Farmer-to-Farmer-to-Farmer

I've been speaking at a series of spring marketing meetings these past few weeks, with one small difference from my usual springtime routine -- the meetings have been in Ethiopia.

There have been some challenges. For instance, one day, after waiting several hours for the expected number of farmers to trickle in from the countryside, and then waiting in vain for the intermittent electrical grid to flicker on, the farmers' co-op that was hosting me finally fired up a generator so we could power a borrowed projector and show PowerPoint slides. My presentation in English maybe would have taken half an hour, but after each few sentences, I would pause so that Zenebe, my translator, could get the message across in the local language, Oromifa.

After about an hour, I wrapped it up. "And that's why it will be important, as Ethiopia's farmers continue to achieve greater production, that you as farmers be sure to profit from value chain activities in a cooperative structure. Are there any questions?" Demonstrating that farmer meetings are the same all over the world, the audience nudged awake its few dozing members, and then a woman in the front row spoke up (in Oromifa): "Yes, that's nice, but when is it going to rain?"

By the time you read this, I will presumably be on a plane to the United States, so I'm writing this while packing for home and reflecting on the overall experience. I've been part of a program called Farmer-to-Farmer, funded by USAID and Catholic Relief Services. Typically, the projects involve a farmer from the U.S. teaching farmers in a developing country some technique for better agricultural production -- seed planting, fruit-tree pruning, animal healthcare, etc. My project was a more esoteric business topic -- value chain analysis for a farmers' cooperative union.

It's nice to think that not only could Ethiopian farmers apply lessons from U.S. agriculture brought over by a farmer, but that maybe I could bring some lessons back for U.S. farmers from Ethiopia. We could amend the title to be "Farmer-to-Farmer-to-Farmer."

I think if an Ethiopian farmer was teleported to a field in Iowa, she might be able to teach the locals a thing or two about efficiently managing plots of vegetables, but she wouldn't necessarily have much expertise to improve U.S. grain farmers' already-advanced practices for growing corn, soybeans, or wheat. For reference, the average Ethiopian yield for maize (white corn) has been 32 bushels per acre in recent years.

However, smallholder farmers in Ethiopia deal with their business conditions in several ways I very much admire and which I think should stay at the front of U.S. farmers' minds, especially during periods of low profitability.

1. Diversification

It doesn't seem like anyone here relies on just one or two crops, year after year after year. All the farmers I met split up their few hectares to grow a variety of grains they would consume themselves or rely on to get through the year (maize, teff, wheat), as well as higher-profit crops that may be destined for the export market (haricot beans, tomatoes, green beans). In this way, they limit their financial exposure to the risk of any one crop having a low price and maximize their chances of hitting a home run some year with a high-profit crop.

2. Direct selling

Ethiopian consumers buy far less processed, packaged food (pretty much zero) and far more raw, whole grains at the street market than I could have possibly imagined. This limits the agriculture industry's opportunities to sell high-margin, heavily-processed goods for now (no artificially-dyed HFCS Peeps for Easter and no ethanol because the country's food security is priority No. 1). But it fosters a thriving market for farmers and local traders to sell a final product directly to end consumers.

3. Thrift

I realize I am stretching a bit to romanticize the people's creative use of beat-up old jerry cans to haul water, or their necessity to drive donkey carts with limping donkeys and wobbling, bald tires. But for U.S. farmers who are still adjusting back to "normal" after the years of $7 corn and new pickup trucks, Ethiopian farmers' frugality should be an inspiration.

4. Cooperatives

Only in the past seven years have grain farmers' cooperatives been formed in Ethiopia to collectively warehouse and merchandise grain, as well as to collectively purchase inputs. I've been hanging out at the Bora Denbel Cooperative Union in Meki, an umbrella organization for 65 little cooperatives out in the countryside. They do seed, fertilizer, chemicals, trucking, education and auditing for members, and even crop insurance for the past couple of years! Now, a farmers' co-op isn't an earth-shattering idea for U.S. farmers, but maybe it has been a couple of decades since times have been tough enough to emphasize the importance of having a farmer-directed grain-buying organization in your community. Something to think about.

5. Value chain capture

In the U.S., a lot of the agricultural value chain has already been firmly established within the provinces of various huge corporations -- livestock feeding and slaughter, oil and syrup and starch refining, flour milling, food manufacture and packaging, and even ethanol. In a country where those activities have yet to fully develop (e.g. Ethiopia), farmers have a wonderful opportunity to band together and keep the profits from those value chain activities to themselves. It will require supportive investment, but I'm optimistic for them.

As I left the new friends I'd been working with for two weeks, they were gung-ho to write a business plan for value-added ag processing activities at the cooperative union level, and all the cooperatives' member farmers seemed supportive of capturing more of the industry's value chain and finding new customers. Maybe someday you will see Bora Denbel-branded dry soup beans on a grocery store shelf near you!

So except for the grazing camels, the donkey carts thronging on the gravel roads, the hyena calls, the monkey calls, and the church loudspeakers pumping out Easter chants from the Ethiopian Orthodox muezzins all night, I feel like the past 2 1/2 weeks wouldn't have been much different if I had spent them speaking with American farmers instead of Ethiopians. It's certainly not unusual, at an American co-op meeting, to have an audience member rouse himself after a discussion of options pricing and comment: "Yes, that's nice, but when is it going to rain?"

For more information on the Farmer-to-Farmer program, including a volunteer application, visit http://farmertofarmer.crs.org/….

Elaine Kub is the author of "Mastering the Grain Markets: How Profits Are Really Made" and can be reached at elaine@masteringthegrainmarkets.com or on Twitter @elainekub.

(CZ/SK)

(CZ/SK)

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