Tag: flower farms in ethiopia

POLICY ADVOCACY

EHPEA’s Progress in Improving the Ethiopian Horticulture Sector

The Ethiopian Horticulture Producer Exporters Association (EHPEA) has made significant strides in improving the business climate for the horticulture sector. Key achievements include:

• Land Lease Issues Resolved: Successful negotiations have addressed pending land lease agreements for farms in Batu and Bishoftu.
• Tax-Related Challenges Addressed: EHPEA has facilitated discussions to resolve tax-related issues, including unjustified tax claims and the application of the 65/35 principle.
• Incentive Package Revised: The incentive package for the importation of capital goods has been updated to align with the current economic landscape.
• Public-Private Partnerships Strengthened: Four public-private partnership dialogue forums have been organized to address sector challenges and opportunities.
• Cluster-Based Meetings and Training: EHPEA has conducted cluster-based meetings to resolve issues like salary increments and internal disputes and provided capacity-building training to task force members.
• Studies and Assessments Conducted: EHPEA has conducted studies on tax-related challenges, input-output coefficients, export earnings retention, and cluster-specific needs.
• Advocacy and Lobbying: EHPEA has advocated for various issues, including the revision of wall and roof taxes, access to finance, and improved peace and security in farming regions.

These efforts have contributed to a more favorable business environment for horticulture farms in Ethiopia and have positioned the sector for sustainable growth.

CAPACITY BUILDING

The Ethiopian Horticulture Producer Exporters Association (EHPEA) has made significant progress in enhancing its training services to support the sector’s growth and sustainability. Key achievements include:

EHPEA Strengthens Training Services for Horticulture Sector

• Legal Framework Development: EHPEA is developing a robust legal framework for its TVET center, including Articles of Association, bylaws, and operating procedures.
• Curriculum Expansion: Four new units of competence have been developed, covering essential skills in quality standards, nursery activities, and postharvest handling.
• E-Learning Platform Development: EHPEA has developed e-learning modules on farm operations and established a comprehensive e-learning and knowledge management system.
• Trainer Certification: Four trainers have achieved Level One Certification of Competence in Basic Horticulture Crop Production.
• License Renewal: EHPEA successfully renewed its training center license for two years.
• Training Program Delivery: EHPEA has conducted various training programs on safe pesticide use, pesticide storekeeping, farm safety, environment committees, crop scouting, and FCM management.

These initiatives have equipped horticulture farms with essential skills, knowledge, and techniques, fostering a more sustainable and competitive sector.

EHPEA’s Gender and Sustainable Development Initiatives

EHPEA has successfully implemented various gender-related training programs and initiatives to promote sustainable development and create equitable workplaces within the horticulture sector.

Key accomplishments include:

• Gender Transformative Training: Conducted training for 18 participants from eight farms on integrating gender-transformative practices into farm operations.
• Gender Auditing and Budgeting: Trained 16 management teams on gender-responsive budgeting and auditing, empowering them to create equitable workplace environments.
• Workplace Sexual Harassment Prevention: Delivered training to 148 gender committee members on preventing workplace sexual harassment and GBV.
• Conflict Management and Grievance Handling: Trained 70 participants on effective conflict resolution and grievance handling mechanisms.
• Committee Awareness Creation: Conducted follow-up visits to assess the impact of committee awareness creation programs.
• Gender-Related Training for Men: Provided training to 145 male employees on challenging harmful gender norms and promoting gender equality.
• VAWG Training: Trained 130 gender committee members on violence against women and girls (VAWG).
• HR and Conflict Management Training: Trained HR managers and farm managers on relevant topics.
• Corporate Due Diligence Workshop: Organized a workshop on the German Act on Corporate Due Diligence and the EU regulation.
• Experience Sharing: Conducted experience-sharing sessions on SRHR, GE, and OSH practices.

These initiatives have contributed to creating more inclusive and equitable workplaces, promoting gender equality, and advancing sustainable development within the horticulture sector.

