Market Assessment and Value Chain Analysis in Benishangul Gumuz Regional State, Ethiopia

Transcription

1 Market Assessment and Value Chain Analysis in Benishangul Gumuz Regional State, Ethiopia Final Report By SID SID Consult Support Integrated Development Contact Person: Bezabih Emana (PhD) P.O. Box Tel / / E mail: emana_b@yahoo.com Addis Ababa June, 2010 Addis Ababa

2 Table of Contents List of Tables... v List of Figures... vi Acknowledgements... vii Acronyms... viii Executive Summary... ix 1. Introduction Background Objectives Methodology The study team Data collection Data analysis Organization of the report Limitations Brief Description Benishangul Gumuze Regional State Geographic Location and Area Agro-ecology The people Economic situations Description of the Seven Project Woredas Population Economic Mapping of the Seven Project Woredas Key sub-sectors Selection of commodities for value chain and income generation Market Infrastructure and Facilities Market Information Summary of Issues Raised at Community Level Oil Seeds Value Chain Key actors and functions Production ii

3 4.1.2 Collection/Local Trading Wholesalers and Commission Agents Cooperatives Processing Export Consumption Summary of oilseeds value chain actors Margins Potentials and Constraints Proposed Interventions Honey Value Chain Key actors and functions Production Trading Processing Export Consumption Margins Potentials and Constraints Proposed Interventions Gums/Incense Value Chain Production Processors/Exporter Potentials and Constraints Potentials Constraints Proposed Interventions Fruits (Mango) Value Chain Key actors and functions Potentials and Constraints Potentials Constraints Proposed Interventions iii

4 8. Rural Finance and Credit Analysis Financial Institutions Current Status of Micro-financial Institutions in BG Region Strength and Challenges Strengths Challenges/weakness Recommendation Institutional and Regulatory Environment Policy Environment Supporting Institutions and Capacity Building Needs Summary and Recommendations Potentials, Issues and Recommendations for Income Generation and Value Chain Development Synergy between the Proposed Value Chains and Food Security and Capacity Building Components of BG FSEG Program Annex 1: Checklist for Institutions (GOs, CSOs, Cooperatives and Private Sector) Annex 2: Activities related to value chain and Income generation iv

5 List of Tables Table 1: Number of participants of FGDs and Key Informants Interview... 4 Table 2: Location of gold resource by woreda and kebele Table 3: Population of the target woredas Table 4: Crops produced in the project woredas and their relative importance Table 5: Area under crops in the 7 woredas (ha), Table 6: Productivity of crops in the 7 woredas (qt/ha), Table 7: Estimated livestock population of the seven woredas Table 8: Kebeles suitable for beekeeping Table 9: Kebeles benefiting from Fish production Table 10: Selection of Commodities for value chain development and Income generation Table 11: Coverage of value chain and IGA Table 12: Summary of issues raised by women and men focus group discussants Table 13: Ethiopian sesame seeds export and importer countries (2005-March 2010), kg Table 14: Ethiopian Niger seeds export and importer countries (2005-March 2010), kg Table 15: Summary of roles of oilseeds value chain actors Table 16: Value addition in sesame Table 17: Constraints and opportunities for oilseeds Table 18: Major Ethiopian Honey export and the importer countries (2005-March 2010), kg Table 19: Price margins for honey production and marketing Table 20: Constraints and opportunities for honey Table 21: Major Ethiopian Gum/Incense export and importer countries (2005-March 2010), kg 54 Table 22: Summary of roles of stakeholders in market led development process Table 23: Summary of Income Generation and Value Chain for the BGFSEG project Table 24: Summary of synergy between value chain commodities and other outcomes v

6 List of Figures Figure 1: Map of the project area... 7 Figure 2: Average income composition in the project woredas Figure 3: No. of beehives and distribution in the project woredas Figure 4: Quantity of vegetables demanded by students' cafeteria (Wollega University) Figure 5: Oilseeds value chain Figure 6: Destination of groundnuts marketed at Chagni market Figure 7: Trend of sesame export and revenue (2005-March 2010) Figure 8: Trend of Niger seed export and revenue (2005-March 2010) Figure 9: Trend of groundnuts export and revenue (2005-March 2010), kg Figure 10: Export price per kg of oilseeds Figure 11: Honey value chain Figure 12: Source of honey supplied to Chagni Market Figure 13: Trend of honey exported and revenue (2005-March 2010) Figure 14: Unit Price of exported honey (ETB/kg Figure 15: Incense value chain Figure 16: Trend of Gum arabic/incense export and revenue (2005-March 2010) Figure 17: Unit price of exported incense (ETB/kg) Figure 18: Mango Value Chain vi

