Engaging Smallholders in Value Chains: Creating new opportunities for beekeepers in Ethiopia | Beehive | Beekeeping

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An initiative in the Amhara region of Ethiopia has capitalized on the potential of local honey production to build a promising alliance between smallholder farmers and a private-sector export company. A coalition of facilitating partners has developed the value chain for honey and other bee-derived products by providing producers with technology inputs, training, and extension services, helping them to organize their production, and creating an enabling policy environment. Farmers who previously produced small quantities of low-quality honey have quadrupled their output and are now producing certified organic honey for export to international markets, which has significantly increased their incomes.
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    4. Engaging Smallholders in Value Chains Creating new opportunities for beekeepers in Ethiopia   Mengestie Alemu, 30, is a woman beekeeper in Mecha District  ©  Gizachew Sisay An initiative in the Amhara region of Ethiopia has capitalized on the potential of local honey production to build a promising alliance between smallholder farmers and a private-sector export company. A coalition of facilitating partners has developed the value chain for honey and other bee-derived products by providing producers with technology inputs, training, and extension services, helping them to organize their production, and creating an enabling policy environment. Farmers who previously produced small quantities of low-quality honey have quadrupled their output and are now producing certified organic honey for export to international markets, which has significantly increased their incomes.    P  r  o  g  r  a  m  m  e   I  n  s   i  g   h   t  s      4. Engaging Smallholders in Value Chains  , Programme Insights, Oxfam GB. April 2011 1 Introduction Ethiopia is one of the poorest countries in the world, in 2010 ranking 157th out of 169 countries in the Human Development Index (UNDP). 1  An estimated 77.5 per cent of the population live on less than $2 per day and the adult literacy rate is just 35.9 per cent (Ibid.). 2  Beekeeping is an important economic activity, with the sector contributing around $1.6m annually to the national economy (Government of Ethiopia). 3  The production of honey and beeswax provides a secondary source of income for smallholder farmers, who traditionally also grow cereals, pulses, oil seeds, and chillies. The country has more than ten million beehives, the largest number in Africa, and around two million people are involved in the value chain. 4   Ethiopia is Africa’s largest producer of both honey and beeswax, and the fourth largest producer of beeswax in the world (Allafrica.com). 5  Ethiopia has the potential to produce 500,000 tonnes of honey and 50,000 tonnes of beeswax per annum, but currently production is limited to 43,000 tonnes of honey and 3,000 tonnes of beeswax (Government of Ethiopia). 6  Moreover, the quality of Ethiopian honey is generally poor, as 95 per cent of beekeepers follow traditional beekeeping practices with no improved techniques or technology (Oxfam). 7  Most honey (over 97 per cent of production) is sold via formal and informal domestic spot markets, and 85 per cent of this is purchased by brewers of tej , a honey wine (mead). 8  Income from the sector is minimal, primarily due to low productivity and poor quality, but also because of limited market access, which forces producers to sell locally at low prices. Smallholders produce on average 5kg of honey per year from each hive, and must travel long distances to markets or sell at low prices to middlemen or local traders (Ibid.). 9  Globally, there is large and growing demand for honey and other bee products. 10  From 2001 to 2005 the average annual growth rate of honey production globally was 2.3 per cent, 11  although since then supplies have decreased, mainly due to the growing incidence of colony collapse disorder (CCD) in Europe, the USA, and South America. There is a large unmet demand for organic honey in European countries and, according to the International Trade Centre (UNCTAD/WTO), East Africa has good potential for organic beekeeping. In the past few years, increasing demand has provided Ethiopia with opportunities to export small amounts of smallholder-produced honey to neighbouring countries such as Yemen, Djibouti, and Israel. It has also begun tentative moves to export honey to the European market, and is on a list of approved suppliers to the EU.    4. Engaging Smallholders in Value Chains  , Programme Insights, Oxfam GB. April 2011 2 Starting out: the pilot project In 2003, Oxfam initiated a three-year pilot project to promote the trade of honey and bee products in Amhara National Regional State. The evaluation of this programme coincided with the establishment of the Ethiopia Agricultural Scale Up programme, which ambitiously aimed to increase the incomes of one million smallholder farmers through empowerment and better access to market opportunities. As part of its approach, the programme identified specific commodities in which the development of value chains would offer opportunities to leverage private sector investment for poverty reduction and generate evidence to support advocacy