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Pulses Value Chain Potential in Ethiopia
Constraints and opportunities for enhancing exports
July 2010
With significant contribution from:
Chilot Yirga
Ethiopian Institute of Agricultural Research
Shahidur Rashid
International Food Policy Research Institute
Befekadu Behute
International Food Policy Research Institute
Solomon Lemma
International Food Policy Research Institute
IFPRI | Pulses Diagnostics July 2010 | i
Table of Contents
I Executive Summary .......................................................................................................................... 1
Pulses in Ethiopian agriculture .......................................................................................................... 1
The potential of a vibrant pulses sector ............................................................................................. 1
Challenges in the value-chain ........................................................................................................... 2
The recommendations ....................................................................................................................... 2
The way forward ............................................................................................................................... 3
II Acknowledgments ............................................................................................................................. 5
III Acronyms .......................................................................................................................................... 6
IV Background ....................................................................................................................................... 7
V Methodology of diagnostic work ...................................................................................................... 9
1. Introduction........................................................................................................................................ 11
1.1 Characterization of pulses subsector ..................................................................................... 11
1.2 Recent growth of the pulse sub-sector ...................................................................................... 15
1.3 Public policies ....................................................................................................................... 19
1.4 Contributions of pulses to smallholders’ livelihood .............................................................. 20
2. Results of value chain analyses ....................................................................................................... 23
2.1 Production ................................................................................................................................. 23
2.2 Product aggregation and trading ............................................................................................ 26
2.3 Commercialization/Export .................................................................................................... 29
3. Recommendations ........................................................................................................................... 35
3.1 Strengthening the export sector ............................................................................................. 35
3.2 Increasing linkage between exporters and producers ............................................................ 38
3.3 Increasing inputs to improve productivity ............................................................................. 40
4. Implementation ............................................................................................................................... 42
5. Conclusion....................................................................................................................................... 44
5.1 Overview ............................................................................................................................... 44
5.2 Five-year sectoral vision........................................................................................................ 44
5.3 The way forward ................................................................................................................... 44
IFPRI | Pulses Diagnostics July 2010 | ii
Appendix 1 – References and other resources ....................................................................................... 46
Appendix 2 – Global pulse production .................................................................................................. 50
Appendix 3 – Volume and value of pulse exports by exporter category ............................................... 51
Appendix 4 – Producer prices ranked by total production .................................................................... 52
End Notes............................................................................................................................................... 53
Figures
Figure 1: Overview of recommendations and activity sequencing .....................................................4
Figure 2: Geographic distribution of chickpeas ................................................................................13
Figure 3: Geographic distribution of haricot beans ...........................................................................14
Figure 4: Geographic distribution of faba beans ...............................................................................15
Figure 5: Importance of pulses export to total export earnings .........................................................16
Figure 6: Importance of pulses export to total export earnings .........................................................16
Figure 7: Pulses crop area by pulse (1994/95 to 2008/09), 000s ha..................................................17
Figure 8: Pulses production by pulse type (1994/95 to 2008/09), 000s tons ....................................17
Figure 9: Pulses yield by pulse type (1994/95 to 2008/09), tons/ha .................................................18
Figure 10: Trends in pulses export performance .................................................................................19
Tables
Table 1: Pulse production in Ethiopia by region, 2007 ...................................................................12
Table 2: Share of EGTE's local purchase from total production by pulses type .............................20
Table 3: Gross margin analysis for selected crops per hectare ........................................................21
Table 4: Overview of challenges in the pulses value chain .............................................................23
Table 5: Ethiopian grades and standards for chickpea.....................................................................28
Table 6: Pulse grain use in Ethiopia, 2007 ......................................................................................30
Table 7: Breakdown of chickpea production prices (USD/ton).......................................................32
IFPRI | Pulses Diagnostics July 2010 | iii
Table 8: Implementation actions to strengthen the export sector ....................................................38
Table 9: Implementation actions to increase linkages between exporters and
producers ...........................................................................................................................40
Table 10: Implementation actions to increase inputs to improve productivity ..................................41
This report was commissioned by the Bill & Melinda Gates Foundation at the request of the
Government of Ethiopia. The authors are solely responsible for the findings and conclusions
contained in the report.
The authors would like to thank the McKinsey & Company team for their analytical support and
assistance.
IFPRI | Pulses Diagnostics July 2010 | 1
I Executive Summary
PULSES IN ETHIOPIAN AGRICULTURE
This report provides an analysis of the critical role of pulses in agricultural production as a driver
for economic growth and food security. Pulses, which occupy approximately 13 percent of
cultivated land and account for approximately 10 percent of the agricultural value addition, are
critical to smallholder livelihoods in Ethiopia.
Pulses contribute to smallholder income, as a higher-value crop than cereals, and to diet, as a
cost-effective source of protein that accounts for approximately 15 percent of protein intake.
Moreover, pulses offer natural soil maintenance benefits through nitrogen-fixing, which
improves yields of cereals through crop rotation, and can also result in savings for smallholder
farmers from less fertilizer use.
Pulses also contribute significantly to Ethiopia’s balance of payments. They are the third-largest
export crop after coffee and sesame, contributing USD 90 million to export earnings in 2007/08.
THE POTENTIAL OF A VIBRANT PULSES SECTOR
Through productivity and market improvements, the critical role of pulses in smallholder
livelihood and food security can be expanded. The current productivity of pulses falls
significantly below the demonstrated potential. For example, current average chickpea yields are
1.2 metric tons per hectare1
Estimates suggest that productivity gains from improvements in planting techniques could
double overall pulse production to two million tons over a period of five years. This gain in
productivity would not only increase smallholder income by 40 to 70 percent per hectare, but
would also ensure greater food security through meeting domestic pulse demand.
but the demonstrated potential in Ethiopia is 2.9 tons per hectare if
accompanied by the appropriate inputs.
In addition, Ethiopia could expand its foreign market presence through increased production
levels, which will lead to at least doubling of its current annual exports of about 140,000 tons.
Even under conservative assumption of proportionate increase in domestic consumption and
export, doubling production will result in at least doubling of export earnings from US$90
million to US$180 million. If the domestic production remains at the current level, export
earnings will be far greater.
1 This yield is substantially higher than the world average and sub-Saharan African averages of 0.8 tons/ha
IFPRI | Pulses Diagnostics July 2010 | 2
CHALLENGES IN THE VALUE-CHAIN
However, a set of constraints span the pulses value-chain in production, aggregation and trading,
and demand sinks/export. High-level findings are presented below:
Production. Productivity is below potential due to: low input usage, especially chemical
fertilizers capable of increasing yields in field trials by 10 to 80 percent; limited availability
of seed and limited familiarity with the variety of existing pulse types, and; limited usage of
modern agronomic practices.
Aggregation and trading. The link between the producers and the export markets is weak,
due to the large number of ineffective intermediaries operating in the value chain. The
intermediaries have failed to acquire scale and operate in limited geographic areas. The
fragmentation of intermediaries between the producer and consumer markets creates a lack of
transparency in markets.
Export. While there has been substantial growth in recent years, the current export market is
underdeveloped. The less developed, fragmented exporters operating at smaller scale in the
market results in inconsistent export flows and thus, inconsistent demand for exports. The
major causes of limited export development are (i) inadequate market intelligence (ii)
inability to leverage scale efficiencies due to smaller size and (iii) non-conducive the
business environment due to missing credit and insurance; and (iv) inconsistent
implementation of policy interventions.
THE RECOMMENDATIONS
Core interventions and enabling actions can holistically strengthen the Ethiopian pulses value
chain to be productive and stable, and provide year round transactions that supply domestic and
international markets. These recommendations are complementary to and intended to accelerate
the impact of current GOE and development partner strategies:
Increase inputs to improve productivity. Access to inputs is a key step in bridging the
yield gap between current and potential production. Phosphates and other fertilizers should
be supplied to farmers, along with knowledge on how to use them effectively. Seed
multiplication should be increased to adequately supply the needs of exporters and domestic
demand. Pulse breeding should expand, and leverage varietals used in other countries.
Extension should incorporate pulses into the curriculum.
Enhance linkages between exporters and producers. Stronger linkages between exporters
and smallholders will lead to a more efficient value chain where demand signals are clearly
communicated to the producers, and where inputs are available to ensure proper production
of the necessary export pulses. Actions to enable consistent supply between producers and
exporters may include: provision of regional-specific input packages; development of new
IFPRI | Pulses Diagnostics July 2010 | 3
varieties appropriate for export; leverage of cooperatives to provide consistent input supply
and off-take.
Providing adequate market to the exporters and farmers. ECX will play an important role in
market transparency, quality, and aggregation for exports. However, exporters association
and other relevant agencies assume the responsibility of tracking both domestic and
international markets
Strengthen the export sector. Developing the export sector will drive foreign reserve
earnings and will create a steady demand pull for pulses, thereby acting as a catalyst for the
sector. Exporters should be supported through a business environment more conducive to
investment and policies aimed at bolstering exporters’ scale, knowledge base, as well as
business acumen.
However, realizing the potential of the pulses value chain cannot be done in isolation; it can only
work if other components of the agriculture system are in place: extension, improved seed, and
soil fertility measures. This report shows how Ethiopia can chart a practical path of initiatives to
realize the potential in the pulses value chain, while increasing incomes of its small holder
farmers and delivering on food security objectives.
THE WAY FORWARD
With a clear, fact-based vision for the aspiration, a credible plan of action, and the support of an
effective performance management process, Ethiopia will be in a strong position to mobilize the
resources needed to deliver on these constraints. Ethiopia can convert this potential into critical
improvements in food security and livelihood for the country. The recommendations of this
report offer a first view on how Ethiopia can chart a practical path of initiatives to achieve these
goals.
The approach will require resources that GOE will likely have to mobilize beyond its own,
identifying new resources and using existing resources more effectively. The recommendations
outlined in this report and in the other sub-sector diagnostic reports are not an explicit roadmap
of the activities the BMGF is best positioned to solely resource; they reflect a set of findings to
support MoARD and all donors in the planning and implementing strategies to accelerate growth
and food security in the context of Ethiopia’s nationally stated objective to achieve middle-
income status by 2025.
Implementing the recommendations outlined in this report will require human and financial
resources. They will also require a level of sequencing and coordination that have in the past
been challenging to implement at a national and regional level. To achieve these objectives, the
GOE will need to work closely with all its partners (donors and development community, NGOs,
cooperatives and unions, public and international research organizations, private sector and the
various organizations working directly with farmers at the local level).
