2. Table of Contents
Executive summary i-ii
1. Background and objectives of the study 1
1.1 Background of the study 1
1.2 Objective of the study 2
2. Methodology of study and structure of the report 3
2.1 Study approach and data sources 3
2.2 Structure of the report 3
3. Study findings and discussions 4
3.1 Overview of the Ethiopian vegetables and fruits sector 4
3.1.1 General 4
3.1.2 Vegetables production 4
3.1.3 Fruits production 8
3.1.4 Fruits and vegetables export 11
3.2 FAV Seedling market in Ethiopia 12
3.2.1 Vegetable seedling market 12
3.2.2 Fruit seedling market 19
3.2.3 Major challenges of the FAV seedling business in Ethiopia 24
3.2.4 FAV seedling prices 25
3.2.5 Logistics requirement 26
3.3 FAV seedlings market system: The M4P Lens 28
3.3.1 The core transaction 28
3.3.2 The support functions and rules 28
3.4 Review of current seedlings business models in Ethiopia 32
3.4.1 Traditional seedling business model 32
3.4.2 Modern (organized) seedling business model 33
3.5 International experiences on the FAV seedlings business models & lessons
learned 36
3.5.1 International experience 36
3.5.2 Lessons learned 37
4. Major findings and way forward 40
4.1 Summary of findings 40
4.2 Proposed FAV seedlings business model 41
4.2.1 Market agent based business model 41
4.2.2 Intermediary multiplier/ acclimatizer business model 44
4.2.3 Satellite FAV seedlings nursery supported business model 48
4.3 Potential areas of intervention 49
4.3 Implementation strategy 50
Annexes:
Annex I. List of companies and organizations visited
Annex II. Ethiopian VAV seedling propagators’ map & brief descriptions
Annex III. Important decrees & regulations related to plant protection, seed import and
distribution as well as plant quarantine issued by the GoE
Annex IV. Improved FAV seeds released by the Ethiopian Institute of Agri Research
Annex V. Questionnaires used during the survey
Annex VI. ToR of the Study
3. ii | page
LIST OF TABLES:
Table 3.1 Vegetables production in hectare both in Meher/ main and Belg Seasons, 2015/16
crop year
5
Table 3.2 Production of major types of vegetables (including root crops) production in
Ethiopia, 2015/16 (qty in quintals)
7
Table 3.3 Percentage share of regions in the production of various vegetables, 2015/16 in
percent
7
Table 3.4 Relative engagement of the Smallholders by region and vegetable type in
Meher/ main and belg seasons, 2015/16
8
Table 3.5 Selected fruits production in hectare, 2015/16 crop year 8
Table 3.6 Production of major types of fruits production in Ethiopia, 2015/16 (qty in
quintals)
9
Table 3.7 Percentage share of regions in the production of various vegetables, 2015/16 in
percent
10
Table 3.8 Relative engagement of the Smallholders by region and fruit type in Meher/ main
and belg seasons, 2015/16
10
Table 3.9 Ethiopian export of vegetables and fruits in qty & value, 2004/05-2013/14 11
Table 3.10 Vegetable seedlings and supply by the modern propagators, 2016 18
Table 3.11 Fruit seedling and supply by the modern propagators, 2016 23
Table 3.12 Seedling prices of selected FAV seedlings of hybrid variety 26
Table 3.13 List of registered seed importers and certified vegetable seed varieties, 2015 29
Table 3.14 Import of vegetable and fruit seeds in Qty and value, 2011-2015 29
List of Figures:
Figure 3.1 Production of major types of vegetables (including root crops) production in
Ethiopia, 2015/16 (qty in tons)
6
Figure 3.2 Production of major types of vegetables (including root crops) production by
region in Ethiopia, 2015/16
6
Figure 3.3 Major types of fruits production 9
Figure 3.4 Production share of the three fruit seedlings suppliers, 2016 22
Figure 3.5 Ethiopian FAV seedling propagators map, 2016 22
Figure 3.6 Traditional FAV seedling business for open variety 33
Figure 3.7 Modern (organized) vegetable seedling business model for hybrid varieties 34
Figure 3.8 Modern (organized) fruit seedling business model 35
Figure 3.9 Proposed market agent based business model 42
Figure 3.10 Proposed intermediary multiplier agent based business model 45
4. iii | page
Acronyms:
CF Commercial farmer
CSA Central Statistics Agency
EIAR Ethiopian Institute of Agricultural Research
EP Enterprise Partners
FAV Fruits and vegetables
GAP Good agricultural practice
M4P Making markets work for the poor
MoANR Ministry of Agriculture and Natural Resources
NBE National Bank of Ethiopia
PSC Phytosanitary Certificate
SHF Smallholder farmers
ToR Terms of reference
5. i | page
EXECUTIVE SUMMARY
Ethiopian has immense potential for the development of horticulture: varied altitude
(ranging from sea level up to 4,500 meters), over 3.5 million hectares of fertile and irrigable
land that can be used for horticulture, over 122 billion cubic meters of surface water and 2.6
billion cubic meters of ground water1
resources that can be used for irrigation, proximity to
the main international markets of the Middle East and Europe, etc. In addition, the large and
growing domestic market (average 21.75% growth rate of private final consumption
expenditure per year coupled with over 4.92% urbanization)2
, impressive infrastructure
development as well as excellent government policy and investment incentives given for
commercial agriculture and agro-processing projects show the promising potential of the
sector.
Despite all the potentials, the fruit and vegetable (FAV) sector of the country has remained
underdeveloped. Among others, absence of efficient market systems (input and farm
commodities) has been one of the major development constraints of the FAV sector in the
country.
In Ethiopia, the majority of smallholder farmers raise FAV seedlings from own recycled OP
(open variety) seeds in their farmstead. Only when farmers face shortage of vegetable
seedlings, they buy from nearby farmers who either have surplus or purposely raise and
supply to the market. However, the seedlings market has a lot of deterring problems such as
poor quality and disease infested seeds as well as absence of seedling standards and
unpredictability of seedling demand and supply, etc. Despite the shortcomings there is an
increasing trend of the seedling marketing among smallholders being driven by the
increasing awareness of the benefits of using better quality seedlings for good production. In
addition, noticing the untapped opportunities in the country (i.e., the under supply of FAV
seedlings), some flower and herb farms (both growers and propagators) have engaged in
vegetable seeds production as well as in the supply of seedlings to commercial and
smallholder farmers.
Indeed, such modern FAV seedlings market, as with flowers, is just emerging in the country.
Many of these modern FAV seedling propagators (except Florensis and few others) as well as
the tissue culture laboratories were established recently within timeframe of 3 years. On
aggregate, through these modern vegetable seedling propagators, 71.8 million FAV seedlings
have been raised and supplied in 20163
which is less than 2% of the FAV seedlings
requirement of the country. In terms of location, many of them are concentrated in Bishoftu
town (45 Kms to the east) and Koka-Meki area (about 100-130 Kms to the south of Addis
1
P. Desalegn and B. Hailu, Ethiopian Commercial Fruits and Vegetables Sector Study, Draft # 2, PP 03, Funded by EP, 2015.
2
World Bank, Ethiopia Urban Population (also available at http://api.worldbank.org/v.2 en.indicators) for urban population growth and
NBE, Annual Report, Annex 2014/15 for private final consumption expenditure for the years 2009/10-2014/15.
3
Data collected from the respective propagators (also indicated in Table 3.9).
6. ii | page
Ababa) which is difficult for the majority of the smallholder farmers accessing throughout
the country to access their seedlings and/ or propagation services.
An attempt has been made in this study to explore existing FAV seedling business models;
specify key players involved in each of the business model and define their roles (functional
correlation among themselves) as well as critically assess their relative strengths and
weaknesses in transforming the market system. Finally, the study has proposed three
seedling business models and identify potential partners that can be considered by EP
(Enterprise Partners) in implementing the seedling scale-up intervention. Based on the
analysis of the local FAV seedlings market system mainly the support functions and rules as
well as lessons learned from the international experience, the study has identified areas of
intervention where the government and development partners such as EP would intervene
in order to enhance the FAV seedling market system in the country.
7. 1 | page
1.BACKGROUND AND OBJECTIVE OF THE STUDY
1.1. Background of the study
Fruits and vegetables (FAV) are increasingly becoming one of the major cash crops grown by
smallholder and commercial farmers throughout the country. In 2015/16, over 16 million
smallholder farmers were engaged in the production of fruits, root crops and other
vegetables cultivating a total of 841,833 hectares (750,235 under vegetables and 91,598
under fruits) and produced an aggregate of 9.2 million tons4 of the same (i.e., 8.52 million
vegetables, and 686.83 thousand fruits) in both Meher/ main and Belg seasons. In addition,
145 private large and medium scale commercial farms were engaged in the production of
vegetable and fruits in Ethiopia on the year 2015/16. In the same year, these large and
medium scale private commercial farms have cultivated an aggregate of 11,443 hectares of
land and produced 160.55 thousand tons5
of fruits and vegetables. On the export side,
Ethiopia traded over 69.0 thousand tons of different fruits and vegetables and earned about
56.5 million US$ on 20146
all indicating that the FAV subsector is one of the most important
sectors of the country at both micro and macro levels.
Indeed, compared to the country’s production and export potential, the quantity produced
and exported as well as the revenue generated at local level and foreign currency earned
from the export are negligible. As a matter of fact, local and international experiences
indicate that the FAV sub-sector is among the major sources of income and new jobs for
both rural and urban population. Moreover, FAV cultivation is environmental friendly and
women domain agricultural (economic) activity with contribution to ensuring human health
wellbeing.
Various factors contribute to low national fruits and vegetables sector performance. In the
upper steam, lack of agronomic skills required to germinate healthy and good quality
seedlings, unaffordability and unavailability of good quality seeds/seedlings and other inputs,
poor awareness of the small-holder farmers of the association between vigorous and healthy
seedling on yield, lack of access to irrigation water, poor seedlings germination rate,
underdevelopment of agricultural inputs and products marketing, etc. are considered to be
the major ones.
Appreciating the potentials and understanding of the root causes of the sector, EP has
prioritized the FAV sector as one of the strategic sectors to address poverty in the country.
To that effect, EP has developed sector and market strategies and is implementing various
interventions. The Seedlings Business Expansion Intervention which has been implemented
for the past one and half years in partnership with Jeju Horticulture PLC is one of the FAV
sector interventions that have yielded a promising results in terms of addressing the root
4
CSA, Agricultural Sample Survey, 2015/16, Vol 1-4 also indicated in Tables 2.1, 2.2, 2.4 and 2.5.
5
Ibid.
6
P. Desalegn and B. Hailu, Ethiopian Commercial Fruits and Vegetables Sector Study, Draft # 2, PP 11, Funded by EP, 2015.
8. 2 | page
causes of the market at the upper stream of the value chain, i.e., contributing to improving
income of smallholder farmers and creating new jobs.
Encouraged by the results attained from the seedlings business intervention piloted with
onion seedlings, EP planned to further the seedling marketing business to impact on the FAV
productivity of the country. To that effect, EP initiated this study to explore country wide
opportunities with seedlings marketing and develop options of market based business
models that would benefit more farmers operating throughout the country mainly women
and improve the overall sector performance.
1.2. Objective of the study
The study was aimed at assessing local and international Fruits and Vegetables seedlings
business experiences with intention of developing options of appropriate and viable FAV
seedling business model(s) which are applicable and scalable throughout the country.
