Jemma Agrotech has taken the bold step of testing an out-grower seed multiplication model for onion and potato, making it the first in Ethiopia. IAP partnered with Jemma Agrotech to provide the needed technical support by employing its expertise in the horticulture sector and share the financial risk to help build a model that can address the critical seed source gap in the country.
Jemma Agrotech has been one of the pioneers engaging in certified onion seed production and sales on a commercial basis in a sector which is publicly driven. The current availability of improved vegetable seeds in the Ethiopian market is not more than 2% of total demand. Out of this, close to half is covered by imports while the rest is met by local certified seed production. The extreme low availability of quality seed has significantly hampered productivity and income generation for farmers engaged in horticulture. Consumer demand for quality, affordable horticultural produce is largely unmet.
IAP partnered with Jemma Agrotech to test an out-grower model aiming to expand the local certified seed production and distribution through inclusion of smallholder farmers in the seed supply chain. In the first round of production, the company engaged 60 farmers as out-growers in onion seed multiplication and five farmers in potato seed multiplication. The first production cycle was successful as Jemma Agrotech doubled its production and sales. The smallholder farmers involved in the first trial of the multiplication scheme were also very keen to form a longer lasting partnership with Jemma, as it gives them an opportunity to access technical and financial support offered by the company, and to have access to a guaranteed market (Jemma) that pays a good price. The out-growers have seen that more income can be made by growing seed than by selling their produce on the local markets. Both Jemma Agrotech and the out-growers are new to the seed business but are now fully aware of the great potential for increasing company sales revenue and household income respectively.
Jemma Agrotech has already expanded its out-grower scheme to include 120 smallholder farmers for onion seed and 20 for potato seed multiplication. In addition, the company has added more staff to its technical support team. Jemma Agrotech anticipates quadrupling production of onion seed (from 30 tons to 120 tons) and potato seed by seven-fold (from 48 tons to 350 tons). Jemma Agrotech’s business model has the potential to scale up even further (including other horticultural crops) and is stimulating a promising trend in the local certified seed business sector to tackle the acute quality seed shortage in the Ethiopian market.