Afdb Concept Notes - Ata-Eiar Final 13aug21 Subm 16aug21

Ethiopian Agricultural Transformation Agency & Ethiopian Institute for Agricultural Research
Project Concept Notes

Proposal for the African Development Bank
August 2021
Table of Contents
Executive Summary............................................................................................................... 1
A. ATA Project Concept Notes ............................................................................................ 3
1. Mobile Wallets (E-Wallet System) for Ethiopian Smallholder Farmers (SHFs) .................. 3
2. Guarantee scheme arrangement to access input and output finance for AgriHub focused
MSMEs across different ATA projects .................................................................................. 9
3. Enhancing Agro-processing Investment in Integrated Agro-Industry Parks .................... 13
4. Feed and red meat development integrated with lowland wheat production in pastoral
and agro-pastoral areas of Ethiopia................................................................................... 17
5. Strengthening Remote Sensing and Crop Modelling (RSCM) Technologies in Agricultural
Commercialization Cluster (ACC) Woredas ........................................................................ 22
B. EIAR Project Concept Notes ......................................................................................... 28
1. Plant Tissue Culture Development in Ethiopian Institute of Agricultural Research ......... 28
2. Ethiopia Wheat National Flagship (WhNF).................................................................... 30
i
Executive Summary
The present document provides an overview and summary of five Ethiopian Agricultural
Transformation Agency’s (ATA) and two Ethiopian Institute of Agricultural Research’s (EIAR) Project
Concept Notes, which were developed following initial meetings with the AfDB teams, at the end of
July in Addis Abeba. These seven projects have been selected as they represent potential areas of
common interest between ATA, EIAR and AfDB, based on the exploratory meetings held.
The Ethiopian Agricultural Transformation Agency was established by the Government of Ethiopia in
2010 with the primary aim of catalyzing the transformation of the agriculture sector. The ATA’s vision
is for a transformed Agriculture sector: a market-oriented agriculture sector that uses natural
resources sustainably, and generates improved production and productivity, and higher incomes for
farmers and pastoralists. This vision is supported by our mission of catalyzing sustainable
development of agricultural value chains and markets, through promoting effective practices and
approaches to address systemic constraints and coordinating execution and integration of high-impact
interventions on the ground. To achieve that goal, ATA works closely with government partners, local
and international private sector firms, and development partners, to address systemic challenges in
agriculture.
In its 10-year (2020-2030) strategy, ATA has identified 4 Sectorial Objectives and key focus areas: (1)
Market-oriented Crop Production and Productivity; (2) Market-oriented Livestock & Fisheries
Production and Productivity; (3) Sustainable Natural Resource Development and Utilization and (4)
Mainstreamed Crosscutting Initiatives (gender, climate, nutrition, and jobs). Furthermore, the ATA’s
key focus areas will contribute strongly to the pillars of Agriculture Sector Reform in the Homegrown
Economic Reform Agenda of Ethiopia.
The selected projects in this document are strongly aligned with ATA’s key focus areas and they
address systemic bottlenecks in the Agriculture Sector in Ethiopia, such as access to finance (#1 - E-
Wallet System and #2 - Guarantee scheme for MSMEs in input and output finance), value addition
and job creation through agro-processing (#3 - Enhancing Agro-processing Investment in Integrated
Agro-Industry Parks), improvement of pastoralist livelihoods (#4 – Feed and red meat development
integrated with lowland wheat production) or the promotion of climate-resilient agriculture (#5 -
Remote Sensing and Crop Modelling technologies). Furthermore, all the projects have been developed
having in mind the need to create an enabling environment for the involvement of the private sector
as well as integrating cross-cutting initiatives in the fields of climate, gender, and youth.
The Ethiopian Institute of Agricultural Research (EIAR) was established in 1966 as as the first
nationally coordinated agricultural research system in Ethiopia. The institute underwent significant
reform in the early 1990s following the declaration of a decentralized political system of Government
in the country and the institute took its present shape in 1997 with the establishment of the Ethiopian
Agricultural Research Organization (EARO), which later was renamed as the Ethiopian Institute of
Agricultural Research (EIAR) in October 2005. The EIAR has 4 objectives: (1) to generate, develop and
adapt agricultural technologies that focus on the needs of the overall agricultural development and
its beneficiaries; (2) to coordinate the research activities of Ethiopian Agricultural Research System;
(3) build up research capacity and establish a system that will make agricultural research efficient,
effective and based on development needs; and (4) popularize agricultural research results. In
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alignment with these objectives, EIAR’s selected projects address the demand for improved and more
efficient seed development (#1 Plant Tissue Culture Development in EIAR) and support the
Government of Ethiopia’s initiative to achieve wheat self-sufficiency (#2 Ethiopia Wheat National
Flagship (WhNF).
The five ATA proposed projects require a total budget of around USD 26 Million, based on our
experience from past project implementation efforts. The major components of the cost would be
system development, technology adoption (namely feed and data tracking technologies), awareness
creation, studies and implementation support.
The estimated total government and private costs of the Ethiopia Wheat National Flagship project is
USD 1,436.2 million, of which the Government and Development Partners are expected to contribute
a total of USD 133.6 million during the five years of the project, with the GoE taking the lead on the
strategic and facilitative investments, mainly for infrastructural development and the creation of an
enabling environment for the private sector to invest.
Budget Summary:
No. Output Budget (USD)