PROMOTION OF THE SECTOR AND MARKET LINKAGE

EHPEA Drives Horticulture Sector Growth Through Strategic Initiatives

The Ethiopian Horticulture Producers and Exporters Association (EHPEA) has been instrumental in promoting investment and exports within the Ethiopian horticulture sector. Here’s a concise overview of their achievements:

• International Representation: The Ethiopian Horticulture Producers and Exporters Association (EHPEA) has successfully promoted Ethiopian horticulture products on the international market through active participation in four trade fairs. These events provided a platform for EHPEA to connect with over 246 potential buyers, fostering business opportunities and expanding the sector’s reach.

By showcasing Ethiopia’s diverse range of horticulture products, EHPEA has strengthened the country’s reputation as a reliable and competitive supplier.

• Experience Sharing Events: EHPEA facilitated knowledge sharing through events like the “FCM experience sharing program” which empowered flower farms to combat False Codling Moth (FCM). Additionally, a media tour program raised awareness about advancements in Ethiopian horticulture.
• Promotional Materials: EHPEA published informative booklets and folders highlighting investment opportunities and sector updates. They also distributed New Year giveaways and maintained a strong social media presence to promote the sector.

These initiatives have significantly contributed to:

• Promoted Ethiopian Horticulture Brand: By showcasing Ethiopia’s potential, EHPEA promoted the country horticulture sector globally.
• Export Market Growth: Participation in international fairs and buyer connections have expanded export opportunities for member farms.
• Knowledge Sharing and Capacity Building: Educational events and media outreach have empowered stakeholders and improved farming practices.
• Sector Visibility: EHPEA’s promotional efforts have enhanced the global recognition of Ethiopian horticulture.

In conclusion, EHPEA’s commitment to promoting investment, exports, and knowledge sharing has positioned Ethiopia’s horticulture sector for sustainable growth and international success.

The Ethiopian Horticulture Producer Exporters Association (EHPEA) recently organized a study tour to Thailand for a delegation of seventeen members. The group, comprised of representatives from the Ministry of Agriculture, EHPEA, the Ethiopian Institute of Agricultural Research, and the Agricultural Transformation Institute, aimed to learn from Thailand’s successful horticulture investment sector.

During their visit, the delegation explored the legal, operational, and marketing frameworks that underpin Thailand’s horticulture industry. They studied incentive schemes, market infrastructure, and agro-logistics services, all of which are essential for a thriving horticulture value chain. Additionally, the delegation gained insights into the collaborative efforts between research centers, universities, and producers in driving innovation and improving productivity.

Key areas of focus included understanding wholesale markets, retail segments, consumer behavior, organic farming models, the seed industry, and the integration of ecotourism with horticulture. The lessons learned from these areas will inform decision-making and strategic planning as Ethiopia strives to enhance its own horticulture sector.

By studying Thailand’s experiences, Ethiopian stakeholders can identify bottlenecks and develop effective strategies to promote horticultural investments and improve market access for Ethiopian products.

Ethiopia’s agricultural sector is blossoming, with horticulture emerging as a powerful driver of economic development. This dynamic industry is creating jobs, empowering communities, and contributing significantly to foreign exchange earnings.

The horticulture industry offers a diverse range of Job opportunities for Ethiopians of all skill levels. From specialized graduates to general workers, over 200,000 jobs have been directly and indirectly created. Notably, 80% of these opportunities are filled by women, fostering greater gender inclusivity.

As demand for fresh produce, flowers, and ornamental plants soars globally, Ethiopian horticulture is not only just ensuring food security, but also catalyzing sustainable employment. Recognizing the importance of fair wages, the Ethiopian Horticulture Producer Exporters Association (EHPEA) has established a pioneering cluster-based minimum wage system in Ethiopia.