Hence, the study has explored the Ethiopian FAV sector, assessed the seedlings market
system and reviewed current local and international experiences of the FAV seedlings
business models. The study has also proposed options of viable business models for
promoting seedling marketing business in Ethiopia as appropriate. In addition, the study
has outlined an implementation strategy that would facilitate realization of the proposed
business models.
9. 3 | page
2. METHODOLOGY OF THE STUDY AND STRUCTURE OF THE REPORT
2.1. Study approach and data sources
The study combined review of the background information from existing literatures and
collection and analysis of primary data. As part of the desk work, key documents such as
national agricultural transformation strategy and national horticulture road map, EP’s FAV
sector and market strategies, seedlings market development intervention, periodic MRM
reports related to the pilot results of the intervention, local and international experiences on
seedling marketing practices as well as relevant policies were gathered and analyzed.
The study team conducted a field study to the major vegetable and fruit producing areas of
Upper Awash area including Jeju area, Meki-Zeway and Arbaminch areas (the central and
western rift valley areas), Shewarobit, Kobo-Mohoni and Bahirdar-fogera areas and made
discussions with the major FAV seedling actors operating in these areas. During the
fieldwork, the study team used discussion checklists and questionnaires and held discussions
with key industry actors and stakeholders in both Addis Ababa and regions.
2.2. Structure of the report
The study report is structured into five main chapters.
Chapter 1: Provides background and describes objectives of the study.
Chapter 2: Presents methodology used in conducting the study.
Chapter 3: Presents study findings and detail discussions. Mainly, this section
Presents an assessment of the FAV sector in general and the seedlings
market in particular. In addition, it analyses the FAV seedlings market
system using an M4P lens and finally review and examines current
seedlings business models in both local and international markets.
Chapter 4: summarizes findings and proposed most viable FAV seedling marketing
business models. In addition, this chapter outlines an implementation
strategy and proposes potential partners.
10. 4 | page
3. STUDY FINDINGS AND DISCUSSIONS
3.1. Overview of the Ethiopian fruits and vegetables sector
3.1.1 General
Ethiopia has enormous potential for the production and marketing of fruits and
vegetables: favourable and diverse agro-climatic conditions, availability of fertile and
suitable cultivatable land, huge potential of both surface and ground water, geographic
proximity to major market destinations of Europe and the Middle East, cheap and easily
trainable labour, etc. These all are important for the production of many types and
varieties of vegetables and fruits.
On the contrary, the vegetables and fruits production in Ethiopia is subsistence based,
cultivated mainly under rain fed and is dominated by low yield and low value crops. In
terms of area of cultivation, potatoes, red pepper, Ethiopian cabbage, sweet potatoes and
toro/ godere are the major vegetables produced in Ethiopia in the descending order.
Similarly, Banana, mangoes, avocados, papaya and orange are the major type of fruits
cultivated in the country in the descending order of land coverage.
3.1.2 Vegetables production
Ethiopia produces few variety of vegetables (including root crops) such as lettuce, head
cabbage, Ethiopian cabbage, tomatoes, potatoes, green and red pepper, sweet potato,
garlic, onion, toro/ Godere.
The production system is highly fragmented and over 98 percent is produced by
smallholders with no or little application of modern inputs and technologies. These
smallholder farmers use traditional production techniques in which the use of improved
inputs and technology is low and agronomic extension support is poor that both lead to
low productivity. Moreover, the smallholder farmers use open pollinated from own
(recycled vegetable) seeds because the good quality hybrid seeds are either unavailable
in the local markets and if available are unaffordable to the majority of the smallholder
farmers.
Vegetables are produced throughout the country with relative concentration in the upper
Awash and Central Rift Valley areas (Central Oromia corridor), Dire Dawa – Haremaya
area (Dire Dawa and Eastern Oromia Corridor), Kobo-Mehoni-Enderta-Mekelle area
(Tigray Corridor), Bahirdar-Abay Valley-Fogera area (Amhara Corridor), Hawasa -
Arbaminch areas (SNNP Corridor), the Ethiopian Somali Area (Somali Corridor) as well as
the Jima areas.
In 2015/16, over 16 million smallholder farmers were engaged in the production of
vegetables (in both Meher/ main and Bulg seasons) cultivating a total of 738,792 ha of
land which is 98% of the aggregate land cultivated by vegetables in the country (Table
3.1). In addition to these, there were also 145 private large and medium scale
11. 5 | page
commercial farms who were engaged in the production of vegetable and fruits in Ethiopia
as of 2015/167
. In the same year, all these commercial farms have cultivated an
aggregate of 11,443 hectares of land constituting only 2% of the aggregate land used for
the production of vegetable crops. Potato which commanded a total of 296,408 ha
(39.5% of the land used for the production of vegetables) is by far the major vegetable
crop cultivated in the country followed by red pepper 145,122 ha (or 19.3% of the
aggregate land), Ethiopian cabbage 82,124 ha (10.9%) and sweet potato 55,365 ha
(7.4%) of the aggregate land used for the production of vegetables in the country
indicating that production is made mainly for domestic consumption and dominated by
low value crops (Table 3.1). Taking only the smallholder vegetables production, SNNP
Region with an aggregate of 288,734 ha (39.08% of the national) land cultivated by
different vegetables is the major vegetables producing region followed by Oromia
270,653 ha (36.63%), Amhara 166,677 ha (22.56%) and Tigray 4,768 ha (or 0.65%).
For details see Table 3.1 and figures 3.1 and 3.2.
Table 3.1.
Vegetables production in Meher/ main and Belg Seasons, 2015/16 crop year Figure in hectare
Product type
By smallholder farmers
Commercial
farms
Total
Ethiopia
Oromia Amhara Tigray SNNP Afar Somali Benshangul Gambella Harari Dire Dawa
Potatoes 100,941 81,737 395 113,008 - - 231 - 79.24 - 17 296,408
Red pepper 66,590 52,694 1,712 20,454 - - 1,971 87 - - 1,614 145,122
Ethiop. cabbage 22,383 1,311 25 57,714 - - 399 93 - - 199 82,124
Sweet potatoes 21,544 371 - 32,765 - - 489 82 64.56 49 55,365
Toro/ Godere 7,389 - - 46,154 - - 33 - - - 40 53,616
Onion 20,457 19,666 608 4,796 678 2,218 95 - - 77 4 48,599
Head cabbage 5,617 1,518 135 2,238 12 25 117 - 8 25 7,686 17,381
Garlic 6,447 5,632 758 3,591 - - 45 - 1.2 - 173 16,647
Tomatoes 8,510 2,083 772 3,116 8 526 327 50 - 88.52 243 15,724
Green peppers 5,497 1,331 363 2,368 3 - 62 - - 16 15 9,655
Carrot 2,636 - - 1,023 - - - - - - 1,438 5,097
Beetroot 2,642 334 - 1,507 - - - - - - 14 4,497
Total 270,653 166,677 4,768 288,734 701 2,769 3,769 312 153 256 11,443 750,235
Source: CSA, Agricultural Sample Survey, 2015/16, Vol 1-4.
In terms of quantity, Ethiopia harvested an aggregate vegetables production of 85.6
million quintals of which the major vegetable crops such as potatoes, sweet potatoes,
Taro/Godere, Ethiopian cabbage and onion accounted for 36.6 million quintals (42.97%),
16.4 million quintals (19.24%), 12.7 million quintals (14.86%) and 7.7 million quintals
(9.06%) of the aggregate vegetables production of the country respectively as of
2015/16 in both Main and Belg seasons (Table 3.2). Regional level comparison of the
vegetables production indicates that SNNP region which produced an aggregate vegetable
crops of 44.52 million quintals (or 52.27% of the national production of the same) is the
major producer followed by Oromia, Amhara and Tigray regional states. For details see
Figures 3.1 and 3.2 and Table 3.2.
7 CSA, Report on large and medium scale commercial farms sample survey, results at country and regional level, 2015/16.
12. 6 | page
Figure 3.1.
Production of major types of vegetables (including root crops) production in Ethiopia, 2015/16 (qty in
tons)
Source: Figure developed from CSA data, Table 3.2.
Figure 3.2.
Production of major types of vegetables (including root crops) production by region in Ethiopia, 2015/16
Source: Figure developed from CSA data, Table 3.2.
13. 7 | page
Table 3.2
Production of major types of vegetables (including root crops) production in Ethiopia, 2015/16 (qty in quintals)
Type of products Oromia Amhara Tigray SNNP Afar Somali Benshangul Gambella Harari Dire Dawa
Large scale
Farmers
Total
Ethiopia
%
Share
Potatoes 10,043,176 7,692,501 37,165 18,552,271 - - 27,043 - 11,886 - 232,356 36,596,398 42.97
Sweet potatoes 8,907,856 - - 7,308,330 - - 71,354 - 10,320 7,891 81,173 16,386,924 19.24
Taro/ Godere 1,328,840 - - 11,322,953 - - 8,702 - - - 12,660,495 14.86
Ethiop. cabbage 1,987,356 116,191 2,205 5,542,981 - - 15,979 1,528 - - 54,193 7,720,434 9.06
Onion 1,343,346 1,731,696 33,085 458,460 48,997 160,202 6,586 - - - 1,617 3,783,989 4.44
Red pepper 1,271,360 876,062 30,953 433,829 - - 22,606 - - - 37,504 2,672,314 3.14
Garlic 528,327 494,596 52,162 268,729 - - 95 - 87 - 209,680 1,553,676 1.82
Green peppers 329,917 85,211 21,138 153,703 - - 1,773 - - - 563,604 1,155,346 1.36
Tomatoes 663,780 156,225 31,366 202,540 284 11,572 9,156 1,000 - 7,503 1,349 1,084,775 1.27
Beetroot 241,839 23,784 - 116,324 - - - - - - 362,186 744,133 0.87
Head cabbage 322,224 117,973 4,320 117,654 336 625 2,844 - 480 1,550 58,536 626,542 0.74
Carrot 121,310 23,459 - 41,164 - - - - - - 348 186,280 0.22
Total 27,089,330 11,317,697 212,394 44,518,937 49,617 172,399 166,139 2,528 22,773 16,944 1,602,546 85,171,305 100
% Share 31.81 13.29 0.25 52.27 0.06 0.20 0.20 0.00 0.03 0.02 1.88 100.00
Source: CSA, Agricultural Sample Survey, 2015/16, Vol 1-4.
Out of the aforementioned vegetable products, tomatoes, head cabbage, green and red
pepper and onion seedlings can be developed commercially to be delivered to the local
market. On the other hand, the relative magnitude of these crops at regional level may also
suggest the type of crops which EP should concentrate at regional levels. For instance,
taking only those vegetable crops for which commercial seedlings can be developed, 45% of
the aggregate onion production is made in Amhara Regional State while 47.6% of red
pepper, 28.6% of green pepper, 61.2% of tomatoes and 51.4% of head cabbage crops are
produced in the Oromia Regional State indicating that these crops are widely grown by the
smallholder farmers in these regions. For details see Table 3.3. Hence, EP should take
these as input in prioritizing and/ or selecting the type of seedlings to be incorporated in its
commercial seedlings development intervention.
Table 3.3.
