As part of our presence at the conference "Making the Connection: Value Chains for Transforming Smallholder Agriculture", This is Africa interviewed Khalid Bomba, CEO of the Ethiopian Agricultural Transformation Agency (ATA). Below is an edited excerpt of the discussion.
How has the thinking of the Ethiopian government evolved with regards the role of smallholder agriculture?
The ATA was created to help address the systemic bottlenecks in the agricultural sector. Ethiopia is growing so quickly - you have agricultural growth increasing at an annual rate of over 8 percent, and the country has over 30 different agro ecologies, across a landscape that covers over 100 million hectares. So, there was the need identified for a separate organisation that really stepped back and thought strategically about the systemic changes that needed to occur, the systemic bottlenecks that existed, so that the growth we are experiencing now could be institutionalised, and could be built upon so that it could be sustainable over the long term, so it's not a quick flash and all of a sudden we dip back to where we were two, three or even five years ago.
As a new organisation, we don't pretend to have all the answers, so we rely strongly on partners to come together and think about these types of issues and come up with solutions jointly. What we try and do, is bring international best practices. We can say 'here are things that have worked in Mexico, in India, in China, in Vietnam, in other parts of the world', and then we contextualise them for Ethiopia. But we rely a lot on local experts, because they have been here. They know the unique context of Ethiopia and the challenges it faces.
Some farmers are complaining that it is difficult to get young people to go into farming. Is that something you are looking at?
One of the strategies we are developing recognised the need to commercialise the sector. And that commercialisation in most instances includes the introduction of new technologies. New technologies could be things like improved seed, or complex fertilisers. But we've also realised the level of mechanisation in Ethiopia is so low that the introduction of mechanised threshers or harvesters or planters is something that can be offered as a business to smallholder farmers by the youth, by youth entrepreneurs. So for us, the critical mindset shift that we are trying to bring about is the fact that, number one: agriculture is a business. It is not a subsistence activity that you do just for the household. You have to think about market opportunities that deals with quality, that deals with cleanliness and that deals with reliability, as a business.
Second, to think about agriculture not only from the production point of view, but also from the many business opportunities that are available on the post-harvest side, be it about value addition, or be it about linking smallholder production to markets, and how do we do that more efficiently . We think there is a huge opportunity for entreprenruers, for cooperatives and for youth to be involved in that kind of business activity that is fundamentally part of agriculture.
Do you see good historical precedents for agriculture-led industrialisation?
Every country in unique, every country has unique contexts, a unique history, strengths and assets. And we believe that Ethiopia's assets particularly when it comes to agriculture, lend themselves to agriculture-led industrialisation. Now the question is, how do we make that transition, how do we leverage the strengths that we have, but at the same time, ask what is the five, ten, fifteen year plan, not only to go to a more diversified economy, but one with a more commercially-oriented agriculture sector. Agriculture-led industrialisation certainly plays a part in that. I don't think that any of us would advocate for 100 percent agriculture-driven industrialisation, and that's why you do see diversification of industrialisation here in Ethiopia already.
We've got used to this idea that developing countries try to sell into rich countries, but that's maybe not the best approach and with Africa growing so quickly, there is a huge opportunity right here, both in Ethiopia and the region.
That is, from our experience, absolutely true. The domestic market here in Ethiopia, especially with the growing population and changing tastes and demand from the urban centres, we believe offers a huge opportunity for small holder farmers. Improving the link in the access to those markets so that farmers can capture a greater share of the end price that domestic consumers pay could substantially increase the income that farmers generate from their produce.
To us, it's simply about making that link between the farmer and that domestic market. It doesn't have to be in Addis Ababa, it doesn't have to be the major capital, just that link between the farmer and the local market, and shortening that chain to make sure the smallholder farmer accesses a greater percentage of that end price, we think can have a significant contribution to a farmer's income.
On technology. as we visited Tef farmers yesterday you realise outside of Addis that there isn't a lot of technology. What is the bottleneck? Is it money? Is it conservatism among the farmers, that they don't really get it, they don't understand it? Some combination of those?
I think it's a combination of those things. The first and the biggest constraint at the moment is the ability to reach farmers with the technologies and to make sure that they see it with their own eyes. Now, I have often said that farmers are the ultimate entrepreneurs because ultimately, their income at the end of the year relies 100 percent on what they do themselves personally on their own plots. They are dependent on so many other factors as well. They are dependent on the weather, which none of us can control They are dependent on the availability of the right inputs on time, which is something we absolutely can control. But they are also dependent on the availability of these new technologies. And, given the risks that they face, they are very risk-averse.
Despite what they might be told, despite what they might be trained on, unless they see it on farmers fields, on their neighbours fields, they might not be willing to adopt these technologies as quickly as some of us would like.
The risk is both productivity and the cost of paying for the technology?
Yes, that's right. So there is that mindset aspect to this which is not unique to Ethiopia - it's unique to all small holder farmers because they tend to be conservative and risk-averse. The additional challenge that we face in Ethiopia - that the government has done an incredible job over the last five years in trying to address, and now it is about trying to get it to scale - is the development of the institutions to help reach those farmers both from a knowledge and an inputs point of view. From a knowledge point of view, Ethiopia has the largest public extension system in the world, with approximately 60,000 extension workers that are in nearly every single district in the country. The challenge they face are the operational resources to get the demonstration plots up and running.
One of the things we are working on is looking at international experiences, particularly in Vietnam and China who have tremendous experiences in this area in terms of how to get these extension workers and development agents with farmer training centres and demonstration plots to be financially sustainable.
The Ethiopian financial sector is somewhat puzzling for outsiders, its very different to what is going on in the rest of Africa and it has very limited foreign involvement, very limited involvement of e-payments. How big a bottleneck is that in terms of looking at the financial part of these questions?
I'm not sure the structure of the financial system is really the bottleneck. The problem, in my personal view is more related to the types of products and services that financial institutions are making available to the different parts of the value chain. This is not a unique issue only to Ethiopia. I think that most financial institutions in Africa see other sectors of the economy as more lucrative, and as a result, the financial products made available to the export market, for example, or to commercial construction, are a lot more sophisticated and meet the needs of industries compared to agricultural sector which tends to be very complex. The types of products and financial services that a small holder farmer needs are very different ... I don't think the financial system throughout Africa has evolved to understand those opportunities and create products for those opportunities quite yet.