Blog Linking farmers and markets in Ethiopia: the durum wheat value chain

A study on the durum wheat value chain in Ethiopia applied the LINK Methodology to implement inclusive business models, leaving once again a success story of this methodology.

How would market systems be improved by shortening a value chain that involves many operators in an East African country? In search of inclusion and productivity improvement, our team, funded by the German Agency for International Cooperation (GIZ), conducted a study on one of the most important food crops in Ethiopia. This is the case of wheat, with Ethiopia being one of the largest producers in the world in terms of total cultivated area and total production. Wheat and wheat products represent 14% of the total calorie intake in the country which makes wheat the second most important food behind maize (19%) and ahead of teff (10%), and sorghum (11%).

However, despite being grown in Ethiopia for many decades, wheat value chain is not well developed in the country. One of the critical weaknesses of the value chain is the lack of effective and efficient linkages between producers and other value chain actors to promote inclusivity and good business from production to final consumption.

One of the wheat varieties produced in Ethiopia is durum wheat, primarily used for pasta production. Currently, there has been increased investment and consumption in the pasta industry in Ethiopia due to the new consumers, who are looking for fast and tasty foods, while still cheap and nutritious. Previously, pasta producers depended on massive imports of durum wheat, which was not a sustainable long-term business strategy due to high and volatile costs. Later on, the possibility of obtaining raw material directly from local producers was explored in order to reduce production costs and increase competitiveness against foreign imports. Nevertheless, local production of durum wheat has been insufficient despite the growing demand.

Figure 1. Durum wheat production facts. Ethiopia. 2023. Design by: Carolina Polo 

As part of the “Winner” seed varieties project, the Alliance of Bioversity International and CIAT together with Oromia Seed Enterprise (OSE), identified the need to analyze the current value chain linkages and bottlenecks between farmers, wheat millers and pasta producers in Ethiopia  and develop appropriate business models  for smallholders to access the market more easily, focusing on opportunities for high value products based on nutrient dense traditional and other durum wheat varieties.

Nevertheless, connecting the two disparate worlds of smallholder farmers and emerging markets requires creative solutions so that both sides gain. This is why in the aim of bringing farmers to the market, our team decided to apply the LINK Methodology, developed by the International Center for Tropical Agriculture (CIAT) in the years prior to the Alliance, which builds bridges between these two worlds through the application of a combination of tools including: the value chain map, the business model canvas, the principles for inclusive business models, and the prototype cycle.

Figure 2. The LINK toolbox. 2023. Design by: Erika Mosquera and Carolina Polo. 

Tool 1: Value chain mapping

During this phase, a survey was conducted with a sample of 301 durum wheat producers in Gimbichu district in Oromia region, Ethiopia. Selection of the farmers followed a multi-stage sampling approach where the region was purposely selected because it is the largest producer of durum wheat in Ethiopia.
The aim of the survey was to understand and document farm level smallholder durum wheat production systems, marketing, farm-level opportunities and challenges / weaknesses, and the linkages and contribution to the overall function / dysfunction of the entire value chain.

Dr. Dejene Mengitsu facilitating discussions between all durum wheat value chain actors in Bishoftu. Ethiopia. Photo by: Kevin Onyango

The direct actors in the durum wheat value chain include farmers, aggregators, cooperatives, wholesalers, processors, food distributors, importers, and final consumers. The indirect actors include input producers and distributors, produce stores, transporters, extension agents, and trade promoters. Research, policy, and environmental conditions also play a critical role in the durum wheat value chain in the study area. Figure 3 presents the durum wheat value chain map in Gimbichu district in Oromia region.

Figure 3. Durum wheat value chain actors. Ethiopia. 2023. Adapted from: Link Training Workshop Report. Design by: Carolina Polo. 

Actors in the durum wheat value chain in the study area experience critical challenges, some of them cross-cutting. These include:

Figure 4. Durum wheat value chain critical challenges. Ethiopia. 2023. Design by: Carolina Polo. 

After having presented the context in which this study arises, the processes and some of the key data of the results obtained through the application of the first tool of the LINK Methodology, you can find out how this story continued through the application of the second tool of this methodology in the durum wheat chain in Ethiopia in the next blog of this series.

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