Mobile Wallets (E-Wallet System) for Ethiopian Smallholder Farmers
1
(SHFs) 4,186,377
Guarantee scheme arrangement to access input and output finance for
2
AgriHub focused MSMEs across different ATA projects 574,113
Enhancing Agro-processing Investment in Integrated Agro-Industry
3
Parks 529,007
Feed and red meat development integrated with lowland wheat
4
production in pastoral and agro-pastoral areas of Ethiopia 15,256,000
Strengthening Remote Sensing and Crop Modelling (RSCM)
5
Technologies in Agricultural Commercialization Cluster (ACC) Woredas 5,416,283
Total Budget for the 5 ATA proposed projects 25,961,780
Budget for the Ethiopia Wheat National Flagship (WhNF) – GoE component 133,600,000
1. Budgets prepared in ETB and converted to USD at the CBE midrate of 10 th of August 2021, i.e., 44,669 ETB/USD
2. The initial budget estimates are based upon experience from past project implementation.
3. The EIAR project “Plant Tissue Culture Development” does not have a defined budget at this stage
We look forward to the opportunity to continue the current engagement with AfDB, as key partners
in the process of transforming Ethiopia’s Agriculture sector.
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A. ATA Project Concept Notes
1. Mobile Wallets (E-Wallet System) for Ethiopian Smallholder Farmers (SHFs)
Context
Agriculture comprises a significant part of Ethiopia’s economy, representing over 32% of the nation’s
GDP, engaging 70% of the total labour force, and contributing over 80% of total exports. In Ethiopia,
where approximately 79% of the total population lives in rural areas, livelihoods largely depend on
agriculture and a third of rural households cannot produce sufficient food to meet their subsistence
needs. This is partly driven by small landholdings size, averaging at half a hectare or less per capita,
and partly due to limited availability of resources such as facilities and equipment needed to
modernize the agriculture sector.
Ethiopian smallholder farmers are a highly heterogeneous group, differing in their resource base,
choice of crops and livestock, linkage to markets, income, and other socio-economic factors, hence
demanding the use of different approaches and technological options. At present, one of the most
significant challenges faced by the smallholder farmers in rural areas is the lack of access to the
finances needed to efficiently utilize their available resources and maximize their production,
productivity, and income.
To increase crop yields and promote food security at the household level, and enhance overall rural
socio-economic development, the Government of Ethiopia is providing subsidization blended with
credit for agricultural inputs for smallholder farmers nationwide. Additionally, for those farmers living
in vulnerable rural areas, the Government is also providing social protection and humanitarian
payments to smallholder farmers through the Productive Safety Net Program (PSNP).
Introducing mobile wallets to smallholder farmers would help improve service delivery and enhance
financial services to farmers. The approach will subsidization blended with credit for agricultural inputs
through electronic wallet enabling improvements in production, productivity, and income required to
transform subsistence modes of production to commercialized or market-oriented systems. Mobile
wallets will also help establish efficient and transparent financial transaction systems by simplifying
the administration of the subsidy as well as tracking and monitoring of input and the financial flows
as compared to paper-based voucher systems. Similarly, the approach helps to migrate the social
protection and humanitarian payments (emergency aid and PSNP payments) to digital platforms
leading to direct benefits of smallholder farmers by laying a strong foundation for financial inclusion
and improving the effectiveness, transparency, and accountable management of the system.
Indirectly, it also contributes to the broaden financial inclusion and enhance security in financial
systems.
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Goals and Objectives
Goals:
• The main goal of this project is to increase production and transform smallholder farmers from
subsistence to food self-sufficiency through the provision of subsidization blended with credit
for agricultural inputs, social protection, and humanitarian assistance via mobile wallet.
Objectives:
• Design and implement a mobile wallet system for Ethiopian smallholder farmers.
• Increase the usage of agricultural inputs for increased production and productivity of
smallholder farmers;
• Increase use of subsidization blended with credit for agricultural inputs by farmers through an
electronic wallet;
• Digitalize social protection and humanitarian payments (emergency aid and PSNP payments)
for smallholder farmers;
• Contribute to the efficiency and coordination, transparency, accountability, and security of
national financial systems in the country.
Implementation Approach
ATA will be the lead organization for this project. Development of the Mobile wallet system will be a
complex undertaking performed by multiple partners and thus requires an effective alignment and
coordination among different owners for successful execution.
Based on the ATA’s 10-year strategy, digital agriculture is one of the top priority agendas for
agricultural transformation. Thus, this project, with the following activities, is considered as one of the
important priorities in the upcoming productions season.
• Facilitation of the design, planning and launching of the project through engaging all relevant
partners and their institutions;
• Building the implementation capacity of relevant institutions and stakeholders engaged in the
implementation of a Mobile wallet (E-wallet) system to properly discharge their roles and
responsibilities;
• Overseeing project implementations and ensuring the project is smoothly implemented as
designed and ensuring the official handover of the project lessons when the project lifetime
is completed;
• Ensuring at least 30 % targeted groups are female farmers;
• Integrating the approach with climate agriculture development through the 8028 Farmer Free
Hotline;
• Engaging rural youth through building their capacity on mobile wallet service provisions.
Estimated Duration
• The project is expected to be implemented for four years (2022-2025).
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Project Outputs
1. Increase use of agricultural inputs by SHFs through a mobile wallet payment system
Agricultural inputs (seeds, breeds, fertilizer, agrochemicals, animal feeds, vet medicines etc.) are
critical resources to boosting the production and productivity of smallholder farmers. However, due
to a lack of financial options suitable to purchase inputs, more than 85% of farmers still use poor
yielding traditional crop varieties that are susceptible to various diseases and pests. Similar limitations
apply to the use of chemical fertilizers and veterinary medicines.
The introduction of the mobile wallet approach will address these problems by improving financial
accessibility and provisions of subsidies blended with credit for agricultural inputs for the targeted
farmers in their closet residents. The federal government and state governments contribute a
percentage of the input costs, resulting in a subsidy provided directly to smallholder farmers. Similarly,
financial institutions can also provide the needed credit facilities and technical support by overseeing
the implementation of the technology platforms in rural settings.
In this approach, both the state and local governments will be responsible for registering the targeted
farmers and improving digital literacy through regular extension services. Important data will be
gathered, processed, and well documented in a national database system. Smallholder farmers
participating in the pilot will receive a unique ID number for easy referencing and communication, and
periodic messages from the system confirming their registration and notifying them when and where
to redeem their subsidy blended credit allocations. Registered farmers with phones will receive short
message service (SMS) notifications and proceed to the redemption centre for collection. Registered
farmers without phones would observe or hear that it is time to redeem input subsidies when the
other farmers in their communities begin to receive SMSs. At the redemption centre, farmers will pay
a percentage of the input cost and collect the allocation along with credit available. If the transaction
is successful, all the transacting parties will receive confirmation messages authorizing input
redemption. Basically, the scheme1 will deliver subsidies blended with credit for agricultural inputs to
farmers through electronic wallets, in which farmers use unique codes delivered to their phones to
redeem their input allocation from accredited input suppliers.
At the completion of this project, farmers, the Federal and Regional governments, input suppliers,
rural financial institutions, and other parties (fintech operators) will benefit from this scheme.
2. Increase use of mobile wallets by rural households for social protection and humanitarian
payments
Globally, aid and humanitarian payments are migrating to digital platforms. In Ethiopia, prioritizing
the migration of social protection and humanitarian payments to digital platforms has become one of
the main action items under the national payment strategy of the country (National Digital Payment
Strategy). Part of cash assistance is already migrating to digital platforms in the country. In particular,
the Ministry of Agriculture (MoA) provides PSNP payments, in partnership with donors, microfinance
institutions, and non-financial institutions through mobile money.
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The system will directly benefit all stakeholders (service seekers, service providers and service
facilitators) by harnessing cooperation and improving the efficiency and effectiveness of agricultural
input marketing and distribution by making the system more reliable and transparent, with clear roles,
responsibilities, and accountabilities among the stakeholders. Equally, the system will indirectly
contribute to the broader financial inclusion program as using digital payments has the potential to
connect financially excluded beneficiaries to the financial sector, serving as the first entry point into
digital transactions. Furthermore, digital payments would enable the Government to respond to
farmers’ needs and improve their long-term resilience as part of the COVID-19 response strategy and
any other unexpected crises. This approach could also apply to non-donor-funded social aid programs
delivered by the government and non-government intuitions.
Contributions to Cross-Cutting Initiatives

Climate:
• Farmers are given the electronic amount after the relevant parties/experts approve the
amount of recommended agricultural inputs needed for the farmer’s land, based on agro-
ecological and weather information;
• In some areas, the subsidized-blended credit will be implemented in a way that prioritizes
farmers that were affected by unfortunate weather conditions and diseases;
• The mobile wallet system enhances easy input access and increases productivity that reduces
the burden on the natural environment and further degradation/deforestation for agricultural
land expansion;
• All the transactions will be conducted on an electronic platform that will have fewer
environmental effects.
Gender:
• The project is expected to support rural women farmers through prioritization of female-
headed households;
• A minimum of 30% of beneficiaries expected to be women.
Budget Estimate
Increase use of agricultural inputs by SHFs through the mobile wallet
1
payment system 2,574,510
Increase use of mobile wallet by rural households for social protection
2
and humanitarian payments 1,611,867
Total Budget 4,186,377
2. The initial budget estimate is based upon experience from past payment systems implementation. The major components of the cost are system development,
awareness creation, and implementation support
3. A more detailed budget breakdown can be provided upon request
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High-Level Assumptions and Constraints
Hypotheses underlying the project theory of change:
• A key constraint on input use by farmers is the lack of capital to buy the required amounts of
inputs;
• Awareness-raising and training activities can change the knowledge, attitudes, and behaviours
of stakeholders in the current system;
• Provision of input subsidization blended with credit and social and humanitarian payments
through mobile wallet system is more efficient and accountable than the provision of these
payment services through the hard cash system;
• Incentives built into the mobile wallet system will be strong enough to motivate and reinforce
positive behaviour, such as:
o Farmers investing their time to use mobile wallets to access subsidized input and
credit and receive social service and humanitarian payments;
o Assigned stakeholders will fulfil their tasks as the agreed roles and responsibilities;
o Assigned relevant stakeholders will get a commission/fee for providing the services.
Assumptions:
• Value-cost ratios for different crops in the regions is high enough to make agricultural inputs
economically profitable for farmers;
• Farmers with access to subsidized blended credit have a higher probability of adopting
agricultural inputs than those farmers who do not;
• No change in law or regulation will directly impact the system negatively;
• Parties who sign the MoU fulfil the responsibilities as outlined therein (e.g., sufficiently train
farmers so that knowledge, attitudes, and behaviours are changed);
• No force majeure or catastrophic risk affecting operations of the mobile wallet system, input
distribution, or planting, growth, or harvest of the different crops.
Implementation Constraints:
• Lack of capacity of implementing partners or stakeholders;
• Limited availability of necessary facilities and infrastructures, especially telecom and
electricity;
• Poor digital literacy rates.
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Stakeholders
Project Title: Mobile wallet (E-wallet system)
Last Updated On: 06/08/2021
Degree of
Stakeholder (Organization) Requirement
influence
Ministry of Agriculture High
Ministry of Finance High
Regional Agricultural Bureaus High • Increase use of agricultural inputs by SHFs through
Regional Cooperative mobile wallet payment system:
High
Promotion Agencies • Increase use of mobile wallets by rural households
Regional Microfinance for social protection and humanitarian payments
High
Institutions
Regional Finance Bureaus High
Donor High Grant Source
ATA Very High Lead Implementer
Technology High
Develop and scale up mobile wallet system
Developer/Operator
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2. Guarantee scheme arrangement to access input and output finance for AgriHub
focused MSMEs across different ATA projects
Context
Along the agricultural value chain, agriculture-oriented enterprises play critical roles in distributing
agri-inputs, production, processing, marketing, and developing infrastructures. However, these
enterprises are predominantly micro, small, and medium-sized businesses, which remain largely
underdeveloped due to several barriers, like lack of entrepreneurial innovation, business skill, access
to relevant and adequate finance, business networking, market linkages, and efficient supply chains.
Thus, there is a need for targeted support to these agricultural enterprises, as they are major catalysts
to improve production, food security, and rural incomes and can serve as building blocks to form larger
agricultural enterprises spurring Ethiopia’s future economic growth.
AgriHub is designed to be a platform that provides various business development services for MSMEs
across different ATA projects. AgriHub intends to improve, scale-up, and sustain the growth and
operational capacity of the MSMEs, by providing customized business development services and
facilitating access to finance depending on the potential of the MSMEs. Currently, AgriHub is providing
the MSMEs with business model design and optimization support, business skill development training,
business advisory services, accounting mentorship and coaching, group networking and experience
sharing opportunities, business tools and software, and access to finance to help them grow and scale
up their businesses.
The need to incorporate access to finance within the scope of AgriHub support was necessitated by
the challenge faced by MSMEs under AgriHub in accessing loans for working capital to run existing
businesses and expansions. Although AgriHub’s access to finance service is primarily targeting the
MSMEs across different ATA projects, it is also expected to have a wider impact on the agricultural
finance sector in Ethiopia by providing support to selected financial institutions on the development
of adapted strategies and financial services for agricultural SMEs in the country.

