Promotion and integration of rural finance in BENEFIT programmes: challenges and opportunities

BENEFIT Partnership held a half-day brainstorming session to share experiences on agriculture finance, seeking a common ground BENEFIT should consider in future planning. The meeting was led by Cor Wattel, Senior Researcher-Financial Services in Agriculture from WUR who has international experience in micro finance and rural economics, and was attended by 14 BENEFIT staff representing all programmes (ISSD, REALISE, CASAPE, SBN and ENTAG and PCU). The session was relevant to reflect on financial issues that is hindering programme progress and explore ways to stimulate the financial ecosystem towards achieving the programmes’ goals.

The participants agreed that finance is a major challenge in all BENEFIT programmes. Properly functioning agriculture finance system is relevant to prevent farmers take debt from money lender, enable them to adapt new agriculture technologies and practices, enable coops to increase operations and make investments, increase their capability to engage in various market etc. The participants looked at key ingredients in agri-finance including channels, financial services and financial products.

It was noted that agri-finance aims to bridge the gap between the farmers’ and the finance’ world for maximum benefit for both sides. Both parties should understand the risk involved on both sides and understand the logic and language of each other. Farmers and cooperatives should be able to meet the requirements from financial institutions, just like the financial institutions should offer financial services that are suitable for the farmers. By understanding each other, trust and long-term partnerships can prosper.

In many countries, most of the farmers’ finance comes from their own pocket and relatives (60%-70%). Other finance sources include unions, cooperatives, SACCOs, money lender or trader (buyer/ seller). The traditional approaches like Idirs and Equbes are other relevant financial structures small holders greatly depend on.

The group discussed the pros and cons of group lending and different ways to manage individual loans, crop insurance, community warehouse financing, and experience of Grameen in Bangladesh. Some of the issues raised by the programmes included the challenge related with cooperatives being not treated and functioning as enterprises, political interference, cultural perspective of loans (being opportunist), poor governance, financial illiteracy etc. SBN work with banks, financial literacy and a guarantee fund, CASCAPE’s Malt Barley experience in linking farmers with beer factories to resolve input and marketing finance issues, using joint financing strategies (AGP), the pros and cons of providing grants (ISSD) and other innovative funds to minimize financial shortage were discussed in depth.

At the end, the participants’ suggestion on areas of future possible engagement  included: (i) piloting already demonstrated successful financing interventions; (ii) strengthening farmer organizations and businesses through finance literacy, developing business concept and bankable business plans, internal resource mobilization, and business planning; (iii) organizing financial trade fairs; (iv) partnering with finance focused organizations; (v) co-financing and providing credits to Community Based Organizations and other target groups; (vi) increasing capacity by recruiting financial experts for our target groups; (vii) support in designing financial models that are sustainable, cost-effective and implementable under Ethiopia’s context and promote  workable packages to policy makers to include them in public programmes.

From PRA to scoping and planning – (BENEFIT-REALISE)

Following the completion of Participatory Rural Appraisals (PRAs) in selected BENEFIT-REALISE implementing woredas, a workshop was organized to discuss the next steps of scoping the existing partnership and opportunities to contribute towards effective planning. The workshop was held from December 3-5, 2018 at Pyramid Resort in Bishoftu and was attended by 35 participants from Wageningen University & Research (WUR), REALISE Program Coordination Unit (PCU), as well as cluster managers and experts from University clusters.

The first day was devoted to review status, learn from and identify gaps in the PRA exercise. During the morning session enough time was given to discuss how to prioritize problems and move from problems to opportunities. The afternoon session covered topics on scoping methodology, stakeholder analysis and how to identify strategic opportunities to resolve existing problems.

Collaboration being one of the critical components of the programme, the second day focused on learning from BENEFIT-ISSD (Integrated Seed Sector Development) and BENEFIT-CASCAPE (Capacity Building for the Scaling Up of Evidence Based Best Practices in Agricultural Production in Ethiopia)two of the five programmes under the BENEFIT umbrella. The participants were grouped for parallel sessions, where the first group discussed seed; since one of the programme outcomes is to increase availability, timely delivery and use of quality seed of new, improved, and/or farmers preferred varieties; due attention was given to draw lessons from ISSD experience about the seed systems in Ethiopia, seed value chains, Local Seed Business (LSB) development, crowd etc. The discussions that followed focused on future collaboration between the two sister programmes especially in crowd sourcing, LSBs as well as layering and sequencing of activities in woredas where both programmes will be operational.