In the absence of a national minimum wage threshold, EHPEA, in collaboration with the Ministry of Labor and skill and trade unions, has implemented a system where farms within specific clusters collectively set fair and standardized minimum wages. This approach ensures equitable compensation that reflects the cost of living, local economic realities, and the nature of horticultural work.

The introduction of the cluster-based wage system has led to a significant increase in the average wage within the sector. 

EHPEA’s cluster-based wage system serves as a leading example for addressing the lack of a formal minimum wage threshold. Through an inclusive and participatory process, involving farm management and worker unions with the witness of EHPEA and The Federation of Farm, Plantation, Fishery & Agro-industry Trade Unions (NFFPFATU), the annual minimum wage is determined, considering factors like farm performance, inflation, and cluster-specific living standards.

Ethiopia’s bargaining horticulture sector offers a compelling story of growth, empowerment, and responsible practices. By prioritizing fair wages and fostering a collaborative environment, EHPEA is paving the way for a sustainable and thriving future for this vital industry.

According to Floriday, digitization is changing the way we work in the floriculture industry. This requires collaboration from both growers and buyers. Floriday spoke to Henk de Jong, commercial manager at The Orchid Growers about it. Why do they consider digitization important? How are they digitizing their processes? And what results have been achieved so far?

As of 1 January 2022, Ter Laak Orchids and Orchios have merged their sales and marketing activities into one new platform: The Orchid Growers. Every year, they sell some 11 million Phalaenopsis orchids. Henk de Jong is the commercial manager at the company and responsible for commercial policy. Digitizing trading processes is one of the spearheads in this.

Why digitize?
Henk sees the opportunities that digitization offers the company: ‘Previously, orders came to us through Florecom, email, WhatsApp and phone. By digitizing our sales processes, all orders now come in through one channel which saves us a huge amount of time. The order process is faster and the extra time we now have can be invested in customer relations or other things like data processing and optimizing presentations in Floriday, for example. Additionally, digitization provides us with more focus and peace of mind in the order process.”

Together for an efficient order process
At the start of The Orchid Growers, a project team was launched to work on digitization on a daily basis. Henk: “Our team also saw the need to digitize and was fully committed to making this way of working the standard. The project team had many conversations with customers, as it is important to know how they work and what they need to take this step. For example, we looked at what systems (ERP) they work on. You rely on each other. It is also up to us to encourage buyers as much as possible to get the most out of Floriday. We do this, by, for example, working with weekly lists, offers, contracts, and purchasing tips.”

What will digitization bring The Orchid Growers?
Henk: “In very concrete terms, we save two hours per day per employee because our order process is now digital. In our case, we save about 40 hours a week in total. This gives sales staff more time to have an alternative conversation with the customer. It also gives us more time to take a break from the hustle and bustle of the day and think about what the customer really needs. An appropriate supply on Floriday is one such point. It helps the buyer and again saves both of us time.”

Future for the sector
Floriday asks Henk what advice he has for buyers and fellow growers. Henk: “Digitisation will become increasingly crucial in the future. Not only for individual companies but also for us as an industry. My advice is to embrace digitization in your business and connect with fellow growers and buyers. Support your customers in getting ready for further digitization. When we act together as an industry, we achieve the best result by working as efficiently as possible. Of course, this sometimes requires you to step out of your comfort zone and make choices. But it pays off!

We now work fully with Floriday, are active members of Plantform, and are constantly working on developments in the industry. I believe many more things are possible, and I hope we can embrace this as an industry and that everyone starts to see and experience the added value.”

For more information:
Floriday
www.Floriday.ioPublication date: Thu 22 Aug 2024
https://www.floraldaily.com/article/9651895/the-orchid-growers-digitization-improves-order-process-and-strengthens-customer-relationships/?utm_medium=email

The recent directive from the National Bank of Ethiopia (NBE) mandating that exporters convert half their foreign exchange earnings into Birr within a month has triggered discontent within the flower industry and broader horticulture sector. The regulation, part of a sweeping overhaul of foreign exchange rules effective July 29, 2024, is seen by many in the industry as an impediment, given the logistical complexities and extended timelines involved in importing essential inputs.