Goals:
• Enable MSMEs to access finance/loans from financial institutions by resolving the problem of
collateral.
Objectives:
• Identify potential MSMEs qualifying the requirements of financial institutions to access loans
and having the capacity to properly utilize loans;
• Evaluate, select, and partner with relevant financial institutions that provide timely and
adequate loan fit to the MSMEs demand;
• Facilitate guarantee scheme arrangements partnering with AfDB to provide MSMEs with input
and output financing.
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ATA will be the lead organization for this project which will be performed in collaboration with
multiple partners. As such, it requires effective alignment and coordination among the different
stakeholders and partners to ensure effective execution of the following activities:
• Facilitation of the design, planning and launching of a guarantee scheme arrangement through
engaging all relevant partners and stakeholders;
• Identification and selection of potential partner financial institutions along with the AfDB;
• Building the business capacity of the SMEs engaged in input, production, and marketing
segments along the agricultural value chains;
• Ensuring all women-owned SMEs are benefited from the access to finance arrangement;
• Documenting the methodologies and experiences for further refinements to arrangements in
the SME financing system.
Estimated Duration
• The project is expected to be implemented for five years (2022-2026).
Project Outputs
1. Enhanced access to finance for Agri-MSMEs provided through guarantee scheme arrangement
SME-specific factors and macroeconomic factors were indicated by all MFIs and banks as significant
obstacles to the development of SME lending. While banks and MFIs believe there is high growth
potential in lending for small enterprises, the current lack of involvement is due to perceived risks.
Most financial institutions highlight the poor quality of financial statements, inability to manage risk,
lack of knowledge of business management, inadequate collateral, and the informality of SMEs as
major challenges. Inflation, tax regulations and the high vulnerability of the agriculture sector were
mentioned as macroeconomic hindrances by financial institutions.
Financial institutions in the country perceive that costs and risks are higher in the SME segment as
compared to the larger enterprises with banks having a more negative perception of risks and costs
than the MFIs. Furthermore, when asked to compare the profitability of SME loans versus large
enterprise loans, SME profitability is perceived to be considerably lower. Therefore, though the major
exporting sector is agriculture, financial records indicate that lending to the sector is lower than the
recommended average of 5% of the total loan portfolio. Hence, by systematically addressing these
specific challenges, particularly through the risk-sharing guarantee scheme modality, the project will
establish a partnership with financial institutions to access finance for the agribusinesses. With such
intervention, working capital financing, lease financing, and other innovative financing products can
be developed through partnering with financial institutions and AFDB.
2. Mature Agri-MSMEs linked with financial institutions
As a business grows and transitions from SME to large enterprise, it needs higher capacity and new
technology to cut unit costs and stay competitive. New technology can be relatively expensive to the
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business, and it is seen as a long-term investment as the costs surpass the money saved or generated
by the business over a considerable time. Additionally, in fast-moving markets, where competitors are
constantly updating their products, a business needs to spend money on developing and marketing
new products. Unfortunately, many Ethiopian agricultural SMEs are not able to access finance to scale
up their business and transit into large enterprises. Therefore, under this project, mature enterprises
will be prioritized for linkages with financial institutions.

Climate:
• Priority will be given to enterprises with operations that don’t have potentially adverse effects
on the climate or those that are highly likely to be affected by adverse climatic conditions.
Gender:
• The project will ensure that all women enterprise owners and all women staff working in all
the enterprises with various roles will be provided with business development solution
packages.
Budget Estimate
Enhanced access to finance for Agri-MSMEs provided through
1 267,240
guarantee scheme arrangement
2 Mature Agri-MSMEs linked with financial institutions 306,873
Total Budget 574,113
3. Budgets prepared in ETB and converted to USD at the CBE midrate of 10th of August 2021, i.e., 44,669 ETB/USD
2. The initial budget estimate is based upon experience from AgriHub project implementation. The major components of the cost are mainly awareness creation,
partnership formation, and access to finance implementation
3. A more detailed budget breakdown can be provided upon

• One of the key constraints for private businesses in the agricultural sector is the lack of proper
financing. Providing MSMEs with access to finance service through guarantee scheme
arrangement is the best way to resolve the collateral problem that Agri-MSMEs face in the
process of accessing loans from MFIs and banks.
o SMEs with access to finance have a better chance of sustaining their business,
adopting new technologies and growing into large scale enterprises;
o The project assumes that financial institutions will be interested in the guarantee
scheme arrangement to provide agri-MSMEs with access to finance.
• Business skill development training can change the knowledge, skill, attitudes, and behaviours
of the owners and staff of the MSMEs.
o Major reasons offered by financial institutions for their lack of willingness to finance
agri-SMEs are poor quality of financial statements, inability to manage risk, lack of
knowledge of business management and inadequate collateral;
o Business development services provided to the owners and staff of SMEs have
improved their knowledge of business, risk, and quality management.
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• Low interest of the financial institutions to partner with the MSMEs;
• Resistance to project interventions by the potential beneficiaries and other stakeholders;
• The poor financial management system of some MSMEs;
• Inflation resulting in increases in the cost of inputs and logistic services affecting the SMEs
business and purchasing power of the smallholder farmers;
• The political circumstance of the country, which might affect the implementation of the
project supports across regions;
• Lagging of partners (ATA, Financial institutions…etc.) to meet their obligations.
Stakeholders
Project Title: Guarantee scheme arrangement to access input and output finance for AgriHub focused
MSMEs across different ATA projects
Degree of
influence
• Long-term implementer post-project phase out at
ATA
• Providing a certificate of competency for the
enterprises
• Providing trade license and legal registration
Ministry of Trade High service
• Providing trade inspection and regulatory services
• Long-term implementer post-project phase out at
ATA
Regional Agricultural Bureaus High
• Providing a certificate of competency for the
enterprises
High • Form partnership with ATA and financial
institutions
Agricultural MSMEs
• Proper administration and repayment of accessed
finance
Financial institutions (MFIs & • Form partnership with ATA and AFDB
Very High
Banks) • Delivering access to financial services
• Collaborating with AgriHub to enhance
Other ATA project teams High
implementation of joint activities
• Form partnership with ATA and financial
institutions
Donor High
• Provision of a guarantee scheme
• Source of project fund
Other Stakeholders (including
Medium • Experience sharing and learning partners
WBG, IFC and AMIA)
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3. Enhancing Agro-processing Investment in Integrated Agro-Industry Parks
Context
Ethiopia has developed four Integrated Agro-Industrial Parks (IAIPs) to integrate agriculture and agro-
industry and build on the comparative advantage of the country to foster international
competitiveness in selected agro-industrial value chains. The IAIPs were designed to attract domestic
and foreign investors in agro-processing and spur agricultural development. Their main objective is to
create jobs, increase farmers’ incomes, generate export revenue, substitute imports of agro-
processed goods and contribute to economic growth and structural transformation.
Three of the IAIPs located in Yirgalem, Bure, and Bulbula have been operationalized with some
investors engaging in the processing of agricultural products. Yirgalem IAIP has attracted investments
in avocado, milk, and coffee processing, thereby creating strong market linkages for farmers.
However, investment flows in the Bure and Bulbula IAIPs have not met expectations and currently
have limited impact as market outlets for smallholder farmers. One way of attracting investment and
fostering farmers' benefit from the IAIPs is by supporting farmer cooperative unions to engage in and
establish processing factories in the IAPS. To this end, Meki-Batu and Damot Farmers’ Cooperative
Unions have shown interest in establishing a tomato processing plant in Bulbula and a maize and
soybean processing plant in Bure IAIPs respectively.
Damot Multipurpose Farmers’ Cooperatives Union is a limited company established by 6 primary

farmers’ cooperatives from the West Gojjam zone in the Amhara region. The cooperative union had
developed a business plan which focused mainly on the processing of maize. However, the regional
Investment Bureau required the cooperative union to incorporate soybean processing to intensify the
market creation impact for smallholders. The envisaged factory at full capacity operation can process
approximately 520,000 quintals per year to produce around 205,000 quintals of flour, 103,000quintals
of maize grits, 46,000 quintals of maize starch and a variety of by-products (57,000 quintals of maize
fibre and gluten, 46,000 quintals of maize husk, 48,000 quintals germ cake and 255,000 litres of crude
germ oil). The total investment capital required to establish the factory is estimated at ~313 Mn ETB
(7Mn USD).
Meki-Batu Farmers’ Cooperative Union was established by 12 multipurpose primary cooperatives