activities related to regional and national rural policy. The honey value chain in Amhara was selected as one of the focus commodities with potential for scale-up because it offered good potential for reducing poverty amongst smallholder farmers, particularly women and landless people. Beekeeping is one of the most sustainable livelihood options for landless people, as landowners pay beekeepers to set up hives on their land to enhance crop pollination. Generally, women do not own land in Ethiopia, and so over 50 per cent of the beekeepers targeted by the programme were women. The regional government had already identified 31 districts with potential for commercial beekeeping and had developed a plan both to support beekeepers in the use of modern technology and to strengthen the capacity of farmers’ unions. To take advantage of this opportunity, Oxfam set out to modernize traditional beekeeping practices and transform small-scale, low-value production into a model of commercialized beekeeping. As people can keep bees in their spare time at home, this plan had good potential to involve women, as well as offering farmers the opportunity to diversify income sources. Furthermore, honey produced by smallholders is organic and environmentally friendly, and receives priority support from the Ethiopian government as a high-value commodity (Amhara Regional State). 12   Oxfam’s programme capitalized on this by developing co -ordination groups, involving government offices at the local, regional, and national levels, as a forum for honey value chain stakeholders to discuss bee products. Additionally, the experiences of beekeepers were shared at an annual national learning event organized by Oxfam in close collaboration with the Federal Ministry of Agriculture and Rural Development. The pilot project aimed to demonstrate the potential of commercial beekeeping for smallholders and was implemented by partner SOS Sahel, 13  with funding from Oxfam. The project worked with this partner to support the development of six primary co-operatives, involving 2,100 farmer households, and created the Zembaba    4. Engaging Smallholders in Value Chains  , Programme Insights, Oxfam GB. April 2011 3 Beekeeper Co- operatives’ Uni on to co-ordinate their activities. Through these organizations, it provided training in production techniques and the use of improved technology, notably the Kenyan top-bar hive, 14  which enabled women to become more involved in honey production (previously honey production involved tree climbing, which was not seen as socially acceptable for women). Local government offices for agriculture and the promotion of co-operatives were fully involved in extension services and in building the capacity of the co-ops. Evaluation of the pilot scheme showed that, on average, productivity improved from 5kg of honey per hive per year to 20kg per hive per year. Box 1: New markets, new income One key objective of the pilot project was to identify more profitable markets fo r the farmers’ growing honey supply. The project staff dedicated significant time to identifying potential buyers before engaging commercial agents Century Trading Ltd. and Beza Ltd., who promoted retail-packed honey to over 200 supermarkets and grocery outlets in Addis Ababa.  An evaluation report conducted in 2006 showed that, prior to the project, the price received by producers from local traders was Ethiopian birr (ETB) 5  – 6 ($0.30  – 0.40) per kg for crushed honey. Traders also often cheated producers on weights. Through the co-operatives, the producers now receive ETB 32 ($2.46) per kg for Grade 1 pure honey and ETB 28 ($2.15) per kg for Grade 2. Co-op members also receive dividends on the sale of processed bee products to the agents, Beza and Century. These dividends range between ETB 35 ($2.60) and ETB 674 ($50) per season, based on the number of shares the producer owns. Most producers are re-investing their dividends to expand their operations and also the processing centres. ‘ Before the co-operative, we used to sell our honey at a low price to middlemen in the market. I was perhaps getting ETB 8  – 10 ($0.60  – 0.75) per kg, but now through the co-operative we are getting ETB 32 ($2.40) per kg. This is providing 40  – 50 per cent of my yearly income and covers nearly half of my family’s needs, including school and medical fees. With this I am able to send eight of my children to school,’ says  Ato Workneh Addis, a beekeeper from Bahirdar Zuria. Sources: Terminal Evaluation of the Bee Products Trade Promotion P rogramme (August 2006) and M. Shepherd (2007) ‘Honey Co -operatives Case Study’, Oxfam GB (November 2007).   Training was also provided in processing and, together with the government, the project constructed honey collection and processing centres in eight villages. Previously producers had to travel long distances to find buyers for their honey, which reduced their negotiating power and further excluded women from the market. The project also supported co-operatives to apply for organic certification and provided training in marketing, management, and business skills. A credit facility was established and managed by the Meket Micro-Finance Institute (MMFI), which enabled the co-operatives to purchase honey from member beekeepers through the collection and processing centres.
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