Percentage share of regions in the production of various vegetables, 2015/16 in percent
Type of products Oromia Amhara Tigray SNNP Afar Somali Benshangul Gambella Harari
Dire
Dawa
Commercial
farms
Total
Ethiopia
Potatoes 27.4 21.0 0.1 50.7 0.0 0.0 0.1 0.0 0.1 0.0 0.6 100.0
Sweet potatoes 54.4 0.0 0.0 44.6 0.0 0.0 0.4 0.0 0.1 0.0 0.5 100.0
Taro/ Godere 10.5 0.0 0.0 89.4 0.0 0.0 0.1 0.0 0.0 0.0 0.0 100.0
Ethiopian cabbage 25.7 1.5 0.0 71.8 0.0 0.0 0.2 0.0 0.0 0.0 0.7 100.0
Onion 35.5 45.8 0.9 12.1 1.3 4.2 0.2 0.0 0.0 0.0 0.0 100.0
Red pepper 47.6 32.8 1.2 16.2 0.0 0.0 0.8 0.0 0.0 0.0 1.4 100.0
Garlic 34.0 31.8 3.4 17.3 0.0 0.0 0.0 0.0 0.0 0.0 13.5 100.0
Green peppers 28.6 7.4 1.8 13.3 0.0 0.0 0.2 0.0 0.0 0.0 48.8 100.0
Tomatoes 61.2 14.4 2.9 18.7 0.0 1.1 0.8 0.1 0.0 0.7 0.1 100.0
Beetroot 32.5 3.2 0.0 15.6 0.0 0.0 0.0 0.0 0.0 0.0 48.7 100.0
Head cabbage 51.4 18.8 0.7 18.8 0.1 0.1 0.5 0.0 0.1 0.2 9.3 100.0
Carrot 65.1 12.6 0.0 22.1 0.0 0.0 0.0 0.0 0.0 0.0 0.2 100.0
Total 31.8 13.3 0.2 52.3 0.1 0.2 0.2 0.0 0.0 0.0 1.9 100.0
Source: CSA, Agricultural Sample Survey, 2015/16, Vol 1-4.
14. 8 | page
Table 3.4.
Relative engagement of the Smallholders by region and vegetable type in Meher/ main
and belg seasons, 2015/16
Type of products Oromia Amhara Tigray SNNP Afar Somali Benishangul Gambella Harari
Dire
Dawa Ethiopia
Head cabbage 3.24 3.67 1.78 1.31 0.00 0.00 2.46 0.00 11.49 0.00 2.42
Ethiopian cabbage 23.20 7.13 0.90 40.05 0.00 0.00 16.20 36.92 0.00 0.00 27.48
Tomatoes 2.60 1.54 5.98 0.76 32.01 35.01 5.00 6.06 0.00 29.24 1.69
Green peppers 10.64 5.03 14.45 3.15 16.36 0.00 4.50 7.64 0.00 12.29 6.30
Red pepper 9.06 25.36 50.32 2.07 29.73 4.39 26.36 9.19 0.00 0.00 9.57
Beetroot 3.48 1.49 0.00 1.42 0.00 0.00 1.18 0.00 0.00 0.00 2.13
Carrot 1.12 0.90 0.00 1.17 0.00 0.00 0.51 0.00 0.00 0.00 1.08
Onion 5.01 7.88 6.73 2.49 21.91 60.60 4.44 0.56 0.00 29.16 4.45
Potatoes 18.59 27.54 4.12 18.76 0.00 0.00 9.34 0.00 35.94 0.00 19.94
Garlic 7.85 18.72 15.31 3.81 0.00 0.00 6.89 0.00 3.58 0.00 8.06
Taro/ Godere 6.88 0.00 0.00 14.85 0.00 0.00 2.94 27.00 0.00 0.00 9.11
Sweet potatoe 8.32 0.75 0.40 10.16 0.00 0.00 20.16 12.63 48.99 29.31 7.78
Total selected vegs 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
NB: Green colour indicates first major crop with in the region while yellow and red colours show
second and third major items of the region.
Source: Table 3.2
3.1.3. Fruits Production
Fruits are among the most important food and commercial crops in Ethiopia contributing to
income and food security of the farming households, creating employment and earning
foreign currency to the country. In 2015/16, the aggregate land cultivated by different fruits
was estimated to be 91,598 hectares. In terms of the type of fruits, Banana accounted for
53,552 hectares (58.5% of all fruit land) followed by Mangoes 14,754 ha (16.1%) and
Avocadoes 13,653 ha (14.9%) as of 2015/16 (Table 3.4). Similarly, a regional comparison
of the land cultivated indicates that SNNP Region is the largest fruits growing region in the
country followed at a distance by Oromia (28,167 ha or 30.8%) and Amhara (4,839 ha or
5.3%) regions. For details see Table 3.4 and Figure 3.3.
Table 3.5.
Selected fruits production in hectare, 2015/16 crop year
Fruit types
Oromia Amhara Tigray SNNP Afar Somali Benshangul Gambella Harari
Dire
Dawa
Total
Ethiopia
Share (%)
Bananas 14,023 1,486 62 36,883 - - 687 354 44.61 12 53,552 58.5
Mangoes 6,701 1,147 255 4,914 28 - 918 225 527.78 38 14,754 16.1
Avocados 4,377 64 - 9,079 - - 4 129 - - 13,653 14.9
Papaya 896 339 - 1,724 - - 107 66 60 64 3,256 3.6
Orange 1,073 973 70 854 - - 59 21 - - 3,050 3.3
Guavas 840 371 297 251 - - 100 42 10.89 11 1,923 2.1
Lemons 186 459 48 213 34 81 32 65 64.16 8 1,190 1.3
Pineapples 71 - - 150 - - - - - - 221 0.2
Total 28,167 4,839 732 54,068 62 81 1,907 902 707 133 91,598 100.0
Share (%) 30.8 5.3 0.8 59.0 0.1 0.1 2.1 1.0 0.8 0.1 100 58.5
Source: CSA, Agricultural Sample Survey, 2015/16, Vol 1-4.
In terms of quantity, Ethiopia has managed to produce an aggregate fruit crops of 6.87
million quintals of which SNNP region produced 4.46 million quintals (or 64.4% of the
aggregate fruits production of the country) while the other major producers namely Oromia
15. 9 | page
and Amhara accounted for 1.9 million (27.7%) and 238,033 quintals (3.5%) of the national
fruits production respectively as of 2015/16 (Table 3.5).
Table 3.6
Production of major types of fruits in Ethiopia, 2015/16 (qty in quintals)
Type of
products
Oromia Amhara Tigray SNNP Afar Somali
Bensha
ngul
Gambe
lla
Harari
Dire
Dawa
Total
Ethiopia
Share
(%)
Bananas 988,608 31,921 1,791 3,316,062 - - 50,271 30,076 783 900 4,420,412 64.4
Mangoes 441,130 48,790 4,640 437,377 896 - 62,864 21,372 528 2,626 1,020,223 14.9
Avocados 239,872 - - 298,373 - - - 4,249 - - 542,495 7.9
Papaya 136,222 30,336 3,453 299,812 - - 7,605 10,836 9,520 10,282 508,065 7.4
Orange 84,982 76,263 1,726 90,760 - 27,349 1,879 1,913 - - 284,873 4.1
Lemons 7,273 44,204 1,251 11,504 153 - 1,230 2,275 64 316 68,270 1.0
Guavas 7,058 6,519 4,043 2,393 - - 662 252 131 128 21,186 0.3
Pineapples 67 - - 2,695 - - - - - - 2,762 0.0
Total 1,905,212 238,033 16,904 4,458,976 1,049 27,349 124,512 70,974 11,026 14,252 6,868,287 100.0
Share (%) 27.7 3.5 0.2 64.9 0.0 0.4 1.8 1.0 0.2 0.2 100.0 27.7
Source: CSA, Agricultural Sample Survey, 2015/16, Vol 1-4.
Figure 3.3
Production of major types of fruits in Ethiopia, 2015/16 (qty in quintals)
Source: Table 3.5
Taking the fruits separately, SNNP region with a percentage share of 75.02% of the
aggregate banana production, 55% of avocados, 59% of papaya, 31.86 percent of orange
and 97.57% of pineapples production is by far the largest fruits producer in Ethiopia as of
2015/16 (Table 3.6). Similarly, Oromia region which produced 43.24% of the mangoes and
33.31% of guavas in 2015/16 is the largest producer of these fruits and a major producer of
the other fruits as well in the country. Amhara is a single most producer of Lemon fruits and
a second major producer of guavas in the country. For details see Table 3.6.
16. 10 | page
Table 3.7
Percentage share of regions in the production of various vegetables, 2015/16 in percent
Type of
products
Oromia Amhara Tigray SNNP Afar Somali Benshangul Gambella Harari
Dire
Dawa
Total
Ethiopia
Bananas 22.36 0.72 0.04 75.02 0.00 0.00 1.14 0.68 0.02 0.02 100.00
Mangoes 43.24 4.78 0.45 42.87 0.09 0.00 6.16 2.09 0.05 0.26 100.00
Avocados 44.22 0.00 0.00 55.00 0.00 0.00 0.00 0.78 0.00 0.00 100.00
Papaya 26.81 5.97 0.68 59.01 0.00 0.00 1.50 2.13 1.87 2.02 100.00
Orange 29.83 26.77 0.61 31.86 0.00 9.60 0.66 0.67 0.00 0.00 100.00
Lemons 10.65 64.75 1.83 16.85 0.22 0.00 1.80 3.33 0.09 0.46 100.00
Guavas 33.31 30.77 19.08 11.30 0.00 0.00 3.13 1.19 0.62 0.60 100.00
Pineapples 2.43 0.00 0.00 97.57 0.00 0.00 0.00 0.00 0.00 0.00 100.00
Total 27.74 3.47 0.25 64.92 0.02 0.40 1.81 1.03 0.16 0.21 100.00
Source: Table 3.5
Avocado, banana, papaya and mango are the most important fruits that commercial
seedlings production and supply business can potentially be developed in the country.
Guavas and water melon seedlings production are other potential business lines as well.
However, the demand for the latter group of seedlings is low to be considered as a viable
business line at least in the near future. Considering these and taking the relative regional
level engagement of the smallholders in the production of the various fruits indicated in
Table 3.7 the envisaged business model can start with the major fruit crops of Avocado,
mango, banana, papaya and orange. In addition, taking the cri value of apple together with
the availability of vast land that is suitable for the growing of the crops as well as its
potential for improving smallholder income, it would also be advisable to incorporate apple
in the business model.
Moreover, the details of the product mixes and the proportion of the seedling in the
business model would be developed in detail latter and incorporated in the operational plans
of the partners.
Table 3.8.
Relative engagement of the smallholders by region and fruit type in Meher/ main and belg
seasons, 2015/16
Fruits
Smallholder farmers
Large scale
farmers
Total
EthiopiaOromia Amhara Tigray SNNP Afar Somali
Beni
Shangul Gambella Harari
Dire
Dawa
Avocados 17.97 4.34 2.18 27.64 0.00 0.00 0.86 22.15 0.00 0.00 20.84 20.84
Bananas 37.82 22.15 6.72 42.15 0.00 17.37 21.39 25.77 20.37 4.29 37.53 37.53
Guavas 5.52 9.72 28.76 1.82 0.00 9.39 8.05 1.34 8.86 19.85 4.43 4.43
Lemons 1.14 12.00 18.70 1.68 43.61 19.36 5.84 1.90 16.15 12.95 2.83 2.83
Mangoe 21.35 19.19 13.28 14.78 56.39 12.22 40.66 22.34 44.09 30.43 18.32 18.32
Orange 7.32 18.92 15.80 3.95 0.00 28.90 8.37 6.30 0.00 0.00 6.84 6.84
Papaya 8.41 13.68 14.55 7.26 0.00 12.76 14.83 18.95 10.53 32.48 8.67 8.67
Pineapples 0.47 0.00 0.00 0.71 0.00 0.00 0.00 1.25 0.00 0.00 0.54 0.54
Total 100 100 100 100 100 100 100 100 100 100 100 100
NB: Green colour indicates first major crop with in the region while yellow and red colours show second and third
major items of the region.