IFPRI | Pulses Diagnostics July 2010 | 4
This report provides a preliminary view on the sequencing of various activities to strengthen the
pulses value chain. A preliminary view of the sequencing of activities that could strengthen the
maize value chain follows:
Figure 1: Overview of recommendations and activity sequencing
Strengthen
Export
Sector
Increase
export/
producer
linkages
Short –medium term
(1-2 years)
Long-term
(3-5 years)
1.1 –Develop incentives for exporters to invest
resources to link with input supply bodies
1.2 –Build export trader association to build
markets, regulate quality and help achieve scale
1.4 -Develop a business environment conducive
to investment, and policies to scale exporters
2.1 -Supply smallholders with input supply
packages, consistent off-take, and market
information
2.3 -Link smallholders with agribusiness
enterprises through contract farming; put
mechanisms in place for quality control
2.4 -Improve on-farm storage management
practices and structures
1.3 Strengthen export promotion,
market intelligence, and the branding
of Ethiopian products
2.2 –Improve access to markets
through road networks and storage
facilities
Increase
inputs
3.1 -Source phosphate and other fertilizers,
and train smallholders on their use
3.2 -Increase breeding of pulse varietals
3.3 -Increase seed multiplication in order to
meet needs of export and domestic demand
3.4 -Incorporate pulses into the extension
curriculum
3.2 -Increase breeding of pulse
varietals
3.3 -Increase seed multiplication in
order to meet needs of export and
domestic demand
IFPRI | Pulses Diagnostics July 2010 | 5
II Acknowledgments
Since the maize sector diagnostic was initiated in November 2009 at the request of H.E. Prime
Minister Meles Zenawi, over one hundred collaborators have generously participated in the
process, from smallholder farmers and rural Development Agents to research institutes and the
Ministry of Agriculture and Rural Development.
The Ministry of Agriculture and Rural Development provided guidance and leadership
throughout. We are particularly grateful to H.E. Minister Ato Tefera, State Minister Dr. Abera
Deressa, State Minister Bashir Abullahi, State Minister Mitiku Kassa, State Minister Yaekob
Yalla and their colleagues in the federal Ministry, regional Bureaus of Agriculture and Rural
Development, and the woreda and kebele-level offices. Dr. Solomon Assefa, Director General of
the Ethiopian Institute for Agricultural Research, and his colleagues at EIAR also provided
invaluable input.
A panel of Ethiopian experts including Seme Debela, Solomon Bekure, Teferi Amakeltech,
Yeshi Babunuki, Berhande Gebrikidan, Tesfai Kumsa and Gete Zeleke has provided ongoing
guidance. We would also like to provide special thanks to Marco Quinones, Eleni Gabre-
Madhin, Derek Byerlee, Tsedeke Abate, Dirk Hoekstra, Tilahun Amede, and Berhanu
Gebremedhin.
Beyond the local, regional, and federal governments, a broad number of Ethiopian institutes,
research organizations, NGOs, private sector partners, and others engaged with teams of
researchers in developing the content and recommendations from this work. These include:
Addis Ababa University, Agricultural Research Institutes in Amhara, SNNP, Tigray, and
Oromia, Bahir Dar University, Ethiopian Commodities Exchange, Ethiopian Institute for
Agricultural Research, Ethiopian Seed Enterprise, Haramaya University, Jimma University,
Many donors and global experts were also engaged directly in the process. The CGIAR
representations in Addis Ababa provided generous use of facilities for consultant teams and
expert leadership in the diagnostic areas, with particular thanks to the International Food Policy
Research Institute, the International Water Management Institute, and the International Livestock
Research Institute. We would also like to recognize the many institutions and donor agencies
who contributed: the Alliance for a Green Revolution in Africa, ACDI-VOCA, African
Development Bank, CARE, Catholic Relief Services, Center for International Agriculture in the
Tropics, Center for International Forestry Research, CIMMYT, the Royal Dutch Embassy, the
Food and Agriculture Organization, GTZ, International Development Enterprises, IPMS, Iowa
State University, Michigan State University, Natural Resources Institute, Oxfam, Oxford
University, PanVac, Sasakawa Africa Assoication, SNV, JICA, Save the Children, Tufts
University, UN OCHA, University of Minnesota, USAID, Wageningen University, Washington
University, World Bank, and the World Food Program.
IFPRI | Pulses Diagnostics July 2010 | 6
III Acronyms
AEMFI Association of Ethiopian Microfinance Institutions
AMC Agricultural Marketing Corporation
DA Development Agents
ECX Ethiopian Commodity Exchange
EGTE Ethiopian Grain Trading Enterprise
EHPEA Ethiopian Horticulture Exporters and Producers Association
EIAR Ethiopian Institute of Agricultural Research
EOPEC Ethiopian Oilseeds and Pulses Export Corporation
ETB EThiopian Birr
FSS Food Security Strategy
FTC Farmer Training Center
GOE Government of Ethiopia
IFPRI International Food Policy Research Institute
ILRI International Livestock Research Institute
IPMS Improved Productivity through Market Access
MoARD Ministry of Agriculture and Rural Development
NGO Non-Governmental Organization
PASDEP Plan for Accelerated and Sustained Development to End Poverty
SDPRP Sustainable Development and Poverty Reduction Program
SNNP Southern Nations and Nationalists and Peoples
USD United States Dollar
IFPRI | Pulses Diagnostics July 2010 | 7
IV Background
Agriculture is the core driver for Ethiopia’s growth and long-term food security. The stakes are
high: 15 to 17 percent of the Government of Ethiopia’s (GOE) expenditures are committed to the
sectori, agriculture directly supports 85 percent of the population’s livelihoodsii, 43 percent of
gross domestic product (GDP)iii, and over 80 percent of export valueiv
Ethiopia’s agricultural sector has witnessed consistent growth since 2003: maize production has
expanded at six percent per annum, and the aggregate export value across all commodities has
grown at 9 percent per annum
.
v, underpinning an eight percent annual growth rate in GDPvi.
Public investment has expanded access to productive inputs, such as hybrid maize seed and
fertilizer2. Concerted government spending in extension has also established over 8,500 Farmer
Training Centers (FTCs) and trained 63,000 Development Agents (DAs) from 2002 – 20083.
However, the agriculture sector continues to face a set of constraints that restrict further and
accelerated growth. Markets are underdeveloped, federal and regional level public and private
sector partners lack capacities to implement, some gender imbalances continue to be
unaddressed, safety nets account for a large proportion of agricultural spending, irrigation
potential remains underdeveloped, shortages of improved inputs hinder growth, and key areas of
the enabling environment require improvement. Most importantly five to seven million
Ethiopian’s remain chronically food insecurevii
At the request of the Government of Ethiopia (GOE), in 2009, the Bill & Melinda Gates
Foundation agreed to undertake diagnostic reviews of Ethiopia’s seed system, irrigation,
extension, agricultural finance, soil fertility/fertilizer and markets value-chains for maize,
livestock, and pulses. Jointly, these sub-sector diagnostics inform a separate holistic report with
systems-level recommendations across agriculture. This systems-level work captures common
themes from the more siloed diagnostics and identifies priority areas to drive food security and
growth. The integrated, summary report also provides an implementation strategy for a program
to accelerate agricultural development in Ethiopia.
.
The development of these reports has been led by senior fellows with the International Food
Policy Research Institute (IFPRI), the Ethiopian Institute for Agricultural Research (EIAR), the
International Livestock Research Institute (ILRI), the International Water Management Institute
(IWMI), and the Association of Ethiopian Microfinance Institutions (AEMFI). Throughout their
work, these sector experts worked closely with technical experts at the Ministry of Agriculture
and Rural Development (MoARD) as well as other local stakeholders and local and international
content experts.
2 Refer to the seeds and soil fertility diagnostic reports for more details
3 Refer to the extension diagnostic report for more details
IFPRI | Pulses Diagnostics July 2010 | 8
The findings of the sub-sector diagnostics and the system-wide report are a complement to
national GOE strategies, namely PASDEP II, along with corollary projects financed by the GOE
and its development partners. The purpose of the work is to support the GOE to help accelerate
the achievement of PASDEP II’s goals for sustainable growth, food security, and a pathway to
middle-income status by 2025.
IFPRI | Pulses Diagnostics July 2010 | 9
V Methodology of diagnostic work
In close consultation with the Ministry of Agriculture and Rural Development (MoARD), a team
of local and global experts, led by International Food Policy Research Institute (IFPRI),
undertook the pulses value-chain diagnostic in Ethiopia from January 2010 to March 2010. Over
50 stakeholders, including many small-scale farmers, were consulted as part of the process at the
kebele, woreda, regional, and federal level. An independent Ethiopian expert panel, an
international content group, development partners, local institutions, NGOs, and other actors also
provided input into this work. These discussions culminated in a wide-ranging stakeholder
convening held in the beginning of March 2010, where the team’s preliminary finding and
recommendations were presented. This final report reflects the input of all local partners and
stakeholders currently operating in the pulses value chain in Ethiopia.
This sectoral analysis, similar to the diagnostic work in other sub-sectors of Ethiopia’s
agricultural system facilitated by the Gates foundation at the request of the Prime Minister,
consisted of a rigorous multi-step process, described below:
Extensive review of the relevant literature. The pulses value-chain in Ethiopia has been the
subject of only limited investigation. The team conducted an exhaustive review of the
existing reports, which provided a baseline understanding and starting point for the team’s
work. A listing of the various reports consulted is contained in Appendix 1. Further, an
analysis of international cases provided a context to understand the enabling factors in other
economies for successful interventions.
In-depth key informant interviews. Over 70 stakeholders, including MoARD, BoARD,
woreda and kebele-level government staff, development partners, research institutes, traders,
cooperatives, unions, farmers, investors, and others participated in interviews. Appendix 2
contains the complete list. The interviews brought context to and surfaced constraints
identified in the literature review; they also provided a soundboard to validate findings and
recommendations.
Analysis of primary qualitative and quantitative data. Primary data was collected to fill
key gaps in the existing data set. This fact-driven analysis allowed teams of consultants to
make sectoral projections and modeling around constraints and opportunities in the pulses
value-chain. These analyses, in conjunction with informant interviews and literature reviews,
provided the basis for a broad set of systemic recommendations designed to strengthen the
current Ethiopian pulses value-chain.
Multi-stakeholder convenings. Convenings were held toward the end of the study to
present, test and further refine the team’s initial findings and recommendations. These
convenings were attended by regional and federal government officials, private sector
representatives, as well as national and international research organizations.
IFPRI | Pulses Diagnostics July 2010 | 10
Synthesis and validation with expert panels. These meetings served as a final review of the
recommendations and findings. Three separate expert panels were consulted during the
review process: an independent Ethiopian panel; an international content expert group; and a
high-level advisory group for cross-sectoral and broad development issues. Input was
provided by these panels in an iterative process, consisting of meetings and direct comments
into documents, held over a period of several months. During this period, the team also
continued to receive feedback from MoARD leadership.
