The Impact Of Ethiopia S Direct Seed Marketing Approach On Smallholders Access To Seeds Productivity And Commercialization

Several factors contribute to the low level of improved variety use in Ethiopia. Among those, on the supply side, is the limited availability of seed in the volumes, quality, and timeliness required by farmers, which is partly a result of limited public and private investment in the sector. Beginning in 2011, the Government of Ethiopia introduced a novel experiment-the Direct Seed Marketing (DSM) approach-to reduce some of the centralized, state-run attributes of the country’s seed market and rationalize the use of public resources. DSM was designed to incentivize private and public seed producers to sell seed directly to farmers rather than through the state apparatus. This study is the first quantitative evaluation of DSM’s impact on indicators of a healthy seed system: access to quality seeds, on-farm productivity, and market participation of smallholders. Using a quasi-experimental difference-in-differences approach, the study finds that DSM led to a 26 percent increase in maize yields and a 5 percent increase in the share of maize harvest sold. DSM also led to improvements in seed availability for all three of Ethiopia’s major cereals: maize, wheat, and teff. However, DSM’s effects on yields and share of harvest sold are not statistically significant for wheat and teff. These crop-specific differences in performance are likely explainable by biological differences between hybrid maize and openly pollinated varieties of wheat and teff that incentivize private sector participation in maize seed markets over wheat and teff seed markets. These differences demand different policies and perhaps even institutional approaches to accelerating adoption between hybrids and OPVs.

This study evaluates the impact in the main cropping season of 2015 of a new approach to the distribution of improved seed in Ethiopia, known as Direct Seed Marketing (DSM). Under DSM, seed producers are allowed to sell seed directly to farmers, in contrast to the conventional seed marketing (CSM) system in which seed passes from seed producers to regional Bureaus of Agriculture to woreda Agricultural Offices to Development Agents, cooperative unions, and primary cooperatives, who, in turn, sell the seed to farmers. The study is based on a survey of 800 farmers, 118 agricultural extension workers, 75 seed sellers, and 24 seed producers in Amhara, Oromia, Southern Nations, Nationalities, and Peoples (SNNP), and Tigray regions. The performance of the DSM program in 2015 was evaluated on eight criteria: seed availability, sufficiency of supply, timeliness of delivery, seed pricing, quality, ensuring accountability for low-quality seed, ease of purchase, and use of public resources. The results indicate that DSM had heterogeneous effects across the different regions, showing the need to strengthen the sharing of experiences with the program across the regions of Ethiopia to scale up DSM’s benefits. However, when we consider the overall DSM program without regional disaggregation, the DSM and CSM systems do not differ significantly on most of the eight criteria, although DSM required significantly less of the time of the farmer-level agricultural extension agents, the Development Agents. DSM performed as well as CSM across the eight criteria examined, while requiring 39 percent less time for the involvement the Development Agents. Farmers’ subjective views of DSM were quite positive. On most criteria, 50 to 65 percent of farmers said DSM performed “better” or “much better” than CSM. The study also identifies specific areas where the performance of DSM needs to be improved. A review of international experience with seed systems is used to provide some additional recommendations regarding the longer-term development of seed systems in Ethiopia.

In 2013 the Bureaus of Agriculture in the regional states of Amhara, Oromia, and Southern Nations, Nationalities, and Peoples of Ethiopia supported a program of direct marketing of certified seed by seed producers to farmers across 31 woredas (districts). This program stands in contrast to the dominant procedure for supplying such seed in which farmers register with local agricultural offices or extension agents to purchase seed for the coming cropping season and then receive seed either directly from these local offices or through local cooperatives. The evaluation shows that competition between entrepreneurial seed producers to capture a substantial portion of the market of farmer-customers for their seed to enable their firms to remain in business will propel wider and more effective distribution of new and improved hybrid maize to more and more farmers.

Rural producer organizations (RPOs), such as farmers' organizations or rural cooperatives, offer a means for smallholder farmers in developing countries to sell their crops commercially. RPOs hold particular promise for Sub-Saharan Africa, where small-scale farming is the primary livelihood but commercialization of food crops is very limited. Using the experience of smallholders in Ethiopia as a case study, this research monograph identifies the benefits of RPOs for small farmers, as well as the conditions under which such organizations most successfully promote smallholder commercialization. The evidence from Ethiopia indicates that RPOs do increase farmers' profits from crop sales, but that the beneficiaries do not tend to be the poorest smallholders. Moreover, an RPO's marketing effectiveness is precarious: it can easily diminish if the number or diversity of its members increases or if it provides more non-marketing services. The authors conclude that RPOs have a role to play in the agricultural development of Sub-Saharan Africa, but that role should be complemented by other programs that directly target the poorest farmers. Further, the effectiveness of RPOs should be preserved by allowing them to follow their own agendas rather than being encouraged to take on non-marketing activities. The assessment of RPOs presented in this monograph should be a valuable resource for policymakers and researchers concerned with economic development and poverty reduction in Sub-Saharan Africa.