Improving the union and the PCs operations and linking the union to better markets Lume Adama Farmers’ Cooperative Union is the first cooperative union in Ethiopia, established in 1998. The union is located at Modjo town, East Shoa zone of the Oromia regional State. The union was established has started the provision of services in one woreda. Now the number of woredas increased to four and the number of member primary cooperatives increased to 64 representing more than 65,000 farmers. The union is involved in output marketing of mainly Teff, Wheat, Chickpea, White Bean, Lentil and Maize. Out of all the services offered by the union, output marketing found to be the most profitable. Currently, if the government bans the current restriction and allows the export of Teff, the union has interest to export. The union is also focusing on white bean which is only purchased for export and predominantly produced in Boset woreda. The union also deals with chickpea as exportable commodity. It also supplies fertilizer; Chemicals (herbicides, pesticides and fungicides) and selected seeds (Wheat, Lentil and Teff).The union also provide cleaning service for a fee in the chickpea. The union would like to focus more on export of chickpea and white bean. Moreover, the union wants to go for further wheat value addition activities in the areas of Macaroni and Pasta products.

  
Wheat is grown in most parts of the world. Ethiopia is the biggest wheat producer in sub-Saharan Africa, next to South Africa. Wheat production has been exercised in all zones of Oromia region. However, Arsi, Bale, West shewa, East shewa and West Arsi are major wheat producing zones in the region with annual production of more than one million quintals. Southwest shewa, North shewa, and Horoguduro and Jimma zones are also the other major producer zones in the region with annual production of more than 400,000 quintals (EXC, 2008).
  

  
In our country during the past decades, the production and consumption of wheat increased significantly. Therefore, different unions have been engaged in wheat value addition activity by owning wheat processing mills and even some has started producing breads and sell to the local consumers. These unions have seen the profitability of engaging in wheat value addition activity.



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Lume Adama union has already acquired one wheat flour mill factory (360 quintal/day capacity) before two years ago. The union has further engaged in value additions and has been producing breads and sells to the local consumers which turn out much profitable than selling wheat flour stand alone. The union found producing and selling bread to the local consumer is a good business for the union. But this business has becoming a bit challenging to the union due to the perishability of the bread product and some management issues (quality controlling problem, distribution problem, etc.). Currently, the union also aspires to engage into further value addition activities and interested to process wheat flour into Past and Macaroni products. With Agriterra support a detailed feasibility study has been conduct for Pasta and Macaroni processing and a stakeholder validation workshop organized. The report has already shown engaging into past and Macaroni processing activity is a feasible business. The union general assembly have already decided to make the investment. As per the feasibility study, the planned will have a daily theoretical production capacity of 36 tons (360 quintals) per day. The project total investment cost is estimated to be ETB 52.03 million. The union is anticipating to finance 30% of the investment requirement from equity and the remaining 70% from bank loan. Currently, the union has requested a bank loan from one of the interested local financing banks. Thus, to realize the business ambition the union hired competent service provider that could advise the union to establish Pasta and Maccaroni processing plant.  Therefore the 2017 year action plan activities will focus on:
• Realizing the Pasta and Macaroni factory establishment• Strengthen the union management and board members’ leadership capacity• Mobilize 2.5 million birr internal capitalization for Pasta and Marconi factor investment• Strengthen the relationship between the union and PCs• Improving the financial management practice of the union• Bradding and marketing the union products