ETHIOPIA – The Government of Ethiopia has secured US$50 million grant from the government of the Netherlands for its Agricultural Commercialization Clusters (ACC) Initiative.

Under the funding, the governments signed a Memoranduon of Understanding (MoU) aimed at commercializing ACC projects that the country targets to benefit the small holder agriculture through an inclusive and environmentally sustainable approach.

The funding is expected to contribute to increasing small holder farmers’ income, improving agro-processing and value-addition beyond the creation of off-farm employment opportunities.

It will be implemented through the agricultural Transformation Agency (ATA) on the geographical cluster of the four major regions including, Tigray, Amhara, Oromia and Southern Nations Nationalities Regional States (SNNP) between 2019 and 2023.

With a focus on ten major commodities, the ACC aim to develop integrated, end-to-end, geographic value chains supported by vibrant stakeholder alliances to enhance commercially driven output production and processing of high-value crops.

This is expected to offer a consistent supply of sufficient quality, raw materials for processing and value addition.

The agreement was signed by Ethiopia’s State Minister of Finance, Admasu Nebebe and Charge d’Affairs of the Embassy of the Kingdom of the Netherlands in Ethiopia, Thijis Wounstrahis in Addis Ababa.

Admasu said the financial grant will have a pivotal contribution to create economic opportunities for Ethiopian small holder farmers by improving access to domestic and international markets.

“The MoU of the Agricultural Commercialization Cluster project that we signed today further boosts the longstanding development cooperation of the two countries by contributing to Ethiopia’s agriculture sector development,” he stated.

In addition, Wounstrahis said that Netherlands will strengthen its keen support to transform and enhance the productivity of Ethiopia’s agriculture sector.  

According to him, the two countries’ cooperation in the agriculture sector which is considered as the backbone of Ethiopian economy started almost 17 years ago, the cooperation has brought many positive changes in the sector.

Ethiopia is still heavily reliant on smallholder farming, which accounts for 85 percent of the country’s employment and 95 percent of its agricultural production, according to the Food and Agriculture Organization.

However, most of the country’s 12 million farming households do not have access to major resources such as irrigation and mechanisation technology, which hampers full realisation of the country’s agriculture sector.