Establishment of an animal feed processing plant
Written by Olika Urgessa, Cooperative advisor Ethiopia
Chercher Oda-Bultum Farmers’ Cooperatives Union, with 168 primary cooperatives and 65,113 individual members, has been an Agriterra client since 2017. The Union is situated in the West Hararge and East Hararge zones of the Oromia regional state in Ethiopia. In these areas, landholdings are highly fragmented, with most farmers owning small plots of land. The majority of this land is used for growing the common cash crop, Khat/Qat, leaving limited space for crop cultivation and livestock rearing. Among the farmers, livestock fattening activities, particularly cattle and goats, are prevalent, and the "Bullock of Harar" is renowned for its tasty and organic raw meat. Additionally, certain regions practice dairy production.
The Union has successfully set up commercial dairy farms and a fattening project in the Goda-Hora area, located just 12 kilometres from its head office in Bedessa town. These initiatives aim to address the dairy supply shortage in the local community and foster the adoption of superior breeds, such as Borena Breed and hybrid heifers, for distribution among the farmers.
However, the fattening and the increase in dairy cows require a supply of sustainable, quality, and low-cost feed. The discussion with the board members of the union, the Office of Agriculture and Natural Resources, and the Office of Livestock Development from Oda Bultum and Habro Districts revealed that livestock in the region face challenges with poor feed supply and management. Feed is generally a problem in Ethiopia as a whole where few manufacturers of animal feed are available operating at the central part of the country while the livestock is widely dispersed over the nation. Especially, the shortage of balanced feed is the major problem that inhibits the production and productivity of the livestock resources. The culture of cultivating animal feed crops is also poor. Research centers and the relevant government structure also pay low attention to the realisation of ensured animal feed supply to the market.
Realisation of members’ investment ambition
To realise their investment ambition, the board and management of the union decided to establish an animal feed processing plant. This decision followed a comprehensive feasibility study and validation workshop attended by board members, management, experts from Oda Bltum University, cooperative promotion agency experts, invited bank professionals, and Agriterra Business Advisors. The feasibility study confirmed that investing in the feed processing plant would significantly benefit the organisation.
Agriterra and the union agreed to hire professional consultants for international bid document preparation, invite suppliers, and evaluate and select the best machinery suppliers. Additionally, Agriterra facilitated an international visit to selected animal feed processing plant suppliers, based in Turkey, for board members, management and consultant hired. After the visit, the union signed a contractual agreement with Tanis company to provide machinery supply, installation, and training services to the staff of the union. The union accessed an investment loan of 45 million ETB (818,182 euro) for the investment.
Agriterra's comprehensive support to the Union has yielded remarkable results:
- The realisation of members’ investment ambition and the start of production of concentrate feed.
- Created job opportunities for 25 professionals at the union level and expected to increase when the plant starts operation at full capacity.
- The cooperative's use of the dairy concentrate feed has resulted in an impressive increase of 5 litres of milk per cow, indicating the feed's high quality.
Olika Urgessa, Cooperative advisor Ethiopia, says: “We are happy to see the result of our efforts in supporting the union to achieve its members' goals. The Chercher Oda Bultum Farmers' Cooperative Union has successfully produced 1200 quintals of various feed types as part of pilot testing and has commenced distribution to its members. The union products were tested by members in three woredas, and the quality of the feed was appreciated. The union is in preparation for full-capacity production. Currently, the cooperative members are benefiting from the price difference offered by the union, which is lower than the market price for feed. This success story demonstrates the significance of collaboration and support in fostering agricultural development. We look forward to witnessing further growth and positive impacts in the future.”
The animal feed processing plant was inaugurated on July 6, 2023, where more than one thousand represented primary cooperative leaders attended the event. The event marked a significant success story for Agriterra.