7 Acknowledgements The study is part of the PIP preparation for the Benishangul Gumuz Food Security and Economic Growth Program (BG-FSEGP) funded by CIDA. CHF commissioned the study to SID Consult and provided the logistics needed for the field work. The data collection benefited from the support of regional government institutions, BG FSEGP consortium members, the communities and persons contacted during the field work. The consortium members commented on the data collection instruments. The regional and woreda government staffs, NGOs working in the project woredas, traders, community members and traders and processors contacted during the data collection provided useful data without which this report would have been impossible. CHF staff and management facilitated the overall field mission, followed up the progress and provided comments on the draft report. CIPAR, FHI and CHF staff facilitated the field data collection in their respective woredas. Damte Dagnew (CHF), Geremew Argeta and Teka Birhanu (BG regional Cooperatives and Agri. and Rural Development staff) participated in the data collection. The team sprit shown by the team was crucial for the successful accomplishment of this assignment. Dereje kebede assisted in the data processing and review of documents needed for draft report preparation. I appreciate and thank all the institutions and persons who directly or indirectly contributed to the accomplishment of the study. Bezabih Emana (PhD) Managing Director SID Consultant Support Integrated Development vii

8 Acronyms ADLI ARD BGR BGNRS BG BG FSEG BPR CBE CSO CBOs CIDA CSA CIF DAs FSEG FGD GDP Ha HH IGAs Kg MFIs MTDP NRM NBE NGOs RED/FS PNRM PASDEP Qt SNNPR SDPRP - ATVET VAT Agricultural Development Led Industrialization Policy Agriculture and Rural Development Benishangul Gumuz Region Benishangul-Gumuz National Regional State Benishangul Gumuz Benishagul Gumz Food Security and Economic Growth Business Process Re-engineering Commercial Bank of Ethiopia Civil Society Organization Community Based Organizations Canadian International Development Agency Central Statistical Authority Cost Insurance Fright Development Agents Food Security and Economic Growth Focus Group Discussion Gross Domestic Product Hectare Household Income Generating Activities Kilogram Micro Finance Institutions Market Towns Development Project Natural Resource Management National Bank of Ethiopia Non Governmental Organization Rural Economic Development and Food Security Participatory Natural Resource Mapping Plan for Accelerated and Sustainable Development to End Poverty Quintal (100 kg) Southern Nations Nationalities Peoples Region Sustainable Development and Poverty Reduction Agricultural Technical Vocational Education and Training Value Added Tax viii

9 Executive Summary Despite its importance, the agricultural sector in Benishangul Gumuz region faces different problems and challenges such as low level of use of improved agricultural technologies, traditional methods of production, natural resources degradation, livestock disease, poor infrastructure and lack of sustainable market outlet. To reverse this situation and contribute to the BG regional state s objective of improving food security and to bring about economic growth, CIDA has provided funds for implementing the BG FSEG program with the expected outcomes of improved food security and increased income. Thus, this market assessment and value chain analysis was commissioned by CHF to SID Consult. The study aims at identifying potential commodities for value chain development and income generation along with identifying associated constraints and opportunities for improvement. To achieve the specified objectives of the study, different methods of data collection such as key informants interview, focus group discussions, field observations and review of secondary data were used. The key findings of the study are summarized below. Key sub sectors in the area: the economies of the project area are based mainly on agriculture which includes crop and livestock production. Crop production and livestock production account for about 41% and 26% of the household income, respectively. Food crops (including maize, sorghum, haricot beans, okra, and finger millet), oil crops (sesame, Niger seed and groundnuts), pulses (mainly haricot beans and soya beans), some vegetables, fruits (mainly mango) and root crops are produced in the project area. Livestock production includes goats, sheep, poultry, cattle and donkey. Fishing exists but limited in the project woredas to woredas where rivers cross the woredas. Other economic sub-sectors include mining (contributing about 22% of the HH income for Kurmuk, Sherkole, Sirba Abay and Guba woredas); non-timber forest products such as incense and honey production; and non-farm sectors such as trade/petty trading. Bamboo is an important resource for construction purpose. Its role as income generation activity is limited due to its presence in remote areas making access difficult. This resource is somehow endangered and subject to continued degradation. Potential commodities for value chain development and income generation: potential commodity identification for value chain development and income generation was done based on the economic importance of the commodities, their ecological and social suitability, farmers objectives to produce the products for market (marketability), and potential for value addition and market linkage. Ecological suitability has been expressed in terms of adaptation of the commodity to the area while the social suitability was expressed in terms of the communities willingness to engage in the production of the product. These parameters were given score ranging from 1 (the lowest) to 5 (the highest) for each of the commodities and the average score was used to select the commodities for value chain. The result shows that Mango, oil seeds, incense and honey scored an average value of 4-5 and hence selected for value chain intervention. Mango value chain development was identified for Kurmuk while honey value chain development was selected for five woredas: Belojiganfoy, Sirba Abay, Kurmuk, Dibate and Mandura. Incense was identified for four woredas: Sirba Abay, Kurmuk, Sherkole and Guba while oil seed is suitable in all of the seven project woredas. Food crops production, livestock ix

