AgroBIG Phase I overview

 

The Agro-Business-Induced Economic Growth (AgroBIG) Programme is a bilateral agricultural development programme, financed by the Governments of Ethiopia and Finland, using the Value Chain Approach to develop selected agricultural value chains in the part of Tana Beles Growth Corridor that falls within Amhara National Regional State in North-Western Ethiopia.

Programme Area

Agro-processing is one of the priorities in the Growth and Transformation Plan (GTP) of Ethiopia. Irrigation development is also strongly supported and GoE contributes substantially to agricultural research. The geographically differentiated strategy for different agro-ecological zones has been the driving force to create Growth Corridors in Ethiopia, the first of which is the Tana Beles Growth Corridor situated in Amhara and Benishangul-Gumuz Regions, where AgroBIG is operating. The Programme will initially be implemented in two priority Woredas, Fogera and Mecha.

Donor Support

The Government of Finland’s (GoF) support to Ethiopia is geographically concentrated around the Tana and Beles sub-basins in Amhara and Benishangul Gumuz Regions. The thematic areas of support include water supply, sanitation and hygiene, watershed development and land administration. The Agro-BIG programme has been initiated to strengthen the economic growth in the same geographical area, complementing the other initiatives by directly focusing on agricultural growth through agri-business development. Most of the Growth Corridor has high potential for irrigation schemes and agricultural development and value addition of agricultural produce.

Overall objective and purpose of the programme

The overall objective of the Programme is to contribute to poverty reduction through agriculture based economic growth in the Programme area.

The purpose of the Programme is to establish efficient and profitable value chains of selected crops/products benefitting the involved actors and stakeholders along the chain (farmers, processing industries, traders and buyers).

Programme Components

The activities designed to address the purpose of the AgroBIG are grouped into three components with specific objectives:

  • Component 1: Value Chain Development – to develop fully functioning and efficient value chains, which targets organization, communication, planning and investments.
  • Component 2: Service Delivery Development – to develop service delivery that can support and facilitate value chain development, which involves human resources development, formation of groups, access to market information etc.
  • Component 3: Access to Funds and Financial Services – to provide private and public sector actors along the chosen value chains with access to funds and financial services, which involves the setting up of a number of grant funds.

 
The Value Chain Approach

The AgroBIG Programme will use the Value Chain approach. The idea is to address the value chain constraints of specific agricultural commodities. A detailed Value Chain Analysis will be made for each selected value chain. Such analyses will map out actors and stakeholders and their relations, identify their constraints and needs, identify potentials and prospects for value chain development and suggest programme interventions.

The level of agricultural business development service and technical assistance in public and private sector is generally low in all agricultural value chains in the country. Investment in new technologies is low and the private and public financial institutions have limited relevant products to offer.

Actors and stakeholders along the value chain

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The categories of actors and stakeholders include not only farmers, farm labourers, transporters, millers, traders and brokers involved in the production and bringing of products to the market, as can be seen in the above figure, but also other bodies providing services to the successful operation of the value chains. This includes input suppliers, direct service providers, extension workers, bankers, farming cooperatives, irrigation water user’s associations, wholesalers and retailers, exporters, processors, consumers, research centres and many government agencies with support functions at Region and Woreda levels in addition to policy makers.

Value Chain Finance

AgroBIG will provide access to finance for actors along the value chain in order to support value chain efficiency and ensure growth. As much as half the total AgroBIG budget is available in the form of three grant funds. These funds are set up for different purposes and are open to application from specific groups, as follows:

  • Value Chain Fund – to support small investments on farms and for local businesses, open to registered legal entities such as cooperatives and production associations.

 

  • Matching Grant Fund – to support large investments in storage, post-harvest technologies, processing, packaging, distribution and marketing, open to formally registered businesses.
  • Innovation, Demonstration and Research Fund – to support innovative solutions to value chain constraints, demonstrating new technologies and undertake adaptive research, open to public and private organizations, cooperatives, associations, companies and research organizations.

 

Apart from the above three grant funds, Agro-BIG has also established a Loan Fund, specifically to provide cooperatives with marking capital so that the cooperatives can buy produce from its members.

Implementation

AgroBIG is implemented at the woreda level, where established value chain platforms form the entry points for activities to be undertaken. Key implementing partners are the actors operating along the chosen value chains. The overall responsibility for the implementation of the Programme rests with the Regional Government. A Programme Support Unit, PSU has been established for the effective coordination of activities and for the direction of the flow of funds. The PSU is headed by an appointed Programme Director and assisted by a team of internationally recruited technical advisors.

A Human Rights Based Approach

Within the framework of the Human Rights Based Approach and the focus of the programme on establishing efficient value chains, the programme will address the needs of the groups that are directly involved in working along the value chains, with a focus on women and youth.

Cross cutting issues

The cross cutting issues that will be mainstreamed include gender, environmentally sustainable development, support to vulnerable groups and adaptation to climate change. Effective approaches aimed at mainstreaming of cross cutting issues will require targeted actions aimed at meeting specific needs.

Where we are now

AgroBIG started off working with two value chains, for onions and potatoes, that were chosen to pilot the development of the approach to value chain analysis and development. These two value chains are now quite well developed and understood, with major constraints and opportunities having been identified and under exploration with specific interventions. The programme is therefore moving onto other value chains. The selection of additional value chains will be based upon a number of selection criteria including unmet market potential, environmental considerations, inclusion of socially disadvantaged groups, linkages with irrigation development and complementarities with other on-going activities in the Programme area. Next, Agro-BIG will address the value chains for rice and maize.