Fortune News | Dec 26,2020
Ethiopia's spice production plagued by low quality and limited volume has undermined possible earnings prompting experts at the Ethiopian Tea & Coffee Authority to prepare regulatory interventions to control the informal supply and market chain.
The directive is hoped to improve production and quality of exports while meeting domestic demands by outlining the responsibilities of producers, processors, wholesalers and exporters.
According to Shafi Umer, deputy general director at Authority, the country has a great advantage of spice due to its favourable ecology with the potential to produce high-quality spices.
The total area of spices currently stands at 441,000hct with production nearing 791,000tn, doubling from five years ago. According to Shafi, although the demand for the international market is increasing by five per cent every year, its contribution to the national economy is relatively low due to the absence of a legal framework.
"Expanded investment is needed to reach profitable margin with spice," he said.
The directive signed off by Girma Amenite (PhD), Minister of Agriculture, entails setting a minimum threshold for exporters following the 10.48 million dollars in export earnings from 63,230qtl of spices that showed a five folds decline from six years ago.
Even though Ethiopia has the potential for 100 types of different spices and herbs only half are cultivated and 16 types are brought out to the international market. According to Shafi, introducing new products internationally is an important step in boosting spice export.
In the last few months, the Authority has profiled several regional states with varying landscapes to yield varieties of spices with better quality and production. A little more than 60pc of these commodities are shipped to international markets with Saudi Arabia, the US, UAE and Indonesia taking the major share.
Black cumin takes the lead accounting for 57pc of the total export, followed by cardamom with 13pc and red pepper with six per cent of the total export volume. International market prices for black cumin go for 2.4 dollars a kilo, while the commodity can fetch as much as 240 Br in local markets.
The lack of proper pre and post-harvest handling practices has remained a constraint for the spice industry.
Addisu Ferede, president of the Spice Herbs & Aromatics Growers & Processors Association said intermediaries adulterating spices exacerbated by poor farming practices have been major hurdles faced in the supply chain.
Addisu said that the lack of finance is driving exporters away, leaving the Association with nearly 64 active members.
"Half of them opt out of the sector," he said.
Exporters cite poor quality of spices and weak market linkage as challenges.
Incorporated with 200,000 Br initial capital, Majet Agro-processing Company has been exporting coriander, rosemary and red pepper for the past five years.
Deputy Managing Director Zufan Alebachew said they source export commodities from Merkato at a higher price for a lack of better linkage. This year, they shipped containers of processed spices worth 900,000 dollars, mainly to Canada and the US markets.
Shortage of demand and poor quality supply with doubling prices have been pressing factors for Zufan.
"It is making our profit margin shrink by the day," he said.
Productivity among nearly 1.78 million farmers mostly from Amhara, Oromia and the Southern regional states remains low with weak and substandard pre and post-harvest practices in the absence of regulation.
More than 50pc red pepper, followed by black and white cumin, is produced in Amhara Regional State. This year, farmers in the region were able to harvest over 1.44 million quintals of spices, where red pepper accounts for three-quarters of the total 89,792hct land.
Tesfaye Tsegaye, a horticulture expert at the region's Agriculture Bureau, said that pesky pests have subjected farmers to poor yield. Meanwhile, Tesfaye said the large production costs lead them to resort to unconventional methods such as drenching commodities to add weight.
The shortage of fertilisers and high transaction costs have been discouraging smallholder farmers such as Mulu Dereje.
The 50-year-old farmer is a breadwinner for a family of seven who lives in Takusa Wereda, Southern Gondar Zone in the Amhara Regional State. He cultivates red pepper on 2.5hct of land and produces nearly 40qtl for a hectare while cultivating black and white cumin on the 1.5hct of land.
Last Meher season, he harvested and sold 87.5qtl of red pepper at 250 Br for a kilo. Mulu believes the lack of technical support is subjecting him to high production costs with little to no profit.
“We sell our commodities at barely any profit,” he told Fortune.
Experts argue that the low attention given to high-valued spices is indebting the country billions of dollars.
Abebe Dagnaw, an agricultural economy lecturer and researcher at Gonder and Haromaya universities observes less value-added exports coupled with weak market chains plagued the production of spices.
He suggests identifying varieties with huge demand and adding value will garner more profit than expanding varieties. He mentioned that working on increasing the production of highly demanded spices such as black cumin which so far yields only 12qtl a hectare will garner more profit and increase the share of spices to the national economy.
"We have to be selective," he said.
PUBLISHED ON
Aug 05,2023 [ VOL
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