10 production, and off-farm activities which include petty trade, bamboo products, mining, and fishing could be considered for income generation. Opportunities for value chain development and income generation: Key opportunities that contribute to the value chain development of selected commodities include availability of ample land and good climate for production; expansion of road infrastructure especially road connecting the woredas to the main market centers and road connecting to the Sudan; good vegetation cover and ample bee colonies as well as existence of raw materials for beehives construction; experiences of production for the selected value chain products; existence of good market demand for the products; high interest of farmers to participate in value chain products; and existence of exporters currently interested to involve in the processing and/ or marketing of the value chain products. Likewise, opportunities identified for income generation include existence of land and conducive climatic condition for crop and livestock production; good market for small ruminants in the local markets and neighboring Sudan; road infrastructure connecting the woredas to regional town and to the Sudan; existence of limited skill in income generation activities. Challenges for value chain development and income generation: Challenges that need to be addressed to realize the objectives of the food security and income generation activities include poor working culture and agricultural practice in the area; lack of skill in modern agricultural practices; poor quality of products and low prices; low productivity and production; no market information system for effective agricultural marketing; limited access to market especially between kebele and woreda; lack of processing, preservation and transportation facilities for the products; capital shortage and lack of access to credit; water shortage during dry season; wild fire, and pests and diseases. Key recommendations for potential commodities selected for value chain development and income generation: Value chain development: Honey: Conduct Participatory Natural Resource Mapping (PNRM) to identify forest area that can serve as area closure; Increase community awareness and introduce bylaws to protect the forest from burning; Skill building in modern beekeeping (queen rearing, utilization of bee equipments, hives making, bee management, honey processing and packing); Provide seed money/credit to initiate modern beekeeping; Establish honey processing and marketing cooperative; provide seed money; training on entrepreneurship and business development; link with the market; provision of water supply; support private bee colony multiplication and marketing for income generation; and facilitate exposure visits. Oil seeds: Supply improved inputs (seed, draught power, and agronomic practices) to increase production and productivity; establish marketing cooperatives at kebele level and union at woreda level and capacitate them by providing them with seed money/credit and skill building; link them with processors and exporters; establish market information system x

11 and build the capacity of the region as well as the woreda to effectively provide market information to the community; and establish market center in Guba woreda. Mango: Establish mango processing and marketing cooperative; provide material, financial and skill building to enable processing and marketing; improve the juice quantity of local mango through grafting without reducing the mango quality. Support development of private nursery which can serve as income generation; and facilitate exposure visit. Incense: Community mobilization and behavioral change on work culture and entrepreneurship; conduct Participatory Natural Resource Mapping (PNRM) to identify the existing and potential incense area. Develop community action plan to manage and benefit from incense plants; Increase community awareness and introduce bylaws to protect the incense trees; expand the plant population through plantation; skill building in incense tree management and harvesting; establish linkage with exporters; facilitate exposure visit. Income generation: Small ruminants/ poultry production and marketing: Provide revolving fund for women to rear and market goats; training on goats husbandry; agribusiness skill development to promote fattening; improve veterinary services; and facilitate exposure visit. Non-farm income IGAs: Provide revolving fund for petty trade, grain trade, etc.; technical support on market information system: establish the system and make it functional at all levels. This is also valid for all income generation and value chain interventions; provide training to improve the quality of the product; and establish market linkage. Crop production: Provide revolving fund for accessing oxen and other inputs and train farmers on how to plough. This requires provision of adequate veterinary services to reduce the impacts of tsetse fly; alternatively, organize/strengthen farmers cooperatives, provide seed money to purchase small/medium tractor to rent to farmers; train farmers on improved agronomic practices; mobilize the community to improve their working culture by involving CBOs; introduce early maturing and striga resistant varieties suitable for the area e.g. onion, papaya, sorghum, sweet potatoes; and facilitate exposure visit. Improve livestock production productivity: livestock feed management to mitigate feed shortage during dry season; enrichment planting of fodder plants; introduction of tsetse resistant breeds like Sheko and Abigar cattle; training on livestock health management; improve veterinary service; promote livestock product utilization to improve income and nutrition; provide credit facility to purchase livestock; and facilitate exposure visit. Fishery: Skill building on fishing and fish management; provide fishing material; introduce fish drying technique; and link to market. xi

