Farmers' unions across the country have inked a deal with a private feed processing company as the cost of nourishing livestock remains untenably high.

MSA Trading Plc signed agreements with no less than 20 unions from five regional states last week, with officials from the Ministry of Agriculture facilitating the deal. Ranchers and pastoralists have been under pressure from rising animal feed prices, which have nearly tripled to around 3,000 Br a quintal over the past year.

"We hope the agreement will bring relief to farmers," said Araya Abraham, director of feed development.

The rising costs for feed have been a worry for federal authorities as the livestock sector contributes 16pc to the gross domestic product (GDP). There are an estimated 59 million heads of cattle; sheep and goat populations count at 7.5 million and 13.2 million, respectively. The latest survey from the Ethiopian Statistics Service put the country's chicken population at around 59.5 million.

Experts blame compounded events over the last two years for such exorbitant prices. The Covid-19 pandemic, desert locust invasions, economic stagnation, political instability, runaway inflation, and civil war have contributed to the disruption of the feed market in the past two years, says Wessinew Adugna (PhD), who studied livestock productivity at the Addis Abeba University before embarking on a two-decade career in the field working for an international organisation.

"Developing processing plants where raw materials are easily accessed is another option," he told Fortune.

He believes attracting private investors to feed production is a sustainable response to deal with supply gaps.

Officials from regional agricultural bureaus and the Ethiopian Cooperative Commission (formerly the Federal Cooperative Agency) pushed for the sales contracts signed between the company's executives and the unions' leaders last week. The deals are set to run for the coming three years.

"The agreement is vital considering the long supply chain," said Ayalsew Werkineh, head of communications at the Cooperative Commission. "It required a huge amount of budgeting."

Incorporated in 2006 with a registered capital of 1.7 billion Br, MSA Trading processes over 25 types of animal feed from corn and soybean for fish, poultry, and camel consumption. Mulualem Alene, a founder of MSA Oilseeds and Tulip Hotel, is a significant shareholder.