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Owner and General Manager of K Vegetables and Fruits
Plc, Kebreab Abebe, is determined to get his
business back on the export track, and to have his
produce transported to one of the international
markets that every businessman dreams of sending
their commodities to – the European market.
Kebreab’s company owns the 23hct Teppo Farm, located
134Km east of Addis Abeba in Meki area, East Shoa
Zone of the Oromia Regional State.
Established in 1995, Teppo had been producing
vegetables and fruits for European markets until
three years ago. Due to its limited capacity,
however, the company could not survive long in the
export market.
In September 2007 , Kebreab came up with a new
strategy to revive the export business. And he
succeeded. He owes part of his success to his
decision to use organic fertilizers. The businessman
believes this helped his company become cost
effective and provide high quality produce. Organic
Liquid Fertilizer Plc supplies Teppo with the
organic fertilizer, which the farm is applying to
its pilot production.
“We are seeing wonderful results in the pilot
production project, and I have decided not to use
Urea and DAP at all,” says Kebreab. “A hundred
litres of liquid fertilizer, which costs 10 Br a
litre, is sufficient for a hectare of land while the
same size plot needs two quintals of DAP bought for
940 Br a quintal,” he told Fortune. “Besides,
applying organic fertilizer is preferable,” he
added.
The agriculture sector in Ethiopia primarily uses
inorganic Urea and DAP and the use of organic
fertilizers is minimal, according to Assefa Kasahun,
an agronomist at the Extension Department of the
Ministry of Agriculture and Rural Development (MoARD).
About 11.3 million hectares of Ethiopia’s land were
cultivated for production of cereals, pulses and oil
crops during the 2006 crop season, and it was
estimated that about 20.1 million tonnes of grain
were produced.
The government plans to increase cultivated land by
2.86pc, to 12.65 million hectares and to produce
38.21 million tonnes of grain by 2010.
The figures representing the use of inorganic
fertilizers in previous years speak for themselves.
The 480,000 metric tonnes Ethiopia’s annual demand
for fertilizers in 2005 increased to 645, 000 metric
tonnes, of which 145, 000 metric was stocked (not
used), in 2006, resulting in the decline of the
imports of the product the following year (2007) to
530,000 metric tonnes. The government anticipates
the demand to reach 820,000 metric tonnes by 2010,
while its agriculture experts have been busy
estimating the possible demand for the next fiscal
year.
The requirement for fertilizers grows not only due
to the increase in cultivated land, but also because
every repeatedly cultivated land needs increased
amounts from the previous year, an agronomist told
Fortune.
Research done in 2005 by students of the Sociology
and Social Anthropology Department of Addis Abeba
University (AAU) indicates that although a certain
amount of fertilizer applied to a plot during one
harvest season increases productivity, the amount
should be increased yearly.
“Repeated use of the same kind of fertilizer on the
same plot affects the minerals and depreciates the
soil quality,” read the research paper.
On top of this, both the demand for, and the price
of, fertilizer is increasing. During the opening of
a tender in December 2005, the price of DAP was
323.38 dollars a tonne, which increased to 418.83
dollars in October 2007. But within two months (on
December 4, 2007), it had skyrocketed to 761 dollars
a tonne. By the end of the same year, it further
shot up to 871 dollars. Yara, a company dominant in
the fertilizer business in Ethiopia, offered all
these prices.
This price hike directly affects the farmer.
Currently, a quintal of fertilizer sells for up to
950 Br.
Kassahun Abera is general manager of the Yerer
Cooperatives Union, formed by 43 basic farmers’
cooperatives that have 36 thousand individual
members in East Shoa Zone of Oromia Regional State.
He told Fortune that the union offers 915 Br
for a quintal of DAP.
“This is a very expensive price, and the current
global market is unstable,” Kassahun said.
The Federal Government’s budget for fertilizers has
shown an annual 50 million dollar increase over the
past three years. Last year alone, about 300 million
dollars was spent on the commodity.
These fertilizers are mostly supplied to the farmers
on a half-cash and half-credit basis.
“Previously, when the price for a quintal was 300
Br, I used to pay 150 Br in cash and settled the
balance after harvesting. Now that the half of the
price is about 550 Br, I’m not able to purchase
fertilizers,” Belachew Adugna, a farmer from Ada’a
area of East Shoa Zone told Fortune.
Two agricultural economists from the Ethiopian
Agricultural Economists’ Society believe that, in
addition to the costly inorganic fertilizers, the
government should also focus on the organic ones for
two reasons. Firstly, the government should make the
locally available organic fertilizers fill part of
the national demand, and provide financial and
capacity building supports to the producers.
Secondly, since currently there is a high demand in
the global market for organic products,therefore,
emphasis should be given to this sector.
National Fertilizers Share Company and Organic
Liquid Fertilizer Producing Plc are two companies
involved in the manufacturing of organic
fertilizers.
The former, established with a capital of 6.7
million Br, produces an organic fertilizer called
Orga. Its shareholders comprise the
economist-politician, Berhanu Nega (PhD), who has
1136 shares, the Addis Abeba Abattoirs Enterprise
(2114 shares), Infrastructure Project Development
Plc (394 shares) and the Ethiopian Maize Farm Share
Company (3794 shares). Each share is worth 1,000 Br.
This factory was established with the hope of using
animal carcasses, accumulated since 1956 at the
Abattoirs Enterprise, as raw material.
The organic fertilizer produced at this factory is
said to have equivalent nutrient value as that of
DAP. It used to go for 45 Br a quintal, before it
rising to its current price of 120 Br.
However, the new Addis Abeba City Administration,
which took office about a month ago, has prepared a
plan for restructuring the factory and accordingly,
banned its produce from going to the market.
The new General Manager says the colour of the
current Orga the factory produces needs improvement.
“We want to come up with a snow-white colour, while
at the same time securing a raw materials source,”
he told Fortune.
Orga entered the market in 2000, and has been
acknowledged by the MoARD. Nevertheless, MoARD’s
Extension Department Agronomist, Assefa Ayele, says
Orga is not well known among farmers. According to
him, other methods (not including using organic
fertilizers) to increase soil fertility are crop
rotation and the use of compost, but there are not
many companies exploiting these.
The agricultural economists, however, do not agree
with this idea. They argue that the MoARD should
take the inorganic produce of these factories to
the farmers, understand the needs of these
factories, and facilitate ways for them to get
government support.
The Extension Department of MoARD has more than 70
demonstration fields and close to 45,000 extension
workers or Development Agents (DAs) across the
country.
As the farmers are mostly skeptical, they are slow
to adapt new ideas. Thus, delivering such new inputs
as organic fertilizers to them through the DAs is a
viable option, Getachew Alemu, marketing expert at
the Ethiopian Cooperative Commission, told
Fortune.
Organic Liquid Fertilizer Producing Plc produces 500
litres of liquid fertilizer a day, and has the
capacity to produce as much as 2000 litres, if there
is a demand for it.
Kebede Lakew, shareholder and general manager of the
company told Fortune that if his company got
support from the government, organic fertilizer
could be the practical solution to the high prices
of the inorganic brands.
Organic Liquid Fertilizer Producing Plc was
established by Kebede and his partner, Kassahun
Taddesse, two years ago. The owners have invested
1.2 million Br in the business but could not secure
the loan they requested to undergo expansion work
because they cannot provide collateral.
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