12 1. Introduction 1.1 Background More than 85% of the Ethiopian population, residing in the rural area, is engaged in agricultural production as a major means of livelihood. Agriculture, which accounts for about 47% of GDP, 80% of export earnings and 85% of employment is the backbone of the economy. The industrial sector which accounted for only 12% of GDP in 2004 comprises making of textiles, food processing, cement manufacturing, construction and hydroelectric power generation, among others. The main agricultural commodities produced in the country include coffee, cereals, pulses, oilseeds, `khat, meat, honey, hides and skins. Agricultural export accounted for 88.3% in 2007/08 (MoARD, 2008) 1. Coffee is particularly important in the country s economy having accounted for close to 35% of Ethiopia's foreign exchange earnings in 2007/09. Other major agricultural exports are oilseeds (14.8%), pulses (9.3%), hides and skins, and the traditional "khat. Despite its importance, agriculture continues to face a number of problems and challenges. The major ones are adverse climatic conditions; lack of appropriate land use system resulting in soil and other natural resources degradation; limited use of improved agricultural technologies; the predominance of subsistence agriculture and lack and/or absence of business oriented agricultural production system; limited or no access to market facilities resulting in low participation of the smallholder farmers in value chain or value addition of their produces. Benishangul Gumuz Region (BGR) is found in the worst situation in the context of the above problems. Despite high potential for agricultural production, several problems hinder economic development and food security in the region. Low level of use of improved agricultural technologies, traditional methods of production, natural resources degradation, livestock disease, poor infrastructure and lack of sustainable market outlet are among the key problems. To reverse this situation and re-instate agriculture as an engine for economic development calls for the development of appropriate human resources, provision of improved agricultural inputs; adaptation/application of appropriate technologies; and improvement and expansion of economic infrastructures. Securing accelerated and sustained development of the agricultural sector through the transformation of the subsistence agriculture to market- oriented development will also guarantee the sector's contribution to the attainment of the millennium development goals. To realize this, the government designed and put in place multitude of policies. Agriculture related policy instruments revolve around a major effort to support the intensification of marketable farm products -both for domestic and export markets, and by both small and large farmers. Elements of the strategy include the shift to higher-valued crops, promoting high-value export crops with niche markets, and better integrating farmers with markets -both locally and globally, a focus on selected high-potential areas through growth corridors, facilitating the 1 Export statistics of major agricultural commodities for the 2000 EC (2007/2008)

13 commercialization of agriculture, supporting the development of large-scale commercial agriculture where it is feasible. In order to contribute to the BGR s objective of food security and bring about economic growth, the Canadian International Development Agency (CIDA) has provided funds for implementing the Benishangul-Gumuz Food Security and Economic Growth (FSEG) Project. The project will be implemented in seven woredas, namely Belo Jiganfoy, Sirba Abay, Kurmuk, Sherkole, Guba, Mandura and Dibate during the next 5 years. By addressing root causes and structural factors of poverty, the FSEG project will improve the socioeconomic and environmental conditions in BGR by harnessing the potential of the poor, increasing their productive capacity, and reducing barriers limiting their participation in social and economic activities. The project has two major outcomes: 1. Improved agricultural production and productivity in the 7 Woredas; and 2. Increased and sustained income within the community (especially among female) in the 7 Woredas. This market assessment and value chain analysis was commissioned to enable understanding of the potentials of the project woredas to engage in market-led development. The study aims at identifying potential commodities for market development so as to enhance the communities participation in value chain. The study was commissioned by CHF to SID Consult-Support Integrated Development. Dr. Bezabih Emana represented the firm and is responsible for this report. 1.2 Objectives i) To make market assessment and identify potential commodities for income generation and value chain in the select project woredas of BGR; ii) To identify the constraints and opportunities in each of the value chains; iii) To map out the major supply chains and actors in the selected commodities for value chain; iv) Assess the micro-finance conditions and give recommendations; v) To identify potential activities for income generation and value chain to be included in the region s Food Security and Economic Growth project implementation plan. 2

14 1.3 Methodology The study team The study used a participatory research methodology. Field level data collection was conducted in all of the seven project woredas during March 22 to April 20, A team of experts participated in the data collection process: Dr. Bezabih Emana (SID Consult) as a team leader, Damte Dagnew (CHF), Teka Birhanu (BGR Agri. and Rural Development Bureau), Geremew Argeta (BGR Cooperatives Promotion Agency) and delegates of Consortium members implementing the project in the respective woredas participated in the assessment Data collection Review of Secondary Data/Documents: The assessment started with review of project document, different reports about BGR, market study reports in the region. Secondary data were collected from the regional bureaus in the region and the selected woredas. Secondary data on microfinance in the region was collected from The Benishangul-Gumuz Micro Finance Share Co. Export data were collected from the Ethiopian Revenue and Customs Authority. Key Informants Interview: The data collection was made at institution level (region, woreda sector offices) and community level. A total of 104 persons from different institutions and 423 persons from the communities in the seven woredas participated in providing information (Table 1). Government institutions contacted at different levels of administration include the regional Agriculture and Rural Development Bureau, Cooperatives Promotion Agency, Trade and Industry, Agricultural Research Center, Rural Technology Development Center and Road Authority, Technical and Vocational Training and Education Center. At woreda level, the administration offices facilitated the woreda level discussions made with sector partners. The non-government institutions include trader in the respective towns, Wollega University, investors/incense collectors, local NGOs like Boro Shinasha Development Association, Benishangul Rehabilitation and Development Association and Tikuret Le Gumuz Lelimat Mahiber. Focus Groups Discussion: In order to select kebeles for the data collection, mapping of the kebeles available in the respective weredas were made to identify two approximately homogenous groups. The grouping was made in terms of similarities in means of livelihood, market access and ethnic compositions. In Guba and Sherkole, the kebeles are relatively homogenous while in the other kebeles, two groups were formed. Out of the identified group, one kebele was selected for the FGD. In each of the kebeles/community level data collection, male and female groups composed of different age and ethnic groups were formed for the FGD. As shown in Table 1, 49% of the FGD participants were female. Checklist was prepared to guide focus group discussions and the key informants interview (See Annex 1). The checklist aimed at generating relevant information on the potential commodities and agricultural enterprises for value chain and income generation, the existing market situation and linkages, market institutions and facilities, marketing problems and possible solutions, 3

