The choice for the sesame supply chain is motivated by the fact that sesame is high-vale specialty oilseed which is currently the 2nd important export earner in Ethiopia but also has a substantial domestic consumption.
Hypothesis – Value Chains for Pro-Poor Development
The hypothesis is that transaction risks in the sesame supply chain will hamper:
- The construction of a quality-based, resilient and competitive sesame supply chain rooted in local organizational capacities;
- The incorporation of pro-poor mechanisms embedded in the interface between vertical coordination and locally embedded organizations.
- This focus is relavant for pro-poor development because:
- Transaction risks undermine conditions for an equal and committed involvement of low-income smallholder producers in a quality-based sesame chain, which can be addressed by the design and introduction of new institutional arrangements
- The creation of a strategic fit between strategies targeting transaction risks in the chain and risk coping mechanisms embedded in local livelihood strategies creates the conditions for inclusive development of committed agricultural suppliers
- The interface between vertical coordination and horizontal organization entails leverage points for this strategic fit and the effectiveness of specific organizational forms at this interface can be assessed in relation to the capability to manage both transaction and livelihood risks
- The key role of the horizontal-vertical interface encourages upstream chain actors to explore the comparative advantage of collective action
- A resilient sesame chain is able to build on existing social structures for addressing technological or organizational problems
The demand for sesame products in the domestic and export markets are expected to grow and leads to increasing demand for compliance with quality attributes. Sesame is produced by a large number of small-scale, low-income producers and therefore has large pro-poor impact potential. Average sesame yields are low and traders/exporters are confronted with undersupply to meet market demand.
The activities have a strong linkage to national government policies in Ethiopia, facilitating the growth of oilseeds exports and establishment of cooperatives. The action research program is embedded in the Public Private Partnership Oilseed supported by the Royal Netherlands Embassy, which aims to tackle challenges for both public and private parties to improve the enabling environment for oilseeds supply chains.
Goal: Mechanisms to reduce transaction risks in the sesame supply chain have been identified and actors, service providers and government institutions have integrated these in actions, strategies and polices.
Purpose: The research results inform supply chain partners on concrete interventions to reduce transaction risks aiming to include smallholders and building competitive supply chains.