Exporters are particularly distressed by the tight timeframe, which they argue is incompatible with the realities of their business operations. According to Tewodros Zewdie, president of the Ethiopian Horticulture Producers & Exporters Association (EHPEA), the 30-day limit is insufficient, especially for businesses dealing with extended import processes.

“The time is not enough,” he said.

The Association represents 126 members, all of whom are wrestling with the directive’s implications on their ability to maintain a steady flow of imports, crucial for sustaining their operations. Despite acknowledging the directive’s potential benefits, such as improved revenue optimisation and access to investment financing, Tewodros expressed hope that ongoing discussions with NBE officials would lead to a revision of the policy. He stressed the importance of these engagements, noting that they cover various export sectors, including oilseeds, pulses, coffee, and horticulture.

“We’re hopeful it will be addressed soon,” he told Fortune.

Central bank officials defend the directive, arguing that it ensures idle foreign currency earnings are surrendered to commercial banks within a month, injecting much-needed liquidity into the forex market. Abebayehu Dufera, NBE’s deputy director of foreign currency monitoring and reserve management, acknowledged the exporters’ concerns as valid but disclosed that the measure is temporary. The directive is intended to control export revenues and strengthen the interbank foreign exchange market.

“It’ll only stay in effect until there is enough inflow into the banks,” he told Fortune.

Yirga Tesfaye, an economic researcher, praised the central bank’s strategy, which cautiously liberalises foreign currency retentions for exporters while managing foreign currency risks.

“It’s a wise move,” he said.

However, Yirga warned that exporters face a consequential market shock in the new, volatile domestic market. He argued that building hedging and derivative strategies addresses risks and reduces the impact of exchange rate fluctuations on earnings.

“Business is not as usual for exporters anymore,” he told Fortune.

The central bank recently launched a “special foreign exchange auction,” attaining price discovery at a weighted average rate of 107.9 Br for a dollar. Officials are optimistic that this trend will continue, supporting import activities and enhancing foreign exchange liquidity.

Worqu Lemma, a senior banker, attributed the foreign currency crunch faced by most commercial banks to the retention limit. He believes that more dollars within the system will grant liquidity to commercial banks, contribute to price stability, and improve foreign exchange access for other importers.

“The forex revenue cannot stick in one place,” he said.

However, Worqu conceded that the time limit is unrealistic for businesses that require extended periods to complete imports. He acknowledged the liquidity issues facing commercial banks, partly due to the bonds they are required to purchase.

A business lobby, the European Chamber of Commerce in Ethiopia, also raised issues last week, pointing out drawbacks in the new directive that its leaders fear stifles business operations and investment.

The EU Chamber has commended the federal government for introducing a market-based exchange rate as part of the new macroeconomic reform. However, its leaders also called for pending issues that have been overlooked, noting that while the reform may improve transparency and predictability for businesses and increase forex availability for manufacturers, long-standing macroeconomic imbalances have caused financial struggles for exporting manufacturers. Some have been forced to sell at a loss to sustain their import businesses, while others have compensated for losses by selling imported goods at high margins.

According to Bahiru Temesgen, director general of the Chamber representing 180 businesses, delays during imports could impede timely operations. He cited challenges such as freight issues, the security crisis on the Red Sea corridor, and payment delays in international transactions.

“It’ll be burdensome for the exporters,” he said.

One exporter particularly affected by the directive is Joytech Plc, which operates a 100hct farm in Bishoftu (Debre Zeit), in Oromia Regional State. Its General Manager, Bisrat Haileselassie, disclosed that the company has suspended importing materials due to the risks involved, stating that the import process can take up to 60 days.

“It’ll be impossible to import this way,” he told Fortune.

