Building the capacity of cooperative unions on mechanisation activities and digitalizing the accounting practices The Ethiopian economy is mainly reliant on agricultural production. The agriculture sector accounts for 40 percent of the gross domestic production  85 percent of employment  and 90 percent of export earnings. Although Ethiopia has an enormous potential for agricultural production  the growth of the sector has not coped up with the demand of agricultural production. The sector is characterized by farmersrsquo; use of traditional method of production  enormously limited capital  and low productivity. Hence  the sector has not been able to feed the countryrsquo;s fast-growing population and make a sustainable contribution to the economic growth of the country. Close to 15 million rural farm families are directly depending on agriculture for their livelihood and operating a total crop area of 13.5 million ha mainly under rain-fed system. Agriculture is mostly smallholder based where about 90% of the farmers own less or equal to 2 ha per household. Hence  small scale farmers are the main engine of the agriculture sector. As a result  improving the productivity of the agriculture sector is quite demanding. In addition to human muscle  in most cases and particularly in cereal based systems  oxen-draft is the main source of farm power for land preparation and planting. Though Ethiopia has a long history of agricultural practices  the development of agricultural mechanization is still minimal. Farm power is mainly dependent on oxen-draft and human muscle operating using traditional farm implements. Ethiopian government has been showing a keen interest to improve the agricultural mechanization practice in different parts of the country. The government and the other development organizations are creating awareness about the importance of using farm machineries for enhancing agricultural productivity. Thus  in June 2019 the Ethiopia government amended the tax law to exempt agricultural machinery imported from overseas from taxes. This tax reform is aimed at enhancing the agriculture sector by removing duty and taxes on imports of farming machinery  irrigation and drainage equipment as well as animal feed ingredients and technologies; providing incentives to invest in the importation and local production of these technologies. The objective this project is create a basis for the professionalization of the mechanization activities of the selected Unions. An assessment will be done on Union and primary cooperative level to identify the gaps. This activity will be followed by an awareness creation session to align all relevant stakeholders and to share the identified gaps. The next step is to start with improving the planning between Unions and their primary cooperatives through training on business planning. The GIZ Agricultural Mechanisation and Technology for Smallholder Productivity (AMTP) project recently extended their activities to the Amhara region. The objective of the project is assist smallholders farmers to use high-quality mechanization services and technologies and raise their productivity and income levels. It started working with Merkeb and Damot Unions. Agriterra is also active in the Amhara region and is  among others  working with Damot and Admas Injibara Unions. In the past there were also activities with Merkeb Union. Since both GIZ and Agriterra are working with the same Unions and there seems to be complementarity in terms of activities  this proposal is being developed to formalise the collaboration. Agriterra will continue working with Damot and Admas Injibara Union as contracted with these organizations at the beginning of 2019. However  the activities will be extended with a focus on the mechanization business and Merkeb Union will also be included. Concerning financial management  this is seen as one of the weaknesses of Unions in Ethiopia. The often large organisations have very basic  manual accounting procedures  which provide limited business support. Therefore  Agriterra will support by providing accounting software training to digitalize the accounting practices of Hetosa Union.