Tuesday, May 21, 2024
BusinessFarmers as entreprueneurs

Farmers as entreprueneurs

As the Ethiopian beer market intensifies to competition due to having a fast growing market and the privatization of most of the once government controlled enterprises, there are now almost two dozen beer brands in the market. With the purchase of the Meta brand by Diageo in 2011 and Heineken following suit with the Harar and Bedele brands in addition to the introduction of Walia and its signature Heineken and the St. George brand being sold to BGI Ethiopia in 1998, the Ethiopian market is in transition to the big league. It no longer is a market that is sheltered and neglected to the interest of the government alone, but booming private interests from international players.

There are now almost two dozen brands being sold within Ethiopia.

To appease this growing market, most beer producers are beginning to find new innovative ways to acquire needed raw agricultural materials locally. Most are partnering with local farmers to up their quality and quantity to appease an overwhelming booming demand in the market. They are helping them build the needed mechanism to achieve a mutual interest, for the farmers and the producers of beer. This is seen as a strategic move to leverage shortages of foreign exchanges in the country and attempt to forge developmental relationship and make use of a fertile land that is not fully being used to its potential.

The Dutch-based beer company, Heineken, is leading a pioneering project which is to purchase 60 percent of its raw materials from local farmers in Africa rather than import from Europe. For that, they have partnered with the Government of Ethiopia, which is on a drive to change the narrative of the nation with foreign investments from abroad and Holland, an aid giving nation that has had a tradition of supporting the economic revolution of Ethiopia via a program called CREATE – Community Revenue Enhancement through Agricultural Technology Extension.

At its entrance in the Ethiopian beer market, Heineken constructed its brewery in Kilinto.

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To date, more than 10,000 farmers have taken part in the pilot initiative becoming important partners in the agricultural value chain of the agro-business. The new initiative targets about 20,000 smallerholder farmers to join the fray. This pioneering method comes with the help of EUCROD (European Cooperative for Rural Development) and partnerships with the likes of the Ethiopian Agricultural Transformation Agency, Oromia Agricultural Commercialization Cluster and the Ethiopian Institute of Agricultural Research (EIAR) to create better mechanism for farmers to produce better varieties and as an important European initiative to curb vast young and able-bodied migrants who are fleeing the nation as economic migrants.

Thousands of local farmers have been given high yielding barley verities from Holland, given adequate training, some financial support and business connections to make them become better farmers. This new partnership has opened opportunities for those looking to make earn a living by taking advantage of the shortage of barely in the country.

In West Arsi village of Kore, Oromia Regional State, Mohammed Kursa never imagined he would become a farmer when he graduated from Dilla University, a milestone moment for his family as he became the first graduate. He wanted to venture outside of his village, perhaps to Addis Ababa, thinking he would have more job prospects. That did not materialize as he joined his friends, who experienced that their job prospects were bleaker than assumed.

“In my village, I was the most educated, but I was unemployed and I was not sure what to do with my life,” he told The Reporter. “I saw as my friends participated in protests as way to let go our frustrations but there was nothing for us. I was disillusioned. But now I am productive and happy.”

If the civil unrest did not change lives immediately, its trickle-down-effect is yielding needed results. The government has been listening and has started to act, according to some. For instance, it has started to hand fertile lands to the youth and have them become farmers.

Mohammed and his friends are now proud farmers working with the Heineken chain and they have become not just self-sufficient but have realized that the old wisdom of working necessary for someone else is an impasse; the new norm is to be an entrepreneur and an independent owner, which the new chain allows them to be. Each farmer sells a quintal of barley for 1,200 birr for Heineken. However, not all farmers are happy with that price that Heineken is willing to pay them and have asked that to be adjusted. “There are many factors and hardship that goes with our work, and I think that price should at least be raised to 1,300,” a farmer, who refused to avail his name, told The Reporter.

Heineken is quick to highlight some of the challenges of not doing that yet, including cheaper prices that is paid for imported malts, the local limitation of malt production and limited technology for crop protection mechanism among others.
Today, Mohammed leads a team where they grow barely, which they are hoping to triple its production in the coming years, joining a generation that is seeing potential as the beer drinking population grows, with 12 brewery plants in the nation with more than 100,000 tons of barely demand each year. To date, Ethiopia can barely produce half of that figure, forcing many to import from aboard and Mohammed and company are determined to change that reality.

According to Heineken, the goal is to reduce poverty through rebuilding agricultural production. By doing that the company believes that it would increase food security, rebuild local community cohesion and build needed infrastructure.

Standing next to a farm that is not utilized, with burned farm equipment from a potato farm foreign investor who has since fled, is where Kemal Edo is celebrating his first harvest of barely. “I was determined not to be a farmer like my father when I was in university,” he said. “That changed when I was not able to secure a job in Addis Ababa and moved back home. I was fortunate when I found the opportunity to farm barely and realized I could make a good living, not be like the typical struggling farmers I saw growing up among my family members.”

The Ethiopian market is expected to grow by 10-15 percent, requiring 200k tons of barely by 2020 from its current 120k tons. With the nations noted fertile land that is suitable for growing barely and a land that is available to the tune of 1.1 million, it is no wonder the beer industry is looking to utilize the potential within, rather than needing to export basic ingredients from aboard.  

“I am now content with being a farmer. I do not just want to make ends meet, but want to grow with this new phenomenal”, Edo said.

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