In this wide‑ranging interview, Capital sits down with Dagnachew Lule (PhD), Senior Director of Agricultural Commercialization Clusters (ACC) at the Ethiopian Agricultural Transformation Institute (ATI), to discuss how the 15‑year‑old institution has tried to shift Ethiopian agriculture from subsistence to market‑driven production. He reflects on ATI’s flagship ACC programme, the expansion of cluster farming from 0.6 million ha piloted by ATI in 2019 to above 12 million hectares scaled by regional bureau of agriculture and MoA in 2025, persistent bottlenecks in inputs and data, and why he believes farmers must be allowed to move beyond mere production into processing, exporting and owning formal agribusiness companies. Excerpts;
Capital: What tangible contributions has ATI made to the agricultural sector over the past 15 years?
Dagnachew Lule: The Agricultural Transformation Institute (ATI) was established roughly fifteen years ago with the mission to catalyse sustainable development of agricultural value chains and markets, through promoting effective practices and approaches to address systemic constraints and coordinating execution and integration of high-impact interventions on the ground.
The strategic mandate of the ATI includes identifying systemic bottlenecks & undertake action research on policies, provide implementation support to sectors through human and technical capacity-building programs, strengthen linkage and coordination among actors, and pilot innovative projects & handover on scale-up. Besides, contributing to A Transformed Agriculture through building a market-oriented agriculture sector that uses natural resources sustainably, and generates improved production and productivity, improve the livelihoods of farmers beyond mere labor and finally seeing Agriculture significantly contributing to industrial economies & enterprise farming is the envisaged target of ATI.
One of our primary tasks has been identifying bottlenecks within the agricultural sector. Over the past 15 years, we have conducted nearly 400 studies to address these issues, and research efforts continue today. The agricultural transformation roadmap developed for 10 regional states, the digital agriculture road map, Agriculture and rural development policy, are few among others.
We have also initiated various projects to translate these findings into actionable solutions. Over the last fifteen years, approximately 70 projects have been developed and piloted. For instance, a comprehensive Ethiopian soil fertility mapping was carried out across 748 districts, analyzing nutrient levels and identifying deficiencies in the soil. This study serves as a guide to conduct soil test-based fertilizer rate recommendation and other agronomic practices.
Besides, ATI conducted an Ethiopian investment mapping study, which provides potential investors with information on opportunities within the sector.
We also examined very many climates smart and natural resource management related projects, including water availability. For example, research was conducted to identify the availability of shallow ground water (less than 30-meter depth) found that about 27B m3 water across 452 districts potential to irrigate 3.1million hectares were identified. Following this identification, we have piloted integrated shallow ground water benefiting 247 households with solar-powered modern irrigation systems plus solar electric energy.
Above all, our flagship initiative, the Agricultural Commercialization Clusters (ACC), represents our most significant effort to modernize the agricultural sector. All the projects we have discussed ultimately contribute to this overarching program.
Capital: What role does the Agricultural Commercialization Cluster (ACC) play in the development of Ethiopian agriculture?
Dagnachew: The Agricultural Commercialization Cluster (ACC) is a market-driven value chain development approach to improve the livelihood of smallholder farmers through an inclusive & environmentally sustainable. It’s not just about self-sufficiency; it’s about moving away from a “hand-to-mouth” mentality and focusing on production, profitability and agribusiness.
When fertilizers and seeds are expensive, farmers may only plant local variety without fertilizer just to sustain their families, which perpetuates the “hand-to-mouth” approach. This mindset is inadequate in the face of a growing global population. If a farmer only cultivates their land without considering market demands, it won’t contribute to broader economic change.
We recognized the need to evolve from a subsistence model to a commercial one, prompting us to rename our initiative from “subsistence” to “Commercial.” This change encourages farmers to adopt a business-oriented mindset, focusing on market needs. As ACC, we lead market-driven projects that maintain the value chain.
Improving productivity cannot be achieved unless we work along the value chain of commodities. Take avocados, for example; success requires a comprehensive approach that includes nursery development, quality seedling production, cluster farming, market access, and export strategies. To date, the agricultural commercialization cluster has been implementing about 14 projects along the value chain that directly support cluster commercialization. For instance, we have projects that support research, early generation seed production, input production and distribution, mechanization, digital agriculture, irrigation, rural financing, marketing and agribusiness; all contributing to commercialize cluster farmers and beyond.
Capital: What challenges have you faced over the past 15 years, and what unresolved obstacles remain?
Dagnachew: We’ve encountered numerous challenges. Although the Agricultural Transformation Institute (ATI) is a government entity, it relies heavily on foreign donors’ partners and a limited government budget. Security concerns have caused significant setbacks. If the country were entirely peaceful, we could have made much more progress. This security also affected our partnership with some donor partners during northern Ethiopian conflict, which adversely affects our operations. Many initiatives within the ACC suffered losses during the conflict in the North, leading to the destruction of infrastructure and regression among cluster farmers. Those we hoped would develop into commercial enterprises were unable to produce due to these setbacks, input production and distribution centers, market shades, mechanization service centers were also damaged.
