Agency Inks Pact to Break Ground on 25 Silos

The silos will be built in four regional states for 22.4 million Br

Cooperatives across the country will soon get grain silos to be constructed at a cost of 22.4 million Br. Four regional states will see 25 silos constructed between them by the Federal Cooperative Agency, owner and coordinator of the project, under a Memorandum of Understanding signed with the heads of regional cooperatives on October 11, 2018.

The silos will be used by agricultural cooperative unions involved in teffand wheat value chain in Tigray, Amhara, Oromia and Southern regional states.

Alliance for a Green Revolution in Africa (AGRA), a project inspired by the late Kofi Annan and founded in 2006 through a partnership between the Rockefeller and the Bill & Melinda Gates Foundations, calls for a uniquely African “green revolution” to improve smallholder farm productivity by preserving the environment and investing in agriculture.

The Agency, along with the Kenya-headquartered AGRA, kicked off the construction of the silos in a bid to alleviate the shortage of warehouses and help cooperative unions with a reliable and effective market outlet, according to Abdi Mumed, deputy director for the Agency.

The construction of the storehouses, to be completed by 12 contractors, is expected to be finalised in three months, in time before AGRA’s three-year project in Ethiopia is phased out. The program is expected to increase the income of 26,415 farmers in the four regional states. It also aims at building the capacity of the farmers who are involved in teff and wheat production by creating market opportunities.

An expert on food security and poverty reduction at Addis Abeba University’s College of Development Studies believes that the silos will play a significant role in reducing crop losses.

“Post-harvest grain wastage has reached more than 20pc, which is very high,” said Messay Mulugeta (PhD).

The contractor selection process was finalised last May. However, the project start was delayed due to the preparation of land and allocation of finances, according to Abdi.

“To create a sense of ownership, the cooperative unions will contribute equity to the construction,” Abdi said. “The cooperative unions will cover differences from actual and estimated costs and price differences due to inflation.”

Southern Regional State will get five silos, which will be built in the Gurage zone. Each silo will have the capacity to hold 2,000ql of crops. The region’s coop agency will cover 10pc of the re-design cost incurred for the silos and will sub-contract the work to two companies for four million Birr. Initially, the silos were designed to hold 2,500ql of grains.

Oromia Regional State, which was initially allocated 10 silos, will raise no equity after cancelling one of the planned silos. According to the revised plan, the region will get nine silos, in Arsi and East Shoa zones. Four of the silos can hold 2,500ql of crops each, while the remaining will each have 2,000ql of capacity. Five companies have been hired to construct the projects for eight million Birr.

Tigray Regional State will have six silos in its central zone. Five of the silos will have a capacity of storing 2,000ql each, while the remaining storehouse will hold 4,500ql. Three companies will be paid five million Birr to deliver the silos.

“The Cooperative Agency of Tigray Regional State will not raise any funds as it laid a foundation for one of the silos,” said Abdi.

The remaining five silos with capacities of holding 2,500ql will be constructed in Amhara Regional State, East Gojam zone. The cooperative agencies of the regional state will invest 26pc of the total investment cost. Two contractors will build the silos for five million Birr.

Currently, there are  82,000 primary and 381 cooperative unions organised under three cooperative federations. These unions have a total of 17.4 million members, who registered 20.1 billion Br in capital and hold savings of 13.4 billion Br in banks.

Cooperative unions in the country are not well structured and do not set a clear vision, according to Mohammed Aman, assistant professor at Haramaya University, School of Agricultural Economy and Agribusiness for more than a decade.

“There is no well-organised information channel as well as a transparent system of wealth distribution,” Mohammed said. “That is why they have failed to contribute to the national economy and do not fulfill their social responsibility,” he added.


Published on Oct 23,2018 [ Vol 19 ,No 965]



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