Source: Table 3.5
17. 11 | page
3.1.4. Fruits and vegetables export
Fruits and vegetables are among the export items of the country. Based on this, Ethiopia
exports various vegetables mainly to the Middle-East, the neighboring African countries
and the EU.
Taking the past ten years, the aggregate fruits and vegetables export from Ethiopia
increased over three fold, i.e., from 37.65 thousand tons in 2004/05 to 145.4 thousand
tons in 2013/14 (Table 3.8). During these years, Ethiopia earned a total of 288.14 million
US$ from the export of fruits and vegetables which is equivalent to 28.81 million US$ on
average per annum (Table 3.8). During the same period, Ethiopian export of fruits and
vegetables have increased at an average rate of growth of 16.2% and 12.5% in quantity
and value terms respectively. Djibouti, Somalia, Sudan, Netherlands and United Arab
Emirates have been the major recipient of Ethiopian fruits and vegetables products.
Table 3.9
Ethiopian Export of fruits and vegetables in quantity and Value, 2004/05-2013/14
Year Quantity (000 tons) Value (in Million US$)
2004/05 37.65 15.95
2005/06 34.55 12.74
2006/07 42.08 16.95
2007/08 42.12 18.53
2008/09 39.83 17.41
2009/10 66.41 31.86
2010/11 93.01 40.0
2011/12 123.50 44.9
2012/13 135.20 43.9
2013/14 145.40 45.9
Average 75.98 28.81
Annual rate of growth (%) 16.2 12.5
Source: National Bank of Ethiopia, Annual reports of 2011/12 and 2013/14.
18. 12 | page
3.2. FAV seedlings market in Ethiopia
In Ethiopia, the FAV seedlings market is still infant. At present, the seedlings market is
served by the traditional and modern propagators8
. While the modern seedling propagators
are engaged in the production and delivery of different varieties of vegetable and fruit
seedlings, the latter concentrates on selected vegetable and fruit seedlings such as onion,
green and hot pepper and tomato from vegetables and citrus, lemon, etc. from fruit
seedlings.
In both channels, marketing agents (brokers) operate in the marketing of the major
vegetable seedlings mainly onion, green and hot pepper and tomato seedlings. Similarly, as
the information obtained from the field assessment indicates, there are several marketing
intermediaries9
who buy rootstock and grafted fruit seedlings and supply them to large
buyers such as government agencies, NGOs which the latter in turn distribute them to the
SHFs.
3.2.1 Vegetable seedlings
There are two sources of commercial vegetable seedlings: the modern and traditional
sources.
The traditional vegetable seedling suppliers are individual farmers who propagate vegetable
seedlings dominantly onion, green and hot pepper and tomato on an open field and supply
on farm. In this market, transaction is conducted between the smallholder farmers as
sellers and buyers of seedlings propagated in neighborhood. The traditional market involves
smallholder farmers’ own experience of seed selection and multiplication, open field seedling
propagation and direct (face to face) bargaining and cash based sales.
The modern vegetables seedlings suppliers are private seedling propagators (large
commercial farms and tissue culture service providers) as well as public seedling nurseries
and the buyers include commercial farmers, SHFs, different government organizations and
NGOs. In this category, the seedlings are propagated from hybrid seeds and using bio-
technologies.
At present there are 2 major biotechnology centers and eight modern commercial seedling
propagation centers that are engaged in the propagation and supply of vegetable seedlings
These companies propagate more or less similar vegetable crops mainly tomato, pepper,
cabbage, lotus, etc. and sale finished seedlings and/ or provide propagation services to
commercial farms, government organs, NGOs and smallholder farmers. Many of these
vegetable propagation facilities are located around Bishoftu town, Koka-Meki-Zeway areas,
Mehonni-Mekelle as well as Bahirdar Zuria areas.
1. Tigray Biotechnology Center PLC (TBC PLC)
TBC PLC is African largest biotechnology facility and is equipped with the state of the art
technology in the tissue culture laboratory and propagation as well as delivery services. As
8
In this study, commercial farms, farmers’ cooperatives, tissue culture service providers and government
nursery operators are considered as modern seedling suppliers while individual farmers who germinate
seedlings traditionally and supply to the market without having any license are considered as traditional.
9
These group of marketing agents are estimated to share less than 10% of the aggregate seedling purchase.
19. 13 | page
the information obtained from the center indicate, the company can propagate 6.0 million
seedlings at a time. Taking an average of 33 days of propagation plus one-week preparation
period, the Center can produce an aggregate of 54 million seedlings per year. In addition, to
propagation facilities, the Center has six special cold trucks with a carrying capacity of
600,000 seedlings per vehicle. Tigray biotechnology is the sole propagator of sugarcane
seedlings to the Ethiopian Sugar Corporation and has so far produced 63 million seedlings
and delivered them to the different plantation sites (i.e., Tendaho, Metahera, Fincha, Wenji,
Kesem and Tena beles) of the corporation located throughout the country.
Tissue culture
propagation room
Fruit seedling propagated Sugarcane plantlet
So far, TBC has developed protocol optimizations for 17 species and mass propagation for
12 different species. With regard to vegetable seedlings, the center also propagated over
five million potato and sweet potato seedlings (vine cuts) and delivered them to NGOs
nursery sites operating in the Tigray region. In addition, TBC PLC provides tomato and
pepper propagation services to commercial farms operating in Mehoni areas of the Region.
As the information obtained from the company indicate the Center has delivered 1.5 million
seedlings of various vegetables (both sales and propagation services) in 2016. The
propagation service of the company is Birr 0.45 per seedling of tomato and pepper (the two
major service mix of the center so far).
2. Narus Biotechnology and Agro-industry PLC (NBA) PLC
Narus is the second largest and modern tissue culture facility in the country and was
established in 2010. The tissue culture facility of the company is located in Mojo town.
Overall, the facility has an aggregate capacity of 27 million seedlings per year.
Narus has developed 17 protocols of various fruits and vegetable crops and has propagated
over 5.0 million sugarcane seedlings10
to the Ethiopian Sugar Corporation, over 1 million
pine apple to Horizon plantation, 200,000 seedlings of banana and other fruits seedlings to
its sister company namely Naurs Farm Development Project and 1.5 million of sweet potato
seedlings (vine cuts) to Amhara and Oromia regional states.
10
Under the sub-contract agreement with Tigray Biotechnology Center PLC
20. 14 | page
3. Florensis Flowers
Florensis flowers is located in Koka area and has started vegetables propagation services in
2009. Compared to the other commercial farms with no tissue culture facilities, Florensis is
by far the largest and most advanced propagation and delivery facility in the country. Its
hygienic safety measures, plant media preparation and germination facilities, its
propagation equipment (pressing, tray filling, water misting, sowing and the automated
germination room, its seedling hardening and growth rooms, its overall greenhouse
infrastructures, in farm seedling transportation facilities, etc. are all to the standard. The
company has 40 hectares of land and its main operation is the production and export of
roses. However, it started vegetables, ornamental trees and fruit propagation services as
one of its product mix on about 0.5 hectare.
Taking only vegetable seedlings, the company sales and/ or provides propagation services
of tomato, (80% of its total
seedlings production), pepper
(10%) and the others such as
cauliflower, cabbage, eggplant,
etc. constitute the other 10% of
its seedling propagation
business. The company only
accepts internationally
renowned and packed
vegetable seeds of F1 because
of the fear of disease
infestation. As the information
obtained from the company indicate, it usually supplies seedlings at the propagation center.
However, in some cases, it also arranges transport services to its customers at cost. The
major customers of the vegetable seedlings propagation service are commercial and
smallholder farmers operating around Koka-Meki-Zeway areas. However, it has also
customers mainly government agencies and commercial farmers who operate around upper
Awash, Shewa Robit, Wolayta and Dire Dawa areas. With regard to its price, the company
sales at Birr 2.5 Birr and Birr 1.5 per stem of chilies and tomato seedlings respectively. For
its propagation service, the company charges Birr 0.45 and 0.5 per seedling of tomato and
chilies respectively.
4. Joy Tech Flowers
Joy Tech Flowers was established in 2003 and is located in Bishoftu town. The company has
100 hectare of land developed under greenhouse and its main objective is to produce flower
as well as herbs and medicinal plants for the export market. Its sister company namely FEA
Addis imports and distributes seeds. Looking at the growing demand for vegetable and fruits
seedlings propagation services, Joy Tech started producing seedlings in 2014.
Presently, the company has allotted 2.5 hectares of land for its seedling propagation
business. Joy Tech has fully dedicated seed research and variety registration unit and has 6
sites located in different agro-ecologies of the country where they conduct research and
adaptation trials in 9 vegetable crops and herbal plants. Many of the customers are
commercial and smallholder farmers operating in Koka-Meki-Zeway areas. However, the
company also has customers who operate as far as Shinile (near Dire Dawa in Somali
21. 15 | page
Region), Wolayta and Gurage zones of SNNP Region, Mehoni (Tigray Region) and Shewa
Robit of the Amhara Regional State. Currently, Joy Tech propagates both tomato and
pepper at a cost of Birr 0.42 per seed for both crops. The selling price of the company for
tomato and pepper seedlings (including seed) is Birr 1.35 and Birr 2.05 per stem
respectively.
5. Roshnara Roses
Roshnara roses is located in Bishoftu town and formally it started vegetable seedling
propagation services business in 2016. And so far, (i.e., in five months the company has
propagated 5 million seedlings of tomato and pepper (3.5 million tomato and 1.5 million
pepper seedlings). To cater the demand for propagation services coming from Dire Dawa-
Shinile areas, the company is also establishing a propagation center at Dire Dawa town.
The company has two sister companies operating in the import of seed and other
agricultural inputs: Axum PLC for seed and fertilizer and Green Line PLC for seed and agro
chemicals.
At present, Roshnara Roses PLC has developed 1.1 hectare of net house for the propagation
of tomato and pepper. As the information obtained from the company indicate 90% of their
customers are smallholders operating around Bishoftu and-Koka-Zeway areas and the
remaining 10% are commercial farmers and government agencies which the latter in turn
distribute the seedlings to smallholder farmers under its food security programme).
Roshnara Roses has 3 forms of pricing mechanisms:
Price per seedling (Birr)
Tomato Pepper
1. For those who want an exact (specific number of
seedlings
1.30 1.85
2. Those who buy the seeds from Roshnara’s sister
company and want a propagation service under the
company’s 85% propagation assurance
1.12 1.67
3. Those who bring their own seed and want to buy only
propagation service
0.42 0.42
Source: Roshnara Roses.
6. UNIFRUIT PLC
UNIFRUIT PLC was established in 2010 and is located in Mehoni
areas of Tigray Region. The farm has 1,000 hectare of land and is
aimed at producing vegetable and fruit crops for the export
market. At present, it has developed 0.5 hectare of greenhouse for
the seedlings propagation business and in 2016 it propagated 500
thousand seedlings for different commercial farmers and horti Life
project (a project under SNV) that operate around Mehonni,
Alamata areas of Tigray Region. Unlike others, the company
doesn’t supply seed. It charges 0.50 Birr per seedling for its
propagation service.
