Community Revenue Enhancement Through Agricultural Technology Extension (CREATE), 2013-2019
Donors: Netherlands Ministry of Foreign Affairs, HEINEKEN International, International Finance Corporation (IFC)
Partners: HEINEKEN, Hundee, ICCO, Agricultural Transformation Agency, Oromia Seed Enterprise
To reduce poverty in Ethiopia, Rwanda and Sierra Leone through increasing agricultural capacity in rural households and limiting the dependency on imported commodities. We aim to rebuild agricultural production and increase food security by linking smallholder farmers to urban markets, restoring essential social services, and rebuilding local community cohesion and infrastructure.
What we do
EUCORD is partnering with HEINEKEN and its subsidiary HEINEKEN Ethiopia to assist with the implementation of the Community Revenue Enhancement through Agricultural Technology Extension project otherwise known as CREATE. Support by the Ministry is used to (a) integrate groups of smallholder farmers into Heineken’s supply chain, and (b) train these farming families in good agricultural practices. This will not only help substitute imported raw materials by local ones (thereby saving scarce foreign exchange resources) but also help establish local supply chains which will transfer purchasing power from the urban middle class to the rural poor.
In Ethiopia, the key objective of the project is to increase malt barley productivity to meet the increasing demand from the beverage industry and food market. The CREATE Ethiopia project has contributed significantly to increased incomes for smallholder farmers and other value chain actors through achieving five major successes in the past six years:
- Introduction and dissemination of two new high yielding malt barley varieties, which contributed to at least a doubling the yield of malt barley in the project area.
- Massive adoption of the Traveler variety and significant improvement in smallholder farmer income. An estimated 31,832 farmers planted in the 2018/19 season with direct support from the project. In addition, around 30,000 other farmers have also benefitted indirectly in 2018 by accessing improved seed from neighbors etc.
- The total production of Heineken varieties is estimated to be around 245K tons. During the 2017/18 production season 66,041 tons of produce was supplied to industry as grain and 3,049 tons of seed was supplied to farmers for the 2019 production season.
- Halting malt barley imports by the Assela Malt Factory, thereby saving foreign currency for the country.
- Significant contribution to improving food security in the region.
At the same time, demand for malt barley has increased significantly over the past five years. The number of breweries has increased from 3 to 12 and their malt requirements (currently 120,000 MT) are expected to rise to 200,000 MT by 2020. In addition, it has become evident that the food market appreciates the new barley varieties as an alternative to Teff. Linked to this rapidly growing demand, the high price of locally grown malt barley as compared to imports and the high malting fee charged by the existing state-owned malteries are major challenges to the long-term sustainability of the value chain.
Local malt is approximately 25% more expensive than imported malt, which is not commercially sustainable for the brewing industry, nor will it allow the Ethiopian Government to achieve its objective of becoming a malt barley/malt exporter to neighboring countries by 2020. To improve price competitiveness, further action is required to increase malt barley supply through higher productivity and geographical expansion and by increasing malting capacity and efficiency via new maltery investments. Two new malt plants are expected to come on-line in 2020.
To maintain the positive momentum created by the project until the new malteries are operational in 2020, there is an urgent need to sustain the existing project activities and to expand them into new areas to bring the benefits to new groups of farmers. In this regard, the Dutch Ministry of Foreign Affairs (MinBuZa)has approved an extension which will continue the CREATE project through the end of December 2020.The high demand from the food market means that an estimated 1 million metric tons of malt barley production will be needed to satisfy total market demand and to bring prices to a competitive level. The project’s success in Arsi, West Arsi and Bale zones will be expanded into new zones, including West Shewa, North Shewa, South-West Shewa and Amhara Regional State in the Northern part of the country.