Commercial Farm Development in Central and Northern Ethiopia

The CFC funded a project in Ethiopia to provide high-quality seed potatoes to local smallholder farmers and transfer much-needed technologies for potato farming and seed production. Local farmers enhance their food security and at the same time produce a cash crop for an emerging local potato processing industry (for crisps and fries). Because of high-quality seeds and on-hand approach of training, it is expected that per hectare production of potato, in the project area, may increase, at least, by a factor of three to four (tons/hectare).

Next to potato planting material, Solagrow also provides seeds from other crops and mechanization services to smallholder farmers. In addition, the company produces quality food crops for local and for export markets on its own nucleus farms and offers collective marketing of produce is offered on a voluntary basis. For the release of new Ethiopian potato varieties and the introduction of new multiplication technologies, Solagrow works closely together with the Ethiopian Institute of Agricultural Research (IAR).

With CFC funding, it is anticipated that some 1,600 new jobs will be created and that the establishment of surrounding outgrower schemes will eventually involve some 2,500 new farmers as outgrowers on around 3,000 ha of land, who will benefit from quality input provision, mechanization services and access to markets. In addition, indirectly, Solagrow is expected to offer its services around each of its farms and reach another 25,000 farmers.

Current status

After the disbursement of CFC resources, Solagrow was able to procure additional machinery and equipment for the expansion of its farming operations. During the implementation of the project, Solagrow encountered an unforeseen operational expense due to loss of inputs (such as seeds, fertilizer), and damages on farm equipment which deprived it of planting of potatoes in 2016. This unfortunate incident dragged Solagrow to a very precarious liquidity position which ultimately led it to restructure its operations.

Several corrective measures have been taken ever since which enabled Solagrow to continue its operations, albeit on a substantially reduced scale to 175 ha (compared to the originally managed 650 ha). As of year-end 2018, Solagrow had been able to reproduce sufficient planting material to recommence with a potato-based crop rotation. Based on the achieved 2019 harvest results and revenues, Solagrow appears to be back to a growth path.

Impact of Covid-19

The COVID-19 pandemic has so far not substantially affected Solagrow’s farming operations and sales, since Solagrow operates in a very remote area and produces for the local markets. It, however, affected their income from sales in a significant way.