FAO Investment Centre

Organizing stronger supply chains


Agricultural production in sub-Saharan Africa tends to be scattered, informal and often not up to quality standards. But the region has huge potential to increase its agricultural production and productivity given the booming demand for food commodities.
In a push to modernize its agriculture sector, Ethiopia has built agro-industrial parks – hubs that link nearby farmers to processing and agribusiness services. By attracting investment and sharing infrastructure and services, agro-industrial parks can reduce post-harvest losses and transaction costs, create jobs along the supply chain and drive inclusive growth. While the main focus of agro-industrial parks is market access, these parks are also strong vehicles for farmers and SMEs to access knowledge and innovation, technology and finance.

In 2019, FAO developed investment plans, with financial support from the European Union, to increase production in nearby areas and organize stronger supply chains to bring good quality raw materials to these parks. The following year, FAO launched its Hand-in-Hand initiative, an evidence-based, country-led and country-owned programme to end poverty, hunger and malnutrition.

The Centre is supporting one of the three pillars of the Hand-in-Hand initiative in Ethiopia to implement the investment plans and increase marketable surplus from agro-commodity procurement zones within a 100 km radius of the parks. This involves addressing bottlenecks inhibiting the production and productivity of lead commodities, like wheat, avocadoes, dairy and coffee, and strengthening the institutional setting for the development of these zones.

The team has assessed investment opportunities across different value chains as well as options to diversify livelihoods in the avocado and coffee value chains. It is using geographic information system technology to map the location of storage facilities for wheat and coffee in the Bulbula and Yirgalem agro-commodity production zones to help prioritize investments in storage and other post-harvest facilities. With EX-ACT and GLEAM-i tools, the team evaluated the greenhouse gas emissions associated with land use change and production systems proposed by the investment plans. Preliminary results from the study for wheat show a potential to reduce CO2 emissions by -0.5 metric tonnes/hectare per year if farmers adopt best agricultural practices. A similar study on dairy is slated for 2022. The team is also supporting regional government and other local actors to plan investments and work together to reach common objectives, including private sector matchmaking, where possible.

Photo credit ©FAO/Olivier Asselin
No records found.