Sub-component 4.2: Support to Farmers’ Organizations

1.1.26Establishing and strengthening of Primary farmers ‘cooperative and Cooperative Federation

1. 
   Primary cooperatives:-The program will support the establishment of primary cooperatives in kebeles where they have not been established earlier and strengthen the one already established. To address the issue of sustainability of Common Interest Groups (CIGs) and their effects, the transition of CIGs into primary cooperatives is essential. Based on interests and willingness of its members, CIGs will be supported to establish primary cooperatives to undertake wider and stronger collective action on behalf of members and provide them with a range of services, including input and output marketing and financial services. They could form a multi-purpose or commodity-specific cooperative society or a primary rural savings and credit cooperative society (RUSACCO) to address important social, economic, or financial needs. AGP II will support the transformation of CIGs to primary cooperatives. This intervention will be implemented by FCA and MoA in collaboration with RCP institution and RBoA.
   

2. 
   National cooperative Federation (NFC):- A national federation of agricultural cooperatives that provides marketing and advocacy at national and international levels and support services for lower-tier cooperatives is lacking in Ethiopia. Because of this, agricultural cooperative unions are incurring high transaction costs in search of both international and national markets in an uncoordinated manner. If a national federation of agricultural cooperatives is established, it will assemble the products from agricultural cooperative unions into larger lots to facilitate more efficient handling and more competitive sales, and then grade and ship these lots to national and international market. The national federation of agricultural cooperatives allows producers penetrate the international markets effectively and efficiently. The formation of this federation requires the support of development partners financially and technically. Hence, the AGP II will support establishment of national federation of agricultural marketing cooperative. The assistance will be provided to Federal Cooperative Agency to conduct (i) feasibility studies, (ii) preparing by laws and business plans; and (iii) conducting workshops and consultative meetings and finally to establish the national federation.
   

The federation is expected to provide marketing and advocacy at national and international levels and support services for respective lower-tier cooperatives. The facilitation of cooperative federations’ linkages with the international cooperative alliance will be assisted to improve access to financial support, new innovations and technologies, international best practices on cooperative development as well as experience sharing visits and trainings. In addition, the federation will help to facilitate capacity building, credit and other services for cooperatives in the country.

1.1.27Improving access to financial services

Credit is a major determinant of the adoption and sustained use of agricultural productivity enhancing input. Limited access to input and output marketing credit, especially output marketing credit, is one of the major problems hindering the effective functioning of most cooperatives. Due to the limited availability of credit services, agricultural marketing cooperatives are not able to purchase outputs from all members in a timely and adequate manner. Therefore, to address this issue, the AGP II will support the following activities:

• 
  Strengthen Rural Saving and Credit Cooperatives (RUSACCOs)
  
• 
  Linking RUSACCOs with Micro Finance Institutions (MFIs)
  
• 
  Linking primary cooperatives to MFIs
  
• 
  Support provision of financial management skill to primary cooperatives, RUSACCos, MFIs and Cooperative Development Agents.
  

The lead implementers of the activities mentioned under the sub component will be FCA and MoA in collaboration with the Regional Cooperative Promotion institutions and RBoA.

1.1.28Capacity Development

1. 
   Human resource capacity development
   

1. 
   For cooperative unions
   

Many cooperative leaders have low capacity to manage and govern a well-functioning enterprise. Board members and managers especially are sometimes unprofessional, part-time, and/or unpaid. As a result, the government and NGOs currently provide most of the capacity building to the cooperatives sector. For agricultural cooperatives to be effective in agricultural commercialization of smallholder farmers, capacity-building support is fundamental. Hence, AGP II will support capacity-building efforts of the government through different methods.

Board of directors and union managers will be provided a systematic, well-designed and periodic capacity building trainings and experience sharing to improve their knowledge and skills to manage their cooperatives in a professional manner. The trainings will cover topics such as cooperative management, business development skill, financial planning, credit management, grain quality control, warehouse management, and gender awareness and mainstreaming. These trainings will enable the cooperatives to control the quality of agricultural commodities, to avoid considerable loss from grain spoilage, to manage account books, to prepare bankable business plans and to make appropriate marketing decisions.
Cooperatives will participate in local experience sharing visits focusing on value addition, financial and accounting management, warehouse management, internal control systems to learn best practices for improving their performance. The capacity building efforts is also expected to increase the membership size and capital of the cooperatives. The AGP II will support training need assessments, training modules preparation, as well as conduct and impact assessment of the trainings. It will also help to identify well performing agricultural cooperatives and cooperative promotion agencies and facilitate experience sharing visits to these selected cooperatives and cooperative promotion agencies. This capacity building will support the commercialization of smallholder farmers by having efficient and well functioning cooperatives. Training on gender mainstreaming will be given to the leadership and general assembly to include women in the leadership position in farmer’s organization (union and primary cooperatives). The human resource capacity development will be implemented by the FCA in collaboration with the RCP institutions.

2. 
   For Agricultural Cooperatives Support Services
   

To improve the service delivery of the federal cooperatives agency and regional cooperative agencies the AGP II will support

• 
  Capacity building through trainings and local exposure visits to improve the competency of the promoters, auditors, legal advisers, inspectors and marketing officers. These visits and trainings will focus on input and output marketing, cooperative management, business management, cooperative accounting, value addition, market linkage and the role of cooperative in the diversification and specialization of agricultural product.
  
• 
  Provision of training on mainstreaming of gender ,nutrition and climate smart agriculture to the cooperative experts at various level to ensure shared objectives and responsibilities by experts for promoting gender equality in the sector and ensure nutrition and climate smart agriculture being mainstreamed in their activities.
  
• 
  Organizing and Conducting of Consultative forums or platforms to discuss critical issues affecting the overall performance of agricultural cooperatives, cooperative promotion agencies as well as other development partners or NGOs supporting the cooperative sector. These forums will help to create strong linkages to avoid duplication efforts and encourage efficient resource use among public institutions, cooperatives, development partners and others stakeholders.
  
• 
  Bi annual monitoring and evaluation review meeting is as one of the tools of monitoring and evaluation is conducted with implementers of the cooperative sub-component of AGP II. It allows effective and timely decision making by the implementers to improve progress towards the intended results AGP II. Hence, AGP II will facilitate bi annual monitoring and evaluation review meeting through the allocation of the necessary resources for the review meeting with stakeholders.
  

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