The Value Chain Analyses of Onions

This is a summary and overview of the value chain analyses for onions conducted by Agro- BIG:

Onion has become a product consumed by most of the Ethiopian households. At present the local production is not sufficient to satisfy the national demand and at certain periods of the year onions are imported (mainly from neighbouring countries).

There are indications that the potential for the onion VC in Ethiopia in general and in Amhara Region in particular are good, and in practice this still has to be realised.
One of the main constraints, mentioned by farmers and other actors alike, is the difficulty of getting quality seeds. The available quantities are limited and often not in time. The seed supply is still dominated by small informal supplier. A new seed proclamation has just been adopted and the impact (positive and/or negative) will become clear in the future.

Another issue for the farmers are the labour constraints in peak periods, e.g. when weeding has to be done. This may result in production losses as onion is a crop that does not compete well with weeds.
Furthermore, there are reports on substantial post-harvest losses. Although these could not yet be quantified in detail, mere observations and conversations with key people in the sector confirm this finding. One factor that contributes to these losses is the lack of application of good agricultural practices (for whatever good or bad reasons). Other factors are that there are limited storage facilities, no proper packaging for the onions during transport resulting in mechanical damage which reduces considerably the storage life and no processing facilities.

In any case, and this at all levels involved, from the farmer up to the bureaus at Regional level, the marketing aspects are still receiving little attention when compared to attention for production. Many of the actors in the Value Chain have heard about VC but are not yet fully familiarized with the concept. This is quite logic but needs (and will get) due attention of the project.

Most of the farmers have been and/or still are subsistence farmers and are not geared towards commercial production. The same applies for the supporting services: they have been working mainly with subsistence farmers and are not yet familiar with all the requirements for commercial farming. As no staggering is practiced, and all the produce is put on the market in a relative short period of time, the price drops considerably at that period of the year.

Although women play an important role in onion production and retail marketing, they are hardly involved in any decision making, except probably at household level. This means that their knowledge and experience is not being used to the benefit of the development of the chain.

Strategic intervention areas and possible actions

Based on the findings regarding the current situation, the identified bottlenecks and opportunities, some key strategic intervention areas and respective actions have been formulated.
Given the decrease in the gap between onion demand and supply in Ethiopia, as well as the current quality of Ethiopian onion, Agro-BIG will still focus on addressing the domestic market prior to seeking to reach export markets (Djibouti and Sudanese markets could be an exception). However on the longer term, export promotion should be considered.

Strategic intervention areas

Actions

1. Strengthen seed production and distribution

  • Promote cooperation between research institutes and (potential) seed producers /multipliers;
  • Analyse the possibilities for seed certification;
  • Study possibilities of seed production in the AgroBIG programme area, including climate conditions etc;
  • Study the possibilities (and desirability) of transforming (small) informal seed producers into formal producers;
  • Analyse the applicability of ACSI’s pilot with voucher system (for producers wheat seed) for onion VC financing

2. Public-private partnerships in onion processing

  • Analyse possible processing options (examples in other countries, market demand, ….);
  • Lobby for private food processing plants in processing onion (dried onion, onion powder as a spice, …);
  • Organize exchange visits to enhance ideas on processing options;
  • Bring topics to the attention of the Stakeholder Platforms;
  • Facilitate market survey on consumer preferences / willingness and (monetary) capacity to buy ‘new’ products like dried onion.

3. Strengthen link between producers and markets, between different actors in the VC

  • Introduce VC concept at relevant levels, like woreda bureaus, DAs;
  • Collect additional information (disaggregated by sex) of costs / expenses incurred by different actors in the chain and in the different woredas;
  • Collect additional information on number of actors involved in the VC (to improve the mapping);
  • Analyse in detail the role and function of the coops, as well as their skills and training needs (TNA);
  • Obtain information on requirements for getting a TIN number and participation in tenders;
  • Create stakeholder platforms (or link with any existing groups) at woredaand regional level for trust building, strengthening of linkages and relationships between input suppliers, producers, cooperatives, processors and /or other buyers. Link the producers’ group with private companies /small traders at local and central level;
  • Produce material and facilitate training for Stakeholder Platforms and other key actors in order to disseminate information and knowledge on VCD;
  • Promote sorting and grading by producers;
  • Radio broadcastings with relevant information for VC actors;
  • Publication of newsletter and special editions on specific topics;
  • Facilitate increase of storage facilities;
  • Confirm that the transport capacity is sufficient (quantity, quality, reasonable price, also at peak harvest periods); if not, discuss possible solutions; also look at transport from field to collection point;
  • Increase knowledge among producers and traders of market trends and consumer needs;
  • Establish exposure & training programmes to encourage effective organisations, and promote formation of farmers groups, associations, cooperatives etc. (including study tours to central markets, talks by wholesalers, meetings with associations in other areas, hands on training courses);
  • Develop ICT technologies along the value chain to strengthen value chain organization and information;
  • Collaborate with development organizations and donors supporting onion growing smallholders;
  • Identify new outlets in main urban market centres and with institutional buyers in the region.

4.Strengthen services in onion Value Chain

  • Facilitate the improvement of supply of services e.g. via the Stakeholder Platform meetings (presentation of finding of quality, timeliness, etc. of services);
  • Encourage an improved responsiveness of fertilizer and chemical input suppliers.

5. Finance onion VC

  • Use of available funds and credit lines for further development of onion VC;
  • Establish training programme for value chain actors & organisations along the VC in the development of action plans & applications for funds address problems & opportunities including the development of new and improved technologies;
  • Conduct training in business plan development;
  • Develop training programmes to strengthen the record keeping, business planning and action planning capacity of cooperatives and associations;
  • Facilitate MFIs and NGOs to fill the finance demand of the smallholders whenever they are in need of it.

6. Introduce location based onion quality control mechanisms

  • Facilitate the development of location based onion quality control mechanisms with emphasis on seed quality;
  • Promote quality and standard based pricing of onion.

7. Agronomic practices

  • Collect additional information on agricultural practices (disaggregated for male/female farmers, FHH, WMHH, MHH) – good and bad;
  • Collect more information on reasons for low use of fertilizers;
  • Collect more information on labour constraints (when, which activity, etc.);
  • Elaboration of manual for agricultural practices for onion cultivation;
  • Support the training of farmers to produce and store onion seeds on their farms;
  • Identify tailor made training and demonstrations for and by value chain actors – to introduce new relevant technologies i.e. input supply, post-harvest technologies, on farm practices, irrigation efficiency etc.;
  • Train Development Agents to provide tailor-made services;
  • Support for establishment of demonstration centres at kebelelevel.

8. Processing facilities

  • Implement training and demonstrations for processing technologies, marketing and ITC technology;
  • Develop bank guarantee scheme to ensure access of processors to finance;
  • Promote value addition and enhance the linkages of small urban town with the rural producers;
  • Support actors in the VC to develop action plans & applications to be funded through the Innovation, Research & Demonstration fund. These should include the whole chain from improved inputs, certified seed varieties, production and post-harvest technologies, to processing technologies etc.;
  • Identify gaps in technology or techniques that could be supported with innovative new products, equipment or techniques;
  • Improve incentives for upgrading agro-processors and smallholders alike, entailing reductions in the risk of adopting new technologies, selling of new markets and trusting other value chain actors. Use the demonstration and innovation funds to buy-down the risks of upgrading without distorting support service markets.