Success story of Tsehay
Tsehay, the union of farmer cooperatives in the north of Ethiopia, has been working together with Agriterra since 2012. A lot has changed since then and there has been progress in different areas (internal capitalisation, investments, skills and knowledge, market linkage).
Tsehay Farmers Cooperative Union Limited was founded in the year 2000 and has now grown into a union of 142 cooperatives, working in 10 woredas. The union consists of more than 120,000 small holder farmers, of which about 94,000 are male and 26,000 female.
100 employees in total work for the union, buying mainly sesame, chickpeas, soybeans, green mug teff and spices from its members and selling various inputs (fertiliser, improved seeds), consumable products, insecticides and pesticides to its members at a discount.
The union used to have problems managing the union activities, motivating their staff members and with how to communicate and delegate the management tasks. After participating in the training and sharing experiences (locally and internationally), the union’s management system gradually improved. Now, they haven’t only changed and improved their management system, but have also shared their experiences with other unions.
Before Agriterra came, there was no international market linkage. The union only supplied agricultural commodities of poor quality on the local market. Agriterra gave a variety of trainings, especially in international marketing, customer management and satisfaction, leadership, preparation of export documents, international market linkage and in creating a bankable business for bank loan purposes. Thanks to Agriterra’s support, the number of marketing transactions increased and the hard currency grew from USD 337,500 to USD 3,750,000. In 2017, the union started exporting organic sesame to Europe (Greece), USA and Kuwait. The conventional sesame is exported to China, Israel, India, and Algeria.
When the union needed 2 million euros to establish its edible oil-factory, Agriterra experts gave an Internal capitalisation-training. The trainers showed the participants how to mobilise farmers to collect the money and how to establish the new factory. After that, the farmers gathered more than EUR 420,000 within two months. After one month, the factory started to produce the edible oil out of sesame, Niger seed and sunflower. Encouraged by this experience, the union plans to make new investments in the region.
The union accounting used to be done manually and preparing an income statement, balance sheet and cash flow statement in one month’s time was a challenge. After installing Peachtree and training the accounting officers, all transactions can be done by Peachtree now and all statements can be prepared in one day. All union finance transactions are done by the Peachtree accounting system now.
Warehouse and material management
The union used to have a very bad warehouse and material management. For example, they stored all kinds of commodities and chemicals together. After receiving a training, the warehouse employees improved the warehouse organising and stocking. Now, the warehouse is open every day. It is clean and its commodities are organised in the best possible way.
The training was provided not only to warehouse employees, but also to primary cooperative members. As a result, the commodities are of a better quality now and are no longer affected by insects.
The following significant changes are in the pipeline:
1. The market linkage between onion & primary cooperative becomes strong and sustainable.
2. The union will launch a new department for new business seed multiplication and crop production.
3. The quality of the agricultural product will improve.
4. The farmers can determine the price of the agricultural product.
5. Good governance and management will be formed.
6. The skill and knowledge gap between the union and primary cooperative employees will be closed.
7. The union will participate in the international market and get hard currency.