From Farm to Table

 Looking at the wheat and malt barley value chains in Ethiopia

Nick Minot and James Warner meeting with a group of farmers. Photo credit: IFPRI-REAP.

Nick Minot and James Warner meeting with a group of farmers. Photo credit: IFPRI-REAP.

Wheat is a staple for Ethiopia, but, about 20-35 percent of the wheat consumed is imported. As “consumption preferences” have changed, more Ethiopians are buying bread and other wheat products in higher quantities than before.  “Raising the productivity of wheat would go a long way to increasing farm income and reducing rural poverty,” says Nick Minot, IFPRI Senior Research Fellow.

The story is similar for barley. There are two malt factories in the country, one in Asela, the other in Gondar. Both tend to buy locally, but also import large amounts of processed malt barley. “In 2003/04, the net barley import bill was about a quarter million dollars,” says Shahidur Rashid, IFPRI Senior Research Fellow. “By 2013, it jumped to 50 million dollars. If it continues, the country might end up spending half a billion dollars for importing malt barley.”

One priority for the government is to shrink the import bill, so the Ethiopian Agricultural Transformation Agency (ATA) has commissioned IFPRI-REAP to draft two reports on the wheat and barley value chain. “These studies are trying to understand the areas where the government can intervene to improve the value chain and eventually enhance productivity so they can replace imports and possibly export in the future,” says Rashid.

The team will look at the comparative advantage of growing wheat and malt barley domestically. They also hope to answer several questions: what challenges do farmers face to raise crop yields? How does wheat and barley get from farmers to consumers? How can the marketing channels be made more efficient to help lower costs?

To answer these questions, the team consulted secondary sources such as the ATA baseline survey, price information, the CSA’s Agricultural Sample Survey (AgSS) data, and the like.  But numbers don’t always tell the whole story. “I personally believe that for studies like this one, we should go and see to understand what is actually going on. It’s very difficult to make sense of the numbers when you’re just cranking it out of some survey data,” says Rashid. So the team left their desks for the field.

They traveled to the main barley and wheat-growing regions in Amhara and Oromia to talk to people involved with “production to marketing all the way through to consumption,” says Minot. One team—Shahid Rashid, Gashaw Tadesse, and Solomon Lemma—traveled north to the main barley growing region in Amhara—North Gondar, North Shewa, West Gojam, Debre Berhan, and Bahir Dar. The second team—Nick Minot, James Warner, and Leulsegged Kasa—traveled to the south—visiting the prime wheat growing regions of Bale, West Arsi and the market town Shashamane. Both teams met with farmers, traders, wholesalers, processors, and staff working at national research centers, seed centers, factories, breweries and even bakeries.

The teams held focus group discussion with groups of 10-20 farmers to probe various topics, such as the costs to grow the crops, transportation costs, processing, crop losses, and changes in the market. The teams heard a common complaint from farmers; they were not able to easily access improved seed varieties for wheat and barley. “Only a limited number of farmers had access to improved varieties,” says Gashaw Abate, visiting IFPRI research fellow. “Most of them use local varieties, which have been cultivated for a long period of time.”

Another problem that farmers face is weighing the cost of buying inputs that can potentially increase crop yields against the risk of poor rains and low harvest where they would lose the money invested to purchase seed and fertilizer.  “ A lot of farmers are cash constrained, so it makes it difficult for them to buy seed and fertilizer, even if it might be profitable for them,” says Minot.

During a visit to a barley farm, the farmer explained to Rashid and his team one of the reasons that malt barley tends to be less productive than food barley. Malt barley only has two rows of grain on the head, while crops like wheat and other varieties of barley have six rows. When the team visited one of the regional bureaus of agriculture in Amhara, Rashid mentioned this to one the head breeders. The breeder had already engineered a new variety that now had four rows of seed on the head but lacked the funding for testing. “They are underfunded, clearly, but that’s one side. The other side is there should be some mechanism when they have a new variety to take it out and test it out…but that hasn’t been done,” says Rashid.

Could growing and buying locally help develop the economy? IFPRI researchers think so. But it is not just about increasing crop production; it is also about harvesting high-quality crops and developing the county’s agro-industry sector for processing right at home.

“Right now, there is very limited processing,” says Rashid. Instead, processed malt barley is imported from Belgium, the Netherlands, Denmark and other places. “If they grow [barley] domestically, there will be domestic value addition. There will be processing factories, there will be grading and standards that will improve the quality [of barley], and also create jobs.” In the end, you have higher levels of employment that stem beyond the farm. “That’s why we are looking at value chains, not just understanding it from production to the consumer. We are looking at options where it can add more value to create more jobs.”

The upcoming report will feed into the ATA’s development of a new barley strategy and revision of the current wheat strategy. There are many areas where improvements can be made, but after spending time in the field, the teams are confident that farmers can cost effectively grow wheat and barley. It’s now time for the team to “crank the numbers”, but according to Rashid, “my gut feeling is that for both wheat and barley there is room for substantial value chain improvement and employment generation.”

*The wheat and barley value chain reports are expected to be released in early 2015.

 

This article originally appeared in Volume 3 of REAP's project Newsletter. Read the full newsletter here. Download a PDF of volume 3