from the East Shoa zone in the Oromia region and has 8,360 members. The proposed plant processing
capacity is 104,000 quintals of tomato per year, which is significantly lower than the volume of
marketable surplus for tomatoes in East Shoa. The union has developed a pre-feasibility study on the
project with the expected investment cost is estimated at ~155 Mn ETB (3.47Mn USD).
In total, the two cooperative unions are currently planning to invest 467.8 Mn ETB (10.48MN USD) in
Bure and Bulbula agro-industrial parks. However, agro-processing investment requires the utilization
of sophisticated technologies, project management skills, and operational capacity. In line with this,
ATA has started working with the Cooperative Unions and other development partners to fill these
gaps and assist the cooperative unions to realize their investment vision.
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Goals:
• The main goal of this project is creating sustainable markets, improving employment
opportunities, and ensuring improved living conditions for SHFs.
Objectives:
• Increase investment in integrated agro-industry parks through:
o Support to Damot Cooperative Union to engage in Maize and Soyabean processing in
Bure Integrated Agro-industry Park;
o Support to Meki-Batu Cooperative Union to engage in Tomato processing in Bulbula
Integrated Agro-industry Park.
ATA will be the lead organization for this project as increasing market access for smallholders is one
of the top priority agendas in ATA’s 10-year strategy. To this end the project will:
• Provide capacity building to implementing organizations to enable proper execution of roles

and responsibilities;
• Provide oversight during project implementation to ensure the project is being smoothly
implemented as per the design;
• Ensure smooth handover of the project lessons once the project timeline ends.
Estimated Duration
• The project is expected to be implemented for three years (2022-2024).
Project Outputs
1. Increased investment in integrated agro-industrial parks
In both East Shoa and West Gojjam zone where the two cooperative unions exist, most farmers
produce maize, soybean, and tomato at a very large scale. However, farmers are forced to sell their
produce at low prices that at times are insufficient to cover production costs. Therefore, to overcome
the problem of market access both cooperative unions have plans to enter processing and value
addition.
As agro-processing investment requires utilization of sophisticated technologies, project management

skills and operational capacity, ATA has begun working collaboratively with the two cooperative
unions and other development partners to support these cooperatives by conducting feasibility
studies, hiring an agronomist/consultant, and providing oversight throughout the establishment of
the processing units.
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Climate:
• Processers will be committed to Climate Smart Agriculture value chains, where market linkage
creation will prioritize farmers within ACC who follow Climate Smart agricultural production
practices.
Gender:
• 30% of the total workers at the processing factories are expected to be women.
Youth:
• The project will result in employment opportunities that will largely go towards youth.
Budget Estimate
No. Output Activity Budget (USD)
Conduct an updated feasibility study of the project 22,387
Hire a consultant on project management 145,068
Nursery Development 44774
Increased investment in
Hire a technical expert on project implementation
1 integrated agro-industry
and operation 126,935
parks
Pre-Operational Expenses (machinery selection,
experience visit, product development and etc) 44774
Hire an agronomist for developing the value chain 145,068
Total Budget 529,007
4. Budgets prepared in ETB and converted to USD at the CBE midrate of 10th of August 2021, i.e., 44,669 ETB/USD
2. The initial budget estimate is based upon experience from ATIP project implementation. The major cost items for the project are conducting feasibility studies
and hiring experts/consultants.

The establishment of the processing factories can benefit the farmer and the country at large through:
• Creating sustainable market channels for the farmers;
• Generating foreign currency through the export of products;
• Job creation;
• Knowledge and technological transfer to similarly inclined cooperative unions.
• Difficulties in the engagement with cooperative unions as decision-making is very remote;
• Limits in the capacity of implementing partners or stakeholders;
• Knowledge gaps, within these unions, on processing and value addition technologies;
• Poor operational management skills within cooperative unions.
To mitigate these impediments the project plans to hire consultants that can provide short-term
operational support and training on developing internal capacity on processing technology and
operations management.
15
Stakeholders
Project Title: Enhancing Agro-processing Investment in Integrated Agro-Industry Parks
Degree of
influence
Damot and Meki – Batu
Farmers’ Cooperative Unions Very High • Investing in processing units
National and regional

• Approving project and providing investment
investment Very High
license
agencies/commissions
Ministry of Trade and Industry
and regional industry park
Very High • Providing space in IAIPs
development
commissions/corporations
• Providing agronomic support for actors along the
Regional Agriculture Bureaus High
value chain
Regional ATA Offices Very High • Increasing use of agricultural inputs by SHFs
Development Partners High • Providing technical and financial support
16
4. Feed and red meat development integrated with lowland wheat production in
pastoral and agro-pastoral areas of Ethiopia
Context
Ethiopia has the largest livestock population in Africa, with over 70 million cattle, 43 million sheep, 52
million goats and 8 million camels. The lowland pastoral and agro-pastoral areas, which account for
about 60% of the total land area, are rich in livestock resources that play key roles in supporting the
livelihood of pastoral and agro-pastoral communities, providing household nutrition mainly through
consumption of milk, and supporting the regional and national economy. Livestock is the mainstay
and the primary livelihood activity of the pastoral and agro-pastoral community. In these areas, cattle
and goats have the most potential while sheep, camel, dairy, poultry, apiculture, and fish can also
contribute. The Ethiopian pastoral and agro-pastoral areas are the dominant suppliers of livestock for
the export markets and an important source of high-quality red meat for domestic consumption.
However, the livestock sector in these areas, similar to other parts of the country, is undeveloped and
constrained by various systemic issues (e.g., feed, health services, market access…etc.), traditional
production systems, and value chain inefficiencies.
Lack of adequate and quality feed supply year-round is the most critical and widespread systemic
bottleneck to increasing livestock productivity. The major feed resources for livestock in Ethiopia are
crop residues, grazing forages, cultivated forages and concentrates. Availability of crop residue, which
constitutes 35% to 70% of the overall feed resource base of the nation, is increasing year after year
associated with the increase in cultivated cropland and productivity of crops. This huge feed resource
is, however, not properly utilized. The nutritional value, digestibility and intake of crop residues are
also low compared to other feeds resources. Due to improper utilization and lack of proper
conservation, there is a huge wastage of crop residues in the country.
The nutritional value, intake and digestibility and consequently efficient utilization of crop residues
can be improved by employing simple and proven technologies such as chopping, urea treatment and
effective microbial (EM) treatment. These technologies are known to increase digestibility, and intake,
with urea and EM treatments also increasing the protein content and energy availability of crop
residues, hence yielding a positive effect on livestock productivity. Additionally, proper collection of
the straw at the right time, baling and proper storage are instrumental to enhance utilization.

Goals:
• Increased income of pastoralists and agro-pastoralists through improved wheat-by products
utilization and, enhanced productivity and commercialization of high-value livestock
commodities.
Objectives:
• Develop modalities and rollout improved wheat straw utilization and commercialization
activities in irrigated lowland wheat development areas;
• Develop modalities for improved forage production (irrigated and/or rainfed) close to wheat
production areas;
17
• Establish youth-based feedlots integrated with lowland irrigated wheat development
activities;
• Create enabling environment for the involvement of the private sector for enhanced market
linkages through the establishment/strengthening of abattoirs.
ATA will be the lead institute of this project. However, stakeholders described elsewhere will have a
direct involvement for better catalysation of the project activities.
Based on the ATA’s 10-year strategy, the livestock sector is one of the pillars of the agricultural
transformation. To this end the project will:
• Facilitation of the design, planning and launching of the project through engaging all relevant
partners and their institutions;
• Building the implementation capacity of relevant institutions and stakeholders engaged in the
implementation of the project activities to properly discharge their roles and responsibilities
along the value chain;
• Overseeing project implementations and ensuring the project is smoothly implemented as
designed and ensuring the official handover of the project lessons when the project lifetime
is completed;
• Engaging unemployed youth through capacity building, improved access to inputs,
technology, and finance.
Estimated Duration
• The project is expected to be implemented for five years (2022-2026).
Project Outputs
1. Enhanced wheat straw utilization and commercialization from irrigated lowland wheat
development areas through improved technological innovations
In pastoral and agro-pastoral areas, rangelands are the main sources of feed for livestock. However,
there has been an increasing trend of reduction in the productivity of rangelands over the years due
to various factors, which demands proper interventions to positively impact the status of the
rangelands. Furthermore, feed shortage is critical during the dry season in these production systems
and is associated with livestock loss. Thus, exploring options to bridge the dry season feed shortage
gap is highly important.
Identifying, producing, and properly utilizing other potential feed resources is key for sustainable and
enhanced production of livestock in the region. To this end, the increasing trend in agro-pastoralism
is producing enormous volumes of crop residues that can serve as feed for livestock. The current
initiative by the Government of Ethiopia to produce a significant amount of wheat in pastoral areas
will apparently yield an immense amount of wheat straw. The estimated amount of wheat straw that
can be produced as a by-product will be similar to the amount of the grain or wheat yield. Properly
18
utilizing this ample resource will, therefore, fill the gap in feed supply in the region, and the surplus
could be marketed to the highlands. This feed resource can be used to fatten beef cattle and feed
dairy animals, and other livestock species.
Different technological options can be employed to properly utilize the wheat straw. This might
include the treatment of the crop residue by different means to increase palatability and nutritional
value, the use of wheat straw as a significant part of a total mixed ration (TMR) that can be used to
feed different livestock species and/or the production of wheat straw as well as TMR as marketable
commodities. Moreover, collection of the straw at the right time, and conservation through baling and
proper storage are instrumental to enhance its utilization. If properly implemented, this component
of the project will address the feed supply challenge in the area and beyond and create job
opportunities for youth in wheat straw quality improvement and conservation.
2. Increase utilization of wheat by-products through the establishment of youth-based feedlot

