Project Factsheet
Tools for » Edible Oil Value Chain Enhancement
Project ID:00067259Description:MDGF-2053-D-ETH
Fund:
MDG Achievement Fund
Start Date *: 17 Mar 2009
Theme:
MDGF Private Sector Devt
End Date*: 30 Jun 2013
Country: Ethiopia Project Status: Financially Closed
  Participating Organization:   Multiple
About

Overview:

The Programme is perfectly aligned with the country’s national strategy of Agricultural Development Led Industrialization (ADLI) strategy and the edible oil sector being one of its priority sectors.

The Joint Programme sought to enhance productivity & competitiveness of private sector led agricultural production of oilseed. Reports indicated that during the JP lifetime productivity of linseed increased from 7.2 quintal/ha (quintal = 100 kg) before the project intervention to an average yield of 14 quintal/ha. In addition, it aimed to increase capacity for processing of edible oil seeds is enhanced. In this regard the JP has gone well beyond its design in establishing a clear plan for potentially critical changes to the structure and functioning of the oil seed sector in the future in both the Amhara and Oromia regions and has been an example of public private partnership. Lastly, it sought to improve access to local and international markets. The focus of the programme was on local markets. The most important success in this component was in the development of the vertical linkages within the value chain that contributed to an improved marketing framework for seed growers, cooperatives and processors.

Was able to showcase through a pilot an efficient oilseeds value chain & cluster development model which promotes entrepreneurship, provides capital and services to farmers, raises demand for agricultural products and connects farmers with markets through a strengthened value chain (the production, handling, processing, marketing and distribution of oilseeds). As a result the pilot areas have seen an enhancement of productivity and quality of oil seeds and edible oil production, and subsequent generation of employment and increase in income, which has also led to increased food security. Further innovation throughout the value chain, clustering and the creation of associations has had a positive impact on the incomes of the farmers, processors and traders, contributing to the achievement of the MDGs (Goal 1 – poverty eradication, Goal 3 – gender equity promotion, Goal 7 environmental sustainability).

A key result of the JP was to showcase that with appropriate interventions the sector is profitable, at a critical time when many processors reported to have lost hope in the industry and were ready to move into other businesses. It highlighted the need to update existing processing practices to refine crude oils for both health and economic benefits. 

The JP also helped to build network among members of oil processors who were previously reluctant to collaborate and competing against each other, with both Oromia & Amhara Regions having formed 2 Sectoral Associations and 2 Business Companies (PLCs) with the objective of investing on common facilities, such as, refineries, packaging plant and joint purchase of raw materials and spare parts, as well as relocation of their existing facilities from residential areas to industrial zones. The continuously increasing financial contribution of its members is a clear indication of ownership and a guarantee for sustainability of the project achievements. 

Although no changes in policy were directly triggered in the sector, the programme conducted a study on Reviewing existing government Policy and Regulatory Framework of the Edible Oil Sector. The government is expected to make the recommended improvements.

Additional resources were leveraged by ensuring buy-in from processors from the Clusters established in the Oromia & Amhara Regions, who have been supporting the results with their own resources. In addition, the Ministry of Industry took the lead in the resource mobilization process for the second phase of the programme and advocated for UN agencies to commit some bridging funds for the transition period during which these resources should be mobilized.

 

Outcome 1:

Productivity & competitiveness of private sector led agricultural production of oilseed is enhanced.

 

Outcome Achievements:

  • Productivity and competitiveness of oilseeds was enhanced. Reports indicated that productivity of linseed increased from 7.2 quintal/ha (quintal = 100 kg) before the project intervention to an average yield of 14 quintal/ha. Though access to adaptable and preferred variety of nigerseed was unavailable, target farmers who planted local variety of nigerseed increased yield from 4.5 quintals to 8 quintals/ha., mainly attributed to the fact that farmers adopted to use best performing varieties and associated management practices.
  • Simultaneously the price per quintal of linseed increased from USD 40-43 to USD 59-70 because farmers were able to produce better quality seeds which have demand in the market, which in turn increased their capacity to negotiate with the oil processors.

 

Outcome 2:

The capacity and competitiveness of the stakeholders for processing of edible oil seeds is enhanced.

