Ethiopia's Sesame Sector: The contribution of different farming models to poverty alleviation, climate resilience and women's empowerment | Agriculture

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Oxfam commissioned this research to assess the contribution of different agricultural business models to poverty alleviation, livelihood security, climate resilience, and empowerment of women in the sesame sector in Metekel and Assosa in Benishangul Gumuz, Ethiopia. The key findings of the report are that sesame is a suitable crop for poverty alleviation for smallholders in Benishangul Gumuz and that the smallholder model is competitive versus the large-scale investor model in terms of productivity. With minimal expenditure for sesame seeds and some simple equipment for ploughing, weeding and harvesting, farmers can cultivate sesame on a family labor basis. Potential income is higher in the smallholder model than from either communal land management, or from the salaries from working for large-scale investors. Smallholders can improve their income and security further through membership of primary production co-operatives that offer higher sales prices and paid-out dividends. Women are marginalized in sesame cultivation as they are excluded from the sales process and expected to manage household labor, thus facing a double work burden. Working as daily laborers on large-scale farms is particularly disadvantageous for women. The smallholder model is more suitable for women since it allows them to manage their double workload burden according to their needs.
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  Oxfam Research Reports thiopia’s   sesame sector THE CONTRIBUTION OF DIFFERENT FARMING MODELS TO POVERTY ALLEVIATION, CLIMATE RESILIENCE AND WOMEN’S EMPOWERMENT Genia Kostka and Jenny Scharrer July 2011 www.oxfam.org/grow    Ethiopia’s sesame sector  , Oxfam Research Report, July 2011 2 CONTENTS EXECUTIVE SUMMARY ......................................................................................................... 3   1   Introduction .................................................................................................................... 5  1.1. Sesame production in Metekel and Assosa ............................................................. 5 1.2. Different business models ........................................................................................ 7 2.   Contribution of different business models .................................................................. 9  2.1. Poverty alleviation and livelihood security .............................................................. 10 2.1.1. Income of smallholder farmers from sesame production ................................ 11   2.1.2. Income from communal land management .................................................... 13   2.1.3. Income for laborers working on investor’s farms ............................................ 15   2.2. Climate resilience ................................................................................................... 17 2.2.1. Changing climate in Metekel and Assosa ....................................................... 17   2.2.2. Adaptive capacity across business models .................................................... 18   2.3. Empowerment of women ........................................................................................ 24 2.3.1. Women’s control over revenues from sesame sales ...................................... 25   2.3.2. Representation in farmer organizations .......................................................... 26   3.   Conclusion ....................................................................................................................28  3.1.1. Findings .......................................................................................................... 28   3.1.2. Role of Oxfam ................................................................................................. 29   Bibliography ........................................................................................................................ 31   Appendix ............................................................................................................................... 33   Appendix 1: Sesame production area in Ethiopia .................................................................. 33  Appendix 2: Interview list ....................................................................................................... 35  Appendix 3: Interview guideline ............................................................................................. 36    Ethiopia’s sesame sector  , Oxfam Research Report, July 2011 3 EXECUTIVE SUMMARY The key findings of this report are that sesame is a suitable crop for poverty alleviation for smallholders in Benishangul Gumuz and that the smallholder model is competitive versus the large-scale investor model in terms of productivity. Farmers can achieve high profits without significant up-front investments. With minimal expenditure for sesame seeds and some simple equipment for ploughing, weeding and harvesting, farmers can cultivate sesame on a family labor basis. Potential income is higher in the smallholder model than from either communal land management, or from the salaries from large-scale investors (see Figure 1). However, this potential is mirrored by the highest risk for farmers to receive the lowest income. Smallholders can mitigate this risk as well as increase their income further through membership of primary production co-operatives that offer higher sales prices and paid-out dividends. Figure 1: Farmers’ income ranges in different business models Income ranges for farmers show highest income potential for smallholder farmers