VegCrop Plc, a Kenyan-owned flower company operating in Ethiopia for over 12 years, has encountered difficulties due to the new forex rule. According to Mehandira Patel, its general manager,  the time required for imports, from proforma invoices to the arrival of goods, can take up to two months. He criticised the absence of one-stop windows for different institutions, such as NBE and the Ministry of Agriculture, as well as the long bureaucratic processes that unnecessarily extend the timeline. The bureaucratic and logistical issues caused problems for the company, which imports fertilisers, chemicals, and packaging materials.

The problems facing Ethiopia’s horticulture industry are particularly acute this year.

Despite its promising potential, horticulture exports have seen an alarming 22pc decline, dropping to 535 million dollars, the first drop in over a decade. Flowers continue to claim a substantial share of export proceeds, accounting for 86pc of the nearly four billion dollars earned last fiscal year, while vegetables and fruits lag. The Ministry of Agriculture has introduced a 10-year strategy to promote the sector, appropriating 24.5 billion dollars in investment over the next decade. The strategy sets ambitious goals, including increasing the horticulture sector’s contribution to GDP to 12pc, from the current 4.5pc, and reducing post-harvest losses to 20pc.

PUBLISHED ON Aug 18,2024 [ VOL 25 , NO 1268]
https://addisfortune.news/horti-exporters-face-forex-squeeze-as-new-directive-sparks-outcry/

A National Agricultural Investment Forum, hosted by the Ministry of Agriculture (MoA), at Millennium Hall in Addis Ababa. The event aimed to spotlight Ethiopia’s agricultural investment potential and a linkage for business development. The event brought together government officials, investors, and industry stakeholders to explore and capitalize on Ethiopia’s vast agricultural potential.

High-level government officials outlined their respective offices’ investment facilitation and incentives to encourage private sector participation. The forum served as a platform for local investors to connect with potential partners and expand their businesses. 

Over 130 exhibitors, including representatives from urban agriculture development, livestock, horticulture, and large-scale farming, showcased their products and services.

As a strategic partner of the MoA, the Ethiopian Horticulture Producer Exporters Association (EHPEA) played a pivotal role in organizing the event and highlighting the services offered for  its member farms.

The COMESA EAC Horticulture Accelerator Ethiopia National Chapter has officially been launched today, Tuesday, August 13, 2024! This significant step marks the beginning of a journey to unlock the immense potential within Ethiopia’s horticulture sub-sector, with a special emphasis on Potatoes, Onions, and Avocados.

Industry stakeholders from Ethiopia’s Horticulture sector gathered in Addis Ababa to witness this landmark event, joined by leaders from the Ministry of Agriculture and the Alliance for Commodity Trade in Eastern and Southern Africa (ACTESA-COMESA).

We were also honored to have the support and presence of development partners from the Bill and Melinda Gates Foundation (BMGF), Foreign, Commonwealth & Development Office (FCDO), Alliance for a Green Revolution in Africa (AGRA), and the Ethiopian Horticulture Producer Exporters Association (EHPEA), all of whom have pledged their commitment to ensuring the success of this transformative program.

Together, we’re paving the way for a brighter, more prosperous future in Ethiopian horticulture!

The Ethiopian Horticulture Producer Exporters Association (EHPEA) has initiated a comprehensive training program to equip EAA inspectors with the knowledge and skills necessary to effectively manage the False Codling Moth (FCM).

FCM poses a significant threat to Ethiopia’s horticulture industry, particularly with the implementation of new EU regulations. This training adopts a systems approach to address the complex challenges associated with FCM, emphasizing the importance of collaboration and joint efforts.

The training covers in-depth information on FCM biology, identification, and management strategies. Practical field visits are an integral part of the program, providing participants with hands-on experience.

EHPEA is committed to supporting the horticulture sector in overcoming challenges like FCM and ensuring the continued growth and success of the industry.

Addressing Import Challenges; The Ethiopian Horticulture Producer Exporters Association (EHPEA) recently convened a meeting to address pressing issues facing its members. Key topics included the challenges posed by the new approval process for duty-free import of inputs and goods, as well as concerns related to the doing business challenges of the horticulrure issue.

