Malt Barley Contract Farming and Agricultural Cooperatives in Ethiopia

Academic Paper from the year 2020 in the subject Business economics - Investment and Finance, Haramaya University, course: Agricultural Commercialization, language: English, abstract: This paper seeks to discern the relationship between agricultural cooperatives and contract farming scheme both in the modern malt barley value chain sector in Ethiopia. It ponders over various results of secondary data sources of studies. Despite the fact that contract farming is at its inception in Ethiopia, GTPs I and II (Growth and Transformation Plans), promotes smallholders commercialization via contract farming and agricultural cooperatives as pillar in the growth. Contract farming is an option way-out to make agricultural commercialization viable. It is an institution that eases supply of agricultural produce for firms and access for input and output market for smallholders. Currently malt barley contractual farming is widely practiced in Ethiopia (Arsi, Shoa) due to the emerging investment of multiple beer factories. Agricultural cooperatives play a significant role in harnessing smallholders and firms in the value chain of malt barley. Along the value chain of malt barley marketing mainly Assela Malt Factory, beer firms, and traders, exist. Malt barley collection from Primary Cooperatives exceeded in 2014 crop year, because of five birr premium price per quintal. However, the amount stipulated in the contract and the collection varies as evident of side selling.