22. 16 | page
7. Flora Veg
Flora Veg was established in 2015 and is located 11 Kms away from Meki town along the
road that takes to Zeway. The company has leased 1.2 hectare of land from ET Seed PLC
and provides propagation service of tomato and pepper
seedlings. The company raises seedlings in modern
plastic sheet and net houses as well as apply excellent
agronomic practices. While many of the plant media
preparation, sowing and propagation activities are
manual and of lower technology compared to the other
propagation service providers.
In 2016, Flora Veg propagated about 6 million seedlings
at a proportion of 75% tomato and 25% pepper and
over 90% of their customers are smallholder farmers
operating around Koka-Zeway areas. Compared to
other propagation service providers Flora Veg provides
a higher propagation assurance rate (i.e. 86% for tomato and 95% for pepper). Others
provide an assurance of 85% germination rate. The company charges 0.41 Birr and 0.47
birr for the propagation services of tomato and pepper seedlings respectively.
8. Venus Seedlings Center
Venus Seedlings Center is a sister company of Saron Roses PLC and is located at Sebeta
town. The company was established in 2015 and at present it has developed 0.5 hectare of
greenhouse. In 2016, the company has propagated 4 million seedlings: about 3 million
tomatoes and 1 million pepper seedlings. During the same year, 60% of the seedlings it
propagated and sold to the farmers is from its own imported hybrid seeds while 40 percent
of the seeds it propagated was brought by the customers who needed the propagation
service.
Compared to others, Venus charges lower for its propagation services (i.e. 0.40 Birr per
seedling for both tomato and pepper) than its competitors. Note that others charge a
minimum of Birr 0.41 for tomato and Birr 0.42 for pepper.
9. Jeju Horticulture PLC
Jeju Horticulture Plc. was established in 2013 with the objective of producing and
marketing variety of quality vegetables for the local market. The farm is located 165 km
to the east of Addis Ababa in the Oromiya Regional State, Upper Awash Rift Valley area,
Jeju Woreda. The company commands 40 ha of land and gets irrigation water from the
Awash River. Presently, the farm is cultivating different vegetable and fruits. Out of its
total 40 hectares of land, 25 hectares is under Onion, 6 hectares of watermelon, 7
hectares under fruits (mainly papaya), 1 hectare of nursery for its own consumption and
another 1 hectare is used for the propagation of onion seedlings for the market. The
company has developed a modern onion seedling germination system, provides training
to nearby farmers on the agronomy of onion crop and developed sample plot on the
cultivation of the same.
23. 17 | page
Jeju Horticulture PLC is the only commercial farm (at least, from those commercial farms
which this study team has visited) that produce onion seedlings in a largescale for the
market. Unlike other vegetable sees such as tomato,
pepper, etc. onion seedlings are easily propagated in
an open field. The difference in yield between in-house
(greenhouse or mesh house) propagated onion
seedlings and those propagated on open field is
marginal. In addition, the onion seedlings population
propagated per hectare is about 0.6 million on average
compared to other vegetable seedlings population of
less than 40,000 per hectare. The other peculiar part
in marketing of onion seedlings is that onion seedlings
are traded by seedling beds not by seedling counts.
Hence, the transaction is based on seedling bed size,
seedling physical condition such as stand, health,
coloru, etc.
Photo: Onion seedlings of 1x5 meter bed size at Jeju farm
Hence, propagating onion seedlings under the
intensive care and expensive greenhouses is not commercially viable venture for the
farmers. For this reason, onion seedlings propagation is made in an open field. In 2016, Jeju
Horticulture PLC has propagated about 300 beds of 1x5 meter sizes (i.e. an equivalent of
26.25 million) onion seedlings and supply to the nearby commercial and smallholder
farmers at an average of Birr 325 per bed. Taking an aerage of 600 thousand onion
seedlings per hectare, one can see that the company has delivered seedlings to the nearby
farmers that can cover up to 44 hectares of farm land.
10. Simur Agri Development PLC
Simur was established in 2008 and is
located in Mehoni area of Tigray Region.
The farm has a total land area of 40
hectares and produce various vegetables
and fruits for both local (Mekelle and
Addis Ababa) and export markets.
Until recently, the farm was getting fruits
and vegetable seedlings propagation
services from Tigray Biotechnology
Center and UNIFRUIT PLC. The farm is
equipped with all modern irrigation and agronomic infrastructure and facilities.
At present, the farm has constructed 0.5 hectare of greenhouse and has a plan to expand it
to 2 hectares in near future. Because of this, Simur started to propagate different vegetable
seedlings for its own farm and is taking propagation service orders from other commercial
and smallholder farmers and NGOs operating in the area. When it completes the
construction of its greenhouses, the farm will have a propagation capacity of 6 million
seedlings per year.
24. 18 | page
Table 3.10. Vegetable seedlings production and supply by the modern propagators, 2016
No. Propagators Major types of vegetable
seedlings produced
Location Actual production (000 seedlings) Potential
(attainable)
production
(000
seedlings)
I. Tissue cultures tomato Pepper
(including
chilies)
Potato &
sweet potato
Onion Others Total
1 Tigray Biotechnology center PLC
Potato, sweet potato, tomato
& pepper
Mekelle 350 150 1,000 - - 1,500 36,000*
2
Narus Biotechnology & Agro
Industry PLC
Potato and sweet potato Mojo 1,500 - - 1,500 13,500*
Sub total 350 150 2,500 - - 3,000 49,500
II. Commercial farms
1 Florensis R
Tomato (80%), pepper (10%),
lotus, eggplant & cabbage (%)
Koka area 9,600 1,200 1,200 12,000 36,400
2 FloraVeg Tomato (75%) & pepper (25%) Koka area 4,500 1,500 6,000 15,000
3 JoyTech Flowers
Tomato (50%), pepper (35%) &
others such as head cabbage,
cauliflower, etc. (15%)
Debrezeit 7,500 5,250 - 2,250 15,000 54,000
4 Roshnara Flowers Tomato (70%) & pepper (30%)
Debrezeit &
Diredawa
3,500 1,500 - - 5,000 20,000
5 UNIFRUIT Tomato (75%) & pepper (25%) Mehonni 375 125 - - 500 18,000
6
Venus Seedling (sister co. of
Saron Roses)
Tomato (75%) & pepper (25%) Sebeta 3,000 1,000 - - 4,000 18,000
7 Jeju Horticulture PLC Onion (100%)
Upper Awash
(Jeju area)
- - -
26,250 (300
beds of
seedlings 1x5
meter size)
- 26,250
70,000 (800
beds of
seedlings of
1x5 meter size
each)
8 Simur Agricultural Development Tomato (50%) & pepper (50%) Mehonni - - - - - - 6,000
Sub total 28,475 10,575 - 26,250 3,450 68,750 237,400
Total 28,825 10,725 2,500 26,250 3,450 71,750 286,900
*Assuming 50% of their capacity will be used for vegetable seeds propagation and the rest for fruits
Source: Data collected from the respective companies (farms and tissue culture enterprises).
25. 19 | page
All in all, there are 2 tissue cultures and 8 commercial farms that provide seedlings
propagation services as of 2016. In response to the demand for their customers, many of
these farms provide propagation services of tomato, pepper and sweet potato seedlings and
only one was engaged in the propagation and sales of onion seedlings.
As indicated in Table 3.8, the aggregate actual and potential production capacity of the
existing seedling propagators is 71.75 million and 286.9 million respectively. In other
words, these propagation service providers are using only 25% of their production capacity.
Looking at the crop based propagation, these farms propagate 28.8 million of tomato, 10.7
million of pepper, 2.5 million of sweet potato, 26.3 million of onion and 3.45 million of other
vegetable seedlings as of 2016.
Taking an average requirement of tomato seedlings of 24 thousand per hectare, 33
thousand seedlings of pepper, 45 thousand of sweet potato and 600 thousand onion
seedlings, then the aggregate propagation services provided by the aforementioned farms is
equivalent to 1,200 hectares, 325 hectares, 56 hectares and 44 hectares of farmland
respectively as of 2016.
On the other hand, the total area cultivated under tomato, pepper (hot and green), sweet
potato and onion was estimated as 15,724 hectares, 154,122 hectares, 55,616 hectares
48,599 hectares respectively as of 2015/16 crop year. Hence, the aggregate farmland
covered by the seedlings that are propagated by the 2 tissue cultures center and 9
commercial propagation service providers is only 7.6% of the total farm cultivated with
tomato, 0.2% of the pepper, 0.1% of sweet potato and 0.1% of the onion farms indicating
that the bulk of the seedlings comes from own farm propagated in an open field with a lot of
problems and their consequence on crop yield. This also partially shows the ineffectiveness
of the existing seedlings business model in the country.
During the discussions with the nursery operators, the major reasons for the under capacity
operation of the seedling propagation centers are:
1. Because many of these enterprises are just entering into the market and haven’t
penetrated into the market or didn’t promote themselves and their services to
their potential customers.
2. Lack of sufficient quantity of the required hybrid variety of vegetable seeds in the
local market.
3. Poor supply of materials and inputs such as germination tray, plant media mainly
coco peat, chemicals (pest & herbicides as well as hygienic elements), etc. in the
local market or absence of substitutes of the sterilized plant media using locally
available inputs.
3.2.2. Fruit seedlings market
The three major sources of commercial fruit seedling are the tissue culture service
providers, private fruit seedling propagators and public and related nursery facilities.
3.2.2.1 Tissue culture centers
There are five major tissue culture facilities in the country of which three are functional and
two are under construction. Of these five centers, three are private owned companies, one
26. 20 | page
is a research center and another one is owned by regional government (i.e., the Amhara
Regional State).
The two major tissue culture centers (i.e., Tigray and Narus Biotechnology Centers) have
developed 17 fruits propagation protocols each and produced over 1.5 million different fruit
rootstocks. Despite their huge propagation facilities and good number of different
specialists, the two tissue culture centers have not promoted themselves and penetrated
the market. The other two biotechnology centers are under implementation and are
expected to start full scale propagation in 2018-2019 (i.e., ORDA Tissue Culture in 2018 and
Dessie Tissue culture in 2019).
Overall, the national tissue culture facility is big and growing. And these have a large
potential in the development of modern commercial farms, improving food security, saving
and earning foreign currency by substituting import of rootstocks and export of the same
and generally improve income of farmers and operators across the value chain.
3.2.2.2. Private fruit seedling propagators
The modern private fruit seedling producers concentrate on the production and supply of
apple seedlings. Based on the field assessment, the team of this study has learnt the
existence of one large scale (Gilboa Seeds and Seedlings Agri PLC), three medium scale and
about ten small-scale apple seedling producers and suppliers in the country. There are also
other traditional and/ or smallholder fruit seedling producers and suppliers who started
propagation based on technical and financial assistances of NGOs and government.
However, no information was obtained for this study regarding their number and
propagation capacity of this traditional seedling producers.
Taking the modern and commercial apple seedling producers, they on aggregate produce
about 279.5 thousand apple seedlings as of 2016 of which 89.5% was shared by Gilboa
Seeds and Seedlings Agri PLC, the three medium scale seedling producers on aggregate
shared 5.2% and the small scale producers shared 5.3% of the national apple seedlings
production. In terms of their capacity, these modern apple seedling producers have the
potential to produce about 1,080 thousand apple and/ or other seedlings per year.