The methods sought to combine academic rigor with a participatory, forward-looking, and
actionable process with the stakeholders in Ethiopia who, at the end of the day, are the
protagonists who will be affected by and take leadership in the implementation of the findings
and recommendations of this work. It also sought to interact directly with the farmers who are
not only the primary beneficiaries of the work, but the final link in the chain in implementing
recommended interventions. The incorporation of a farmer perspective, with a focus on gender,
ensures that recommendations are demand driven, catering to the needs of the end beneficiaries.
IFPRI | Pulses Diagnostics July 2010 | 11
1. Introduction
The pulse industry has developed significantly with little intervention, and great potential exists
to increase the production and impact of pulses through proactive and targeted support. Rough
calculations suggest that Ethiopia could expand its foreign market presence by at least doubling
its current exports of ~140,000 tonsviii (USD 90 millionix) through increased production levels.
Smallholder income could also be increased by at least 40-70 percent per hectare of pulses
planted through greater pulse productivity (with better inputs and sound agronomic practices).
There is an opportunity to stabilize and increase supply by improving production up to the full
potential (of 2 million tons) which would meet domestic demands, helping to ensure food
security4
Section one is divided into three parts. Part one provides an overview of Ethiopia’s production
system for pulses, identifying the primary production regions and the agro-ecologies poised for
growth. Part two reviews trends in the market, with a discussion of the remarkable growth in
both cultivated land and aggregate production in key varieties, along with the unexpected price
collapse in 2008/09. The final part touches on the nutritional and income potential of pulses for
smallholder livelihoods, particularly women, who are responsible for the majority of harvest and
value-addition activities in Ethiopian pulses.
.
Section two provides a value-chain analysis. The section looks at production, aggregation and
marketing, and commercialization for export. Section three provides the details for a set of
actionable recommendations, followed by an implementation plan. Recommendations are
divided in three parts, following the structure of the value-chain analysis, focusing on on-farm
productivity, marketing and export. The implementation plan gives a sequencing, prioritization
and ownership for the timing and different actors involved in the first five-year window.
1.1 CHARACTERIZATION OF PULSES SUBSECTOR
1.1.1 Overview of Ethiopia’s pulses production system
Twelve pulse species are grown in the country. Of these, faba bean (Vicia faba L.), field pea
(Pisum sativum L.), chickpea (Cicer arietinum L.), lentil (Lens cultinaris Medik.), grass pea
(Lathyrus sativus L.), fenu greek (Trigonella foenum-graecum L.) and lupine (Lupinus albus L.)
are categorized as highland pulses and grown in the cooler highlands. Conversely, haricot bean
(Phaseolus vulgaris L.), soya bean (Glycine max L.), cowpea (Vigna unguiculata L.), pigeon pea
(Cajanus cajan L.) and mung beans are predominantly grown in the warmer and low land parts of
the country. Among the individual varieties, faba beans (broadly known as horse beans) accounts
4 Assumes an increase in yield from 1.2 to 2 tons per hectare, accompanied by a 5% increase in current acreage
IFPRI | Pulses Diagnostics July 2010 | 12
for the greatest portion of production5, at 36 percent, followed by haricot beans (17 percent) and
chickpeas (16 percent). Other pulses (e.g., lentils, peas, lupines, and mung beans) account for the
remaining 32 percentx
While pulses are grown throughout the country, and account for 13 percent of cropped land area,
production is concentrated in the Amhara and Oromiya regions (Table 1), which together
account for 92 percent of chickpea production, 85 percent of faba bean production, 79 percent of
haricot bean production, and 79 percent of field pea production. The region is also the largest
producer of three out of the four major pulses varieties in the country (faba beans, chickpeas, and
haricot beans), while Oromiya leads production in the other major variety - field peas.
.
Table 1 provides a snapshot of production levels disaggregated by region and pulse variety.
Explanations of low production in the other regions include: agro-climatic conditions; limited
market access leading to less commercialization (as these regions are further away from main
urban centers and seaports leading to limited access to both domestic and international markets),
and; low population density. According to the 2007 national census, Amhara, Oromiya, and
Addis Ababa account for 64 percent of the total Ethiopian population, compared to 6 percent and
1 percent in Tigray and Benishangul, respectively.
Table 1: Pulse production in Ethiopia by region, 2007
Region Population
(million) % of total
population
Production shares by pulse types
Faba
beans Field
peas Chick
peas Haricot
beans
Amhara 17.2 23.3 48 20 62 42
Oromiya 27.2 36.7 37 58 30 37
SNNP 15.0 20.4 10 18 3 15
Tigray 4.3 5.8 4 1 5 5
Benishangul Gumuz 0.67 0.9 0 2 0 0
Total production
(in ‘000 tons) --- --- 696 330 312 268
SOURCE: CSA 2008/09, Area and Production report; CSA 2007 census report for the population.
The spatial distribution of pulses cultivation is presented in Figure 2 shows the relationship
between agro-climatic conditions and pulses production. Note that chickpea and lentils are
primarily grown on dark soils on residual moisture, which is a predominant soil type in west and
5 Note that the importance of faba beans is limited by disease (chocolate spot) and the bulky nature of its seed (200 kg per hectare
needed).
IFPRI | Pulses Diagnostics July 2010 | 13
north Shewa zones of Oromiya; north and south Gonder, south Wollo, north Shewa, east and
west Gojam Zones of Amhara; Goro zones of SNNPR; and the east Tigray zone. Faba beans and
field pea, on the other hand, are grown during the main season on both red and black soils
primarily in Amhara, Tigray, Oromiya and SNNP regional states. Haricot beans are concentrated
in the relatively dry and warmer parts of the country mainly along the Rift Valley. Production of
haricot beans is also expanding in SNNP region, Gambella and Benshangul-Gumuz regional
states (Figures 3 and 4).
Figure 2: Geographic distribution of chickpeas
SOURCE: Alemu et. al, 2009
IFPRI | Pulses Diagnostics July 2010 | 14
Figure 3: Geographic distribution of haricot beans
SOURCE: Alemu et. al, 2009
IFPRI | Pulses Diagnostics July 2010 | 15
Figure 4: Geographic distribution of faba beans
SOURCE: Alemu et. al, 2009
1.2 RECENT GROWTH OF THE PULSE SUB-SECTOR
Ethiopia is now one of the top ten producers of total pulses in the world, the second-largest
producer of faba beans after China, and the fifth or sixth largest producer of chickpeas6xi
6 Ranking depends on which years are selected (e.g., fifth based on average production 2005-2007, sixth based on 2008 data).
. Within
Ethiopia, pulses are the third-largest crop export behind coffee and oil seed, and represent a USD
90 million export industry (Figures 5 and 6).
IFPRI | Pulses Diagnostics July 2010 | 16
Figure 5: Importance of pulses export to total export earnings
SOURCE: Authors’ computation based on data obtained from NBE
Figure 6: Importance of pulses export to total export earnings
SOURCE: Authors’ computation based on data obtained from NBE
The role that Ethiopia now plays in the international pulse market can be attributed to significant
growth rates in pulse production over the last decade (Figure 8, Figure 9)7
7 The market liberalization provided initial boost. Prior to the market reform measures of the 1990s, pulses and oilseeds were
under the control of country’s grain marketing board that restricted private sector entry into the export markets
. For instance, in
1994/5 the country produced only 742 thousand tons of pulses, compared to 1.25 million tons in
1999/2000 and to 1.8 million tons in 2007/08 (Figure 7). This growth of 243 percent between
1994/95 and 2007/08 implies an annual growth rate of 17 percent. Growth rates for individual
IFPRI | Pulses Diagnostics July 2010 | 17
varieties of pulses are even higher. The total production of haricot beans, a key export, was only
about 34 thousand tons in 1994/95 and increased nearly tenfold to 330 thousand tons in 2008/09.
From 1994/95 – 2008/09, rates of production growth for chickpea, haricot bean, faba bean, and
lentil were 12, 43, 7, and 15 percent respectively. For each variety, the rates of production
growth outpaced rates of growth in cultivated land, suggesting parallel gains in per hectare
productivity.
Figure 7: Pulses crop area by pulse (1994/95 to 2008/09), 000s ha
SOURCE: Authors’ compilation based on CSA Agricultural Sample Survey Reports for various years.
Figure 8: Pulses production by pulse type (1994/95 to 2008/09), 000s tons
SOURCE: Authors’ compilation based on CSA Agricultural Sample Survey Reports for various years.
0
100
200
300
400
500
600
95
00
01
02
03
04
05
06
07
08
09
Faba bean Chickpea Haricot bean Lentil
0
100
200
300
400
500
600
700
800
95 00 01 02 03 04 05 06 07 08 09
Faba bean Chickpea Haricot bean Lentil
IFPRI | Pulses Diagnostics July 2010 | 18
Figure 9: Pulses yield by pulse type (1994/95 to 2008/09), tons/ha
SOURCE: Authors’ compilation based on CSA Agricultural Sample Survey Reports for various years.
Although production continued to increase through 2009, export volumes dropped by 42 percent
in 2008/09 (from 233 tons to 136 tons)xii. As shown in Figure 10, after consistent growth in
prices in global pulse markets for several years, global prices fell in 2008/2009. This caused the
local price for pulses to rise above the export parity available to smallholder farmers. Farmers
sold on domestic markets (as the export price was not high enough to justify transport and
cleaning costs), further depressing the farm-gate price, or stored their pulse supply, anticipating
an upswing in the global price. This price volatility exacerbated challenges throughout the value
chain, causing sourcing problems for exporters and traders and limiting ability for the off-take
market to function. This impact also had lagging effects on pulse production, with estimates
showing fewer pulses planted in 2009/2010 season and a potential for pulse shortages in 2010.
IFPRI | Pulses Diagnostics July 2010 | 19
Figure 10: Trends in pulses export performance
SOURCE: Central Statistics Agency (2009)
1.3 PUBLIC POLICIES
Public policy has played a small yet vital role in facilitating the growth of the pulses sub-sector,
by liberalizing markets in the late 1990s and encouraging private sector entry. During the 1980s,
the government took over all aspects of grain marketing, reducing private sector participation in
the grain and pulses markets. For instance, the licensed traders’ share in Agricultural Marketing
Corporation’s (AMC) annual purchase of cereals declined from 70 percent in 1982 to only 10
percent in 1986xiii
The GOE initially had a separate marketing agency devoted to market development for pulse
exports, the Ethiopian Oilseeds and Pulses Export Corporation (EOPEC). The organization later
merged with the Ethiopian Grain Trading Enterprise (EGTE) in 1999 as part of a broader
consolidation and liberalization effort on the part of GOE. The policies paved the initial path for
private sector participation in the pulse sector, contributing to improvements in production and
exports. That said, EGTE’s role has not been clear. Purchases to date for export continue to show
very little correlation with the production volume of pulses, raising critical questions about the
. The same was true for oilseeds and pulses.