The second group reviewed matching best practices of CASCAPE with condition of REALISE woredas. To this effect 10 best fit practices of CASCAPE were considered to match with the 60 PSNP woredas of REALISE. To do a meaningful discussion, each cluster was given a practical exercise to look at the major problems listed in their PRA study using the following guiding framework:

  1. Problems that can be addressed under the mandate of REALISE
  2. Problems that can be addressed with or by other stakeholders
  3. Problems that are difficult to address by any organization- e.g., the group put landlessness under this category.

The discussion from this parallel session came out with the following points.

  • CASCAPE best fit practices are used with necessary adaptation;
  • REALISE will use but not limited to using practices and experiences of CASCAPE and ISSD;
  • Technologies/practices from other organizations such as EIAR, RARIs and other NGOs should be considered;
  • REALISE will make testing and validation and some research in the study woredas. However, where and when it is possible to get proven technologies/practices from other organizations, REALISE will give priority for available proven technologies and practices. It was made clear that there is no need to wait until validation is done in the research woredas;
  • Clusters mentioned that livestock (poultry and small ruminants) and irrigation interventions are very important to improve resilience in PSNP woredas. It was made clear that REALISE will not make big investment like irrigation development and animal distribution with breed improvement; and
  • Saline soil treatment was also discussed, with the possibility of REALISE providing technical support on saline soil management with expertise from WUR.

The afternoon session also covered how to undertake Training of Trainers (ToTs) needs assessment and how to fill PRA data gaps by making use of existing data of other programmes and secondary sources.

The sessions were relevant to discuss future collaboration between the two programmes; how to extend successful seed sector strategies to PSNP REALISE, matching CASCAPE best practices with “realities of REALISE PSNP woredas” as well as how to integrate planning cycles of seed, capacity development and practices.

ISSD’s experience in mainstreaming gender, particularly women’s role in participatory variety selection process as well as integrating gender in the seed value chain assessment are important practical experiences that can be replicated by REALISE.

During the last day of the workshop, the participants learned how to translate problems and opportunities into proposals, how to use problem tree analysis, developing ToCs, how to ensure cross-cutting issues are taken into account and discussed the upcoming planning workshop. At the end, the participants made agreements on next steps forward for 2019 details planning, including roles, activities and deadlines.

 

 

Contribution to the development of a national seed sector transformation agenda

BENEFIT-ISSD, Integrated Seed Sector Development in Ethiopia held a two-day workshop to contribute to the national seed sector transformation agenda and support regional seed core groups translate the recommendations into their unique situations across the regions.  Over 25 participants from four regional states of Ethiopia (Amhara, Oromia, SNNPR and Tigray), representing Ministry of Agriculture (MoA), regional core groups and federal seed unit, research institutes, bureaus of agriculture, seed regulatory bodies, seed enterprises, ATA, and NGOs (GIZ), and ISSD staffs attended the workshop. It was held on November 29 and 30, 2018 in Bishoftu, Pyramid Resort &Hotel and facilitated by team members of ISSD Ethiopia from Programme Management Unit (PMU) based in Addis Ababa. The workshop was a great success in creating a platform to share expertise and experiences, debate over priorities for change, and collectively agree on next step forward to bring transformational change.

ISSD’s discussion on seed sector transformation started in April 2018. The overall purpose was to better understand the seed sector, and formulate a joint vision, goals and strategies towards a self-sufficient, competitive, transparent, innovative and sustainable seed sector.  The workshop brought together key seed actors to discuss ways to bring fundamental structural and system changes to alleviate systemic problems in the seed sector. This workshop was organized as a follow up to further refine the recommendations from April’s meeting and present it to the newly appointed State Minister of MoA, H.E. Sani Reddi, for further discussion.

The first day morning session devoted to learn and discuss about three ISSD seed value chain innovations.  The “Seed Marketing – enhancing the efficiency of conventional seed marketing” presentation summarized the work that has been done in 2018. The “Sustainable Early Generation Seed (EGS) production and supply in Ethiopia” covered the progress made in the last two years, while “Establishing seed sector coordination body in Ethiopia” highlighted the need for coordinated and collective effort to drive the seed sector transformation agenda.

In the afternoon session, following the sector transformation framework developed by AidEnvironment, the participants were divided into 3 working groups to validate the goals and strategies drafted under six building blocks – production, market, services, finance, coordination and regulation and management.  The amendments proposed were discussed in plenary, and those changes agreed upon were incorporated to be presented for extended consultation with federal representatives the following day.

The second day was dedicated to further validate and refine the goals and strategies with representatives from federal MoA, ATA, EIAR and GIZ, and present the agreed upon outcome to H.E. H.E. Sani Reddi.  The workshop ended with agreement on next steps proposed by the State Minister, and his affirmation on the government’s commitment to work on the agreed upon priorities to transform the seed sector which is imperative to transforming the agriculture sector.