enterprises to drive increased production and supply of high-value livestock commodities
The Ethiopian pastoral and agro-pastoral areas are the dominant and preferred suppliers of livestock
for the export markets and an important source of red meat for domestic consumption. In a recent
study conducted by the ATA, cattle and goats were prioritized for live and meat production, both for
export and domestic market, based on the potential of the pastoral and agro-pastoral areas, consumer
preferences for meat, resilience to climate pressures, and other criteria. The same study estimated
that cattle has the potential of generating 11.3 billion ETB in pastoralist income and increasing Forex
income by 40 Mn USD in live animal exports and 320 Mn USD in meat production.
Despite the huge potential, production and productivity, as well as the amount of income generated
from the livestock sector in pastoral and agro-pastoral areas, is disproportionately low. Systemic issues
such as shortage of year-round feed supply, high young stock mortality (about 23%), poor market
linkages, climate change ...etc. limit the development of the livestock sector in these areas. Lack of
awareness on improved feed utilization and production and improved livestock husbandry practices,
such as fattening, also pose a challenge to livestock development.
Thus, establishing youth-based livestock fattening schemes/enterprises in the pastoral and agro-
pastoral areas can drive efficient utilization of the abundant wheat straw produced in the area, and
would provide an opportunity to address other systemic and non-systemic challenges as well. In
addition, the current wheat development project is expected to supply large volumes of wheat grain
to agro-processing industries such as flour mills, which would produce significant amounts of by-
products such as wheat bran that are important sources of protein (contains 14-20% crude protein)
and minerals such as calcium and phosphorus. The establishment of feedlots would also increase the
supply of good quality animals for domestic and export markets, besides creating job opportunities.
3. Modalities developed for improved forage production
This component of the project is aimed at exploring options to develop improved forage production
close to wheat production areas. If resources like land and irrigation facilities are available and
accessible for developing improved forages, this component will be considered. Detailed description
would be made based on resource assessment and refinement project scope.
19
4. Enable private sector involvement in the establishment of abators and creating market linkage
with feedlots
This component of the project is aimed at supporting the private sector in the strengthening or
establishment of abattoirs (meat processing) and thereby driving increased and quality animal supply
from the feedlots to be established by the project. By doing so, it catalyzes the efficient and timely
marketing of the fattened animals resulting in a positive impact on the effectiveness of feedlot
operations and improving offtake rate at the production level as well. A detailed description will be
developed, provided that it aligns with the scope of the main project.
Climate:
• The integration of lowland wheat and livestock development would help in nutrient recycling;
• Improved forage production includes the introduction of legumes, which enriches soil fertility.
Gender:
• Over 20% of agro/pastoralists and 50% of household members engaged in the project
interventions will be women;
• The project involves technological innovations such as balers, which eases the workload for
women.
Youth:
• Young people (female and male) will benefit from job creation opportunities as wells as be
prioritized for training and involvement in the implementation of different components of the
project.
Budget Estimate
Enhanced wheat straw utilization and commercialization from irrigated
lowland wheat development areas through improved technological 5,061,000
1 innovations
Increase utilization of wheat by-products through the establishment of
youth-based feedlot enterprises to drive increased production and 5,213,000
2 supply of high-value livestock commodities
3 Modalities developed for improved forage production 1,357,000
Enable private sector involvement in establishment of abators and
3,625,000
4 creating market linkage with feedlots
2. The initial budget estimate assumes that the projected will be implemented in 3 regions, namely Afar, Somali and SNNP for a period of 5 years
20
• A key challenge in livestock production is the supply of adequate and quality feed. Efficient
utilization of the available feed resources is constrained by lack of know-how and availability
of sufficient inputs, poor access to finance as well as lack of a coordinated marketing system.
o Awareness creation and creating access to inputs and finance can improve the
knowledge, attitudes, and behaviours of stakeholders, and lead to better utilization
of the feed resources;
o The challenge of supplying quality feed for feedlots and livestock, in general, can
partly be alleviated through the production of irrigated cultivated forages which can
be integrated with the irrigated lowland wheat development initiatives;
o The creation of market linkage to available feed resources could be achieved through
the establishment of youth-based feedlots.
• Although the private sector is a key driver for economic development, there has been limited
involvement of the private sector in livestock. Thus, supporting the private sector to involve
in would drive increased and quality animal supply from the feedlots to processing plants and
consumers at large. This would also help to catalyses the efficient and timely marketing of the
fattened animals.
• Weak commitment or lack of interest from relevant stakeholders to oversee and enable the
implementation of the project due to overlapping institutional mandates;
• Lack of capacity of implementing partners or stakeholders;
• Disruptions in timely availability of budget and other resources;
• Limited supply or availability of inputs, facilities and infrastructures.
Stakeholders
Project Title: Feed and red meat development integrated with lowland wheat production in pastoral and
agro-pastoral areas of Ethiopia
Degree of
influence
Ministry of Agriculture, • Guiding and supporting the implementation of
High
Livestock Sector interventions
Federal and Regional Research • Providing support on technology acquisition and
High
Institutions capacity development
• Providing support in the implementation of the
interventions on the ground
• Engaging/participating in the planned
Private sector Medium
interventions
Regional Job Creation Offices High • Identifying and organizing unemployed youth
Donor High • Providing project funding
21
5. Strengthening Remote Sensing and Crop Modelling (RSCM) Technologies in
Agricultural Commercialization Cluster (ACC) Woredas
Context
The official agricultural production data from Central Statistics Agency (CSA) is aggregated at a zonal
or regional level, which makes it difficult to use for decision making at the cluster and other lower
administrative levels, showing a clear data gap and the need for more spatial precision. Additionally,
climate change and its inconsistent effects require strategic innovations for timely and accurate plant
disease assessment as conventional disease control is often based on the hypothesis that pathogenic
factors are propagated uniformly over cultivated fields. Therefore, crop condition monitoring can have
a significant impact on disease control, limiting the tremendous effect to agricultural production, yield
and quality loss, and preventing consequent financial loss for farmers.
To mitigate the above indicate problems, increase crop yields, promote food security at the household
level, and enhance overall rural socio-economic development, the Government of Ethiopia has joined
other international communities by launching the Ethiopian Remote Sensing Satellite (ETRSS-1), which
is Ethiopia's first Earth observation satellite.
Although Ethiopia has been implementing agricultural data collection since the 1980s and such
datasets include important information at the district level, they are at times subjective and hence
prone to large uncertainties. In this regard, the satellite provides enhanced data on the Ethiopian land
surface characteristics useful to estimate crop yield, monitor the evolution of land use or cover
changes, inform water resources management…etc. The satellite’s products will be utilized for the
country's key economic targets, primarily the management and protection of natural resources and
improving agricultural and forestry yields. It is also expected to supplement ground observation
information and fill the information gaps in the data-scarce sub-Saharan Africa and Ethiopia in
particular. The approach will also help in developing climate smart technologies for different agro-
ecologies and farming systems. It also helps with building the capacity of frontline extension workers.
In addition to ETRSS-1, it is possible to leverage information from other satellites (whose data can be
found for free) and other technologies such as drones to support existing efforts to address problems
and take rapid corrective measures.
In general, remote sensing and crop modelling technologies are not widely used in Ethiopia due to
limited capacity and technical knowledge. The use of these technologies would enable ATA to collect
reliable information and enhance access to data via camera-equipped platforms on the ground or air.
Remote sensing uses a variety of technologies to gather data across several parameters. Below are
the major benefits of Remote Sensing and Crop Modelling technologies in agriculture:
• Crop Production Forecasting: Remote sensing is used to forecast the expected crop
production and yield over a given area and determine how much of the crop will be harvested
under specific conditions.
• Assessment of Crop Damage and Crop Status: In the event of crop damage, remote sensing
technology can be used to penetrate the farmland and determine exactly how much of a given
crop has been damaged and the status of the remaining crop on the farm.
22
• Crop Identification: Remote sensing has played an important role in crop identification
especially in cases where the crop under observation shows some mysterious characteristics.
• Crop Acreage Estimation: Remote sensing has also played a very important role in the
estimation of the farmland on which a crop has been planted. This is usually a cumbersome
procedure if it is carried out manually because of the vast sizes of the lands being estimated.
• Crop Yield Modelling and Estimation: Remote sensing also allows farmers and experts to
predict the expected crop yield from a given farm by estimating the quality of the crop and
the extent of the farmland. This is then used to determine the overall expected yield of the
crop.
• Identification of Pests and Disease Infestation: by identifying pests in farmland and providing
data on the right pest control mechanism remote sensing can help eliminate the pests and
diseases.
• Soil Moisture Estimation: Soil moisture can be difficult to measure without the help of remote
sensing technology. Remote sensing gives the soil moisture data and helps in determining the
quantity of moisture in the soil.
• Soil Mapping: Soil mapping is one of the most common yet most important uses of remote
sensing. Through soil mapping, farmers can tell which soils are ideal for which crops, and
which soil require irrigation and which ones do not.
• Monitoring of Droughts: Remote sensing technology is used to monitor weather patterns.
The technology also monitors the drought patterns of the area. The information can be used
to predict the rainfall patterns and tell the time difference between the current rainfall and
the next rainfall which helps to keep track of the drought.
• Water Resources Mapping: Remote sensing is instrumental in the mapping of water resources
that can be used for agriculture over given farmland. Through remote sensing, farmers can
tell where water resources are available for use and whether the resources are adequate.