Under its AGP (Agricultural Growth Programme) I and II programmes and within the small-
scale irrigation project (SSI), the Ministry of Agriculture and Natural Resources (MoANR)
with the technical and financial support of different development partners have also been
facilitating the establishment of farmers owned and managed small-scale fruit seedling
multiplication and supply business in seven regions and the Dire Dawa Administration.
These were established as private enterprises owned by farmers. So far, the project (AGP)
has supported for the establishment of 34 small-scale fruit seedling multiplication
enterprises owned by group of farmers: 13 in Oromia, 9 in Amhara, 7 in SNNP, 3 in Tigray
and 1 in Benshangul-Gumuz and Harari regions as of 201611
. However, much of these fruit
seedling propagation centers are not functioning properly due to many reasons including
lack of agronomic skills of the farmer operators and traceability problems of the variety of
the seedlings they propagate which led to lack of confidence by the customers.
11
MoANR, Horticulture Derectorate.
27. 21 | page
Apple seedlings in Gilboa, Holeta town 2-year apple seedling in
Gilboa, planted for
training and field
exercise, Holeta town
Kifle Bullo apple seedling greenhouses, Sululta
town
Other fruit seedling nurseries established by model farmers and private seedling nurseries
with the support of various NGOs are also suffering of various technical and financial
problems and are not worth considering in the propagation and marketing of hybrid fruit
varieties.
3.2.2.3. Public and related nursery facilities
These group of fruit nurseries are either fully or partially owned by the government or
farmers’ cooperatives. Hence, all except the farmers’ cooperatives supply their fruit
seedlings at subsidized prices. Unlike the private commercial fruit seedling suppliers who
concentrate on apple seedlings, the public fruit nurseries produce different fruit seedlings
mainly mango, avocado, banana, apple and citrus.
Mushav fruits seedling nursery centers: Mushav (an Israeli’s Agency for International
Development Cooperation) together with USAID and the government of Ethiopia (MoA) are
working in the development of fruit based nurseries throughout the country. So far, Mushav
has developed six large scale modern fruit nurseries in Butajira, Areka (Wolayta), Pickolo,
Gonder, Alamata and Dire Dawa and supply Avocado and mango seedlings to the
smallholder farmers. Mushave imports both the rootstock and scions and developed it to
seedlings in the aforementioned nursery areas and distribute finished fruit seedlings
throughout the country. In addition to supplying the seedlings, Mushav also provides some
extension services and training on the agronomic part of the seedling as well as collect the
avocado fruits produced from its seedlings and deliver it to the international market mainly
Belgium.
Melkasa Agriculture Research Center: Melkasa Agriculture Research center is another
relatively modern fruit seedling propagation center in the country. Indeed, Melkasa
produces mainly rootstocks of different fruits and supply it to the woreda nursery sites for
grafting and further growth there.
As indicated in Table 3.9, the public nursery facilities have produced an aggregate of 722
thousand different fruit seedlings and supply them to the smallholder farmers at subsidized
prices. However, much of these seedlings are of poor quality and because of poor follow-up
and technical assistances, much of them either dies or stunts or do not yield the required
quantity and quality of fruits.
28. 22 | page
Figure 3.4 Production share of the three fruit seedling suppliers, 2016
Source: Table 3.9
Figure 3.5. Ethiopian FAV seedling propagators map, 2016
29. 23 | page
Table 3.11. Fruit seedlings production and supply by propagators12
, 2016
No. Propagators
Major types of vegetable
seedlings produced
Location
Actual production (000 seedlings) Potential (attainable)
production (000
seedlings)
I. Tissue cultures Apple Avocado Mango Banana Others Total
1
Tigray Biotechnology center PLC Apple, citrus, banana, mango
& other 13
Mekelle
- 100 100 50 50 350 36,000*
2
Narus Biotechnology & Agro
Industry PLC
banana, mango, avocado &
other 13
Mojo
- 200 1,000 1,200 13,500*
3
Amhara Regional Agriculture
Research Center
Banana Bahirdar
- 3 3 3,000*
4 ORDA tissue culture Banana Bahirdar - 10 10 6,000*
5
Amhara Regional State Tissue
Culture
Bannana, apple, manago,
avocado, etc
Desie town
-
Under
construction
20,000
Sub total - 100 100 263 1,050 1,563 78,500
II. Private fruit seedling propagators
1 Gilboa Seeds & Seedlings Agri PLC Apple & others Holeta 250 - - - - 250 1,000
2 Kifle Bullo apple seedling producer Apple Sululta 7.5 - - - - 7.5 15
3 Tesfaye and friends’ cooperative Apple Chencha 3 - - - - 3 10
4 FAGI Temperate Fruits Apple Debrebirhan 4 - - - - 4 5
Others (seven in chencha, Alemu in
Holeta, etc.)
Apple Throughout
Ethiopia
15 - - - - 15 50
Sub total 279.5 - - - - 279.5 1,080
III
Public/ quasi gov’t nursery
facilities
1
Mashav-USAID-MoANR joint
project
avocado & Mango Six nurseries
in four
regions
- 120 60 - - 180 270
2
Melkassa Agri Research Center Avocado, Mango, banana, etc. Upper Awash
(Adama)
- - - - - NA NA
3
Public (wereda bureau of
Agriculture operated) fruit seedling
nurseries
Mango, avocado & apple Throughout
Ethiopia - 180.7** 180.7** 180.7** - 542 1,000
4
Farmers’ cooperatives in
Arbaminch
Banana Arbaminch
- - - 25 - - 50
Sub total 300.7 240.7 205.7 - 722 1,320
Total 280 401 341 469 1,050 2,285 80,900
*Assuming 50% of their capacity will be used for vegetable seeds propagation and the rest for fruits
** The total estimated number of seedlings is shared equally among the three seedlings due to lack of data.
Source: Data collected from the respective companies (farms and tissue culture enterprises).
12 All modern vegetable seedling propagators except Jeju have built nurseries made of net-houses (not necessarily greenhouse). On the other hand, none of the fruit seedling propagators except
Kifle Bullo has greenhouse. And as the information we got from the experts indicate, greenhouses may develop/ raise humidity and hence many fruit seedlings mainly apple do not need greenhouse.
30. 24 | page
3.2.3. Major challenges of the FAV seedlings market in Ethiopia
Despite promising opportunities for the FAV seedlings market, there are challenges that hinder
full-scale development and also threaten the growth potential of the seedling business in
Ethiopia. Propagation of recycled FAV seeds in these modern propagation centers is not viable
in both financial and economic terms. Hence, this study considers the modern FAV seedlings
market which is based on the hybrid/ improved seeds and modern propagation. Congruent to
this, the major challenges of the seedlings market system in Ethiopia are discussed below.
Poor access and unaffordable hybrid seeds: National FAV seed research and development has
been ineffective. Hence, imported hybrid seeds have remained as the only source of improved
FAV seeds in the country. In addition, the number of importers and distributors of these seeds
are few and their distribution capacity is low. The cost of research and development of new
varieties, certification and registration procedures and the company’s patent fee is discouraging
as of present conditions. These coupled with the poor supply of foreign currency for the
purchase of hybrid seeds reduce the supply of hybrid seeds in the market and push its prices
up. For this reason, the price of imported hybrid FAV seeds has been expensive and prohibitive
for the large number of the Ethiopian farmers.
Poor supply of seedling raising media: Planting media (such as coco peats and peat moss,
planting tray, etc.), trays and growing fertilizers/nutrients required for raising seedlings are not
readily available in the country. Some of them could be produced locally and substitute import
of the same. However, neither the research centers nor the locally operating seedling
propagators is doing so yet. Hence, besides its cost, the poor supply of the planting media and
other materials have challenged the mass propagation and supply of seedlings in the domestic
market. Moreover, the government regulation prohibits allocation of foreign currency for
seedling raising unless a propagator is engaged in export business. Hence, seedling propagators
couldn’t get foreign currency for the purchase of planting media, chemicals, nutrients/fertilizers
as well as materials and also the local supply of these important inputs is almost nonexistent.
Poor access to investment capital: Establishing a modern propagation center is both skill and
capital intensive. Land acquisition as well as clearing and grading works, installation of
propagation houses/sheds, purchase and installation of specialized equipment (such as sowing
hole making, tray filling, water misting, sowing equipment), construction of air conditioned
seed propagation rooms, iron stand beds for germination and growth of the seedling, etc.
require a lot of money that is not easily accessible by small and medium level investors.
Low level of agronomic expertise: Local experts with experience in mechanized FAV seedlings
propagation are not readily available in sufficient number in the local market.
High risk of disease infestation: Seedling propagation is highly exposed to plant diseases. For
instance, if a bacterial or virus infested seed entered and germinated in the propagation center,
then it has the capacity of infesting the whole seedlings13
in the center which is disastrous for
both the service provider and the farmer.
13
Seedlings can easily be infested through bacterial and viral transmitting insects, wind, water and/or physical contact among seedlings
themselves.
31. 25 | page
Poor regulatory service provision: At present, there is no seedling quality standard and
certification regulation in the country. Hence, the business is being conducted on a trust basis
among the service provider and buyer (without legal basis for grievances that may raise in the
business). This stunts the growth of the market system.
Poor marketing and logistics infrastructure and facilities: Seedling is one of the most
perishable commodity. Hence, unless it is transported and transplanted properly, the success
rate during transplantation as well as productivity and product quality may be compromised. In
Ethiopia, the smallholder farmers are fragmented and scattered over the vast territory of the
country with poor transportation infrastructures. Hence, delivering these most perishable items
into the farms of the smallholder farmers will remain one of the challenges in the development
of the FAV market system.
Poor awareness of the farmers on the advantage of using the high yield hybrid varieties: Most
of the smallholder farmers use locally re-cycled FAV seeds that are prepared by themselves
from the previous year harvest. This is partly because of lack of awareness of the farmers of the
relative advantage of planting the high yield hybrid FAV varieties compared to the locally
recycled seeds. Hence, promotion of these high yield hybrid seeds, promotion of improved FAV
seeds that are released by the local research centers as well as awareness creation among the
farmers would remain as the key task in the development of the FAV sector.
3.2.4 FAV Seedling Prices
The price of FAV seedlings tends to vary mainly based on the price and quality of the seed and
propagation quality as well as credibility (thrust) of the nursery operators, etc. In turn, the
driving forces of the price of vegetable seeds are the demand for and price of the final product
of a particular vegetable. For instance, if the price of tomato increases in the local market, then
farmers (both smallholder and commercial) tend to plant tomato in the next crop season and
hence the price of tomato seed tend to increase and vice versa.
Based on the price information collected from the individual seedling propagators, the average
prices of the major types of vegetable seedlings (i.e., tomato and pepper (chilies) are Birr 1.28
and Birr 2.07 per stem respectively. Moreover, the average price of onion seedlings propagated
by a commercial farm is Birr 350.00 per 1x5 meter size bed of seedlings. In the case of the
traditionally propagated seedlings, the price of seedlings ranges between 90 - 100 Birr per
meter square of seedling bed. Usually, in these remote rural areas, the seedling beds are
prepared in 1x12 meter size and the average price of this size seedlings is Birr 1,200 for all
vegetable seedlings.
Similarly, Gilboa, Kifle Bullo and Fagi are the large-scale commercial finished apple seedling
suppliers. The apple seedling price of these suppliers are respectively Birr 190.0, Birr 120.0 and
Birr 140.0 per stem which gives an average of Birr 150.0 per stem as of 2016. Mashav’s project
also produces relatively good quality grafted mango and avocado seedlings at Birr 30.0 for
smallholder and Birr 40.0 for commercial farms per stem as of 2016.
