Agriculture / ASSP / Capacity Strengthening / Ethiopia / Fruit / ILRI / Irrigation / LIVES / Markets / SNNPR / Value Chains

Improved marketing systems raise incomes for banana farmers in Gamo Gofa

Innovation platform meeting among producers, traders, marketing cooperatives and extension staffs in Mirab Abaya district of Gamogofa zone  (Photo:ILRI\LIVES)
Banana is an important commercial commodity in Gamo Gofa zone of the Southern Nations and Nationalities People’s Region (SNNPR) in Ethiopia. About 80% of the banana supplied to the Addis Ababa market is produced in Gamo Gofa through irrigation. Besides banana, the zone supplies apples and mangos to the national market. The lion’s share of irrigated banana is produced in the two low-lying districts of Arba Minch Zuria and Mirab Abaya in the zone.

The Livestock and Irrigation Value Chains for Ethiopian Smallholders (LIVES) project is working with potential stakeholders to enhance banana value chains in these districts. The conventional banana marketing system in Mirab Abaya has been identified as a major challenge affecting the banana value chains in the district.

This story is about the participatory processes of problem identification and introduction of potential interventions to improve banana marketing in Mirab Abaya. The current state of the banana value chains in the district was evaluated through innovation platforms, focus group discussions with producers, discussions with executive committee members of primary marketing cooperatives and through field observations.

There are about 120 local traders (77 in Arba Minch Zuria and 43 in Mirab Abaya) buying bananas from the smallholder producers and selling them all to traders in other parts of the country including in Addis Ababa. Although 14 fruit and vegetable marketing cooperatives (9 in Arba Minch Zuria and 5 in Mirab Abaya districts) were established in the past seven years, only three of them (Ocholo Lante and Genta Kenchama at Arba Minch Zuria and Omolante in Mirab Abaya) offer alternative market outlets for the smallholder producers.

Banana marketing  is better in peasant associations (PAs) where these three marketing cooperatives operate since calibrated weight balances are used enabling farmers to get much better farm gate prices. Despite the huge market potential of banana, in some PAs, smallholder producers choose to grow irrigated maize on their lands because they are not benefiting economically from farming bananas.

Cognizant of the challenges in banana marketing systems, in late 2013 the LIVES project started working with the zonal and district Offices of Marketing and Cooperatives to put together a team of experts to assess marketing problems in the main banana producing peasant associations of Mirab Abaya district. The following bottlenecks were identified:

  • Farmers sell banana to local traders through weight estimation, not through actual weight (except in Omo Lante PA where the marketing cooperative is more active).
  • Local traders buy 8-15 bunches as one quintal while a single bunch could weigh anywhere from 25-60 kgs. This way of marketing leaves farmers highly exploited by traders and brokers.
  • Producers get credit from traders. However, as the smallholder farmers are not getting credit for routine and non-guaranteed household investments, they are forced to depend on the traders to whom they sell their bananas.
  • Local price of bananas is set by local traders and their brokers. The brokers lower the price of the banana significantly and set the local price without proper negotiations with farmers.
  • Local traders and brokers have monopolized banana marketing and outsiders are not allowed to buy bananas.
  • Individual traders collect bananas from individual farmers’ fields. There are no common banana marketing centres where buyers and sellers meet and negotiate.
  • Only the Omo Lante marketing cooperative buys bananas from producers. The other four do not as their committee members have basic experience and skills in business management and creating market linkages.

The aforementioned major bottlenecks were discussed by the fruits value chain actors and service providers at a LIVES-facilitated district-level platform meeting held in December 2013. A follow up discussion was held with a group of influential authorities including officials from the district administration, zonal and district offices of Marketing and Cooperatives, district Office of Agriculture and district Office of Revenue. The officials agreed to create awareness on the major market actors, the impacts of improper marketing system and the need to establish a new marketing intervention. The district Office of Marketing and Cooperatives and the Office of Agriculture led this new intervention.

Subsequently, continuous awareness creation meetings were held with producers, traders, brokers, marketing cooperative committee members and PA administrators. The impact of improper marketing systems on banana productivity, household income and overall value chain were communicated and shared among various actors and service providers. Capacity development (awareness creation, coaching/mentoring) interventions were conducted by experts from the Office of Marketing and Cooperatives and LIVES staff. This resulted in a decision by producers and traders to reach an agreement to use well-calibrated weight balances in each PA.

By and large, the following achievements have been realised:

  • Use of calibrated weight balances for banana marketing has started in nine banana producing PAs in Mirab Abaya District. The PA administrators and the development agents are providing coaching on the proper implementation of banana marketing and the benefits of using well-calibrated weight balances at PA levels.
  • Legal traders from outside the district are now allowed to buy banana from farmers, marketing cooperatives or local traders.
  • Three marketing cooperatives (Ankober, Moleand Kolla and Mulato) have started buying bananas from the producers and selling them to traders. With the improved support from the district Office of Marketing and Cooperatives, they are also trying to create market linkages with wholesalers in Addis Ababa and elsewhere.
  • Most PAs have already allocated marketing centres that are accessible by trucks. In some of these PAs, both marketing cooperatives and traders are buying bananas at these centres. This has enabled the producers to have better access to market information and also to negotiate prices.
  • Starting in January 2014, the Office of Marketing and Cooperatives started recording the daily price and volume of bananas transported from the district. Accordingly, the recorded volume of banana sold from Mirab Abaya district was 850-950 quintals per day from January – May 2014 and 500-700 quintals per day from June – August 2014. The average price of banana was 4.50 ETB (0.22$) per kilogram in January 2014 and grew to 7 ETB (0.35$) per kilogram from June – August 2014. The latter is the largest farm gate price ever in the district.
  • Based on the agreements during the platform discussions, every truck has to take an exit card from the Office of Marketing and Cooperatives to enhance fair trade.
  • Since January 2014, the district office of revenue has started taxing every truck 700 ETB (35$). As there are anywhere from 10 to 25 trucks driving out of the district every day, the local government is receiving increased revenue due to this intervention.

Although there are encouraging achievements so far, there are also challenges ahead in sustaining these new arrangements. For the intervention to bring sustainable impact, more needs to be done on three major aspects:

  • Strengthening the marketing cooperatives and sustaining their role by developing their capacity to improve business management and market linkages.
  • Building the capacity of staff of the Office of Marketing and Cooperatives to provide proper and continuous support to marketing cooperatives and traders regarding market information, creating better market linkages and regulatory services.
  • Putting in place credit service provision for smallholder producers to reduce their reliance on local traders. This will increase the confidence of the smallholders on the sustainability of the marketing cooperatives.

Written by Birhanu Biazin and Tesfaye Dubale with contributions from Yoseph Mekasha.

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