Who are we?
This story is about Abrhame Endrias, a 29-year-old agripreneur from Addis Ababa, Ethiopia. I built my company, Green Agro Mechanization, in 2013, offering inclusive farming services to farmers. I am also a lecturer in Arsi University, Department of Management.
I teach various business courses, conduct community projects, and consult. I am interested in mechanization, environment friendly crop chemicals, climate change, and sustainable farming.
What do we do?
Green Agro Mechanization works with small landholder farmers in the Arsi and Bale zones of Oromiya region, where 65% of the country’s wheat production is sourced. Currently my company has 19 workers—13 permanent and 6 temporary; 15 of them are men and 4 are women, aged 17–35.
Low productivity is a serious issue for me as it challenges food security and better income. Traditional farming practice (using oxen to plough, harrow, and harvest) and using outdated crop chemicals are the main challenges for productivity, and which I think can be avoided.
The majority of the farmers owns a small amount of land and cannot afford to buy machinery. In addition to this, farmers use crop chemicals when available and affordable, regardless of their effectiveness.
My company is providing tractors, planters, crop chemicals, and harvesters to small landholder farmers for rent at affordable prices and supplying crop chemicals. I have seen improvement in productivity: in some farms productivity increased 2.3 tonnes to 5.9 tonnes per hectare (my observation).
Our company focuses on offering services: including ploughing, harrowing, planting and harvesting accompanied with farm credit service.
The farm credit service benefits poor farmers, as they pay 60% of the mechanization service they use and the chemical they buy, and the rest is covered by our company; with harvest day the agreed maturation date.
We developed this package to support rural young, women, and hardworking poor farmers who hold an average of 1.25 acres of land, and to maintain a long-term relationship with farmers, which guarantees the sustainability of our company.
So far we are taking the risk, in case of default, by ourselves and now we are working with Oromiya microfinance to facilitate farmers’ payment through the bank, which will minimize the risk level.
Currently, an ICT solution from Uganda is undertaking web-based mobile applications to follow up and track our beneficiary farmers. The mobile app will be very helpful in delivering climate data and credit packages to small landholder farmers.
We have a good relationship with crop chemical importers, which facilitates credit modality for our orders. We have good communications with local government administrators, enabling us to use government resources and cooperate when needed.
So far, we have offered mechanization and farm credit service to 12,000 and 69 farmers across Bale and Arsi zones respectively. These services ease problems such as access to mechanization and finance.
The other problem challenging us from progress is farmers’ low financial literacy. To address these problems and grow, I am working with Agriculture Transformation Agency (ATA) and USAID to open farmer service centre at two sites and train 3,000 farmers on average every year. The training will include how to record expenses, set prices, calculate profits, and make plans.
This will help us a lot in expanding our business and make a sustainable relationship with farmers. We have also a plan to link the farmer service centre to Arsi University and Meda Walabu University, so that researchers can link their study outcome to the farmer’s farm field.
Why do we do it?
In 2010 I was doing vegetable farming and I found it difficult to access tractor services in the area. The farm went well for 16 months and then was hit by a market price fall which results enormous loss. I found no company to offer me a credit for input so that I can restart the farm. That leads me to switch my business to merchandise at least for the time being.
In 2014 when I go back to Agribusiness, I decided to buy agricultural machineries and serve small land holding farmers (to solve access to mechanization). Many brave young and women rural farmers are quitting agriculture and migrating to town because no one is there to support them by offering credit facility in which it was also one of my biggest challenges while doing vegetable farm. So we designed a farm credit service (to solve access to finance).
We see our bright future through our projects. We are earning money and paying our bank loan on time though challenging to collect credit from farmers. We are also expanding our company by purchasing additional agricultural equipments and outreaching more rural farmers. The community is accessing mechanization service and farm credit service. Their productivity is increasing and earning extra income which in turn helping them raise in standard of living.
How do we do it?
Our company has been operational since 2013 and has contact stations in five different rural areas. We are working very closely with farmers and our staff are visible when farmers need them.
Based on the farming calendar, we plough, harrow, plant, and harvest at a fair price by offering farm credit service as a motivation. We have one agronomist who follows up with farmers and recommends the use of environmental friendly chemicals at the right time.
We bought tractor with its accessories, planter, chemical sprayer, and combine harvester, investing 40% equity and 60% bank loan, to be paid in quarterly over five years.
Improving yield productivity and financial literacy among farmers is our major success factor. So far, compared with our base line study, we have seen significant changes in productivity and progress in financial literacy in our target area. We have to work hard to sustain the result and to reach more farmers.
How will we spend the USD 5,000?
The Budget plan is:
Mobile app development and installation USD 1,800
Mini-Server and apparatus (partial coverage) USD 2,100
Accommodation and training fee field officers (3 x 20 x 5) USD 300
Document and voucher printing for farm credit service (2 x 210) USD 420
Miscellaneous and emergency USD 390
Blogpost and picture submitted by Abrhame Endrias (Ethiopia): Abrhameendrias[at]yahoo.com
The content, structure and grammar are at the discretion of the author only.
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