IFPRI | Pulses Diagnostics July 2010 | 20
value-chain, from issues of quality and aggregation related with production, to questions of
commercialization for export (Table 2).
Table 2: Share of EGTE's local purchase from total production by pulses type
Year
Lentil Faba bean Chickpea Haricot bean
EGTE
purchase
(tons)
Share of
total prod-
uction (%)
EGTE
purchase
(tons)
Share of
total prod-
uction (%)
EGTE
purchase
(tons)
Share of
total prod-
uction (%)
EGTE
purchase
(tons)
Share of
total prod-
uction (%)
2005 26 0.047 44 0.008 21 0.013 239 0.113
2006 0 0.000 0 0.000 46 0.022 103 0.074
2007 36 0.045 0 0.000 185 0.073 335 0.150
2008 6 0.006 58 0.008 126 0.044 544 0.225
SOURCE: CSA for the production and EGTE Annual report for EGTE purchase
In recent years, to develop the potential of the sector to supply high quality products for both the
domestic and export market, various policy initiatives have been undertaken to increase the
competitiveness of smallholder farmers. The initiatives seek to promote improved pulse
production technologies with high yielding varieties, adoption of recommended fertilizer
application rates and crop protection practices, and the promotion of pulse export trade and
financing incentives to enhance the competitiveness of pulse exporters. In large part, these farm-
level efforts have fallen short of achieving the key goals of increasing smallholder productivity,
maintaining steady and high quality production, and ensuring consistency in export volumes,
primarily because of the lack of inputs, effective agencies to implement, and a cross-sectoral
vision for the sector with the confidence of multiple stakeholders.
1.4 CONTRIBUTIONS OF PULSES TO SMALLHOLDERS’ LIVELIHOOD
Pulses contribute to smallholder livelihoods in multiple ways (see case study – story of a small
farmer). Firstly, pulses can play a significant role in improving smallholders’ food security, as an
affordable source of protein (pulses make up approximately 15 percent of the average Ethiopian
dietxiv
) and other essential nutrients. As a protein source, pulses are more affordable for
smallholders than meat, fish, and dairy products, and for the 40 percent of Ethiopians who
practice orthodox Christianity, pulses become the single largest source of protein during the
fasting period.
IFPRI | Pulses Diagnostics July 2010 | 21
Case study – Pulses and livelihood: Story of a small farmer
Hailu Balcha is a small farmer in the Ada woreda of the Oromiya region in Ethiopia, consulted
during the diagnostics. Like his forefathers, he grew cereals, mainly teff, for the food security
of his family. Hailu also had a few livestock and grew vegetables, generating some cash
income. He had never thought of growing pulses as an income source until an extension agent
approached him in 2007. The agent, who was receiving training under a project called
Improving Productivity through Market Access (IPMS), encouraged Hailu to allocate one
hectare of land to a high yielding chick pea variety. Following the instructions from the
extension agent, he plowed his plot three times at an interval of two weeks. He did not use any
chemical fertilizer, but did use 60 gms of bio-fertilizer, which he mixed with 130 kilograms of
high yielding seed just before sowing. The other costs of cultivating his one hectare plot
included 48 days of labor, two kilograms of insecticides, and the use of his donkeys. When all
costs are added, Hailu spent ETB 6,955 and harvested 5.27 tons of chickpeas. Despite these
costs, Hailu ended up making a net profit of ETB 12,744.26 (USD 1,449) from selling at a
market price of ETB 3,738 per ton. Given that teff prices were ETB 4,450 per ton in 2007 and
average yield is only one ton per hectare, Hailu’s income from chickpea cultivation is 286
percent higher than what Hailu would have earned had he cultivating teff in his plot.
SOURCE: Authors’ write up based on the data from IPMS model farmers’ report
Secondly, pulses can have an income benefit for smallholders, both in terms of diversification
and because they yield a higher gross margin than cereals. The income benefits of diversifying
from cereals to pulses for one smallholder farmer are exemplified in the case study, and Table 3
demonstrates the net profit of wheat, barley and teff, compared to faba beans and chickpeas. The
results demonstrate that pulses are generally more profitable than cereals, giving smallholders an
economic incentive to increase pulse production. Faba beans provide the highest net return
among the crops considered, while chickpeas provide higher returns than barley and teff, but
comparable returns to wheat.
Table 3: Gross margin analysis for selected crops per hectare
Item Wheat Barley Teff Faba bean Chickpea, Desi
Gross returns 3,486 2,656 2,961 2,521 6,204
Total costs 2,761 2,473 2,366 1,235 5,484
Net profit 725 183 595 1,286 720
SOURCE: Team analysis
Within chickpea varieties, a recent analysis of production costs and market opportunities of Desi
and Kabuli chickpeas in Ethiopia demonstrated that farmers would yield more income by
switching from the production of traditional desi chickpeas, which use low input production
methods, to the production of high yielding Kabuli chickpeas, while employing improved
IFPRI | Pulses Diagnostics July 2010 | 22
managementxv
However, much of the pulse production in Ethiopia is also consumed on-farm (approximately 65
to 90 percent), and only the remainder is marketed, demonstrating that smallholder farmers
primarily produce pulses for subsistence needs, and this income benefit may not be realized.
However, it is worth noting is that the proportion of marketed pulse output varies significantly
across regions, pulse types and production year
. The switch from the use of low input, low output to input intensive production
technologies, while requiring a higher initial investment, provides higher returns, thereby
justifying the additional costs.
xvi
In addition to improving food and nutritional well-being, pulses can also improve soil health.
Pulses have nitrogen fixing properties that can reduce fertilizer usage for cereals in the next
season by up to 60 percent (if the recommended fertilizer dosage is otherwise adhered to
. For example, a study of smallholders in Alaba
district showed that smallholder farmers sold 46 percent of their haricot bean and chickpea
produce. Thirdly, an indirect benefit of pulse production is the crop residues, which are widely
used as animal feed thereby supporting livestock – an often important means of livelihood for
smallholders.
8
Finally, as the third largest crop export product in terms of total value (USD 90 million), pulses
have a positive impact on the trade balance, and contribute to the country’s foreign exchange
reserves. However, only 140,000 tons out of 1.6 million are exported
).
Given that cereal production causes higher soil nutrient depletion, rotating between pulses and
cereal will not only contribute towards maintaining soil health but can also reduce the country’s
fertilizer usage.
xvii
8 Note that recommended fertilizer dosages are not usually adhered to in Ethiopia – please refer to the soil fertility diagnostic for
more details
. Assuming domestic
consumption remains the same, small percentage increases in production could dramatically
boost export volumes, further contributing to the balance of payments.
IFPRI | Pulses Diagnostics July 2010 | 23
2. Results of value chain analysis
A successful and sustainable pulse industry presupposes that value chain actors are well
integrated and function as a unified system in a way that maximizes the welfare of all actors
involved from production up to consumption. The pulse value chain in Ethiopia, however, is far
from efficient and fraught with several challenges. This value-chain analysis attempts to identify
the various impediments in order to develop possible interventions that can improve the
performance of the value chain.
As an analytical framework, the value chain is divided here into three broad stages, namely
production, aggregation and marketing, and commercialization towards exports. Table 4
illustrates the key challenges at each of the three distinct value chain stages. The
characterizations of each stage were based on interviews with stakeholders across the value chain
and participatory rapid assessments performed by the diagnostic team. The challenges facing
each stage of the value chain are further elaborated in the subsequent sections.
Table 4: Overview of challenges in the pulses value chain
Challenge Description
Low on-farm
productivity Smallholder productivity constrained by limited use of improved
inputs, small fragmented plots, marginal soils, limited use of
improved varieties, and inadequate farm management practices
Inefficient marketing
system Limited effectiveness of marketing due to involvement of many
actors, leading to excessive handling and weak demand signals,
and inadequate financing and transport
Inconsistent export
supply Limited relationship between exporters and importing countries,
unstable and erratic demand from importing countries leading to
limited number of contracts between exporters and producers
2.1 PRODUCTION
The primary producers of pulses are smallholders with small and dispersed plots under rain fed
conditions. Women are also heavily involved in production, conducting the majority of on-farm
labor during both planting and harvest, with additional activities in value-addition. While there
have already been productivity gains in the pulses subsector – for instance from 2000 to 2008,
yields for faba bean increased 20 percent, from 1.06 tons/ha to 1.3 tons/ha,xviii – this study
suggests that there is significant potential for further productivity gains. Comparisons between
current yields with international and on-farm trial benchmarks demonstrate that for both faba
beans and chickpeas, Ethiopia has substantially lower yields than on-farm trail and international
yields would suggest possible.
IFPRI | Pulses Diagnostics July 2010 | 24
For example, although the Ethiopian average chickpea yield, at 1.2 tons per hectarexix, is higher
than countries including India, farm tests on experimental plots in Ethiopia have achieved yields
from 2.9 to 3.5 tons per hectare9 xx
At the farm level, productivity appears to be severely constrained by three major factors
. This implies a minimum productivity gap of at least 150
percent. For faba beans, the gap between actual and potential productivity is even wider, with the
potential to more than triple the productivity from 1.3 tons per hectare to 4.0 tons per hectare.
Bridging this gap would make Ethiopia third among major bean producing countries, as
measured by production.
xxi
2.1.1 Limited use of chemical fertilizers
: (i)
limited or no use of chemical fertilizers for pulses (e.g., phosphates); (ii) very limited availability
of improved seeds (most pulses are grown from unimproved cultivars with low genetic
potential); and (iii) the use of conventional agronomic practices (e.g., sub-optimal crop rotations,
poor seed bed preparation). Each of these factors is further explained below.
Although pulses need little or no nitrogen (depending on the variety), they benefit from
phosphates, potassium and zinc, among other nutrients. Studies in Ethiopia and elsewhere have
demonstrated the productivity benefits for pulses from phosphate fertilizers (e.g., super-
phosphates) in particular, currently not used in Ethiopia. Studies on chickpeas in Pakistan and
Jordan showed yield gains of 65 percent and 88 percent respectively (depending on the initial
soil health and moisture conditions), while yield increases of 25-80 percent and 55-150% have
been seen with faba beans and field peas respectivelyxxii
Fertilizer use in Ethiopia is comparatively low, averaging 25 kg/ha of nutrientsxxiii, and much of
this is currently applied on cereals. The currently limited use of chemical fertilizers on pulses is
due to: lack of awareness of the benefits of fertilizer for pulses; limited access to credit; and the
lack of phosphate fertilizers imported into Ethiopia. In many of the rural sites the diagnostic team
visited, the majority of the farmers mistakenly thought that pulses did not need chemical
fertilizers. In places where farmers did know about benefits of fertilizer application, access to
credit was the primary reason cited for not using fertilizer.