15 institutional capacity for market led development, credit facilities and constraints. The questions were gender mainstreamed. Table 1: Number of participants of FGDs and Key Informants Interview Woreda Kebele Community Total Institutions Male Female % of Non-Government/ women Government private Total Balojiganfoy Sirba Abay Kurmuk Sherkole Guba Dibate Mandura Total in the 7 woredas Nekemte Assosa Chagni 3 3 Bahir Dar Arjo 1 1 Total outside the woredas Total institutions Photo 4: Examples of focus group discussions with the community members 4

16 Field Observation: The assessment team made visual observation of the infrastructure in the regional Bureaus of Agriculture and Rural Development regarding the existing capacity to support market led development through provision of technical support for effective market information system and linkages. The observation shows unavailability of market information collection, analysis and dissemination system in the region. This situation was worse at the woreda level due to lack of institution responsible for market information management and distribution. In each of the woredas visited, the visual observation of the potentials indicated by the woreda staff and the community was made for preliminary verification. Some typical visits were made to the Blue Nile in Sirba Abay to observe the fishing area and the extent of fishing; Forest cover especially of Bamboo plants in the area which is thinly distributed in the areas assumed to have high bamboo cover, visit to Beles river to observe fishing situation in Guba (which was also meager) and incense trees in Kurmuk, Shirkole and Guba. Incense processing warehouse in Chagni, market centers in Chagni, Assosa and Nekemte were also visited Data analysis The information and data gathered from different sources were triangulated and analyzed to be basis for this report. The quantitative data were presented in tabular or graphic forms while quantitative information incorporated in the report to support the quantitative data Organization of the report The report is organized into ten sections. Section 1 introduced the background, objectives and the methodology. The second section briefly introduces the Benishangul-Gumuz region while section three provides a description of the project woredas in terms of population that will benefit from the project, the analysis of economic sectors so as to enable selection of the commodities suitable for value chain and income generation and the market situation in the woredas. Sections 4-7 deal with analysis of value chains for selected commodities, namely oilseeds, honey, Gums/incense and mango respectively while section eight assesses the microfinance situation of the region. Assessment of institutional and regulatory environment was discussed in section nine. Section ten provides summary of the findings and recommendations for project intervention in a concise manner Limitations The major limitation of the study is lack of detailed demand analysis. This should be done along a detailed mapping of the value chain to estimate the demand for the commodities and conditions attached to the products. Product certification requirement is needed especially if some of the commodities are to be registered as a regional specialty. The mitigation strategies and risk management strategy was not covered in this study. There has been some inconsistency in regional and woreda level data which emanated from lack of systematic data management system. We attempted show the source of data used in this report. But institutional capacity problems need to be addressed. Economic empowering women requires in depth gender profile 5

17 study. This assessment tried to identify only the activities which are done by women and suitable for targeting women. The actual targeting can depend on specific situations of women in different places. 2. Brief Description Benishangul Gumuze Regional State 2.1 Geographic Location and Area The Benishangul-Gumuz National Regional State (BGNRS) was established in 1994 by the new Constitution of Ethiopia, which created a federal system of governance with 9 regional states and two city administrations. BGNRS is located in the Western part of the country. It stretches along the Sudanese border between and N. The Western and Eastern limits are given by the longitudes and E, respectively. The Amhara, Oromiya and Gambella National Regional States are bordering the region in the North, East and South respectively. The Region is divided by the Blue Nile in to two parts. The Northern part Metekel Zone comprises an area of 26, 560 Km 2, the Southern part Assosa Zone, Kemashi Zone and Mao- Komo Special Woreda occupies 23,820 Km 2. The Region is administratively divided into 3 zones 19 woredas and 1 special woreda. The total area of the Region is estimated to be about 50,380Km2. According to the information received from the Regional Bureau of Agriculture, the total area of arable land in the region accounts to about 911,877 hectares of land is suitable for farming of which only 26% are used. Furthermore, it is indicated that about 189, 534 hectares of land are potential for irrigation that is 24.24% of the irrigable land. The major rivers within the BGR are Abay River and its tributaries, Beles, Dabus, Dhidhsa, Angar and Dindir. BGR is crossed by the Blue Nile, which enters the region from the east, turning then to the north-west and leaving it between Siriba Abay and Guba Woreda towards the Sudan. The rivers provide some potential for fishing and irrigation. The region has potentially rich surface and sub surface water resources. However little was done to utilize these resources. Due to its topographic feature, BGR is one of the regions in the country where relatively less soil erosion has taken place. However, due to deforestation of natural vegetations during the last few decades, erosion of top soils is becoming a major problem. According to the Woody Biomass inventory Map, the soil loss rate of the region, ranges from less than to equal to 200 tons/ha/year. The degradation of the environment has severe repercussions for rural populations, lowering household income, damaging the agricultural economy, damaging the environment and hindering the general development of the region. 6