In addition to these, Tigray and Narus Biotechnology centers also supply rootstock and grafted
(finished) fruit seedlings to the market. The average price of these centers for the rootstock of
banana if Birr 11.0 while for the other root stocks (primary acli) including apple, mango,
avocado and citrus, it is Birr 13.0 per stem as of 2016.
32. 26 | page
Table 3.12 Seedling prices* of selected FAV seedlings of hybrid varieties, 2016.
NO. TYPE OF VEGETABLE/ FRUIT SEEDLING PRICE PER STEM (BIRR)
I. VEGETABLES TOMATO PEPPER (CHILIES)
1 Tigray Biotechnology Center 1.25
2 Narus Biotechnology Center
3 Florensis 1.50 2.50
4 Joytech 1.35 2.05
5 Roshnara 1.12 1.67
6 FloraVeg 1.21
7 Venus 1.20
8 Uni Fruit 1.30
Average price per seedling (Birr) 1.28 2.07
9 Jeju for onion seedling Birr 350.0 per 1x5 m size bed
II. FINISHED (GRAFTED) FRUIT SEEDLINGS Apple Mango & avocado
1 Gilboa 190
2 Kifle Bullo 120
3 Fagi 140
4 Mashav - Birr 30 for SHF & Birr 40
Commercial farmers
Average price per seedling (Birr) 150 30 for SHF & Birr 40 CF
Banana Others (apple, mango,
avocado, citrus, etc.)
III. FRUIT ROOTSTOCK
1 Tigray Biotechnology Center 10 13
2 Narus Biotechnology Center 12 NA
Average price per rootstock (Birr) 11 13
* Cost of seed plus propagation service fee at 85% germination assurance from the propagator.
Source: Respective enterprises. NA= Not available
3.2.5 Logistics requirement
FAV seedlings in general and vegetable seedlings in particular are highly perishable and
sensitive to transportation and changes in whether condition. Hence, an utmost care should
be given during transportation and transplanting the young plants. Except onion, all
vegetable seedlings are propagated in a planting tray with a size of 126 seedlings. And
matured seedling has to be transplanted directly from the tray to the farm. Hence, before
the seedling goes out of the propagation center, farmers have to finish all farm preparation
and means of transportation.
In all the propagation centers, except Tigray biotechnology center, seedlings delivery and
handover is made on the propagation site. Hence, in most cases, farmers bring vehicles to
transport their seedlings. And only in some cases, when farmers do not get vehicles, the
propagation center arranges or provides transportation service on cost basis. In addition,
since the seedlings cannot be uprooted from the planting tray, farmers are required to
deposit Birr 20.0 per tray of as a security for the safe return of the tray. Once the money is
deposited, the trays with seedlings will be packed in a special seedlings crate and loaded to
a vehicle for transportation to the farmers’ farm.
33. 27 | page
Isuzu trucks loading seedlings at Florensis Farm
Above: Photograph showing seedlings transport and logistics facilities of Florensis Farm
In the case of Tigray Biotechnology Center, the company has six modern special cold trucks that
deliver the seedlings to the farm. Hence, once the farmers inform her/his readiness to
transplant the seedlings, then the company transport the seedlings to the farm on cost basis
and transplant it directly into the plantation beds. For this reason, Tigray Biotechnology Center
doesn’t ask its customers to deposit money for the planting trays.
34. 28 | page
3.3. THE SEEDLINGS MARKET SYSTEM: THE M4P LENS
The FAV seedlings market system is a wider function and multi-player set-up comprising of
the core function (transaction) of exchange as well as the support functions and rules.
3.3.1. The Core transaction
The FAV seeds and particularly the seedlings production and supply are just an emerging
farming inputs business in the country. In this market, the transaction happens between the
nursery operators and the smallholder and commercial farmers who buy the seedlings and
engage in the production of various vegetables and fruits.
Lack of agronomic skills to propagate and manage vegetable seedlings; absence of modern
seedling propagators; poor access to good quality and high yield seed varieties; poor supply
of plant media and chemicals; high cost of imported hybrid seed varieties together with lack
of small quantity (pack) of these expensive imported seeds; etc. have remained to be the
major causes for the underdevelopment of the FAV sector.
At present, smallholder and commercial farms have started buying good quality (healthy
and high yield) of FAV seedlings in small quantities from modern private seedling
propagators and multiplication centers. However, these private nursery operators, besides
being few in number, their capacity is low and are concentrated in a specific geographic
area that all have limited the opportunity of the farmers to get modern nursery propagated
seedlings of the hybrid varieties. If seedling marketing business model is well developed,
then it will provide smallholder farmers an opportunity of buying good quality and healthy
FAV seedlings in the required quantities (i.e., according to their farm size), significantly
improve FAV seedlings survival rate and will enable to avail agronomic extension services
for smallholders through nursery operators.
3.3.2. The support functions and rules
I) Support functions:
Access to agricultural inputs (hybrid seeds, plant media, fertilizer and
chemicals)
Efforts have been made by the various research institutions (mainly Melkassa Agricultural
Research Center) to develop high yield variety seeds of vegetables and fruits. However,
the research outputs and their marketability have remained ineffective. For this reason,
import remained as the sole source of hybrid and good quality seeds in the domestic
market. At present, the Seeds Variety Certification, Seed Protection and Quality
Directorate of the MoANR has certified 21 vegetable hybrid seeds that are registered by
11 seed importers.
35. 29 | page
Table 3.13 List of registered seed importers and certified vegetable seed
varieties, 2015
S.
No.
List of registered vegetable
seed importers
Sources of seed Types of seed
registered
1 Axum Green Line Trading PLC Israel, China, Thailand, Japan &
Australia
Onion seed, white
cabage, tomato, Swiss
chard, lettuce, carrot,
cauliflower, leek seed,
pepper, beet seed,
spinach, Okra
Clemson, Eggplant,
Chinese cabbage,
water melon seed,
Lycoperscicon, chili,
Zucchini, cucumber
and broccoli
2 Markos PLC India, Taiwan, France, Denmark,
China, Italy, Netherlands, South
Africa and UK
3 Issachor Agro Input Import Export Italy, Pakistan, China and France
4 EAR PLC Netherlands, India, Denmark,
New Zealand, Mexico, South
Africa
5 Abduljelil Mohammed Denmark, France, South Africa,
USA
6 Harvest General Trading Italy
7 Betseha Denekew Import Export India and Israel
8 Hebst PLC Netherlands
9 ETECO PLC Israel
10 Makobu Enterprises Ltd. Netherlands & Kenya
11 Assasahegn Denekew India
Source: MoANR, Seeds Variety Certification, Protection and Quality Directorate.
During 2011-2015, Ethiopia has imported an aggregate of 925.42 tons and 94.19 tons of
vegetable and fruits seeds at a total cost of US$ 22.6 million and US$ 1.92 million
respectively (Table 3.14). This is equivalent to an annual import of 185.08 tons and 18.84
tons of vegetable and fruit seeds over the period under discussion. During these years,
import of vegetables seeds has increased at an average of 8.8% and 19.3% per year in
quantity and value terms respectively. On the other hand, import of fruit seeds decreased
at an average of 34.9% and 22.8% per year respectively. For details see Table 3.14. The
large and growing quantity of imported FAV seeds is partly due to the ineffective local
research and development as well as marketing of locally improved seeds.
Table 3.14
Import of Vegetable and fruit seeds to Ethiopia in quantity and value, 2011-2015
Year
Vegetables Fruits Total (FAV)
Qty (ton) Value US$ Qty (ton) Value US$ Qty (ton) Value US$
2011 121.289 2,494,294 30.07 1,087,173 151.36 3,581,467
2012 214.02 3,810,281 37.94 134,969 251.96 3,945,250
2013 173.28 4,643,130 13.56 260,558 186.83 4,903,688
2014 246.65 6,603,061 7,23 54,387 253.87 6,657,448
2015 170.18 5,052,613 5.40 386,148 175.58 5,438,761
Total 925.42 22,603,379 94.19 1,923,235 1,019.60 24,526,614
Annual
average 185.08 4,520,676 18.84 384,647 203.92 4,905,323
Annual rate
of growth 8.8 19.3 (34.9) (22.8) 3.8 11.0
Source: Ethiopian Revenue and Customs Authority and compile by the consultant
In addition to the seeds, there is no domestic supply of inputs needed for the preparation
of planting media such as coco peat as well as pest and insecticides appropriate for
horticulture. Hence, the country depends on import to get these important agricultural
inputs. However, FAV seedling propagators are not given priority (as for growers for
36. 30 | page
export) to get foreign currency to import these planting media and chemicals. Further, as
the information obtained from the market players indicate, the long process of seed
certification and registration, poor import permit and clearance services of the Plant
Quarantine Directorate of the MoANR, poor supply of foreign currency by the NBE for the
purchase of seeds, etc. have been some of the bottlenecks of the import and distribution
of FAV seed business in the country.
Access to Finance:
Modern vegetable and fruit propagation projects are skill and capital intensive
establishments. So far, the FAV seedlings propagation facilities (Except FloraVeg) have
been developed as side businesses by the existing flower exporters. Hence, the source of
investment capital for the establishment of these vegetable propagation centers was the
flower exporters themselves. An attempt has been made to get an information whether a
person or a company can get loan from the Ethiopian Development Bank14
for the
establishment of modern seedling propagation center. However, the Bank has no
commodity study on that business which is prepared internally by its Information Services
Directorate for the purpose of loan appraisal. Because of this, the Bank has not provided
loan so far and cannot extend loan for the development of modern FAV seedling
propagation centers as at present. This indicates that access to finance has remained as
one of the problems of the development and expansion of seedling propagation services
in the country.
14
Note that DBE is the only supplier of long term loan in the country.
37. 31 | page
Seed research and development:
Poor national research and development capacity in improving local vegetable and furit
varieties coupled with long and time taking procedures of good quality hybrid seed
registation and import has been one of the features of the seed market in the country.
The challenge of hybrid seed registration and release is also agravated by the poor
capacity of the local agriculltural research center as well as poor protection of intellectual
property rights of variety owners. Moreover, imported good quality hybrid seeds are
expensive and are supplied in large packs that are unafordable for the majority of
smallholder farmers.
Commercialization of the FAV sector:
Because of lack of access and higher prices of the hybrid seeds, smallholder farmers use
poor quality, low yield seeds from own stock. This has partly contributed to the
underdevelopmet of seed production and supply business in the country.
ii) Rules
Generally, import and distribution of plants and seeds in the country is highly regulated
by the government. To regulate the seed sector, the government has issued one decree
and two regulations at different times. These are indicated below:
No. Decree/ regulation number Objectives
1 Plant Protection Decree # 56/71 To protect local seed varieties and
development
2 Ethiopian Seed Council of
Ministers Regulation # 16/1997
to regulate the production, import, process,
distribution and sales of seed
3 Plant Quarantine Council of
Ministers Regulation # 4/1992
To regulate seed treatment and movement
(import, export and local distribution)
Source: Negarit Gazetta of the respective regulations (also attached as annexes)
From the start, each hybrid seed variety has to be registered in the country to get import
permit. Once it is certified and registered by the Varieties Registration Directorate of the
MoANR, then the company has to apply for import of the registered variety. Each import
is accompanied by an application of import permit, open L/C and get bill of loading. if it is
allowed by the relevant Directorate, then the importer has to open L/C and process the
import. Once, the importer gets bill of loading, then she/he has to get PSC (phytosanitary
Certificate) and apply to the Quarantine Directorate of the MoANR for document
inspection as well as visual and laboratory examinations to check if the seeds qualify all
requirements put by the relevant Directorate.
