Improving the overall business performance of LemLem Union

Lemlem Welkait Union, embracing 14 member Primary Cooperatives (PCs), is well placed in a region where the production of Natural Gum and Sesame is substantial. The production and collection of natural gum is different from the production and collection of sesame. For sesame member farmers sell their yield to the primary cooperative at the spot market then the PC sends the collected sesame to the Ethiopian Commodity Exchange (ECX). The union owns a seat in the ECX and arranges the sales on behalf of the PCs at a commission of 1 Birr per quintal. Thus the union is only acting like a broker in the entire transaction. Other activities such as bulking and transportation are not in the unions system yet. This results in missing of collective effort between union and PCs and this has diminished the benefits of economies of scale that could have been achieved otherwise. Unlike the sesame, the natural gum forest is owned by the PCs without involving individual farmers. For natural gum the union collects the production from PCs and resales it to the market. PCs mainly use daily laborers for harvesting of natural gum. Value addition is limited due to lack of transportation and the product has never been exported due to weak manpower composition and knowledge deficiency. The internal manpower structure is equipped with too few competent staff members to operate effectively, and no departmentalization exists within the organization. In order to improve the overall performance of LemLem, the 2015 Agriterra action plan will focus on: - Strengthening the union and PC board members and Union management leadership capacity - Attracting more qualified staff - Strengthening the PC-union marketing relationship - Improving the union and PC internal operation and administration practices - Preparing the union for entering into sesame export marketing - Developing a 3-year strategic plan and customized HR, material management and financial manuals - Creating awareness about internal capitalization modalities - Conducting assessment to diversify the business activities of the union (Natural Gum and Cotton)