18 Figure 1: Map of the project area Source: New Atlas of BG Regional State (BG BoFED, 2007) 7

19 2.2 Agro ecology BGR has different agro-ecological zones. According to the new Atals of the region (BG BoFED, 2007)2, the region s elevation ranges from 580 to 2,731 masl. The highest peak is the Belaya plateau in Dangur Woreda, the lowest where the Blue Nile crosses the Ethio-Sudanese border. The climate of the region is characterized by a mono-modal rainfall pattern (i.e. a single rainfall maximum per year). The duration of the rainy season decreases from south to north.. Generally the region s climate is grouped in to three zones: Kolla, woynadega and dega. The major part of the region about 75% - is lowlands (Kolla) with an altitude below 1500 masl. It is hot for most of the year with average temperature ranging from >27.5 c. The annual rainfall is about 860 mm. The midland (Woynadega) zone accounts for 24% of the region with an altitude of 1,500-2,500 masl while the Dega zone accounts for only 1 % of the area of the region and lies in an altitude above 2,500 masl. The length of growing period is the period when the available temperature and water permit crop growth in the area. It is determined by mean annual rainfall, temperature and altitude. An area of South of the Abay river has LGP between 180 to 211 days and North of the Abay LGP ranging between 168 and 190 days. Western parts Metekel and the eastern parts of Kamashi administrative zones have LGP at average of 160 days while Assosa Zone has LGP ranging from days. The region is one of the high potential resource areas in the lowland regions located in the west and northwestern part of the country, which is relatively less developed. 2.3 The people According to the population census of 2007, the total population of the region is 670,847 of which 50.7% are male (CSA, 2009). The population has been growing at a rate of 3% per annum during 1994 to 2007 which is higher than the national population growth rate of 2.6% per annum. The population density is low with an average of 12.1 per km 2. According to the CSA (2008), the region is highly characterized by its ethnic diversity. The major indigenous ethnic groups in the region include Berta (25.9%), Gumuz (21.11%), Shinasha (7.59%), Mao (1.9%), Komo (0.96%), and others indigenous people. The other ethnic groups such as the Amhara (2.25%), Oromo (13.32%), Agew (4.24%), Tigre (0.68%), and others form part of the population of the region. 2 Regional Atlas of Benishangul Gumuz Region, Bureau of Finance and Economic Development (BG BoFED, 2007). New BG Regional Atlas1, Assosa. 8

20 Diverse as the ethnic groups is also diverse cultural and traditions governing the lives of these people. The indigenous community has the tradition of social support system in the form of labour for agricultural production and construction, contribution of food, beverages and money on special events of social celebrations or mornings. The work and saving culture of these people severely affected their capacity to accumulate capital and improve their welfare. 2.4 Economic situations Agriculture Benishagul Gumz region is endowed with various resources that if properly utilized can significantly contribute to the economic development of the country. Some of the most important ones include fertile land suitable for high value crops, livestock, apiculture, fishery, minerals like gold and marble, economically important trees like bamboo and incense. The region has a large area of land suitable for both staple and high value crop production. Only 26% of the land suitable for farming utilized so far. Furthermore, it has significant potential for irrigation. Also, the region has suitable agro-ecology and adequate rainfall to improve farm production and productivity. The annual rainfall is high and ranges from mm, and it extends from May to October, although there is a tendency to be erratic during the recent years. Livestock production is important means of livelihood in the region next to crop production. It is important sources of food, cash income, and assets to buffer against shocks. According to the 2005/06 CSA agricultural sample survey, the Region had 350,399 cattle, 314,277 goats, 102,289 sheep, and 961,196 poultry. Goats are the single most important livestock raised by the indigenous ethnic groups of the area. Though the overall number livestock in the region seems small as compared to the national figure (only 0.01% of the total herd of the rangelands), the region has significant potential for livestock production. It has untapped potential for grazing. As anecdotal evidences on regional land use indicates, out of 249,856 total land area, grazing land accounts for 3,816 (1.5%). However, this potential is seriously constrained due to prevalence of various diseases in the area. Trypanosomaisis is the major threat to livestock production in the region. According to the ethno-veterinary survey of June 2004, the direct mortality of animals was estimated to be 46% of the cattle herd and 38% of the sheep and goat flocks per annum. The cattle rearing practice is also traditional and need improvement. Chicken production is widely practiced in the region. Chicken meat has high nutritional value, affordable for investment by poor and easy to manage compared to raising other livestock. Chickens are that main sources of food and income to the majority of the poor. It is highly important to modernize its production system injecting small amount of human and financial resources to its production (Oxfam Canada, 2004). 9

