Farmers ownership of value addition The unions linked to this project are the overarching organisations of many primary cooperatives. All are unions and they are established by the Ethiopian government. On federal level  the Ethiopian government runs the Federal Cooperative Agency (FCA)  the authority responsible for cooperative development. On district level  the FCA is represented by the Cooperative Promotion Agencies (CPA). Overall the 5 unions embed around 207000 farmers that are member of 497 primary cooperatives (PCs). Because the number of farmers is very high only 5 PC per union will be selected for this project and within each PC an average of 500 farmers will be involved which lead to a rough estimate of 12500 farmers. 
Traditionally  cooperatives in Ethiopia have been established by the government to function as distribution channels for inputs (mainly fertilizer). Cooperatives were created in campaigns and farmers were urged to become members. This top-down approach and limited work area did not make farmers feel like they own the cooperative or that they can benefit from it besides getting inputs. Nowadays the structure is changing. The government is seeing cooperatives more and more as value chain actor which should also get involved in the output marketing of its members produce. Primary cooperatives are located in the villages (so-called kebeles) and do direct business with the farmers. These primary cooperatives are grouped together on district level under a Union. Different Unions can be grouped together on regional level under a Federation but this is not existing in each region. 
The cooperatives are positioned in the value chain between the input suppliers (mainly government) and the farmers  and between the farmers and the market. However less than 10% of the surplus produce of the farmers is marketed via the cooperatives on average. 
For cash crops like coffee  Chercher Oda Bultum and Burka Galeti are involved in export. Unions like Becho Woliso and Admas Wolkite are planning or have established processing factories to add value to the produce of their members. Value addition on Union level gets high attention within the country and complies with the national Ethiopian policies regarding cooperative development. 


Besides the cooperative structure  there is a parallel government structure from FCA  to RCPA  to CPA  all the way to the villages (kebeles). Cooperatives are supported by these institutions but also need to be able to discuss with these organisations and lobby for certain support. This is where the FACT methodology can play an important role.  
Description of the project:
General understanding of the cooperative organisation through MY.COOP. Increased awareness about farm business via record keeping on farmer and cooperative level.
  Entrepreneurship and leadership skill trainings to PC leaders (bus International approach). Mobilizes the internal forces of the organizations and creates spirit of ownership and entrepreneurship.
  Value chain collaboration between farmer  cooperative  Union  and buyers. Focusing on business plans to obtain working capital and marketing to deliver the right products and quality. The primary cooperatives are the main suppliers to the union they are member of. This chain focus is key in this proposal.
  Farmers Advocacy Consultation Tool (FACT). Training on the FACT methodology for both Unions and FCA and support on effective lobby trajectories.
  Training of Trainers to create sustainability  both on the level of the unions and primary cooperatives involved. FOs and farmer-led enterprises improve technical and economic services to their members along the value chains:
For the selected primary cooperatives  the general understanding among their member farmers about the purpose of their cooperatives will be enhanced. This will lead to increased ownership and clear ideas about the possible contributions of the cooperative. It will give the cooperative clear guidance towards the needed technical and economical services which are demanded from the members. This information will be used to develop sustainable services.
  FOs influence policies and business environments for the transformation of family farming and the development of sustainable  adaptive economic initiatives and farmer-led enterprises:
Support in effective lobby trajectories at regional level (by the Unions) and at national level (via the FCA) to either obtain land for value adding activities or to change certain policies which currently limit the business of the farmers and cooperatives. As a supportive and governmental organization  the FCA and its RCPAs  will be included in the project via ToTs to make sure they are aligned and involved and can make the intervention sustainable.
  FOs are accountable organisations able to effectively perform their institutional functions:
Good governance  finance  and leadership practices are understood and implemented by the leaders of the unions and Primary cooperatives. This is key to successful and transparent decision making; fair economic transactions and active participation and loyalty among the members. Improving the understanding of good governance  finance  and leadership is key at both union and primary cooperative level to ensure maximum functioning of the FO  allowing for economic transaction and expansion in the agricultural business. Agriterra and the five unions included in this proposal have been working together for various years. Each union has its specific development path and are in different stages of development. Specific action plans are being developed per client and based on: a) results achieved so far  b) current needs of the clients involved  and c) aligned with the strengths of Agriterra in terms of training  institutional and agricultural development. 

AHA will complement the activities of Agriterra. In the past years  AHA has trained Ethiopian Trainers in its Entrepreneurship Training approach bus International. This interactive method focuses in 3 modules on the personality of an entrepreneur  the development of the enterprise and a compact business plan model. It has proven very effective with Seed Producer Cooperatives in Ethiopia and will have impact on the leaders of the PCs. An additional module to be developed and trained to trainers provides capacity building on selected leadership skills relevant for the PC leaders. It will be an extract that has been trained to leaders of 4 Farmers’ unions in Ethiopia.
Commodity or value chain and products and refer to policy document (national/ regional) where this value chain was prioritized
Taking into account that almost all unions in Ethiopian are multipurpose unions  meaning that they are active in various value chains  this proposal focuses on various value chains as well: chickpea  Niger seed  coffee  dairy  maize  and animal fattening. By working on a union level and with a certain number of underlying PCs  which are also mainly multipurpose cooperatives  the impact of the programme will be bigger than when a focus on one specific value chain is applied. The exception is Admas (mainly Niger seed).
The main market of all unions is the domestic one. The fast growing economy and population of Ethiopia cause that almost all value chains are lagging behind in terms of production  supply  processing and marketing to the final markets. In the case of Niger seed  the Ethiopian government has plans to reduce the import of edible oils and to promote the production and consumption of national oils. Regarding coffee production  the Ethiopian Coffee and Tea Authority is reforming the policy to improve the country’s coffee production.
Outcome Unions:
Unions and cooperatives in Ethiopia have originally been established by the Government  farmers were pushed to become members. Therefore  the objective is not to increase membership but to make it more balances (women/youth) and to focus on active members who do transactions with their cooperative. Although increased membership is not a specific objective  it is estimated that the improvement of functioning and performance of the FO will attract new members  which will increase the traded volumes  expand the services and also increase the financial possibilities of internal capitalization and working capital. It is estimated that at least 20 unions/PCs will succeed in increasing their membership number.
  
Due to the diversity of value chains the overall outcomes of the Unions will be focusing around value addition and creating a solid collaboration in the chain concerning both input supply and output marketing.
The introduction of demand driven services and new value adding activities will lead to an increased productivity  quality and resilient production by members and an enhanced position in the inclusive value chain which will eventually result in better income levels at farmer level. These demand-oriented services are sustained by income generated through the PC's. The increased performance of both unions and PCs that are selected to participate in this program  will result in increased sales volumes and profits.
This performance  together with the focus on internal capitalisation  will form the base to develop concrete business plans that can be submitted to financial institutions with the aim to attract investment loans. Based on the experience of the agencies so far  the target is that at least 5 bankable business plans will be made. Exact calculations of the amounts have not been made yet  but (for example) Seyemti’s target is to obtain 5 2 million Ethiopian birr through internal capitalisation.