 

Outcome Achievements:

  • Processors of oil seeds expressed a renewed confidence in the sector.
  • The JP has demonstrated effective and successful ways to improve small and medium size processor competitiveness demonstrating the potential for domestic production of edible oil to replace imports.
  • The establishment of processors’ Associations at the two project sites has resulted in the creation of key institutions for the sector and will support the sustainability of project achievements.
  • The other result of the JP which is difficult to quantify but has clearly shown remarkable achievement is the high capacity enhancement observed with all beneficiary groups, i.e., farmers, processors, public sector, financial institutions, private sector BDS providers and other support service providers, etc. The JP has successfully implemented various interventions that elevated the technical capacity of the above groups. The JP has also successfully demonstrated the possibility of installing quality systems and work practices such as Occupational Safety and Health (OSH) even in small enterprises.
  • Through the preparation of Strategic Business Plans (SBP) has helped the Clusters to pursue their roles in better and long term perspective with clearer visions and missions.

 

Outcome 3:

Access to local and international markets for edible oil producers is improved.

 

Outcome Achievements:

  • The JP has helped to overcome bottlenecks in the supply of oilseeds by establishing direct linkage between the processors, traders, brokers and regional agricultural marketing offices for sustained supply of oilseeds. As a result, both farmers and processors are now aware of the requirements of their respective market places, both in terms of quality and quantity.
  • The installation of locally manufactured semi-refining equipment, certification by quality authorities and packing of edible oils of the processors and participation in national trade fairs and exhibitions resulted in increased in sales of edible oils and higher market outreach & more revenue and income for the processors.

 

Best practices:

  • The JP has gone well beyond its design in establishing a clear plan for potentially critical changes to the structure and functioning of the oil seed sector in the future. This development which is the establishment in both the Amhara and Oromia regions of joint processing facilities, has been an exemplary demonstration of a public private partnership, and sets the stage for potentially significant developments in the sector. 
  • The number of Agencies was limited, strictly, to critical, core components of the JP. There were no ‘add-ons’ – the design logic was tight, within the JP and within the value chain and the Agencies each had clear, and specific result areas within component – and in linking components. A close correlation between the priorities, skills and experience of Agencies, and Agency staff, and the requirements of the different components of the value chain ensured clarity during the implementation process. 
  • The cluster methodology added value to JP implementation in the form of more effective coordination, communication and ‘whole of value chain’ engagement which contributed to the JP’s success. Of particular relevance to the role of joint programming in the success of the JP was the tight correlation between output areas and UN Agency responsibilities/capacities, coupled with the tight correlation between output areas and the edible oil value chain. The significance of these two factors in the success of JP design and implementation is, primarily, that there was nothing superfluous in either design or implementation. Every activity and output area contributed directly to anticipated results, and, generally, contributed ‘forward and backwards’ in the value chain.  
  • Ministry/Bureau-Agency synergies, as well as the related producer-processor-marketer relationships provided a much more significant design and implementation context than would have been possible with a focus on a single component. The evolving relationships between farmers, cooperatives and processors (Associations and PLCs) was in no way forced – the response in the field to evaluation enquiry was very strong in awareness of the economic benefits of this change in practice.  
  • The fielding of Cluster Development Agents (CDAs), acting as local coordinators for the different agencies, was a vital arrangement for timely implementation and trust building with beneficiaries. In fact, the CDAs were mainly implementing UNIDO activities and subsequently FAO decided to have a similar arrangement in order to monitor more closely activities and speed up implementation.

 

Lessons learned:

  • A donor strategy integrated with the Communication and Advocacy Plan and grounded in the M&E reports should have been prepared in the last year and implemented in the last 6 months of the project.
  • The contribution of the Universities has added particular technical and social/ethical value to implementation approaches.
  • Implementation was much more effective where specific, trained resources, were assigned to delivery.
  • The PRODOC formulation stage will largely determine the success of JP implementation. Nevertheless, as the initial program document may not be based on enough in depth information, a thorough diagnostic at the very early stages of the programme is determinant for the development of a realistic and well coordinated JP. For this reason inception & design stages should be considered in addition to the implementation period and not as part of it.
  • An integrated/multi-sectoral approach to development should be adopted to multiply results and increase impact but this can only be ensured by minimizing overlap of activities among agencies and clearly separating outputs and responsibilities.
  • Within such a short timeframe to implement UN agencies need to be flexible and quick in reacting to changes in circumstances to ensure a more effective implementation. The different procedures and operations of different agencies should be closely analyzed to facilitate smooth implementation.
  • Having the JP focal points sitting together (even if part time) in a physical space would have enhance communication among agencies. 

 

More details can be found in the documents below.

Recent Documents
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If you have questions about this programme you may wish to contact the RC office in Ethiopia or the lead agency for the programme. The MPTF Office Portfolio Manager (or Country Director with Delegation of Authority) for this programme:

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