Through robust discussions and advocacy, EHPEA secured a significant victory for its members: the reinstatement of the online duty-free approval system. This positive outcome underscores the association’s commitment to representing its members’ interests and improving the business climate.

With a membership of 126 businesses engaged in producing and exporting cut flowers, cuttings, ornamental plants, fruits, vegetables, herbs, and vegetable seeds, EHPEA is a leading force in Ethiopia’s horticulture industry. The association represents the interests of its members both domestically and internationally.

Since its inception, EHPEA has been instrumental in supporting members to adopt sustainable practices, enhance competitiveness in the global market, and uplift surrounding communities. Through advocacy, training, and capacity building, the association has contributed to the growth and development of the horticulture sector.

Ethiopia’s horticulture industry is thriving, with over 120 international and local investors operating in the country. Major export destinations include the Netherlands, Germany, the UK, Saudi Arabia, Norway, Belgium, the UAE, France, Japan, Italy, and the United States.

EHPEA is proud to collaborate with international institutions to elevate Ethiopia’s horticulture sector to new heights. By working together, we can create a sustainable and prosperous future for the industry and its stakeholders.

In an unprecedented shift in economic policy, Ethiopia has announced the liberalisation of its
foreign exchange market, a move set to take effect on Monday, July 29, 2024. For the first time
in over half a century, the exchange rate of the Birr will be determined by market forces, a
landmark decision that could reshape the country’s economic landscape.

Prime Minister Abiy Ahmed (PhD), made the announcement today, justifying the decision as a
necessary measure to address deep-seated economic structural issues, including foreign exchange distortions and macroeconomic imbalances.

“The liberalisation is expected to enhance the competitiveness and inclusiveness of the financial
sector, ultimately promoting a more resilient and sustainable economic environment,” he stated.
The Prime Minister’s administration is banking on these reforms to control inflation, improve
public investment efficiency, and bolster the banking industry’s soundness. The announcement
has sent ripples through the financial sector, with Central Bank Governor Mamo Mehirtu
convening an urgent meeting with senior executives of commercial banks late in the
afternoontoday. The National Bank of Ethiopia (NBE) has issued a directive to enforce the
decision, which forms a critical part of the second edition of the Home-Grown Economic Reform
Program (HGERP). The directive outlines the framework within which banks will operate in the
new, liberalised environment, requiring major adjustments as they adapt to market-determined
exchange rates.

For decades, Ethiopia’s economy has struggled under the weight of foreign exchange distortions
that stifled growth and fostered inefficiencies. The official exchange rate currently stands at 58.6
Br against the Dollar, while the parallel market sees rates of 115 Br or more. The disparity has
fueled a robust parallel market, complicating economic planning and fuelling inflation. The
government hopes that by allowing market forces to set the exchange rate, these distortions will
diminish, creating a more favorable balance of payments and attracting foreign direct investment.

Governor Mamo’s briefing focused on the urgency and importance of preparing the financial
sector for the upcoming changes. Prime Minister Abiy has committed to maintaining transparent
communication with all stakeholders during this period of transition.

“We’re dedicated to continuously reviewing and evaluating the impact of these reforms,” he
asserted.

The anticipated rise in the value of the Birr against the Dollar, as the market takes over, could
lead to consequential economic shifts. With the official rate at 58.6 Br against the Dollar and the
parallel market at more than double that rate, the alignment of these two rates under market
forces is expected to streamline economic activities and reduce black market incentives.

Prime Minister Abiy has also pledged measures to protect the most vulnerable members of
society. Social safety net programs and wage subsidies for low-income public service employees
are part of the broader strategy to cushion the potential short-term impacts of the liberalization.

Source
https://addisfortune.news/breaking-news/ethiopia-unleashes-market-forces-in-historic-forex-liberalization/
Jul 28 , 2024