.
The use of fertilizer is especially important in light of multiple Ethiopia-specific studies that
assert that soil fertility depletion is one of the fundamental biophysical causes for declining per
capita production10. For instance, estimated soil nutrient losses for the highlands of Ethiopia are
high, exceeding 122 kg of N, 82 kg of K and 13 kg of P per cultivated hectarexxiv
9 Based on crop trials in 2004
.
10 Refer to the soil fertility diagnostic report for more details
IFPRI | Pulses Diagnostics July 2010 | 25
2.2.1 Limited availability and use of improved seeds
The pulse research program in Ethiopia has released a number of
improved pulse varieties including 20 faba bean, 26 field pea, 16
chickpea, 36 haricot bean, 7 lentil and 13 soybean varietiesxxv
Figure 11: Yield gap for key pulse varieties in on-farm and on-station trials
. As
depicted in Figure 11, these varieties, if used with recommended
input packages, have the potential to increase pulse yields two to
three fold. The merits of these varieties have been confirmed by
nationwide technology demonstration programs conducted
throughout the country with farmers, researchers, extension agents
and other stakeholders. Yet, despite the release of this large
number of improved pulse varieties, that are adapted to a wide
range of rainfall, soil and altitude regimes, the use of certified
improved seeds by farmers is very low. A combination of factors
explain low adoption: on the one hand, supply side constraints
including extension, limit the knowledge of smallholder on production practices and benefits of
diversification; on the other hand, a set of market-led demand constraints, particularly the price
instability in 2008, led to diminished trust in the pulses sector for small producers after declining
market returns.
SOURCE: CSA, various years
0
500
1000
1500
2000
2500
3000
3500
4000
4500
Faba bean Field pea Chickpea Lentil Haricot bean
Pulses
Yield (kg/ha)
National average (1997 & 98)
National average (1999-2008)
Average (on-farm)
Avearge (on-station)
“
I do not know if improved
seed is worth it so I don’t
use it”
— Farmer visited on
field visit in Oromia
“Farmers save seed and
re-use but do not realize
deterioration of
productivity over time”
— Pulse expert at
research institute
IFPRI | Pulses Diagnostics July 2010 | 26
2.1.3 Modern agronomic practices not widely used
While agronomic practices such as the timing of plowing,
fertilizer and insecticide applications, crop rotation, and weeding
and harvesting are critically important to achieve optimum
productivity, many farmers are unaware of their benefits. Limited
knowledge of best practices for overall agronomic practices and
post-harvest management has resulted in poor quality, low
yielding pulses.
In particular, the lack of crop rotation is a key issue with respect to
farm management practices. Currently, 13 percent of the land area
used for grain production in any one year is devoted to pulses,
suggesting a significant portion of the remaining cultivated area
for grain is under mono-cropping. Farmers may mono-crop cereals to meet the family’s need for
cereal grain for food at the expense of long-term sustainability of the farming system. However,
crop rotation presents significant potential – research on cropping systems in Ethiopia indicates
that the improvements in soil fertility from optimal crop rotation (e.g., planting wheat after faba
beans) improved grain yields of wheat by more than one ton per haxxvi
2.2 PRODUCT AGGREGATION AND TRADING
. The adoption of optimal
rotations, besides increasing the productivity of pulses and the subsequent cereal crop through
improving soil fertility, can increase farmer income as area devoted to pulses increases.
The analysis of aggregation and trading (otherwise referred to as marketing) examines the flow
of pulses from their origin (producer) to their final destination. Several studies have
characterized the pulse marketing channels in Ethiopia, and have concluded that, with the
exception of haricot beans, the marketing system of pulses is highly underdeveloped, and more
or less similar to that of cerealsxxvii.
Pulse marketing, from producer to consumer, is a complex process involving handling from
multiple intermediaries. There are three separate levels of marketing as shown in Figure 12:
Primary markets (buyers who buy directly from the producers) include rural retailers, rural
assemblers, brokers, and primary cooperatives
Secondary markets (buyers who purchase products primarily from originators) include
woreda retailers, woreda wholesalers, and farmers unions
Tertiary markets include urban wholesalers, urban retailers, processors, supermarkets, and
grain exporters, and are located in larger cities such as Addis Ababa and Nazereth (Adama)
The interaction between the actors in these markets is demonstrated in Figure 12. The
complexity of the marketing system is not only exemplified by the multitude of players, but by
“
I don’t weed too much…
pulses don’t need it”
— Farmer visited on
field visit
“Farmers plant on
marginal lands, they know
it helps soil nutrients but
lowers the yield of
pulses”
— Pulse expert
IFPRI | Pulses Diagnostics July 2010 | 27
the many paths that pulses can take to reach end consumers. From primary markets, produce may
or may not pass through secondary and/or tertiary market actors before reaching consumers.
Figure 12: Stylized chick pea marketing chains in Ethiopia
SOURCE: IPMS Chick peas document (2007)
Aggregation from producers often takes substantial effort as production is from about 11 million
households that are spread over large and hard to reach areas. Many actors are involved in
aggregation and trading - the number of actors and their economic performance is unknown.
Some estimate that there are thousands of aggregators (including assemblers, retailers,
wholesalers, farmers’ union, processors and exporters) operating at different levels in the value
chain.
Traders typically operate in small geographic areas and trade relationships are based heavily on
social capital. The relatively large number of actors working in a highly fragmented manner,
coupled with poor road infrastructure and the inability for large-scale international traders to
track products, implies high transaction costs for aggregators and traders.
The three major constraints in pulse aggregation and trading are: (i) the complex marketing chain
means that quality is reduced through excessive handling and the demand signal is lessened from
multiple middle men separating producers and exporters; (ii) there are financial constraints and
logistical limitations; and (iii) infrastructure challenges create transportation difficulties. These
constraints are expanded upon in the following sections.
IFPRI | Pulses Diagnostics July 2010 | 28
2.2.1 Complex marketing chain results in lower quality and weaker demand
signals
The negative implications of a complex marketing chain are that: (a) the quality of the product is
reduced through excessive handling; and (b) the demand signal is lessened due to the multiple
middlemen separating producers and exporters so smallholders are unknowledgeable about the
quality and type demands in end markets.
Quality is an important parameter that determines both the price and volume of pulse exports.
Exporters estimate that they reject 10 to 25 percent of produce due to quality standards, which
impinges upon both the profitability of exporters and ultimately the prices paid to farmers. The
most important quality parameters dictating pulse export quality include: seed size, color,
appearance, and existence of mixtures (Table 5). Most of these parameters are dictated by the
type of pulse variety (traditional versus improved), management practices and post-harvest
handling.
However, farmers are often unaware of the characteristics desired by the end markets (e.g.,
exporters) and developing smallholders’ knowledge on the quality requirements of the
international market, including pulse aggregators and traders, would benefit all involved in the
value chain.
Table 5: Ethiopian grades and standards for chickpea
Quality traits
Maximum allowable limit (%)
Grade 1 Grade 2 Grade 3
Total damaged seeds 0.3-1.0 1.0-1.5 1.5-2/0
Broken grains 0.5 1.0 1.5
Wrinkled grains 2.0 4.0 8.0
Cracked coat 3.0 5.0 7.0
Foreign matter 0.2 0.3 0.5
SOURCE: Compiled by Shiferaw et.al 1997 from Quality and Standards Authority of Ethiopia (QSAE)
2.2.2 Financial and logistical limitations
Availability of inputs such as quality seeds, fertilizer and credit is crucial for an efficient and
effective marketing system. However, consultations with primary cooperatives, unions and
government officials indicated that only about 1 percent of primary cooperatives and 10 percent
of the unions have access to credit. This suggests that aggregating and trading activity is limited
IFPRI | Pulses Diagnostics July 2010 | 29
by constrained access to finance, at least for smaller marketing actors. Larger traders in the major
cities, however, are able to access formal credit to finance their business11
Other than financial constraints, limited storage facilities and lack of timely market information
have constrained the efficiency of market actors involved in pulse aggregation and trading. In
terms of market information, market participants typically have either no or ill-informed
information on prevailing grain prices, supplies, stocks and inter-regional grain flows. A source
of market information for importers and exporters, who seldom operate and scale and are largely
fragmented, is limited. Market information to importers and exporters is also unavailable. As for
storage facilities, post-harvest crop losses due to inadequate and poor-quality storage are a
fundamental problem in Ethiopia, at about 15 to 20 percent of all pulse production is lost.
.
2.2.3 Infrastructure challenges create transportation difficulties
High transaction costs lead to lower prices for producers, higher prices for urban consumers, and
suppressed export competitiveness. It is worth noting that, despite the fact that Ethiopia is among
the top pulse producers in the world, the price received by farmers is relatively low compared to
other pulse producing countries (Appendix 4).
Finally, despite recent improvements in road networks, Ethiopia still suffers from inadequate
road networks. Most rural households are still located in areas that cannot be accessed by
motorized vehicles. Smallholder farmers depend on pack animals and human labor to transport
their surplus produce to primary markets. Assemblers and other market actors often pay high
transportation costs to move their purchases to secondary and tertiary markets. Consequently,
moving crops around is not only slow but expensive.
2.3 COMMERCIALIZATION/EXPORT
As with all commodities traded in highly competitive markets, information on the demand and
consumption patterns of pulses is critical for designing appropriate interventions that enhance the
competitiveness of the pulse sub-sector. Consumers, be it domestic or international, indicate their
demand through the price they are willing and able to pay, and the market transmits the price
signal to producers so that they may respond accordingly. In the pulse market in Ethiopia,
however, a number of factors restrain the market forces required to provide the right signal to all
actors in the value chain. In this section, the major demand pulls for Ethiopian pulses, as well as
and the factors that affect demand and supply, are discussed.
11 Please refer to the agricultural finance diagnostic report for more details
IFPRI | Pulses Diagnostics July 2010 | 30
2.3.1 Domestic consumption and marketable surplus
Pulses are a significant portion of the Ethiopian diet, particularly for rural and peri-urban
consumers. Among pulses varieties, grass pea, pigeon pea and cow pea are mainly used for
domestic consumption, while haricot beans, faba beans, chickpea, lentils and field pea are
primarily exported. Table 6 summarizes the end markets for the primary pulses in Ethiopia. This
table demonstrates that the bulk of the pulses are consumed on-farm, with marketed output
accounting for only 13 to 28 percent of production, depending on the variety.