21 Apiculture Apiculture is another economically important activity in the region. Settlers commonly involve in honey production using traditional beehives. On the other hand, forest honey is collected by the indigenous people from hollow trunks of big trees and stone caves along riverbanks in areas not affected by external encroachment. The fact that the region is endowed with favorable climate and large vegetation cover makes it suitable for apiculture. About 223,980ha or 89% of the total land of the region is covered with vegetation. According to Oxfam Canada s study in 2007, there were 166,736 traditional and 682 modern beehives engaged in the region. According to the regional Bureau of Agriculture and Rural Development, there were 37,087 beehives in the seven project woredas in More work should be done to take advantage of the vegetative cover of the region, which is conducive for honey production. Minerals Further, the region is endowed with important mineral resources. According to studies conducted in some areas, it is proved that the region has potential for gold and base metals such as zinc, lead, copper, and considerable reserves of marble, silica and clay soil. Gold and marble are the most significant mineral resources of the region. Gold mining is practiced among the indigenous community as income generating activity. It is mainly for subsistence and to meet immediate household needs. According to the information received from the Bureau of Water, Mines and Energy, the potential gold mining areas of the region are indicated in Table 2. Table 2: Location of gold resource by woreda and kebele Zone Woreda Kebele Rivers used Metekel Dangur Ditchigir Beles Mandura Debuh Giorgis Laheh Dibate Albasa; Galisa; Gofen Demben; Zigehe Tiba; Berbere Zuria; Shar Guba Arenga; Fangula; BabZinda Abay; Belese Bulen Gitchi Dugi; Ilgod Kissa; Gishen Wonbera Dikok; Ajoba; Wabo; Menjeda; Baniyame; Dura; Abay; Yussa; Belese Assosa Zone Kisseya; Atshaga; Jelekota; Merar; Apir Kumruk Dulhudi; Dilshitalo; Azale Akendiyo; Kutaworkie Mengie Kudenyo Mangie Sherkole Sherkole Kamash Sirba Chibie Chibie Zone Godere Godere Source: Bureau of Water, Mines and Energy, 2004 Fishery Fishery is important and developable economic engagement in BGR. Some of the most important rivers that are host to varieties of fish include Blue Nile, Dabus, Dhidhessa, Anger, Diga and Daka. The indigenous people residing along some of these rivers practice traditional 10

22 fishing as supplementary subsistence activity. However, this potential resource is rarely utilized for commercial purpose so far. Handcraft Handcraft is another important economic activity in the region especially for the women. Several handicraft products are produced from clay soil, wood, iron, bamboo, and barks/grass mostly for home use. However, some basketry products from bamboo and palm leaves and pottery are produced for sale. Handicraftsmen among the indigenous ethnic groups are respected and many seek to acquire the skills which are contrary to the segregation and marginalization attributed to them in the highland areas and elsewhere in Ethiopia (Oxfam Canada, 2004). This provides an opportunity to expand handicraft activities through training as a strategy for income generation. 3. Description of the Seven Project Woredas 3.1 Population The BG FSEG will be implemented in seven woredas listed in Table 3, below. The woredas are located in all the three zones: Guba, Mandura and Dibate woredas are located in Metekel zone; Kurmuk and Sherkole woredas in Assosa zone and Sirba Ababa and Belew Jiganfory in Kamashi zone. The woredas vary in terms of population, area coverage and potentials. Most of the woredas are located far from infrastructure and the livelihood of the people at a very poor condition. Kurmuk, Sherkole, Guba and Sirba Ababay woredas are typically located in high temperature areas with poor infrastructure. The living condition of the people is very poor and food insecurity is common. The project targets some 179,313 people (about 27% of the population of the region). About 49% of the population is female. The female members of the household are solely responsible for the reproductive and household chores and equally share the responsibility of participating in crop and livestock production and marketing. In fact, the burden of undertaking routine and laborious tasks rests on women (see photo 1, for instance). Table 3: Population of the target woredas Woreda Urban Rural Total Male Female Total Male Female Total Male Female Total Guba 1,258 1,086 2,344 6,227 6,330 12,557 7,485 7,416 14,901 Mandura 4,187 3,777 7,964 14,876 13,728 28,604 19,063 17,505 36,568 Dibate 2,196 2,396 4,592 24,916 24,672 49,588 27,112 27,068 54,180 Kurmuk ,637 6,389 13,026 6,958 6,621 13,579 Sherkole ,442 9,643 19,085 9,931 10,061 19,992 Sirba Abay 1,451 1,265 2,716 6,252 6,132 12,384 7,703 7,397 15,100 Belew Jiganfoy 1,270 1,116 2,386 11,895 10,712 22,607 13,165 11,828 24,993 Total 11,172 10,290 21,462 80,245 77, ,851 91,417 87, ,313 11

