Agricultural Cooperatives Sector Development Strategy 2012-2016 The stat of affairs

1. Agricultural Cooperatives Sector Development Strategy 2012-2016 The stat of affairs

2. Focus of the presentation Enhanced Capacity Building (Ardaita as Center of Excellency Improve Marketing infrastructure Improve the structure, capacity and accountability of public regulators Design a comprehensive cooperative development policy and Guidelines Experiences from the study to the Netherlands

3. Role of cooperatives Increase market price (7-8%) Collective voice to advocate for their needs (In Thailand, Korea, Netherlands) World Development Report 2008 reviewed the evidence and concluded that “Producer organizations are essential to achieve competitiveness for small-scale producers”.

4. Cooperatives in Ethiopia (FCA 2010) 40,000 Coops (now more than 45,000) 4 Agricultural Coops 10,000 Single purpose 3,000 Multi purpose 7,000 6.7 million members 70% members of Agricultural Cooperatives

5. 1.5. SWOT analysis of the Agric Coop Sector in Ethiopia Strength Input Delivery (90-95%) Output marketing (coffee, sesame and others) 7-9% price increase Number of members are increased Reduce interference Good rules and regulation

6. Weakness Do not sufficiently help members improve their yields and incomes (World Food Program in 2010) Financially unsustainable (do not work at cost) Do not attract substantial membership Quality of coops’ service provision at all cooperative tiers is not keeping pace Leaders have low capacity Low role clarity and capacity stakeholders to implement and enforce policies/regulations

7. Opportunities Strong government commitment to support and promote Existence of government oversight/regulation structures from federal down to woreda level Several Ethiopian universities offer robust curricula for students training to be cooperative auditors or managers Good working relationships between the Government and development partners Demand agricultural products from agricultural cooperatives

8. Treats the absence of a comprehensive cooperative development policy limited access to high-quality services capacity building modules are often out-of-date, impractical, redundant, and not sufficiently comprehensive or available Prohibitive bank policies

9. Mission new Cooperative strategy Mission: A well-functioning agricultural cooperative sector that helps many smallholder farmers increase their yields and incomes through a) autonomous and efficient cooperatives at all tiers that provide effective and sustainable services to members, and b) a robust enabling environment of policy and regulatory oversight as well as capable and reliable service providers that ensure that cooperatives have the necessary support to succeed.

10. Good international practice (1) Focus on single product (at earlier stage) Extend to focus on multiple product Able to link input – marketing – credit (finance) provide four core services to members focus on increasing farmers productivity and income provide services systematically generate surpluses in serving members, so that their service provision is self-sustaining

11. Good international practice (2) provide services systematically Benefit members more than non-members marketing service better price non economic services members decide the modalities and beneficiaries of services offered by the cooperative, through a General Assembly provide services that benefit both men and women farmers

12. 1. Current state input procurement and distribution AC distribute fertilizer and seed /obtain Plan by DA and BOA Allocated to Coops By BOA Credit by CBE The margin is Determined by BOA (not this year) Lower the 2% of the total price Other countries greater than 5% credit sometimes sits on the cooperatives’ books, and undermines their economic viability

13. Long-term strategic direction strengthen the financial viability of cooperatives margin should be incentive for the coops farmers need additional tools and strategies in order to afford inputs, especially seeds and fertilizer Farmer savings groups Credit guarantee schemes Output markets linked input financing: Weather insurance: Coop should not be asked to take on additional risk, particularly credit provision for serving non-members

14. 2. Output marketing Collection of farmers product (known price) Quality Control Storage (to get better price) Value addition Prepayment

15. Current state in Ethiopia: Cooperative Marketing 20% of smallholder grain output that is marketed each year Limitation of the current cooperative output market Limited value addition Not increase farmers income

16. Long-term strategic direction Implementation of two marketing activities Marketing information Sells farmers produce on the behalf of the farmers Improve linkages of primary and secondary Cooperatives Ownership of the product Commission Larger buyers Quality production service Value addition Central service

17. 3. Roles and responsibilities of federal and regional government Kebele (CDA) to Federal Government Structure Promotion support Oversight and regulation roles Current state in Ethiopia FCA RCPA Types of Cooperatives Problems on oversight and promotion support Organizational Accountability (FCA and RCPA)

18. Long-term strategic direction Develop inspection and cooperative legal support framework Correct accountability of FCA and RCPA Give attention to non-agricultural cooperative Consider National development strategy Formulate cooperative law Accountability of FCA and RCPA

19. III. Enabling Environments policy and regulation cooperative Finance cooperative capacity Building Cooperative audit and legal service Cooperative Promotion

20. Policy framework Agricultural and Rural Development Policies, Strategies and Systems Proclamation 147/1998, 204/2004, Regulation 106/2004, Organization rules and Regional Coop Proclamations These Policies and Regulations are not sufficient because the following points are not included comprehensively Roles of women and youth Relation with stakeholders Cooperative training Implement and enforcement of the laws Inconsistent interpretations of the law (regions and federal)

21. Long term strategic Directions Develop Comprehensive policy (with the participation) Translate any policy change to related laws, regulation and bylaws as relevant Aware and build members and leaders on the policy Build oversight officials’ capacity to enforce the policy, rules and regulations at all levels Institute performance reviews of government cooperative offices

22. Capacity Building for Cooperatives Consists two element capacity building content (what) the institutions and process by which the content is delivered (who and how) Cooperative capacity Building Providers Government University Ardaita college Private NGO Cooperative Movement

23. Persistent problems of Existing Coop Capacity Building Programs Not based on the current situations Not practical Redundant Not need based Due to these Cooperative Boards are Bottleneck Knowledge Lack skill

24. Long term strategic Direction Contents should have four primary features Tailored Result oriented Quality Controlled Demand Driven

25. Content should be three type Strengthen Ardaita institute’s mandate to begin developing into world class college Prerequisite content College – Ardaita Branches of Ardaita Training institutions AAC Geographic focus – AGP (High potential Woreda) Commodity Based Previous and expected performance Individual and Cooperative Training (as incentive)

26. Thank You For All