Table 6: Pulse grain use in Ethiopia, 2007
Type of Pulse Number of
households (million)
Pulse grain use (%)
Marketed Consumed Other12
Faba Beans
3.8 18 64 18
Haricot Beans 2.5 13 72 15
Field peas 1.7 18 65 17
Chickpeas 1.0 18 64 18
Lentils 0.7 28 51 21
SOURCE: CSA (2008)
As this table suggests, smallholders market surplus grains in small quantities of varying quality
and farmers are not well integrated to the market. The small quantity of pulses produced and sold
coupled with high transportation and transaction costs incurred in pulse aggregation and trading
reinforce the subsistence orientation of the smallholder farmers.
2.3.2 Exports
Pulses are the third most important crop for Ethiopia, as measured by export earnings. The most
important export pulses include: haricot beans, chickpeas, faba beans, lentils and field peas.
Ethiopia exports pulses to many countries in Africa, the Middle East, Europe, Asia and America.
The major haricot bean destinations include the Sudan, Yemen, South Africa, and UAE. The
importance of these countries as a destination for Ethiopian pulses, however, varies from year to
year. As depicted in Figure 13, while the demand for Ethiopian pulses grew steadily in Yemen,
India, Italy, Netherlands, Belgium and Romania, demand was erratic for Sudan, UAE, Pakistan,
Morocco and Saudi Arabia. Ethiopia, therefore, needs to work to ensure consistent demand for
its pulse exports, and it will be difficult to maintain steady demand by country.
12 Includes seed, wages in kind, animal feed and post-harvest losses
IFPRI | Pulses Diagnostics July 2010 | 31
Figure 13: Ethiopian main haricot beans destinations (2006 - 2008)
SOURCE: CSA (2010)
The price collapse in 2008/09 after nearly fifteen years of consistent growth in pulse exports,
with a significant acceleration of 43 percent between 2005/6 – 2008/2009, must be considered.
Nonetheless, domestic prices rose much faster than international prices in the boom, while in the
decline, world pulse prices fell more sharply than domestic prices. The implication is that price
increases in local markets made exporting pulses less attractive. As depicted in Table 7, local
market prices plus transaction costs are greater than foreign market prices, suggesting exporters
took a loss by selling below cost.
IFPRI | Pulses Diagnostics July 2010 | 32
Table 7: Breakdown of chickpea production prices (USD/ton)
Items Price structure
Scenario
Low price High price
1 Raw material 366 742
2 Production 16 16
3 Sales and marketing 17 17
4 Transport to Djibouti 26 26
5 Exporter margin 21 40
6 Retail Value 446 841
7 FOB value 555 650
8 Difference (Item 7 minus 6) 109 - 191
SOURCE: Team analysis (based on interviews and field visits)
Another factor impacting pulse exports is that the pulse export sector is dominated by a large
number of small-scale exporters lacking scale efficiency, many of which operate in lower quality
markets. For instance in 2007, about three quarters of pulse exporters exported less than 500
tons, contributing only 20 percent to export value. On the other hand about 6 percent of the
exporters contributed 45 percent to total export value, exporting 2000 tons of pulse grain
(Appendix III). Barriers to scale-up are driven by several factors, including consistency of
supply, quality of supply and lack of strong relationships with foreign buyers. Small-scale
exporters have difficulty maintaining good, premium demand contracts. Moreover, the capacity
needed to forecast demand for pulses in the foreign market is lacking, especially in smaller
exporters. Building the capacity of small-scale exporters and encouraging new large scale
investments is crucial in order to develop the export sector.
A further obstacle to new entrants is the perceived business risk in Ethiopia. World Bank
indicators highlight Ethiopia’s business climate as being less attractive than neighbors such as
Kenya. Another hurdle is that foreign investors are only allowed to acquire export licenses if
they add visible value to pulses, limiting new entry.
Explanation for 2009 export drop
One of the main reasons for initiating this diagnostic was a sudden drop in export in late 2009.
Table 7 has portrayed one scenario where export can be unprofitable if domestic prices are
relatively higher than the international prices, which is what many stakeholders had pointed out.
However, an analysis of export volume and parity prices gives a different explanation. Figure 13
presents such an analysis for chick peas and faba beans. Notice the big change in the export
volume trends. Compared to earlier years, export volumes shows a very different trends in 2009,
IFPRI | Pulses Diagnostics July 2010 | 33
when export of both chick peas and faba beans dropped down to zero in March-April and
September –November of 2009.
Figure 13: Trends in export volumes and parity prices of chick pea and faba beans in
Ethiopia, 2005-09
However, the main reasons for concerns are drops in March and April, not so much so for
October and November, because these months historically records low exports of these
0
2000
4000
6000
8000
10000
12000
14000
0
100
200
300
400
500
600
700
800
900
Export in Tone
Price US$/Ton
Export volumes and prices of Ethiopian chick peas, 2005 to
Dec 2009
Sum of Net_Export (Mt)
FoB price (US$/Mt)
Export parity at Djibouti (Addis price + 60)
0
1000
2000
3000
4000
5000
6000
7000
8000
0
100
200
300
400
500
600
700
800
Export volumes and prices of Ethiopian faba bean, Jan 2005
to Dec 2009
Sum of Net_Export (Mt)
FoB price (US$/Mt)
Export parity at Djibouti (Addis price + 60)
IFPRI | Pulses Diagnostics July 2010 | 34
commodities. According these graphs, decline in exports was clearly not due to relatively higher
price in the domestic markets, as export parity price (green line) was far below fob prices. This
requires further probing, but one possible explanation for the drop in March 09 exports might
have to do with price expectations by the farmers and traders. Enjoying high prices for several
consecutive months, both producers and traders might have found it difficult to accept the new
low prices.
This is the classic case of lag effects in economic time series. Another explanation might be the
thinness of market—that is, even though pulses were sold in domestic market and prices were
being recorded, the volume might have been too small and transactions were too fragmented for
an exporter to viably buy and export. Indeed, during stakeholders’ consultations, many exporters
indicated that cooperative unions and farmers organizations, which had sizeable stocks, were
asking prices at which the exporter could not export profitably. Again, the fact that farmers’
groups and coops were asking for higher price and holding onto their stock was not irrational
behavior. Because prices were higher in the previous years, and because they didn’t have
information about international markets, these groups formed a price expectation that did not
match with sudden drop in international prices.
IFPRI | Pulses Diagnostics July 2010 | 35
3. Recommendations
Available evidence suggests that the pulse sub-sector has huge potential to reduce poverty and
contribute to sustained economic development. Despite the country’s potential and sustained
development efforts to get the sub-sector moving, the competitiveness of the pulse sub-sector
and hence its continued contribution to economic development is threatened by low on-farm
productivity, inefficient marketing system and inconsistent supply that does not meet export
quality. Recommendations intended to address these three challenges are summarized below.
The pulses sector could be strengthened by enhanced on-farm productivity and developing a
more efficient chain of inputs and off-take, driven by a strong, stable export sector (with a
minimum of three to five strong export players) to ensure consistent international demand.
Effective on-farm production practices and decision-making would include use of phosphate
fertilizer on appropriate soil types, use of improved seed in areas with the capacity to support it,
increased adoption of modern agronomic practices (e.g., weeding, depth of planting etc.), full
crop rotation to ensure healthy soils, and consideration market demand as well as household
needs when choosing varietals. Capable aggregators would support improved farmer production
and commercialization, through standardization in inputs aligned with agro-ecology, and
transparent and nationally-consistent off-take contracts with accepted, published market pricing.
Finally a broad range of well-developed exporters would have strong links to the international
commodity markets. In order for the sector to play a key role in increasing farm income,
contributing to improved food security, and improving the balance of trade, coordinated and
integrated effort by multiple actors along the pulse value chain is required.
Three major interventions are suggested to emphasize development of the industry structure by
focusing on creating both a demand pull and a supply push:
Increasing productivity through improved input usage
Linking the export market to producers to stimulate quality and supply
Strengthening the export sector
Taken as a whole, these interventions represent a cohesive set of actions that can be pursued to
strengthen the Ethiopian pulses value chain. Improving production is key to stabilizing and
growing the pulses value chain, while commercialization provides a demand pull, with the
middle of the value chain an enabling mechanism to improve production.
3.1 STRENGTHENING THE EXPORT SECTOR
The export sector in the pulses value chain can be used to drive foreign reserve earnings and
maintain a steady balance of trade. It also has the ability to act as a catalyst for developing the
pulses market structure by creating and maintaining a steady demand pull which will stimulate
IFPRI | Pulses Diagnostics July 2010 | 36
the right quantities and qualities of production. Most importantly, strengthening the export pull
for pulses will improve the livelihood of smallholder farmers by increasing their income and
improving the productivity of their land assets for the production of cereal crops. The export-
driven nature of this recommendation stems from the realization that the pulses value chain
requires a stronger industry structure that is currently absent in Ethiopia. Empowering exporters
and other market players will force the development of a functional pulses industry. Specific
actions include:
Incentivize exporters to link with input supply bodies to provide stronger vertical
integration in the sector. This would include working closely with cooperatives, traders and
smallholder farmers, and incentives would be contingent on solving input supply/distribution
issues (e.g., seed, fertilizer) and offering off-take opportunities to smallholders. Specific
incentives could include government support (e.g., financing) or policies that ensure that
exporters benefit directly from their investments (e.g., providing an exception clause for
pulses similar to sesame seed in ECX allowing exporters who vertically integrated with
cooperatives and/or producers to directly sell their product). The government would develop
this incentive program, while exporters would own implementation of program details.
Build a dynamic export traders association to build markets, regulate quality and help
achieve scale. This could be supported by establishing a joint vision and development
program among key existing public and private actors in each sector, to align all players
around a common goal. Development of this program would bring together all key players,
including government entities, private companies, industry associations, cooperatives, unions
and development partners. This development program would consist of several key
components:
– Clearly defined sector vision and objectives; clearly defined roadmap, roles and
responsibilities for all key public and private actors; realistic production targets, and; joint
governance and coordination (potentially through an annual review by an independent
third party).
– Institutionalizing a unit that tracks, analyzes, and disseminates market intelligence all key
actors in the value chain.
– Establishing a discussion forum for all stakeholders to help jointly highlight and address
issues in the sector. Industry associations could be strengthened as a potential vehicle for
this coordination. An example of where this has been successful is with the Ethiopian
Horticulture Producer Exporter Association (EHPEA) (see case study).
IFPRI | Pulses Diagnostics July 2010 | 37
Case study – Ethiopian Horticulture Exporters and Producers Association (EHPEA)
The Ethiopian Horticulture Producer Exports Association (EHPEA) was established in 2002
with the mission of promoting and safeguarding the sustainable competitive position of the
Ethiopian horticulture sector within the global market. It has 83 licensed members, all of whom
are registered producer exporters, and affiliations and partnerships with GOE (e.g., Ministry of
Trade & Industry), other private sector players and state owned enterprises (e.g., Ethiopian
Airlines, banks) and key development partners (DFID, CBI, Netherlands, French Development
Corporation). Key activities of the association include facilitation of market access and
linkages, supporting implementation of responsible production practices that protect employees
and the environment, organizing, supporting and delivering capacity building for members, and
implementing a floriculture Code of Practice.
