The Ministry of Agriculture and Natural Resources is going to develop a contract farming law to allow farmers and investors to transact agricultural products via a contract agreement.
Assuming it gets 2/3 approval in parliament it should be approved just after the Ethiopian new year.
In contract farming, a specific product is cultivated after an agreement is made between a farmer and a buyer. The farmer must deliver the product in accordance to the agreed upon quality, quantity and time.
The buyer in turn must commit to purchasing the cultivated product and has to provide farming inputs including seeds, fertilizer and technical support.
A source close to the issue told Capital that contract farming will benefit the investors and the farmers.
“In Ethiopia one problem is that you don’t have guaranteed weather so a farmer will sell you a certain product at the price that you might expect, but when they there is a high demand from others they will forget you. However, when the price declines the farmers are forced to sell at a lower price. Contract farming helps solve this problem because the price is based on the consensus of both parties.”
The draft proclamation explained that the law would allow the increase of agricultural production and productivity and enhance economic development.
Agricultural produce that will be included in the contract farming proclamation or allowed to be embedded under the new law and will include commodities traded under the Ethiopian Commodity Exchange.
In the definition the proclamation states that agricultural produce means all produce, whether processed or not, of agriculture, apiculture, sericulture, horticulture, floriculture, aquaculture, animal husbandry, or forestry as well as products directly derived from this produce including milk, honey, and silk.
The draft proclamation indicates that a contractor is obliged to provide appropriate agricultural inputs and other support to the producer as agreed in the contract, while the producer is responsible for producing and delivering the product.
Contract farming may soon become reality
Ermias Eyasu
Name: Ermias Eyasu
Education: BSC in Engineering
Company name: Ermo car décor and spare parts
Title: Founder and manager
Founded in: 2018
What it does: Car decoration and spare parts provider
HQ: Kenteri , Alemgena
Number of employees: 2
Startup Capital: 60,000 birr
Current capital: Growing
Reasons for starting the business: To be self-employed
Biggest strength: Eagerness to learn new things
Biggest perks of Ownership: Helped me to develop my money management skill
Plan: To be a major spare parts importers
Biggest challenge: People’s attitude towards the job
First career: Engineer
Most interested in meeting: PM Abiy Ahmed (PhD)
Most admired person: My mom
Stress reducer: Chilling with my friends
Favorite past-time: Going to church
Favorite book: Lela Sew by Mihiret Debebe
Favorite destination: Bahirdar
Favorite automobile: Toyota Prado
The Seqota Declaration
Last week I attended a reporting and planning workshop, organised by the Coordination Unit of the so called Seqota Declaration Program. Bureaus of the Tigray and Amhara Regions, as well as partner organizations presented their achievements since the declaration came into effect, followed by their plans for the next financial year and discussions on challenges they face and the way forward. Seqota is a Woreda in the Amhara Region where the effects of under nutrition were so apparent that Government officials who visited the area during a particular time of stress agreed to join hands and work out a multi-sector and multi partner plan with the purpose to bring stunting of children under the age of 2 back to zero by 2030. This is an ambitious goal, to say the least. It literally means that 12 years from now all children in Ethiopia will eat enough nutritious food for their bodies and mind to develop in an optimal way. It means that a sufficient variety of foods will be available that contains all the essential vitamins and micronutrients, including fresh fruits & vegetables, animal sourced proteins and fortified staples. It also means that Ministries, Bureaus, Departments and Development partners indeed need to join hands and plan for and implement activities in a coordinated way. The workshop evidenced the commitment of the participants to make this happen, while they acknowledged the challenges they face and presented ways to address these challenges. Just over one year into the implementation of the first phase, this is no small achievement. So, what exactly does this Seqota Declaration entail? Below I copy the Executive Summary from the Seqota Declaration Innovation Phase Investment Plan 2017 – 2020 for the reader to learn about this ambitious plan and to find out whether it presents opportunities to engage with it.
“The Seqota Declaration is a high-level commitment unveiled by the Government of Ethiopia in July 2015 to end child undernutrition by 2030. Recognizing the role of nutrition in propelling sustainable development, Seqota Declaration builds on and supports the implementation of the National Nutrition Program (NNP II). Informed by a conceptual framework built around three pathways of change, the 15-year Seqota Declaration Roadmap focuses on delivering high-impact nutrition specific, nutrition smart and infrastructure interventions across multiple sectors namely health, agriculture and natural resources, livestock and fishery, water, irrigation and electricity, education, labour and social affairs, women and children affairs, as well as environment, forest and climate change.
The Seqota Declaration Roadmap will be executed in three phases over a 15-year period involving an innovation phase (2016 – 2020) which focuses on the implementation of priority intervention packages that will be monitored and evaluated to generate learnings and evidence for the expansion phase (2021 – 2025), which will reach more vulnerable woredas before a national scale-up phase (2026 – 2030) involving full-blown implementation of evidence-based multisectoral interventions. The innovation phase investment plan has ten strategic objectives and 50 strategic initiatives which will be implemented in 32 selected high stunting prevalence woredas in Amhara and Tigray National Regional States.
Through an extensive consultative process at federal, regional and woreda levels aimed at increasing understanding about the Seqota Declaration and facilitating local ownership, a comprehensive and integrated three-year costed innovation phase implementation plan has now been completed. Utilizing the PDUs as central facilitators and coordinators, the planning process was conducted in collaboration with multiple stakeholders. Apart from the seven sectors primarily responsible for implementation, development partners, community-based organizations and implementing partners have prepared and submitted three-year costed plans for their respective sectors. Adopting a common planning framework enabled all stakeholders to harmonize their approaches for achieving the 2025 target. The federal and regional PDUs also used the common planning framework to develop the monitoring and evaluation system including the selection of key performance indicators for tracking the progress of each sector against its quarterly and annual targets.
The main components of the Innovation Phase include the establishment of PDUs, Community Labs, a robust nutrition data management system, Agriculture Innovation and Technology Centres (AITEC farms), and costed woreda-based comprehensive nutrition investment plans. In addition, the first 1000 days plus public movement and government leadership and coordination at all levels are key implementation approaches. The federal and two regional PDUs are responsible for providing technical leadership and performance management of the implementing sectors and development partners. The Food and Nutrition Councils at federal and regional levels will provide overall strategic guidance.
The total investment cost needed to implement the three-year Seqota Declaration investment plan is $538,718,444. Out of this, 48.3% has been mobilized from the government and development partners leaving a funding gap of 51.5% of the total investment cost.”
I conclude that the Seqota Declaration indeed will only become successful if the different sectors and development partners join hands and plan and implement activities in a coordinated way. During this phase of innovation, we need to find out what works well and find ways to scale up together if we want to achieve the goal to reduce undernutrition and all its consequences. I also conclude that there are ample opportunities for the Private Sector to come in, engage and play their role in bringing in innovative and effective solutions in agriculture, water and other activities.
Indeed, together we can!
Ton Haverkort