Goals:
• The main goal of this intervention is to contribute to increased production, productivity, and
market linkage of smallholder farmers via the promotion of climate-resilient agriculture
development through better by assessing the impact, feasibility, and sustainability of RSCM
technologies in Ethiopia’s agriculture.
Objectives:
• Operationalize remote sensing and crop modelling technology for wider use;
• Set up a system to identify and predict major agricultural risks and address them before their
negative effect;
• Establish yield estimation, and market centred decision making through providing on-time and
reliable information;
• Further assess the impact, feasibility, and sustainability of scaling up RSCM applications in ATA
and Ethiopian agriculture.
23
A partnership option offers a higher capability of executing the projects with greater impact and
minimized cost. In this approach, ATA can leverage both ATA’s and external companies’ resources for
a facilitated combined effect.
• ATA will play the integrator role whereas the external companies will focus on the
implementation phases of the project;
• Although this approach has some disadvantages, such as ATA having limited control on the
deliverables, overall, its advantages, such as the higher combined capacity in human
resources, infrastructure, and experience, outweigh the disadvantages in the long term.
In addition to capturing the target woreda for specific agroecological information, conducting of soil
health and fertility mapping of the target Woredas and kebeles and developing of web portal /system,
It is important to undertake additional activities such as collecting ground level truth that requires
smart phones and continuous capacity building of the frontline extension workers are also critically
important to maximize the impact of this project.
Estimated Duration
• The project is expected to be implemented for four years (2022-2025).
Project Outputs
1. Enhanced crop stress, diseases, and insect infestation control
Infestation and disease incidence monitoring in ACC is not data-driven or proactively tracked.
However, extension is provided when outbreaks occur. Globally, the implementation of early warnings
and forecasting, in Pakistan for instance, are extraordinary examples of how to develop early warnings
and forecasting systems to provide timely information. Some of the impacts of this intervention are
the reduction of survey costs from USD $7 million to USD $300,000 and staff from 3,500 to 18. On the
contrary, its drawback is it has image quality problems causing mismatches between the reality on the
ground and the dataset.
Using Sentinel 1 & 2, ETRSS-1 or other commercially available satellite images, it is possible to capture
data with advanced technologies such as high resolution spatial, near-infrared and spectral imagery.
For triangulating the collected data, ground truthing is required along with analysis of captured data.
This includes photo interpretation & pre-processing, normalized difference vegetation index, GCI -
green chlorophyll content estimates, ...etc. High-spec processing computers and a technical team of 5
personnel will be needed to conduct the analysis.
Remote sensing data for early warning systems can be available every 5-6 days, rendering usable
information on potential affected geographical areas. Additionally, this can be integrated with the
data hub initiative to provide a more targeted extension service using 8028 to SHFs and development
agents (DAs). It is estimated that utilizing remote sensing to monitor crop health can enhance
productivity in ACC woredas by 4% and reduce administrative costs by 86%. Therefore, this
24
intervention would mainly benefit smallholder farmers improving their production and productivity
and reduce their administrative costs.
2. Enhanced market linkages due to early yield estimation
The current data collection system requires 0.92 USD per hectare if data is collected at farmer or FPC
level, and 3 – 4 months to complete. Not only does the system provide less accurate yield estimations,
but its lengthy duration also often delays planning activities for the following season. Furthermore,
pre-harvest yield estimation cannot be used for market linkage purposes as the results are not farmer
or FPC specific.
Even though there is no large-scale applications of remote sensing based crop yield estimation in
Ethiopia, experimental level applications were observed in few regions (Oromia and Tigray). In the Arsi
zone, experimental level application revealed that crop yield forecasting using remote sensing and GIS
is effective. This experience has proven that this method can be used as a modern tool for similar
analysis enabling decision-makers to identify relatively productive areas well in advance of harvest.
The implementation of remote sensing on crop classification can decrease administration costs by
78% and the time required to survey four ACC regions from 91 days to 30 days. The implementation
also results in increased accuracy of data which will be georeferenced at the farm level eliminating
survey sampling issues.
Through this approach production and productivity estimations, and yield forecasts can be done 2-3
years in advance. Additionally, it can also be integrated with Farmer Production Cluster Digitization
Platform, National Market Information System (especially the Digital Market linkage platform which
is under development) and the data hub.

Climate:
• In line with promoting sustainable agriculture, this project aims to flag risks, such as crop
disease, that could affect yield and productivity to optimize the use of existing cultivated land.
o This is done by supporting the selection of mitigation/adaptation plans to ensure
environmental sustainability by providing timely and reliable data.
• It promotes CSA practices such as
o Improving crop health and resilience;
o Implementing better soil management activities.
Gender:
• Of the smallholder farmers affected 20% are female-headed households and over 35% of the
household members are women.
25
Budget Estimate
1 Enhanced crop stress, diseases, and insect infestation control 2,911,252
2 Enhanced market linkages due to early yield estimation 2,505,031
2. The initial budget estimate is based on past project experiences with system development and data tracking

