Establishing financially sustainable local seed supply systems in Ethiopia

Retta Worku (rworku@snv.org), senior advisor at SNV, Addis Ababa, Ethiopia
Gerrit Holtland, project manager, SNV, Addis Ababa, Ethiopia

Background

The potato is the largest arable crop cultivated in Ethiopia covering 181,000 ha of land annually. Only 1.3% of the total seed potato is sold/transacted as certified seed fulfilling the Ethiopia Agricultural Authority’s standard. With the seed rate of 2 tons/ha per ha, 362,000 tonnes of certified seeds would be needed to meet demand.

The low national yield is due to several production problems besides lacking quality seed. Potato cultivation dominates in the highlands where there is a lack of irrigation watering schemes and farm size is small, usually less than 2 hectares per family. The unavailability of certified seed, suboptimal agronomic practices, along with a heavy late blight pressure summarize the major constraints limiting tuber yields in Ethiopia.

Public and private partners involved in addressing the sustainable production of seed in quantity with quality

SNV Netherlands Development Organization is an international NGO working in more than 35 countries in Africa, Asia and Latin America. It has worked in Ethiopia since 1974. Horti-LIFE is an SNV project funded by the Dutch Embassy that focuses on improving the access of smallholders to high-quality inputs and to knowledge and skills. At the core of the program are Farmers’ Field Schools (FFSs) in which smallholders learn how to make optimal use of improved seeds and other inputs. This is complemented by strengthening input suppliers, seed systems, nurseries and banks. One specific objective of SNV is to improve the seed potato supply chain. Because of the intensity of the problem, SNV brought different partners on board to improve the seed potato shortage in Ethiopia. Those partners include:

• Ministry of Agriculture of Ethiopia (MoA) is our main national partner together with the Ethiopia Agricultural Authority. In general, the project is implemented with the Development Agent (DA) hired by the MoA found in villages where the project is operating.
• Irish Potato Research and Development Association (APReDA) is an umbrella organization under which all the activities related to potatoes are conducted. It influences the policymakers and the members to create an enabling environment for the potato sector.
• Accredited seed potato multipliers were selected and trained to handle the minitubers and grow them out two times to get a significant quantity of virus-free seed for commercial growers.
• Zonal branches of the seed inspectorate are responsible for licensing seed producers and inspecting and certifying seeds.

Steps taken

The first step was to gather the stakeholders and prioritize the issues to be addressed. The early generation seed (EGS) multiplication took priority and three tissue culture companies were asked to take on the role of producing the mini tubers: Dessie Tissue Culture Center, Bahardar Plant Tissue Culture PLC and Tigray Biotechnology Center PLC. They were engaged to multiply half a million mini tubers annually. SNV paid 50% to the tissue culture providers, who sold to accredited seed multipliers at a 50% subsidy. Both private growers and farmer cooperatives could apply for this subsidy and multiplied the seed further in fields (Picture 2).

Unfortunately, the price structure in the seed system is distorted by NGOs and projects who offer EGS for free or at highly subsidized prices. This means that the price of the G1 seeds is too low to make adequate profits (as the price of mini-tubers, G0, is very high). However, when the same multipliers use their own G1 to produce G2, the profit is very good. The high yields and good prices of the G2 generate a good return on investment for both growing seasons.

A related problem is the repayment system that cooperatives and projects use when they provide seed potatoes as credit in kind. Farmers who get 100 kgs of seed potatoes of Generation X pay 125 kgs in return of Generation X+1. This is not enough to cover all costs and weight losses of the coop. The coop is not able to buy a new batch of generation X. We advised the cooperatives to use a ratio of 1:2.5. The cooperatives provide G1 seed to their members on the condition that they repay 250 kg per 100 kg of seed. With this model, the cooperatives can continually buy mini tubers and distribute them to their members without sacrificing the cooperative cash flow.

Over time the project developed the commercial market for mini tubers by linking the tissue culture companies to well-equipped seed multipliers. We trained seed multipliers on production technology and in constructing DLS. In five cases commercial farmers and cooperatives were provided with a screenhouse so that they can produce the mini tubers themselves from plantlets that they buy from the tissue culture companies. This reduces the costs of the mini tubers considerably, which will lead to a better price structure in the seed potato chain. At the same time, we equip the tissue culture companies and the seed inspection system.

To increase the supply and ease access to mini tubers, we have built screen houses at multipliers’ sites in different parts of the country where seed multipliers are confined. A single-screen house has the capacity to produce more than 16,000 mini tubers per cycle which could cover 0.3 hectares for further multiplication (Picture 3).

Results

In total, 510,000 mini tubers were produced and sold. These were collected from two tissue culture companies and were produced in three cycles. The first cycle is already in field multiplication for the 2nd field generation. There are four private seed multipliers and 16 farmer cooperatives fully engaged with our project, and this will benefit the 16,000 members of the cooperatives and other potato farmers who suffered from severe shortages of certified seed for a long time. In the meantime, eight plant health regulatory offices were also supported with pest identification and provided with Elisa kits for potato virus testing.

Lessons learned

Seed potatoes provided at no cost or at subsidized prices to growers by the government or NGOs distort the potato value chain. It is not sustainable. The SNV, along with its partners, want to create a system of seed potato production that is profitable for all the players in the seed system. Presently all G0 minitubers greater than 5 grams are being sold at 0.127 USD/tuber. All G1 seed is sold at 0.727 USD/kilo.

The second lesson is that there must be a continuous, sufficient supply of early-generation seeds to feed the field-grown seed system.

The third lesson is the business model used by coops and projects when they give seeds as credit in kind; by leaving too much of the profit with the farmers it prevents them from investing in the next round. Multipliers buying mini tubers for commercial prices need to be able to sell the next-generation seeds for a price that allows them to save enough money to purchase the next batch of mini tubers on a commercial base. The prices used for the G0 and G1 in our business model offers a sustainable and profitable business to all those involved in early generation seed potato production.