Climate change poses another persistent challenge. Conditions are worsening rather than improving in some parts of the country, which severely impacts the agricultural sector.
Additionally, there are still a mindset shifting assignment that has to be done on youth to consider agriculture as a business. While we can’t claim to have completely changed attitudes, assessments indicate that 83% of our cluster farmers are willing to continue working within the cluster system.
The most significant one is the underutilization and limited supply of full packaged agricultural inputs. Timely and quality access to fertilizers and seeds are still problematic. We lack the capacity to apply site specific nutrients tailored to each piece of land, relying instead on “blanket applications ” in areas unaddressed by research intervention. We require more soil analysis, laboratory facilities, and the capacity to reach that level of precision. Furthermore, there are gaps in seed production; we cannot yet guarantee that all farmers receive the seeds they need—both in terms of quality and timeliness.
Agricultural financing is also a very critical challenge that should be intervened by higher government bodies. Agriculture can give you an output if you give sufficient input including finance.
Capital: If ATI can help farmers, why are producers still restricted from selling their products directly?
Dagnachew: Our next step is to address where farmers sell their products after production. It would be beneficial for farmers to not only produce as a collective but also to process & export their produce.
Currently, we see high production levels of wheat and other grains, yet many farmers still face hunger. What is the issue? Are brokers the ones benefiting? When we evaluate whether the producing farmers are truly profit making, the answer is “not enough.” Both consumers and producers are suffering, while only a small group of middlemen profits. We can resolve this by enabling farmers to add value to their products, transit them to agribusiness companies that can create jobs for their families and neighbors, and sustaining the value chain.
Capital: The first phase of the ACC has been completed. What tangible changes have you implemented since the start of the second season?
Dagnachew: A significant amount of work was accomplished during the first phase, which was crucial for shifting the mindset farmers and others. Today, the cluster expanded from 0.6 million hectares to 12 million hectares. This represents a substantial change for us, indicating a shift in our attitude. We’ve gone beyond simply improving the lives of those around us, which remains our goal for the future. This progress allows us to make a meaningful difference in the lives of others.
What comes next? In the first phase, we were focusing to increase production and productivity, and farmers became more receptive. We’ve worked along the entire value chain and will continue to do so. Now, what’s our next step? These cluster organizations, which were semi-informal, will transition into formal entities—specifically, agribusiness companies.
What will these companies do? They will address the issues I mentioned earlier, ranging from production to processing and value addition. If a cluster is formed and production is achieved, but the products cannot be sold at a fair price, that remains a problem.
Moving forward, we will ensure that these organized farmers form a company, creating a legal entity. What if we are allowed to add value, export, process, and aggregate? This transformation means agriculture will evolve into a business and the industry, moving more labor intensive farming to mechanization, digitization and other technologies that enhance surplus production .
This shift will create job opportunities not just for farmers but also for many others entering this sector. The ATI together with all partners, the MoA, research, other government institutions, regional Bureau of Agriculture, are committed to making this happen in the second chapter.
Capital: One of the challenges of working in Ethiopia is obtaining accurate data. What has ATI done to address this issue?
Dagnachew: In Ethiopia, we often rely on administrative data. The national data we use has historically been provided by the Central Statistical Agency (CSA), which is now known as the Ethiopian Statistical Service.
Recently, there have been some gaps in their data collection, but I believe that process is now complete. We anticipate a significant amount of information will be available in the coming months, and we will be guided by this updated data. They are committed to taking a representative sample, which we expect will yield figures that accurately reflect our reality. Additionally, we utilize data from external sources and other entities.
What’s next? We are transitioning to a digital framework. Currently, we are working on Cluster Farmer profiling, enhancing digital literacy, digital kiosk, etc. ATI is heavily involved in digital initiatives, including Digital Agriculture such as 8028 farmers hotline, national market information system and others, which we are currently using precisely. In the future, nationally, I am sure we will have reliable data management system that will be guided by digital tools.
If you take 8028 farmers hotline that benefited 7.1 million beneficiary to date, which allows any farmers to call for free and get information on 21 major crops production and management (plus some livestock commodities), would also serve to conduct survey, provide early warning on climate change, pests and diseases outbreak, providing farmers with vital information regardless of their location. The same is true for National Market Information System to generate up-to-date market price of 19 commodities collected across 307 market centers.
Moreover, if the Ethiopian Statistical Service can regularly address the data precision gaps identified, we will obtain data that is not only representative but also superior to what we currently have. Effective collaboration with organizations like the FAO and the International Food Policy Research Institute (IFPRI) is also another means to generate precise data from the ground.
Capital: International organizations like the FAO have reported that Ethiopia remains “food insecure.” What is your perspective? Should we regard their conclusions as absolute truth?
Dagnachew: We cannot simply accept their conclusions as accurate. We are the ones who should understand our own situation. That is why I am saying outsiders shall be responsible to generate reliable data. It does not mean that they must report wrong data to build our image. Rather, let them work with national institutions relevant to collect data and understand the situation on the ground than projecting. Our first step should be to strengthen our own data collection and reporting method based on reality. This is era of digital and AI technology, where technology can track conditions in the specific locations today and compare them with the past, and predict the future based on evidence.