• Remote sensing and crop modelling technologies are an improved and cheaper data tracking
option compared to conventional methods and will enable better strategic planning and
decision making;
o Data-driven disease and infestation control will enable ATA to identify and resolve
issues early leading to improved farmer productivity;
o Proactively monitoring crop conditions and detecting stress using remote sensing will
lead to early warning systems and efficient data administration;
o Yield estimation can optimize limitations within data collection and market linkage.
• Lengthy partner selection and onboarding processes;
o Limited availability of a partner that can implement analysis and software
development at the same time;
• Limited buy-in from stakeholders. E.g., DAs not utilizing the new information;
• Limited supply or availability of inputs, facilities and infrastructures.
Stakeholders
Project Title: Strengthening Remote Sensing and Crop Modelling Technologies in Agricultural
Commercialization Cluster (ACC) Woredas
Degree of
influence
Ethiopian Institute of Agricultural Research
High
(EIAR)
• Enhancing crop stress, diseases, and insect
Central Statistics Agency (CSA) & Food and
High infestation control
Agriculture Organization (FAO)
• Enhancing market linkages due to early
National Disaster Risk Management
High yield estimation
Commission (NDRMC)
Bahirdar University High
Information Network Security Agency
High
(INSA)
26
Ethiopian Space Science and Technology
High
Institute (ESSTI)
Regional Agricultural Research Institutes High
Donor High Grant source
Technology developer/Operatories High Implementing and scaling up Remote Sensing
Crop Modelers / AI Companies High and Crop Modelling Technologies
27
B. EIAR Project Concept Notes
1. Plant Tissue Culture Development in Ethiopian Institute of Agricultural Research
Introduction
Recognizing the vital role of modern bioscience in the overall national socio-economic development
and rural poverty reduction, the government is supporting agricultural biotechnology capacity
building. This is both through trained manpower and modernizing physical facilities of plant tissue
culture laboratories. The Ethiopian Institute of Agricultural Research (EIAR) is coordinating regional
research institutes, universities and commercial tissue culture firms while the National Agricultural
Biotechnology Research Center (NABRC) is serving as the centre of excellence for plant tissue culture,
animal biotechnology and microbial biotechnology research. The centre, NABRC has a modest tissue
culture laboratory working with a mandate of developing tissue culture protocols that can be used to
produce and supply millions of disease-free quality planting materials of important horticultural crops
within a short period. Thus, plant tissue culture attracted the interest of the government to produce
and supply millions of disease-free and high-quality planting materials. For instance, the Oromia
regional state alone demanded eight million tissue culture derived seedlings of banana in four years.
There is also a huge demand for tissue culture produced banana plantlets in the lowlands following
the Awash basin.
NABRC has complexes of buildings including offices, laboratories, green and glasshouses. It is also
serving as a central lab for all federally coordinated satellite tissue culture labs located at Jimma,
Melkassa, Debrezeit and Wondogenet. These laboratories are moderately equipped with modern
machines and equipment to optimally run tissue culture research activities and have the potential to
multiply and supply a large number of seedlings using the already developed protocols. EIAR has a
moderate staff of researchers at PhD, MSc and BSc levels trained in the area of tissue culture and
related fields, one of the plant biotechnology research programs. However, multiplication of these
high-value crops using the tissue culture protocols are expected from the agricultural biotechnology
sector unlike other technologies in EIAR. For this large scale multiplication, high capacity, regulated
greenhouses and lath houses are required in all the centres.
The construction of new tissue culture laboratories was completed. For the efficient use of this huge
investment, these laboratories need to be furnished with research facilities including some basic
machines, equipment and items required to run research activities. Converting these laboratories into
operational research laboratory facilities will inevitably require final investment in these materials.
Current constraints in plant tissue culture research and development
Existing problems that obstruct the full performance of the current tissue culture laboratories deserve
quick attention. Lack of laboratory supplies due to ineffective purchase system and limited hard
currency, limitation in the local supply of laboratory reagents and scientific equipment, unorganized
and absence of laboratory equipment maintenance, and lack of environmentally controllable
greenhouses are among the major problems in the area. Currently, there are emerging private or
government-owned business enterprises that produce tissue culture generated plantlets of crops such
28
as banana, ginger, sugarcane, apple and pineapple using the already established protocols. Hence, the
whole responsibilities of developing protocols for micro propagating plantlets’, starting materials and
technologies are the national responsibility of EIAR. However, the current facilities in all the research
programs are with many limitations. Functionalizing these newly built laboratories would bridge the
current gap in demand for generating impactful and up-to-date technologies.
In general, significant investment is required to modernize laboratory facilities and upgrade the
standards of the laboratories to a world-class level that qualifies the quality of the research results for
worldwide acceptance and application. The funds raised through this capacity building project will be
utilized to equip the newly built tissue culture facility with modern equipment and necessary reagents
required to run research activities In addition to equipping the experimental laboratories significant
amount of the fund will be used to build green and glasshouses where tissue culture generated plants
will be acclimatized to the external environments and grown in potted soils for delivery to the ultimate
users.
Capacity building requirements

As indicated in the previous section, modern bioscience has several infrastructural, knowledge and
skill limitations which are required to be bridged to fully exploit the benefits that can be reaped from
the application of this science. The crucial area which needs further capacity building to strengthen
plant tissue culture research and development in solving the current and emerging agricultural
problems in Ethiopia is furnishing the new tissue culture laboratory with modern equipment and
improving the multiplication capacities of the research centres.
29
2. Ethiopia Wheat National Flagship (WhNF)
Executive Summary
Ethiopia produces about 0.5 million tons of wheat from 1.7 million hectares of land, annually, making
it the second largest wheat producer in terms of acreage and output in sub-Saharan Africa (SSA), after
South Africa. The crop is produced by about 5 million smallholder farmers, making it the fourth most
widely produced crop and taking up about 17% of all the arable land in Ethiopia.
In terms of wheat productivity, however, Ethiopia ranks poorly globally and in SSA; for example,
average productivity in Ethiopia has reached 2.69 tons per hectare which is lower than Egypt (6.7
tones) and South Africa (3.5 tones). The low productivity has been blamed on over-reliance on the
rain-fed system and the use of traditional production methods. Despite the increases in wheat
production and productivity in Ethiopia, the gap between production and consumption has kept
widening, leading to increasing reliance on imports to bridge the gap.
The increasing import of wheat is placing a strain on the hard-earned foreign currency, a situation
worsened by the steadily rising wheat prices. The upward trajectory of demand for wheat is attributed
to population growth, growth in agro-processing, urbanization, and improved household incomes. So
far, the government subsidizes the importation of wheat to help keep prices affordable, but this may
not be sustainable besides having adverse effects on domestic production. Thus, it may be more
important to invest in enhancing domestic wheat production. Achieving this wheat self-sufficiency and
possible reversal to exportation becomes even of greater importance, in consideration of the lessons
learned during the wake of the COVID-19 pandemic which has created difficulties in international
trade.
Developing this national wheat flagship (WhNF) will support the ambitious goal of the Government of
Ethiopia (GoE) ensure food security for a large proportion of the population; increase smallholder
farmer household income; a sustainable input supply to agro-processors; create a large number of
jobs for rural youth; position Ethiopia as wheat exporting country beyond 2023 and will save the
government to the tune of 0.75 billion USD that can be utilized for other national priorities.
The goal and objective