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Facilitating market linkages for soybean buyers and sellers

BENEFIT partnership conducted the 5th Soya Bean Trading Platform meeting to facilitate market linkages between domestic processors, exporters, and union on December 6, 2018 at Momona Hotel in Addis Ababa. The meeting jointly organized by BENEFIT-ENTAG, BENEFIT-CASCAPE and BENEFIT-ISSD was attended by 31 participants representing food and feed processors, exporters, and unions.

During the Business to Business (B2B) session it was found that the demand for soya bean is three folds higher than the potential supply indicated by the unions. The possibility of working through contract agreements between the buyers and the unions in the near future was discussed.

Limitedness of the production, institutionalization of the sub-sector, price volatility and access to finance for unions and honouring contract and promises were the key constraints raised for effective business linkages. It was also suggested that actors supporting the production are expected to push the agriculture sector to give more attention for soya bean like other cereal crops. For institutionalization, it was proposed for soybean to be included as legume crops to join the pulses council that is under establishment.

Overall the event was successful in bringing sellers and buyers under the same roof to discuss and address their business concerns and find better way of working together.

By Selamawit and Yemisrach

Using PRA to better understand the local context for better development planning

A key component in the BENEFIT-REALISE progarmme is incorporating a participatory approach with targeted beneficiaries throughout the programme implementation process. As an entry point for designing meaningful and sustainable interventions, the programme has started conducting PRAs, baseline and scoping study in its 60 intervention woredas. Eight Ethiopian universities, implementing partners of BENEFIT-REALISE, have started working with regional, zonal and woreda agriculture bureaus extension workers, Regional Agricultural Research Institutes (RARIs), and local communities to identify priority food security challenges, local resources and indigenous knowledge to solve existing needs, and build common understanding of the programme. These exercises are key to design testing and validation activities and build a sense ownership at local level supporting the bottom up planning process adopted by REALISE.

In order to guide this process, a PRA manual was prepared in collaboration between WUR and REALISE PCU (Programme Coordinating Unit) team. The manual contains 10 different community data collection tools on nutrition, seed, climate vulnerability, cropping calendar, daily activity mapping, landscape mapping, access to control, FGD checklist etc. Each tool includes information on number of participants to include (men, women, youth, poor, rich, PSNP beneficiaries, non-beneficiaries), time to spend on each exercise, types of data to collect, as well as methods of facilitation. Overall sixteen focus groups are needed to collect data for the 10 tools.

The PRA exercise is being conducted in all implementing woredas, at different levels. This is done to ensure interventions are designed based on the specific needs and challenges of the communities. Out of the 60 intervention woredas covering 240 Kebeles (similar to Peasant Associations (PAs) spread across four regions: Tigray, Amhara, Oromia, and SNNP, ten (40 kebeles) are research woredas, while the remaining 50 (200 kebeles) are scaling woredas. Research woredas are woredas where Best fit Practices (BFPs) are selected, validated and adapted based on a constraints and opportunity analysis and mapped for suitability against socio-economic and biophysical conditions in selected woredas. At the scaling woredas, scaling methodology is designed, tested and institutionalized into the extension system.

Considering the length of time and resources needed to conduct full PRA in all woredas, it was decided to conduct full PRAs, using all 10 tools, in 2 selected kebeles in each of the research woredas (2*10=20 full PRAs) and two scaling woredas in the satellite clusters: Oda Bultum and Arba Minch (2*2=4 Full PRAs). This means a total of 24 full PRAs. On the other hand, PRA light, using only 2 tools will be conducted in two kebeles in the remaining 48 woredas (48*2=96 PRA light). All clusters began the PRA exercise simultaneously and expected to complete the exercises at the end of November.

Throughout the process different measures were taken to facilitate open discussion. The farmers were central in ranking the priority problems under each topic, what they perceived to be the cause of the problems and what kind of coping strategy to implement keeping in mind the available resources that are present in their surroundings and at their disposal.

Thus far, the exercise is found to be a great opportunity for the community to reflect on their livelihood and for REALISE to identify technically viable, environmentally sound and culturally meaningful interventions that will address the food security challenges of the communities. The motivation, sense of ownership, and tireless engagement of all involved in the PRA process is a good indication of positive things to come in the planning and implementation of the programme.

BENEFIT-REALISE is a three year programme (2018-2020), implemented in collaboration with eight local Ethiopian universities spread over four regional states of Ethiopia (Tigray, Oromia, Amhara, and SNNPR) and  Wageningen University & Research (WUR) in Netherlands. The main implementing local universities are Arba Minch University, Arsi University, Bahir Dar University, Haramaya University, Hawassa University, Mekele University, Oda Bultum University and Woldia University. In addition, REALISE partners with government institutions at all levels throughout the implementation process.