As the information obtained from the key players of the market indicate, both the seed
registration and import processes takes a long time and in many cases there are chances
when imported seeds arrive on the warehouse of the importer after the plantation season
has passed. Therefore, there needs to start discussions among the GoE and stakeholders
to get ways of shortening the process and time that takes to import and distribute the
seeds at the right time.
38. 32 | page
3.4. REVIEW OF CURRENT FAV SEEDLING BUSINESS MODELS IN ETHIOPIA
In Ethiopia, there are two major vegetable and fruit seedling business models through which
the various market actors interact with each other and make a business. These can be termed
as traditional and modern (organized) business models.
3.4.1 Traditional business model
This type of business model is the simplest and straight forward version with one or two
tiers where the seedlings seller interacts directly with the buyer or through a broker. This
model is predominantly employed in the rural areas of the country and is much closer to the
farmers (both commercial and smallholders) or farm locations. In turn, this enables the
farmers save travel time, energy and cost. For this reason, such business model is common
within the smallholder farmers for an open field propagated seedlings using open varieties
and locally recycled seeds. This business model also includes business interactions among
the commercial farmers themselves or commercial farmer to smallholders as sellers and
buyers respectively in the marketing of onion seedlings who are connected either directly or
through marketing agents (brokers).
As the information obtained from the seedling propagators and buyers, the brokering
service of marketing agents (brokers) is common in this traditional seedling business model
and their service charge is Birr 10 per 1x5 sized seedling bed (about 2% of sales value) and
Birr 20 for the 1x12 size of seedling bed.
1x5 meters size bed of onion seedling around
Meki-Zeway area
1x12 meters size bed of onion
seedling in Bahirdar Zuria
39. 33 | page
Figure 3.6 Traditional FAV seedling business model for open variety
Smallholder FAV farmers
Smallholder farmer
propagators (open
field, recycled
farmers’ seed)
1.1
1.2
Marketing agents
(Brokers)
Commercial FAV producers
Smallholder FAV farmers
Commercial farms
(onion seedling
propagators in
open field)
3.4.2 Modern/ organized seedlings business model
This model serves for both vegetable and fruit seedlings of hybrid or improved seeds with
slight variations. Compared to the traditional model, the market players in this model are
fewer in number and are predominantly applied by the modern commercial propagators as
seedling sellers on the one hand and the commercial farms and other well to do farmers
who have access to the central vegetables and fruits market as buyers.
i) Modern (organized) vegetable seedling business model
This business model serves for the sales of vegetable seedlings or provision of propagation
services. It is a demand driven in that it starts from the demand for seedlings or
propagation services that come from the commercial and smallholder farmers and then goes
either directly to the tissue culture centers or commercial propagators or through
intermediary traders and NGOs, cooperatives and government nurseries. In other words, in
this business model, buyers deliver their hybrid and packed F1 vegetable seeds and put
propagation service order. In addition, it also involves the interaction of the buyers with the
sellers (both commercial farms/propagators and tissue culture centers) for the purchase of
vegetable seedlings.
NGOs, cooperatives and government do also put their purchase orders to buy seedlings
from the propagators to be distributed to the smallholder farmers. In most cases, these
organizations have their own transit nursery site where they temporarily keep the seedlings
until they distribute it to the smallholder farmers.
On the other hand, there are several intermediaries particularly in the Koka-Zeway areas
where they buy propagation services from the modern propagators ahead of the peak
plantation season and then sell it to the commercial and smallholder farmers at the peak
40. 34 | page
season usually when the price hikes. As the information obtained from the propagators and
farmers indicate, the average intermediary’s margin in such a business is estimated as 50%
of the original purchasing price of the vegetable seedling.
Figure 3.7 Modern (organized) vegetable seedling business model for hybrid
varieties including potato and sweet potato
Commercial veg
varmers
Intermediary (seedling
traders)
Smallholder veg farmers
NGOs, Farmers’
cooperatives &
government nurseriesModern veg
seedling
propagators (Open
field for onion &
greenhouse/ mesh
house for other
veges)
&
Tissue culture
centers
ii) Modern Fruit seedling business model
This business model is similar to that of the modern vegetable seedling business model
except that this model is more or less supply driven. Except the tissue culture centers who
tend to secure demand before they propagate the rootstocks, the other suppliers propagate
and graft the fruit seedlings first and then supply to the farmers. In most cases, the quality
of seedlings supplied by the latter group tend to be lower and are sold at subsidized prices
to the smallholder rural farmers.
The selling price of the fruits seedlings also vary in response to the quality and level of
subsidies given by the government and NGOs. For instance, taking only apple, the seedling
price varies from Birr 20 per seedling from the public nurseries to Birr 30.0 from Mashav,
Birr 35 from Tesfaye and friends cooperative (in Chencha), Birr 120 from Kifle Bullo, Birr
140.0 from Fagi and Birr 190 from Gilboa Seeds and Seedling Agri PLC.
In this model, the intermediaries play two roles: (1) grafting and managing the seedlings
growth for sale and (2) trading (seedling aggregation and supply). In their trading role, the
intermediaries participate in tenders floated by NGO, government agencies (mainly different
valleys development agencies) and cooperatives for the supply of fruit seedlings. If they win
the tender, then they buy the grafted fruit seedlings from different propagators and deliver
to the buyers in their temporary nurseries.
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Figure 3.8 Modern (organized) fruit seedling business model
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3.5. INTERNATIONAL EXPERIENCE ON THE FAV SEEDLINGS BUSINESS MODELS15
& LESSONS LEARNED
3.5.1. International experience
Kenya has relatively well developed vegetables and fruits seedlings business model. To
illustrate this the study team has selected the experience of 3 Kenyan seedling propagation
service providers, 1 South African and another 1 Israel companies as a showcase and
experience sharing for the present study. These are detailed below.
Kenyan Plant raisers company: The company (Plant Raisers Co.) buys certified vegetable
seeds of all varieties from companies like Kenya Highlands, Simlaw Seeds and Amiran for
propagation. Some farmers also bring seeds to the company to propagate for them at Sh2
(0.45 Birr) per seed16
. However, most farmers rely on the seedlings of the company.
A farmer runs the risk of up to 30 per cent germination failure rate when he use
conventional methods of growing vegetables from seeds. Seedlings grown using modern
technology in greenhouses have a germination rate between 85 to 90%. Seedlings grown in
greenhouses also have a bigger root mass, which makes the plants stronger and lowers
their chances of dying. The growing media, which includes a cocopit mixture which is locally
available in Kenya’s, mixed with their own secret formulae that helps the company to
achieve 90 to 95% germination rate for hybrid seeds and 80 to 90% germination rate for
the open-pollinated varieties seeds. The company specializes in producing seedlings for
tomatoes, cabbages, cauliflower, broccoli, pepper (hot and sweet), onions, and cucurbits,
among others. It normally takes four weeks for tomato, cabbage, broccoli, watermelon,
kales and spinach seedlings to be ready for transplanting. Onions take about five weeks
while hot and sweet peppers seven weeks. The company arranges delivery to Nairobi, but
upcountry order deliveries are normally made through a courier service for clients who
cannot come to Nairobi.
Kenya- LONGONAT Nursery FARM: The firm has 2 nurseries in Africa, one is in S. Africa
& one is in Kenya. This farm produces seedlings for small farmers and big farms. The farm
has 6 big clients and approximately 20 retailers who supply seedlings to farmers. The farm
imports the planting media from abroad and mix it with soil with a ratio of 1:10. Planting is
made manually and then transferred to a greenhouse for 7 – 10 days till they finish
germination. Transportation of seedlings is made by crates with substrate on it. The
seedlings can be transported up to 500 km and can stay without being planted for more
than 5 days by watering only. The company gets vegetable seeds from other seed
companies like Seminis.
Kenya , Zambia – Amiran Seeds: Amiran has been in the agriculture industry for over 48
years, establishing itself as an expert in the field. It provides a variety of seedlings and can
also grow owner-supplied seeds. The company is the exclusive supplier of Hazera seeds. It
is one of the leading suppliers of seedlings for farmers and market gardeners countrywide.
Seedlings are grown in the purpose-built nursery and greenhouse. The company produces
tomato, pepper, eggplant and melon seedlings, as well as seedlings from seeds supplied by
clients. A variety of fruit trees are available on special order 2 months in advance. Young
15
All information incuded here are obtained from the respective companies’ website and promotion brochures.
16
Based on 2016-12-20 week’s exchange rate between Ethiopian Birr and Kenyan Shilling.
43. 37 | page
banana trees (Williams variety) are always in stock. However, clients are advised to order in
advance to avoid disappointment.
Amiran Ltd has a full complement of experienced staff that are on hand to guide clients on
the best way to grow their crops and get the best and cost effective results. Seeds are
planted for a specific order after a 50% payment in advance and propagators collect the
remaining 50% during delivery of seedlings. Seedlings of vegetable crops are available 4 to
5 weeks after the placement of the order. A certain amount of seedlings are prepared on a
speculative basis.
South African Martin Dale Seedlings Comapny: Martin Dale Seedlings has been
producing vegetable seedlings for farmers in Limpopo and Gauteng for the last 22 years.
Vegetables are produced in a model of 200 trays and take on average about 6 weeks to
produce. The company produces a range of open pollinated varieties on specifications but
do produce hybrids on request. It is recommended that the farmer consults with their local
seed supplier when planning what varieties to produce. The choice is based on the type of
market the farmer wishes to supply as well as the time of year.
The production guidelines recommend that each farmer should understand his/her own
circumstances to determine which variety and plant spacing to use. Higher density plant
spacing leads to less yield per plant and low density planting can lead to low yield per ha, so
it is always a good idea to find the balance between high and low density planting. The
company also produces vegetables in 9 packs for retail nurseries to sell the end user. The
company also advises on GAP.
Israeli Hishtil Comapny: The Israel-based international nurseries organization is a market
leader in vegetable propagation. Hishtil is a world leader in plant propagation and grafting of
various seedlings. Its main product lines re seedlings and young plants of vegetables,
ornamental plants and herbs. The company is renowned for being at the forefront of
knowledge-based plant propagation. Hishtil is dedicated to providing economic and
environmentally friendly horticultural solutions that improve the quality of food.
Hishtil has over 25 hectares of production nursery area across four sites in Israel, plus 25
hectares in 7 international joint ventures in Italy (2), Bosnia, Spain, Turkey and South
Africa (2). Yearly production currently totals well over one billion young plants of
vegetables, herbs and ornamental plants, of which some 80 million are grafted seedlings. All
of Hishtil’s activities comply with the strictest international standards. Hishtil aims to
increase global activity to establish a leading international presence for its cutting-edge
operations. This includes implementing more facilities that capitalize on its inclination for
hot climates. Cooperation with a number of advanced agrotech and agrobiz firms is also
integral to Hishtil’s global strategy.
3.5.2 Lessons Learned
The international experience discussed in Section 3.5.1 above indicates that many of the
private seedling propagators operating in the selected countries use their own seeds (either
produced or imported by themselves). This is beneficial for both the farmers who, in most
cases, do not have access to improved and/ or hybrid seeds and also to the propagators
because that would help them to expand their businesses.
In Ethiopia about 90% of the propagators’ business comes in the form of propagation
services, i.e., the seeds come from the farmers. Hence, only those who can get and afford