Income ranges in different business models per farmer/laborer in Birr per crop year  Total max.4,733Total max.1,172Total max. 5,847Total min.1,472Total min. 504Total min.386        B       i     r     r   Looking at current income levels, the salary a single laborer receives from working one season on a large-scale sesame farm is considerably lower than that of a smallholder cultivating his own land. However, the chart only displays incomes for a farmer per hectare and a laborer per season. Both farmers and paid laborers often receive additional income from other crops and more than one hectare of land or salaries from other jobs. In order to compare farmers and hired laborers, the authors evaluated profits made during one crop season looking at a farmer’s income and at salaries received by a hired laborer. In the case of hired laborer, a per-hectare comparison is not suitable since one laborer will always be working on multiple hectares consecutively in a team rather than on one hectare alone. The smallholder model is particularly well suited for sesame production and is therefore sustainable in Benishangul Gumuz. Its suitability derives from the high labor intensity of    Ethiopia’s sesame sector  , Oxfam Research Report, July 2011 4 sesame cultivation as well as the shortages of labor and high barriers to mechanization that face large-scale investors. At current profit levels investors in Benishangul Gumuz are not willing to undertake substantial investments for mechanized weeding and harvesting. Without mechanization, the competitive advantage of large-scale sesame cultivation is limited. Farming techniques of investors remain similar to those of smallholders. Labor thus remains at the core of sesame production and a key determining factor for profits. Some large-scale investors had to pay premium prices to sufficiently incentivize laborers to diligently work their fields. Investors confirmed that an increase in hectares cultivated leads to a decrease in yields per hectare since manual labor is most effective on small plots of land. If sesame production in Ethiopia were further mechanized, however, the competitive advantage of large-scale farming versus smallholder farming would improve. The particularities of sesame cultivation currently practiced in Benishangul Gumuz make such changes in mechanization unlikely in the near-term future. Despite this potential for smallholders, sesame cultivation also bears multiple risks since it is a highly sensitive crop. Sesame requires careful handling especially during weeding and harvesting with shattering pods causing crop loss of up to 30%. Even small deviations from good practice can significantly reduce yields. In addition, the sesame plant is very delicate and thus particularly prone to weather damage. Due to changing climatic conditions, the area of Benishangul Gumuz has recently witnessed an increase in erratic rainfall pattern, with ice-rain and heavy rain destroying the entire crop in some areas and making sesame more susceptible to crop diseases. Those threats concern smallholders and large-scale farmers alike. However, if risks materialize, smallholders are hit hardest as they tend to have neither household savings nor access to financial support. In the large-scale investor model, laborers tend not to benefit from potential investor savings in the event of crop failure since most of the laborers are hired on a day-by-day basis. Indirect benefits for laborers exist only if farming is done on a contractual basis and minimum income is guaranteed regardless of crop losses. Women are marginalized in sesame cultivation as they are excluded from the sales process and expected to manage household labor, thus facing a double work burden . Working as daily laborers on large-scale farms is particularly disadvantageous for women, as they are absent from their homes and have to cope with household labor and potentially also farmland responsibilities after returning from their workday. The smallholder model is more fitting for women since it allows them to manage their double workload burden according to their needs. However, this model should be combined with an equal representation of women as functional members of boards of primary cooperatives. Currently they hold mostly nominal positions if at all. Mitigating the risks to smallholders’ livelihood security requires efforts from all stakeholders. Farmers have to abide by good farming practices and can strengthen their position by forming primary cooperatives and actively engage in micro-saving-plans offered by government. Primary cooperatives  can support farmers in doing so by providing the following: firstly, cooperatives can offer a 2–5% price premium for sesame compared with prices quoted by local traders. Secondly, profits made by cooperatives through reselling sesame at higher prices can be paid back to farmers in the form of dividends. Thirdly, primary cooperatives are legally required to save 30% of annual profits as reserves, which can be used for hardship loans for farmers, communal investments, or back-up savings. Furthermore cooperatives can organize provision of extension services. Government  agricultural bureaus and research centers need to improve information dissemination on changes in climatic conditions and research on seed varieties tailored to specific requirements of different areas respectively. Oxfam  can play a critical role in strengthening cooperatives and in serving as an idea generator with respect to potential market innovations, e.g. creating linkages to the private sector through value-added activities by cooperatives or unions, as well as developing risk management strategies such as weather-based micro-insurance for smallholder farmers.
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