23 Source: CSA (2008): Population Census of 2007 Photo 1: A Gumuz woman and girl engaged in dual task at a time (March 2010) 3. 2 Economic Mapping of the Seven Project Woredas Key sub sectors The economies of the seven project woredas are based mainly on agriculture. The agricultural activities involve crop and livestock production. Food crops, oil crops, pulses, some vegetables, fruits and root crops are produced. Livestock production is dominantly goats, sheep, poultry, cattle and donkey. Fishing exists but limited in the project woredas. Other economic sub-sectors include mining, non-timber forest products such as incense and honey production and non-farm sectors such as trade/petty trading. This section discusses the economic sub-sectors analysis based on the discussions made with woreda line department staff and the community and the contributions of the economic sub-sectors to the livelihood of the farm households. The assessment of the means of livelihood of revealed that crop production accounts for 40-80% of the household income where the share is higher at Dibate, Mandura and Belo Jiganfoy woredas. Livestock is the second important sub-sector contributing to the livelihood of the farming community. Overall, the average contribution of the different means of livelihood to the household income is shown in Figure 2. The proportion of income generated from gold mining is 22% which is particularly important for Kurmuk and Sherkole woredas. 12

24 Market Assessment and Value Chain Analysis in Benishangul Gumuz-Final Report Figure 2: Average income composition in the project woredas Fish 1% Petty trade 7% Hand craft 3% Gold 22% Crop production 41% Livestock 26% Source: FGD with Communities at Mandura, Sirba Abay, Kurmuk and Shirkole (2010) Other means of livelihood which were not quantified in Figure 2 including honey production, incense and bamboo products. Although the potential for honey production in BGR is high, there is a limited supply of honey due to low yield and poor production practice, making its contribution to the household minimal at the moment. About 37,087 beehives are currently available in the seven woredas, which are mostly traditional hives. The yield of a traditional beehive ranges from 5-9 kg depending on flower availability. During the field work, the potentials and constraints of some of the major economic activities were also assessed. The key economicc sub-sectors are discussed below. Food crops Food crops producedd in the seven woredas include maize, sorghum, haricot beans, okra, finger millet (mainly in Dibate and Mandura). Soya bean is also grown especially in the northern woredas such as Dibate and Mandura thoughh in a limited scale. The relative importance of major crops grown in the project woredas is shown in Table 4. The result shows thatt cereal crops are the most important crops grown as shown with a rank of 1-2 in most of the woredas while oil seeds, especially sesame, are the second most important crops grown. 13

25 Table 4: Crops produced in the project woredas and their relative importance Sirba Crop type Sherkole Guba Mandura Dibate Belogiganfoy Abay Kurmuk Sorghum Maize Sesame Groundnuts Haricot beans Finger millet 2 1 Okra Niger seed Pumpkin 5 8 Pepper Teff 4 Vegetables Note: 1 st is the highest mainly in terms of area under crop and volume of production. The proportion of growers also parallels the ranking but with some overlaps Source: FGDs in the respective woredas, 2010 The area under each of the crops and the production are given in Table 5. The result shows that a total of about 95,000 ha of land was cultivated during the last cropping season in the project areas. Sorghum, maize, haricot beans and sesame are grown in all of the seven woredas. Approximately 28% of the land was allocated to sorghum while maize, sesame and millet were grown on 12.4%, 19.7% and 11.8% respectively. Niger seeds, haricot beans and ground nuts are also important crops grown on 7.9%, 5.1% and 4% of the cultivated area respectively. The findings again confirm that food crops are given the lines share of the area by occupying about 61% of the cultivated area. Okra is also commonly produced and marketed for local consumption as relish. 14

26 Total 6,319 3,726 23,931 10,711 3,804 23,807 19,727 92, As shown in Table 6, the productivity of food crops shows significant difference among the project woreds with Kurmuk and Shirkole yielding the smallest mainly due to moisture stress in relatively dry areas and low agricultural technology use. Belojiganfoy, Mandura and Dibate produce relatively higher yields of food crops due to relatively favorable rainfall and use of chemical fertilizers by some of the farmers. The estimated total production was about 1.15 million qt of cereals and 30,465 qt of pulses. Table 5: Area under crops in the 7 woredas (ha), 2010 Sr. No Crops Sherkole Kurmuk Belojiganfoy Sirba Abay Guba Dibate Mandura Total Percent 1 Finger millet ,115 7,564 10, Rice Maize ,907 2, ,371 3,042 19, Sorghum 2,930 1,903 7,401 3,480 2,435 1,880 5,937 25, Haricot beans , , Soya beans Niger seed , , Sesame 1, ,986 4, ,528 1,865 18, Groundnuts , , Pepper Onion 5? Mango Okra Cotton Table 6: Productivity of crops in the 7 woredas (qt/ha), 2010 Sr. No Crops Sherkole Kurmuk Belojiganfoy Sirba Abay Guba Dibate Mandura Weighted average 1 Millet Rice Maize Sorghum Haricot beans Soya beans Niger seed Sesame ? Groundnuts Pepper Onion Mango Okra Cotton Source: BG Agriculture and Rural Development (2010) 15