All stakeholders participate regularly in a discussion forum to surface and mitigate the issues
faced by what was an infant industry. Government support has included: a 70 percent capital
loan for infrastructure; duty and tax-free status for capital items and inputs; a five year tax
holiday; acquisition of land; quick customs processing for importing inputs and exporting
flowers; access to foreign exchange for inputs; and cold storage at the airport. Meanwhile,
Ethiopian Airlines improved air transport frequency, and reduced charges, while the media
provided coverage of the potential and constraints in the industry.
The sector has seen enormous success since establishment of the association. The number of
exporters has increased from five to over a hundred, foreign exchange earnings from USD 1.5
million to USD 125 million, and more than 50,000 employment opportunities have been
created in the sector. Key success factors included: high market demand; the effective role of
the private sector and foreign direct investment; effective government support; commitment to
a common goal; and quality assurance through the Code of Practice.
SOURCE: EHPEA website, expert interviews
Strengthen export promotion, local and international market intelligence, and branding
of Ethiopian products, potentially through this exporter association. Effective market
information will help exporters target countries and understand their quality and variety
needs. Given the variability of the various destination markets, export promotion, based on
clear market intelligence, is necessary to ensure a consistent and reliable demand outlet for
Ethiopian pulses
Improve business environment to support exporters, making focusing on an environment
more conducive to investment (e.g., contract enforcement) and policies aimed at bolstering
exporters’ scale (e.g., financing for expansion, export promotion/ focus on pulses,
development of risk management tools including potential insurance products). There is also
a need to level the playing field versus public entities, for example ensuring subsidies and
credit are equally available to both public and private exporters. GOE could demonstrate
commitment to entrepreneurship and innovation by recognizing innovative entrepreneurs in
IFPRI | Pulses Diagnostics July 2010 | 38
the value chain (e.g., through an award scheme), and/or leveraging innovative thinking from
other countries. For example, study teams could be sent to connect with experts who
developed ideas such as the “e-choupals” in India, or small-packs in Kenya. One option
would be to establish the concept of a licensed exporter status, giving companies access to
credit and support. Capacity building efforts should also be undertaken.
Below are more details on the specific implementation steps and the potential owners and
stakeholders required for each steps:
Table 8: Implementation actions to strengthen the export sector
Actions Potential owners
1.1 Incentivize exporters to invest resources to link with
input supply bodies MoARD, MoTI
1.2 Build a dynamic export traders association to build
markets, regulate quality and help achieve scale MoARD, donors
1.3 Strengthen export promotion, market intelligence, and
the branding of Ethiopian products Export trader
association, MoARD,
ECX
1.4 Develop a business environment conducive to
investment, and policies aimed at bolstering exporters’
scale
MoARD, MoTI, MoFED
3.2 INCREASING LINKAGE BETWEEN EXPORTERS AND PRODUCERS
Stronger linkages between exporters and smallholder farmers’ and reducing transaction costs
lead to a more efficient value chain where the demand signal is clearly communicated to the
producers and the right inputs are available to ensure proper production of the necessary export
pulses. Enhancing the efficiency of pulse aggregation and trading activities will eliminate
bottlenecks and ensure that an adequate amount of grain is supplied to both domestic and
international markets that meet required quality standards and quantity requirements.
Recommended interventions include:
Input packages - leverage existing input supply system (e.g., Agricultural Input Supply
Corporation or new entities as necessary, regional research centers etc.) to assemble inputs
for production in packages for distribution to smallholder farmers (appropriate quantities of
seed, fertilizer, growing practices information). Packages should be easily usable by farmers
in various regions addressing the challenge of developing consistent, sufficient input access
for producers. This effort should build upon existing research in each region, and link with
international research bodies to understand up-to-date technology in other countries to
leverage this knowledge.
IFPRI | Pulses Diagnostics July 2010 | 39
Leverage cooperatives and traders as links to farmers to provide inputs and consistent off-
take and market information. Co-operatives should play the simple role of providing
appropriate pulses inputs, and act as intermediary for exporters, end-users, potentially signing
contracts for delivery of exports. The Ethiopian Commodity Exchange (ECX) could also
work with/ link with these cooperatives to move pulses through the system and to increase
transparency/ price discovery
Market information - much has been done to improve market information systems in
Ethiopia, particularly through efforts of regional governments and the ECX. Existing best
practice mechanisms (e.g., ECX, regional marketing information systems) should be
identified and used as channels to disseminate not only price data, but also other market
intelligence data needed to improve linkages in the maize value chain. Key steps include:
collecting and triangulating market information data (e.g., price, demand and supply signals
by region) available from different sources (e.g., crop forecasts from donors, EGTE, CSA,
and regions); developing a simple, standard display of regional price, supply, and demand
forecasts so farmers and aggregators can make informed buy and sell decisions; identifying
current best practice information delivery channels (e.g., ECX, regional marketing
information systems) and disseminating market information data, while simultaneously using
the government network periodically, for example, posting data in kebele offices and FTCs
Contract farming - link smallholders with agribusiness enterprises through the development
of best practice models of contract farming. Put mechanisms in place for quality control,
largely through the private sector.
Improve market access through the development of road networks and storage facilities
Below are more details on the specific implementation steps and the potential owners and
stakeholders required for each step:
IFPRI | Pulses Diagnostics July 2010 | 40
Table 9: Implementation actions to increase linkages between exporters and producers
Actions Potential owners
2.1 Supply smallholders with input supply packages (e.g.,
seed, fertilizer, best practices for growing pulses),
consistent off-take, and market information
Agricultural Input Supply
Cooperation,
cooperatives, MoARD,
ECX
2.2 Support cooperatives to become simple input and off-
take channels MoARD, Federal
Cooperative Agency
2.3 Improve availability of market information to
smallholders, cooperatives, traders and other actors MoARD, BoARD, CSA,
EGTE, ECX
2.4 Improve access to markets through road networks and
storage facilities MoARD, Ministry of
Transport
2.5 Link smallholders with agribusiness enterprises
through contract farming; put mechanisms in place for
quality control
Private sector, MoARD,
BoARD
3.3 INCREASING INPUTS TO IMPROVE PRODUCTIVITY
Efforts should be targeted at encouraging smallholder farmers to grow varieties that meet
international quality standards, which will require appropriate cultivation and post-harvest
handling practices to ensure the production and delivery of quality products. Improving the
productivity of smallholders is vital to increasing not only the marketed surplus but also improve
household income and food security. The capacity of small holder farmers to raise productivity
and market a significant proportion of their produce depends on the interaction of a host of
factors including availability of appropriate pulse production technologies, the effectiveness of
the agricultural extension services, and access to credit and finance. Specific actions include:
Sourcing of phosphates and other fertilizers – these should be sourced steadily and
supplied to farmers with knowledge on how to use them effectively in different regions and
for different pulses. This will also entail importing phosphates and other nutrients which are
currently not imported to Ethiopia (in which case consideration would have to be given to the
funding mechanism i.e. government funded versus private funding, versus some
combination)13
Expand pulse breeding - EIAR should expand their pulse breeding programs starting with
benchmarking current pulse varietals in Ethiopia vis-à-vis other countries. This will allow
EIAR to leverage existing global technology and ensure the pulses germplasm in Ethiopia is
the best available. Following benchmarking, EIAR should adapt and adopt these top varietals
.
13 Please refer to the soil fertility diagnostic for more details.
IFPRI | Pulses Diagnostics July 2010 | 41
for the agro-ecological conditions in Ethiopia, focused the varieties appropriate for export,
and suitable for the focus regions.
Increase seed multiplication significantly to adequately supply the needs of exporters and
other domestic demand. Seed enterprises (such as ESE, RSEs, and private seed growers) can
begin growing pulse seeds with a guarantee to buy from input suppliers. Priority should be
placed on producing viable pulse varietals currently “on the shelf” in research centers (e.g.,
EIAR) but not in the hands of farmers.
Incorporate pulses into extension - the extension system should incorporate pulses into
their curriculum, including module development for farmers that explain best practice pulse
production and makes the case for fertilizer and improved seed usage. Extension can also
potentially help to link farmers to input providers and cooperatives focusing on pulses to
ensure consistency across the chain. Extension workers should be trained in the newest
technology, so they can disseminate knowledge on growing practices to farmers in support of
the input packages. Strong links are needed between EIAR and extension in terms of
varieties, soil fertility and crop management practices for pulses14
Improve on-farm storage management practices and structures - reduce post-harvest
losses from poor storage facilities and management
.
The table below provides concrete actions and potential owners and stakeholders for each step to
develop a market stabilization mechanism:
Table 10: Implementation actions to increase inputs to improve productivity
Actions Potential owners
3.1 Source phosphate and other fertilizers, and train
smallholders on their use MoARD, BoARD, private traders,
regional and federal extension
3.2 Increase seed multiplication in order to meet needs of
export and domestic demand ESEs, RSEs, private seed
growers
3.3 Increase breeding of pulse varietals, leveraging
existing global technology EIAR, regional research
institutes
3.4 Incorporate pulses into the extension curriculum (e.g.,
fertilizer use, crop rotation) MoARD, regional and federal
extension
3.5 Improve on-farm storage management practices and
structures MoARD, BoARD, regional
research institutes
14 Please refer to the extension diagnostic report for more details
IFPRI | Pulses Diagnostics July 2010 | 42
4. Implementation
The interventions outlined above will require shifts in resources, priorities and mindsets. The
holistic approach to addressing the entire value chain requires the interaction of a broader group
of stakeholders than is typically used to interacting. The goals of this are to ensure that the
implementation plan is supported by all stakeholders and all those involved in the pulses value
chain take some responsibility for achieving success. Additionally, this provides a chance to
coordinate efforts by numerous NGOs and research organizations aiming for similar objectives –
communicating will ensure that lessons learned are shared, efforts are not duplicated and
organizations are not re-inventing the wheel.
A preliminary prioritization of implementation of the recommendations over the next five years
has been outlined below in Figure 14. In the short to medium term, the core priority is to
establish the pulses value-chain for success and initiate the pre-conditions for basic effectiveness.
In following years, actions will elevate the system to higher performance by building
momentum, expanding and demonstrating early results. During this period, activities will focus
on increasing the effectiveness and sustainability of the first wave of interventions.
For implementation to be successful, a range of actors including the Government of Ethiopia, the
Ministry of Agriculture and Rural Development, the donor and NGO community, and the private
sector will need to work together to implement the various components and programs.
Ultimately, the transformational change required will need to come from within Ethiopia – from
the actors in the value chain and existing institutions to the highest policy makers.