Bringing Entrepreneurship to the young

One of the key activities implemented by BENEFIT-ENTAG supports interns with a meaningful experience that enhances their employability and skills through its postgraduate internship programme.  Accordingly, the progreamme provided training on entrepreneurship on November 7-9, 2018, at Azzeman Hotel in Addis Ababa.  Twenty eight aspiring interns who are currently placed with various agribusiness, horticulture and other agriculture related companies gathered to learn how to recognize business opportunities and become self-reliant by setting up successful businesses.

During the introduction phase it was noted that most of the interns’ knowledge regarding entrepreneurship is limited to a single course taken during their studies, and most have no practical experience. The three day training covered topics on what entrepreneurship means, the relevance of role models, entrepreneurship competencies, social entrepreneurship, profile of an entrepreneur, prerequisite for action, criteria for business opportunities, idea generation and developing business plan. The interns discussed the multiple challenges in the Ethiopian context, such as lack of support, lack of motivation, lack of confidence, market fluctuation, financial constraint, limited managerial, marketing and leadership skills, lack of collaborative efforts etc.

The training provided a dynamic platform where individuals explored their strengths and skills through practical applications and self-examinations. During one of the practical exercises, the interns were grouped to develop business plans in the area of marketing, distribution, vegetable and spice production, poultry and sheep and goats production. They also viewed inspiring videos on entrepreneurs who started small and managed to turn their businesses into big successes.

During the reflection session the interns appreciated the simple and understandable way the training was provided, and agreed that the training encouraging them to think outside the box, build their skills in communication and leadership, strengthen their networking and be more creative in using existing opportunities.

Researchers trained on EGS production and supply in Ethiopia

One of the intervention areas of BENEFIT-ISSD Ethiopia is to improve Early Generation Seed (EGS) production and supply system. In line with that, the programme organized a two-day training for 52 research staff involved in Early Generation Seed (EGS) production. The primary objectives of the training held on October 29th and 30th, 2018 were to introduce the concepts of integrated seed sector development and seed systems, better understand Ethiopian seed related policies and discuss the roles and responsibilities of research institutes in the context of Ethiopian seed policies and regulations.

The two day training covered topics on

  • History of seed sector development in Ethiopia
  • The approach of integrated seed sector development
  • Strengthening formal, intermediary and informal seed systems
  • Seed policy frameworks
  • Seed value chain development
  • System of early generation seed supply
  • Seed quality control and seed quality assurance
  • Direct seed marketing and seed distribution

The participants discussed the need for a vibrant, pluralistic and market orient seed sector development to meet the increasing seed demand in the country and possibly exploit opportunity for global seed market. They looked at BENEFIT-ISSD sector wide inclusive approach to development, and the different kinds of interventions needed for formal, informal and intermediary seed systems.

The presentation and the discussion about the policy framework was an eye opener for most of the participant allowing them to relate their routine operation with the existing policies. And the session on  seed value chain looked at how operator-supporter-enabler configurations differ among crops and specific chains, but most significantly between different seed systems.

In relation to the roles of research institutions in EGS production and supply, the presentation and discussions gave the participants a realization that they are not operating in established system, and that their role is not limited to addressing the gap in EGS supply but also play key role in establishing a functional system.  Emphasis was given to undertake seed production in suitable agro-ecology and also to use seed value addition techniques like seed treatment – upgrading, priming, dressing, coating, pelleting and disinfection.

Even though researchers are not directly involved in the marketing of certified seed, the marketing session gave them a general knowledge on challenges associated with seed marketing in Ethiopia.

At the end of the training the participants were grouped according to their regions and identified two concrete actions the research institutes can undertake to support the development of the EGS system in Ethiopia. Potential actions proposed included internal and external quality control, starting EGS distribution based on contract agreement, addressing post-harvest management issues, supporting off-season EGS production, ensuring the implementation of EGS production as planned though strong follow-up, strengthening the linkage between agreement providers and contractors, ensuring on time seed delivery based on agreement, and EGS planned but not implemented to be done by irrigation etc.

The training was organized by the BENEFIT-ISSD Ethiopia Programme Management Unit (PMU) in collaboration with Wageningen Centre for Development Innovation. Training sessions were facilitated by Dr Amsalu Ayana, ISSD Ethiopia programme manager at PMU; Dr Mohammed Hassena, ISSD Ethiopia Deputy Programme Manager at PMU; and Dr Marja Thijssen, Senior Advisor at WCDI.

 

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