Goal:
The goal of WhNF is to stop wheat import by 2023 and export in the subsequent years.
Specific objectives:
(i) To enhance wheat production by using appropriate, productivity- and quality-enhancing
technologies, inputs, and services;
(ii) To increase the share of the wheat marketable surplus through access to finance for input and
output marketing.
This WhNF addresses the various paths that contribute to achieve the objective of meeting Ethiopia’s
wheat demands and produce a surplus for export. The theory of change is that Ethiopia has the
potential to achieve this objective by:
30
(i) Increasing productivity in existing rainfed wheat production areas;
(ii) Expanding wheat to irrigated production areas; and
(iii) Enhancing wheat production on problematic (acid and waterlogged) soils. Production alone
does not guarantee success, and therefore financial services and market linkages are also the
major considerations in the derived subcomponents, interventions, and key activities. To
achieve this ambitious goal, the flagship has been designed in three components, 10
subcomponents and derived activities.
Flagship Components
The Wheat Flagship is composed of the following three components: (i) Increase production and
productivity; (ii) increase marketable surplus; and (iii) program management, monitoring, &
evaluation and learning. In addition, the third component will support the mainstreaming of cross-
cutting issues (gender, environment, and climate change) throughout the above components.
WhNF will strategically support the developmental ambitions of GoE to increase wheat production
and productivity leading to self-sufficiency in THREE years. The Flagship support will be a catalytic
public sector investment to attract and crowd in the private sector. The support will not be a direct
involvement of the government in wheat production. Rather, the WhNF public sector investment aims
at creating an enabling business environment for wheat value chain actors. WhNF will focus its
interventions on THREE broad but interlinked components: (i)Increase production and productivity;
(ii)increase wheat marketable surplus; and (iii) Flagship coordination and management; Each of the
six components has several sub-components.
The following is a description of the three WhNF components:
Component One of the Flagship will address the interventions for increased wheat production and
productivity organized under the following subcomponents.
Sub-component 1.1: will include interventions that enhance the availability of new wheat
technologies and production practices. Existing improved wheat varieties will be tested for
their suitability, and new ones will be developed for irrigated areas. The supply of early
generation (breeder and pre-basic) seeds will be increased. New and promising varieties will
be promoted through pre-extension demonstrations. Wheat varieties that are currently under
production and those which will be developed for irrigated areas will be maintained according
to standard procedures. Such seed maintenance of the varieties under production is required
to purify and supply enough and high-quality nucleus seed for Early Generation Seed (EGS)
multiplications. In addition, early seed multiplication of candidate varieties for the irrigated
areas will require enough seed for post-release seed multiplication, demonstration, and
scaling-up activities. This subcomponent further generates information on the basic industrial
quality of the recently released varieties and that are under production in a meaningful
quantity. The product-making quality tests will be both for the rainfed and irrigated
production systems. Acid soil management technologies development and demonstrations
will also be addressed. The interventions are expected to lay the foundation for the
31
subsequent chains for farmers to adopt improved technologies and increase farm productivity
and economic gains, and processors have access to adequate raw material.
Subcomponent 1.2: seeks to alleviate the low utilization of certified seeds, inorganic fertilizers,
lime, and agrochemicals in wheat production. It will provide the key interventions to support
the actual wheat production at the farm level through the integrated use of appropriate
available technologies, inputs, and targeted extension services. The interventions will address
activities starting from extension services that would help farmers to use appropriate wheat
technological packages and production inputs. It also seeks to identify farmers’ capacity gaps
in wheat production know-how and skills, scale up proven technologies and innovations, and
build on the ongoing wheat cluster production system. Therefore, the main intervention here
is to strengthen the extension and advisory services in wheat agro-ecologies and build
infrastructural capacity for demonstrations and pre-scaling. It is a stepwise approach that
includes technology identification, compilation, dissemination and scaling up. The packages
include varieties, agronomic practices, and application of crop-protection agro-chemicals. The
second is strengthening the wheat cluster farming─ the Flagship will support the existing
wheat clusters and the establishment of new ones. The Broad Bed Maker (BBM) technology
will be promoted in Vertisols wheat production; areas where wheat production is an old
tradition, but production without an improved drainage system is under-productive.
Therefore, in waterlogging prone areas the BBM technology will be promoted for Vertisols
management. Implementation of the interventions is expected to increase productivity and
production of wheat, reduce post-harvest losses, improve inputs marketing, and enhance the
possibilities of access to finance for wheat value chains in Ethiopia.
Subcomponent 1.3: will provide the key interventions to support the actual wheat production
at the farm level through the integrated use of appropriate technologies, inputs, and targeted
extension services. The interventions will address activities starting from extension services
that would help farmers to use appropriate wheat technological packages and production
inputs. It also seeks to identify farmers’ capacity gaps in wheat production know-how and
skills, scale up proven technologies and innovations, and build on the ongoing wheat cluster
production system. Therefore, there are two main sub-components here. The first is to
strengthen the extension and advisory services in wheat agro-ecologies and build
infrastructural capacity for demonstration and pre-scaling. It is a stepwise approach that
includes technology identification, compilation, dissemination and scaling up. The packages
include varieties, agronomic practices, and application of crop-protection agro-chemicals. The
second is strengthening the wheat cluster farming ─ the Flagship will support the existing
wheat clusters and the establishment of new ones. Wheat production on Vertisols in Ethiopia
is an old tradition. However, Vertisols without an improved drainage system are under-
productive. Therefore, in waterlogging prone areas the Broad Bed Maker (BBM) technology
will be promoted for Vertisols management.
Sub-component 1.4: will cover the whole set of interventions related to irrigation. It starts
from the identification and allocation of land to support the private sector in the lowland areas
of Afar and Somali regions. This subcomponent also includes infrastructural development and
water management practices in irrigated wheat production systems.
32
Component Two: generates and provides detailed information on cost structure, cost-benefit analysis,
production efficiency and level of competitiveness of wheat under rain-fed and irrigation systems. The
status of wheat market integration and market efficiency will also be generated. WhNF will provide
the evidence to support the profitable expansion of wheat production in the country. Farmers will be
trained to produce the desired quality for industrial use and on the importance of contractual farming,
grades and standards, and the legal environment. The wheat agricultural cluster farms will be the main
targets of the training. WhNF will link wheat traders and millers to financial institutions and insurance
companies. There are three subcomponents; these are:
Sub-component 2.1: enhanced access to output market;
Sub-component 2.2: enhanced market infrastructure and services;
Sub-component 2.3: enabling environment for efficient marketing.
Component Three: will provide support to the effective implementation of the flagship by the
coordination unit, institutions, and individuals. The subcomponents are:
Subcomponent 3.1: address the flagship coordination and the institutional arrangements;
Subcomponent 3.2: monitoring and Evaluation & Learning;
Subcomponent 3.3: addressing the cross-cutting capacity gaps in organisational and
operational skills including for women, youth, and the private sector.
The flagship will have a coordination unit under the auspices of the Ministry of Agriculture.
Phases of Wheat Flagship Implementation
To effectively implement the wheat flagship, it is important to achieve its goal in two phases.
Therefore, it is envisaged that WhNF will be implemented over a five-year timeframe with two phases.
The first phase will be implemented in the first two years till Ethiopia stops importing wheat as a
commodity. In the second phase, there will be surplus production for export. Several activities overlap
between the two phases and are continuous in nature. Therefore the flagship implementation, as
designed in this document, focuses on both phases of implementation during the five-year period.
Budget Estimates for WhNF
The resources required go beyond the government budgetary provisions although the Government is
expected to play a major role in funding the flagship. It is also anticipated that additional funding will
be leveraged through Public-Private Partnerships (PPP) and private sector investments. The estimated
total government and private costs of WhNF is US$ 1,436.2 million, of which the Government and
Development Partners are expected to contribute a total of US$ 133.6 million during the five years of
the Flagship. In turn, the projected investment from the private sector including farmers, agro-dealers
and processors is US$ 1,302.1 million. GoE will take the lead on the strategic and facilitative
investments, mainly for infrastructural development and the creation of an enabling environment for
the private sector to invest.
33
Budget estimates of the WhNF by Government and private sector Costs by Component
Totals Including Contingencies (USD)

Year 1 Year 2 Year 3 Year 4 Year 5 Total
Component 1: Increase Production & Productivity
GoE 26,051,672 26,051,672 26,051,672 26,051,672 26,051,672 130,258,359
Private 234,465,047 234,465,047 234,465,047 234,465,047 234,465,047 1,172,325,235
Total 260,516,719 260,516,719 260,516,719 260,516,719 260,516,719 1,302,583,594
Component 2: Increase Wheat Marketable Surplus
GoE 47,660 47,660 47,660 47,660 47,660 238,300

Private 58,251 58,251 58,251 58,251 58,251 291,256
Total 105,911 105,911 105,911 105,911 105,911 529,556
Component 3: Program Management, M&E and Learning
GoE 1,846,125 210,263 125,888 125,888 125,888 2,434,050

Private 0 23,363 13,988 13,988 13,988 65,325
Total 1,846,125 233,625 139,875 139,875 139,875 2,499,375
Grand Total
(including 10% 288,715,631 286,941,881 286,838,756 286,838,756 286,838,756 1,436,173,778
contingency)
Summary of the proportional distribution of the WhNF by Government and private sector Costs by Component
% Share of WhNF % Share of WhNF Private sector Costs

Component
Government Costs
Increase production & productivity 10 90
55
Increase marketable surplus 45
Program management & Monitoring, 3

97
Evaluation and learning
91.7
9.3
All components
34
The Flagship will follow the CAADP/ Malabo mutual accountability principles. There are five major
risks anticipated during the implementation of the project. However, the overall risk of the project is
low to moderate, if the project implements the suggested mitigation measures as shown below.
Risk rating with

Risks to Risk mitigation measures
mitigation
Wavering commitment from key stakeholders. This • Institutional level commitment Moderate
entails leadership turnover from federal to kebele • Create incentive mechanisms
level
Project management risks from planning, budgeting, • The National Steering and technical Low
staffing, executing, monitoring, and reporting committee will mitigate this high-level
risk by engaging key decision-makers
(prime minister, ministers, and regional
presidents) to give additional focus on
wheat production in both lowlands and
highlands.
Delayed funding of the program. The whole program • Strong M&EL system Moderate
activities are time-bound and any delay in funding
will jeopardize the success of the program. Especially,
the irrigated wheat activities if executed late, there • Sensitize PMU
will be a yield penalty that will discourage the
growers and damage the extension system.
Linkages between research, extension, and • All stakeholders will be sensitized to own Low
development agencies are weak (+ Federal vs. the project and contribute their share
Regional) with appropriate credit/incentives.
External risks such as climate change, the occurrence • The utilization of modern technology Moderate
of locusts and birds and social unrest. would allow the project team to detect
factors such as shortage in rainfall, the
incidence of diseases and pests (early
warning system).
• Commitment from Regional governments
35

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Ethiopian Agricultural Transformation Agency & Ethiopian Institute for Agricultural Research

Project Concept Notes

No. Output Budget (USD)

• The project is expected to be implemented for four years (2022-2025).

Contributions to Cross-Cutting Initiatives

Goals and Objectives

• The project is expected to be implemented for five years (2022-2026).

2. Mature Agri-MSMEs linked with financial institutions

Contributions to Cross-Cutting Initiatives

High-Level Assumptions and Constraints

Damot Multipurpose Farmers’ Cooperatives Union is a limited company established by 6 primary

Meki-Batu Farmers’ Cooperative Union was established by 12 multipurpose primary cooperatives

• Provide capacity building to implementing organizations to enable proper execution of roles

• The project is expected to be implemented for three years (2022-2024).

As agro-processing investment requires utilization of sophisticated technologies, project management

High-Level Assumptions and Constraints

National and regional

Goals and Objectives

• The project is expected to be implemented for five years (2022-2026).

2. Increase utilization of wheat by-products through the establishment of youth-based feedlot

3. Modalities developed for improved forage production

Contributions to Cross-Cutting Initiatives

Goals and Objectives

• The project is expected to be implemented for four years (2022-2025).

2. Enhanced market linkages due to early yield estimation

Contributions to Cross-Cutting Initiatives

High-Level Assumptions and Constraints

Current constraints in plant tissue culture research and development

Capacity building requirements

The goal and objective

The following is a description of the three WhNF components:

Phases of Wheat Flagship Implementation

Budget Estimates for WhNF

Totals Including Contingencies (USD)

Component 2: Increase Wheat Marketable Surplus

GoE 47,660 47,660 47,660 47,660 47,660 238,300

Component 3: Program Management, M&E and Learning

GoE 1,846,125 210,263 125,888 125,888 125,888 2,434,050

% Share of WhNF % Share of WhNF Private sector Costs

Program management & Monitoring, 3

Risk rating with

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