Implementation should start by focusing on high priority areas, to ensure early impact, and test
the interventions where there is high-potential. Interventions could then be expanded outwards
from these starting markets. The two highest pulse production areas are Amhara and Oromia, and
these could be a good starting point. There are already demonstrated results revealing the
potential benefits from a value chain approach in parts of these regions (e.g., East Shewa), and
these are being expanded to other areas, thanks to the efforts of EIAR scientists in collaboration
with BoARDs, International Research Centers, NGOs, and farmer organizations. What is needed
now is to mainstream those results.
IFPRI | Pulses Diagnostics July 2010 | 43
Figure 14: Preliminary prioritization of recommended interventions
Strengthen
Export
Sector
Increase
export/
producer
linkages
Short –medium term
(1-2 years)
Long-term
(3-5 years)
1.1 –Develop incentives for exporters to invest
resources to link with input supply bodies
1.2 –Build export trader association to build
markets, regulate quality and help achieve scale
1.4 -Develop a business environment conducive
to investment, and policies to scale exporters
2.1 -Supply smallholders with input supply
packages, consistent off-take, and market
information
2.3 -Link smallholders with agribusiness
enterprises through contract farming; put
mechanisms in place for quality control
2.4 -Improve on-farm storage management
practices and structures
1.3 Strengthen export promotion,
market intelligence, and the branding
of Ethiopian products
2.2 –Improve access to markets
through road networks and storage
facilities
Increase
inputs
3.1 -Source phosphate and other fertilizers,
and train smallholders on their use
3.2 -Increase breeding of pulse varietals
3.3 -Increase seed multiplication in order to
meet needs of export and domestic demand
3.4 -Incorporate pulses into the extension
curriculum
3.2 -Increase breeding of pulse
varietals
3.3 -Increase seed multiplication in
order to meet needs of export and
domestic demand
IFPRI | Pulses Diagnostics July 2010 | 44
5. Conclusion
5.1 OVERVIEW
The findings in this report demonstrate the importance of pulses as a significant contributor to
the economic and social development of Ethiopia. Pulses have the potential to be a significant
driver for smallholder livelihood improvement and food security in Ethiopia. The consistent
growth in the demand for exports and the relative proximity of Ethiopia to these growing
markets is an opportunity to substantially boost earnings. Diversification by small-scale
producers, rotating staple cereal production with cropping pulses, is an important income
opportunity. From the food security dimension, the nutritional effects to enhance protein
consumption for the rural poor will make needed inroads. Finally, from a macroeconomic
perspective, boosted exports in pulses stands to improve foreign exchange and allow for
continued imports of necessary productive inputs.
Realizing the full potential of the crop as a component of Ethiopia’s long-term food security and
growth relies on clear direction and execution capacity from GOE and a wide number of
stakeholders. To achieve the latent potential in the sector, several constraints must be addressed.
These are all within the capacity of the Ethiopian government to stimulate. A common vision
among all stakeholders and the roadmap to undertaking the respective roles of different actors
with the confidence in safeguards in place is critical.
5.2 FIVE-YEAR SECTORAL VISION
The next five years will be a critical window to accelerate the achievement of the long-term
vision for the pulses value-chain. At the close of this period, a pulses sector strengthened by
enhanced on-farm productivity and a more efficient chain of inputs and off-take, driven by a
strong, stable export sector to ensure consistent international demand is possible.
With a strong and functioning value-chain beginning with production, then aggregation and
trading, and finally with unlocked demand sinks, GOE and its development partners, along with
the private sector are in a remarkable position to place Ethiopia on the first five-year trajectory to
fully develop the sector by 2025.
5.3 THE WAY FORWARD
The approach will require resources that GOE will likely have to mobilize beyond its own,
identifying new resources and using existing resources more effectively. The recommendations
outlined in this report and in the other sub-sector diagnostic reports are not an explicit roadmap
of the activities the BMGF is best positioned to solely resource; they reflect a set of findings to
support MoARD and all donors in the planning and implementing strategies to accelerate growth
IFPRI | Pulses Diagnostics July 2010 | 45
and food security in the context of Ethiopia’s nationally stated objective to achieve middle-
income status by 2025.
Accelerating the five-year vision contained in this report will undoubtedly require the effective
use of significant human and financial resources. It will require a level of sequencing and
coordination that has in the past been challenging to implement at a national-level, not only in
Ethiopia, but in success cases globally, from Latin America to East Asia. To achieve these
objectives, GOE will need to work closely with all its partners, ranging from the development
community to the private sector. The recommendations contained in this report offer a
preliminary view on the sequencing of various activities to strengthen the pulses value-chain.
The findings contained in this report are also complementary to a range of other findings across
the diagnostic studies supported by the Bill & Melinda Gates Foundation from April 2009 to
March 2010. The five-year sectoral vision for pulses relies on a set of factors contained in
accompanying diagnostic reports, including a robust system of agricultural extension, a vibrant
and efficient seed sector for hybrids, and access by small-scale producers to irrigation.
Additionally, a set of enabling factors will deepen the impact of these recommendations,
including financial services, rural infrastructure, and information and communication
technologies. At every stage of the value-chain gender must be prioritized, as women are often
primarily responsible for planting, harvest, value-addition, and marketing.
Since each of these sectors is mutually dependent, the recommendations and sequencing of
activities for the pulses value-chain must be seen within the context of the overall
recommendations provided in the holistic and integrated report submitted to the Prime Minister.
With pulses as a key crop to drive Ethiopia’s growth and food security, these steps will be
critical to accelerating the long-term vision of achieving middle-income status by 2025.
IFPRI | Pulses Diagnostics July 2010 | 46
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IFPRI | Pulses Diagnostics July 2010 | 48
MoARD data
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Assessment and study on current cereal market (MoARD, February 2009)
Other documents
Canada’s Pulse Industry (Brochure, Pulse Canada)
2003 Northern Idaho Crop Costs and Returns Estimate, Chickpeas (Univ. of Idaho)
2003 Northern Idaho Crop Costs and Returns Estimate (Zeuli and Cropp)
Ethiopia: Land of Crops Diversity, Ethiopian Puses Profile (Export Promotion Agency, 2004)
Chickpea Botany and Production Practices (Singh and Diwakar, 1995)
Improving the access of small farmers in Africa to global markets through the development of
quality standards for pigeonpea (Jones et al, 2009)
Spring Pea, Lentil, and Chickpea Response to Phosphorus Fertilizer (Chen et al, 2006)
Oilseeds Business Opportunities in Ethiopia 2009 (Wijnands et al, 2009)
Updates on Fertilizer Prices (Olczyk et al, 2009)
Challenges and opportunities of Ethiopian pulse export: development and policy implications
(EIAR, Alemu et al, 2009)
Are Staple Food Markets in Africa Efficient? Spatial Price Analyses and Beyond (Rashid et al,
2010)
Reversing the degradation of arable land in the Ethiopian Highlands (AHI, 2001)
Improving Drought Resistance of Grain Legumes in Ethiopia: A Physiological Approach
(Amede)
Mechanisms of drought resistance in grain legumes I: Osmotic adjustment (Amede and Schubert,
2003)
Guidelines for Integration of Legumes into the Farming Systems of East African Highlands
(Amede and Kirkby)
Guidelines for Integration of Legumes into the Farming Systems of East African Highlands
(Amede et al, 1999)
Production and productivity of pulse crops in Ethiopia (Zekaria, from Food and Forage Legumes
of Ethiopia, 2006)
ICARDA strategies in food legume improvement research: present status and future implications
for Ethiopia (Sarker et al, from Food and Forage Legumes of Ethiopia, 2006)
IFPRI | Pulses Diagnostics July 2010 | 49
Breeding concepts and approaches in food legumes: the example of common bean (Beebe et al,
from Food and Forage Legumes of Ethiopia, 2006)
Faba bean (Vicia faba L.) genetics and breeding research in Ethiopia: A review (Keneni et al,
from Food and Forage Legumes of Ethiopia, 2006)
Breeding chickpea for wide adaptation (Bejiga and Daba, from Food and Forage Legumes of
Ethiopia, 2006)
Cropping systems, soil fertility and crop management research on cool-season food legumes in
the Central Highlands of Ethiopia: A review (Agegnehu et al, from Food and Forage
Legumes of Ethiopia, 2006)
Assessment of soil nutrient depletion and its spatial variability on smallholders’ mixed farming
systems in Ethiopia using partial versus full nutrient balances (Hailelassie et al, 2005)
IFPRI | Pulses Diagnostics July 2010 | 50
Appendix 2 – Global pulse production
Thousand tons (2008)
SOURCE: FAOSTAT
IFPRI | Pulses Diagnostics July 2010 | 51
Appendix 3 – Volume and value of pulse
exports by exporter category
SOURCE: Ethiopian Customs Authority
25
15
30
18
40
32
251
201
78,269
37,541
26,334
16,226
15,484
13,793
17,149
16,792
57
45
19
19
11
16
12
2000+
1000-1999
500-999
0-499
2007
2008
20
Total 266
346
84,352
137,236
Exporters
Number Value of exports
USD
Contribution to
export value
1
Percent
Volume of
pulses
exports
Tons
IFPRI | Pulses Diagnostics July 2010 | 52
Appendix 4 – Producer prices ranked by
total production
SOURCE: FAOSTAT
IFPRI | Pulses Diagnostics July 2010 | 53
End Notes
i World Bank PER, 2008
ii CIA 2009 est
iii Data from MoFED quoted in the Policy and Investment Framework
iv MoARD, as announced in March 2010, US Department of State, 2010
v FAOStat, 1998 to 2008
vi World Bank (2008)
vii Expert interviews
viii Central Statistics Agency (2008/09); MoARD
ix FAOStat (2007)
x Central Statistics Agency (2008/09); MoARD
xi FAOStat (2008)
xii Central Statistics Agency (2009)
xiii Gutema, 1987
xiv FAOStat
xv Shiferaw et al. (2007)
xvi Ferris and Elly (2008); Gebremedhin and Hoekstra (2008)
xvii Central Statistics Agency (2008/09); MoARD
xviii Mesfin et al., (2008)
xix Central Statistics Agency (2008/09)
xx FAOStat; Ethiopian export promotion agency document (May 2004)
xxi Research team field visits; Getachew et al. (2006); Amanuel and Daba (2006); Haileslassie et al.
(2007); MoARD (2008).
xxii Getachew et al. (2006)
xxiii NAIA (2002)
xxiv Haileslassie et al. (2007)
IFPRI | Pulses Diagnostics July 2010 | 54
xxv MoARD (2008)
xxvi Amanuel and Daba (2006)
xxviiHailu et al. (1994); Gezahegn and Dawit (2006); Bekele and Hialemariam (2007); Dawit et al. (2010)
