable them engaged on viable small scale agricultural income

gaining activities.

Strengthening the capacities of TVET institutions: The project has also a capacity building

component for TVET colleges to deliver short term and flexible market demandable agricultural

courses for rural youths who have no access to TVET. The main actions under this component

are; strengthening TVET institutions agricultural workshops by equipping with necessary

materials, trainers capacity building through training and experience sharing, and linking with

public and private institutions to provide trainings on joint basis.

Engage the youth on viable agricultural IGAs: After the successful completion of the short

term agricultural courses, the next step is that youths will be organized to start small scale

agricultural businesses. The woreda TVED offices will be responsible to support the youths on

the preparation of business plans and follow up.

36

Strengthening market linkages: The project will also strengthen flow of market information

and create linkage with potential buyers by searching big traders at Addis Ababa with

appropriate prices. In addition a web-site will be developed which will have full information of

the project and its approaches.

VIII. Monitoring and Evaluation

It is relevant to monitor and evaluate the project towards the improvement of selected value

chain and we need to set indicators to measure the performance of value chains. The monitoring

and evaluation process helps to determine the progress towards goals of value chains (to prove);

make necessary revisions of programs based on lessons learnt from past experiences (to

improve) and also it is important to report relevant stakeholders/donors. The monitoring and

evaluation of value chains should be done jointly with all concerned stakeholders and actors in

the chain.

Model of the Value chains development

Performance Indicators;

Number of rural unemployed youths engaged on small scale agricultural businesses

The capacity of TVET intuitions to provide market demandable flexible agricultural

courses

The level of partnership among private and public institutions for the provision of viable

agricultural vocational trainings

The level of income that the chain added to the unemployed and vulnerable youths

The level of youth employment on agricultural business

Role of farmers/producers in the economic activity

Flow of information among chain actors

Activities

of the project

Sustainable Market

Based solution

Improved

MSME performance

Food Security ensured

among rural youths

Outputs Outcomes Impacts

37

IX. Conclusion

The engagement of farmers on animal fattening and poultry production increases year to

year. This on-farm activity is taken by most of farmers to boost the number of income

generating performance however it is performed in a very traditional way.

Farmers have different customers for their products. The most buyers of their products are

local communities and traders but no relation with cooperative.

Youths encountered problems in animal production and fattening to improve their operation

scale. From these tribulations lack of capital, limited skills of production, and lack of

working land were the three major ones.

Youths are facing problems of accessing credit services due to complication of requirements

from micro financial institutions to borrow.

Most of rural youths have no vocational skills and they have lower access to flexible

agricultural vocational skills trainings

Most of TVET institutions have no experience in providing agricultural vocational skills

trainings and their courses lack flexibility

TVET institutions have poor linkage with private and public institutions

Most of rural youths have no capacity to cover costs of trainings for TVETs

The roads from Mida Woremo, Merhabete, and Mehal meda needs improvement for better

market linkages with Addis Ababa and other regional markets

38

X. Recommendations

To improve the production and productivity of sheep, poultry and bull, there is a very huge

space to increase unemployed youth training on short term vocational skills trainings and

engage them on production on an organized form which needs a collaborative efforts of

CSOs, government, and private firms and TVET institutions.

To increase rural vulnerable and unemployed youths’ access to marketable agricultural skills

trainings, it is the best way that to introduce mobile trainings which can provide the trainings

by moving from kebele to kebele.

Woreda level TVED offices also need capacity building to expand their activities to all

youths to support and follow up their businesses.

TVET institutions capacity also should be improved to deliver quality short term agricultural

courses by equipping their agricultural workshops with relevant materials, books and kits;

capacitating trainers, and linking them with private and public sectors.