Production and Marketing of Spices in Ethiopia

TABLE CONTENTS

1. INTRODUCTION
1.1. Background
1.2. Objective

2. LITERATURE REVIEW
2.1. Theoretical Concepts
2.1.1. Marketing3
2.1.2. Spices Production
2.2. Major Challenges in Spices Production in Ethiopia
2.3. Spices Marketing In Ethiopia
2.4. Major Challenges in Spices Marketing In Ethiopia
2.5. Opportunities of Spices Production and Marketing in Ethiopia

3. CONCLUSIONS AND RECOMMENDATION

4. REFERENCES

Table 1: Mean annual production of spice crops in Ethiopia from cropping year 2005 to 2018

Table 2: Export trend (tons) for different spices in Ethiopia in the cropping years from 2005 to 2012

Table 3: Ethiopia's total spices export by commodity in the cropping year 2009/10

Table 4: Minimum, maximum and most frequent price (Birr kg_” of some prices at Kombolcha, Mekane-Selam and Segno Gebeya Markets

FIGURE

Figure 1: Average Spices Production Shares from 2005 to 2013 in Ethiopia

Figure 2: Figure 2: The Share of Ethiopian Spices Production in 2018.

Figure 3: Production Problems Faced By Pepper Producers at Northwest Ethiopia

Figure 4: Export Volume and Value of Ethiopian Spice Crops from the Cropping Year 2007/08 to 2012/13.

Figure 5: The Trend of Ethiopian Spices Export in Volume and Value from 2011-2017

Figure 6: Ethiopia's Import of Spices during the Years from 2005 To 2009

Figure 7: Marketing Problem Faced By Pepper Producers in Northwest Ethiopia

1. INTRODUCTION

1.1. Background

The agriculture sector is the pillar in the Ethiopian economy as it contributes 34.1% to the gross domestic product (GDP) and offers about 79% of foreign exchange earnings and creating job opportunity for about 79% of the population (Diriba, 2020). Next to coffee, the Ethiopian pulses, oilseeds and spices sectors are among one of the critical components of the agricultural sector contributing to high foreign exchange revenue as reported by the Ethiopian Ministry of Industry (EMI (Ethiopian Ministry of Industry), 2015). As a cash crop, the spice sub-sector has immense potential for income generation of the farming community, creation and development of business opportunities and poverty reduction in Ethiopia (Hordofa and Tolossa, 2020; Tesfa et al., 2017).

The total global spice production was amounted to 12.8 million tons in the year 2018. Chilli was the most commonly produced spices, with a total production of 4.1 million tons in the year 2018 (32%) according to Titus and Wojtek (2020). With long history of spices production (Kifelew et al., 2017; Tesfa et al., 2017), Ethiopia is one of the East African countries that produce and export various spices (Dessie et al., 2020) with production reaching 244,000 tons per year (GIT (Gatefarms International Trade), 2016). Spices production in Ethiopia was expanded between 1995 and 2011 from 107,000 to 153,000 tons with annual growth rate of 9.5% (EMI (Ethiopian Ministry of Industry), 2015). In Ethiopia, more than 50 spice crops are grown and a total potential for growing low land spices is estimated to be 200,000 hectares (GIT (Gatefarms International Trade), 2016; ITC (International Trade Centre), 2020).

The total spice production in Ethiopia increased from 234,000 tons in 2013 to 356,000 tons in 2018, while the area under spice cultivation increased from 150,000 ha to 207,000 ha (Titus & Wojtek, 2020). From 2013 onwards, the Ethiopian spice exports have shown a declining trend due to the bacterial wilt epidemic that considerably affects ginger production (Titus & Wojtek, 2020). As a result, the export of ginger was almost entirely disappeared in 2015 (Herms, 2015). In 2017, ginger exports from Ethiopia had a value of just only US$10,000 and was thus responsible for a negligible share of Ethiopian spice exports (Titus & Wojtek, 2020)

Ethiopia has favorable or conducive environments for various spices production due to the presence of varied climatic and agro-ecological conditions, abundant cultivable and irrigable land, with encouraging government policy environment (Goshme & Ayele, 2019; Herms, 2015; Hordofa and Tolossa, 2020). However, inspite of the suitable agro-ecology base for spice production and a long history of spice cultivation and marketing in Ethiopia, the status of spice production and export in the country is far below expectation. So far, studies related to the production and marketing of spices in Ethiopia are very limited. Even the existing research works and literature have not been well organized and documented in a way it can give enough information for policymakers and researchers in the country for best use of the potential and untapped spice crop resources. Hence, it is essential to review the status, challenges and opportunities in spice production and marketing in Ethiopia for end users, including policy-makers, researchers, students, farming communities and enterprises involved in the spice business or trade, especially processers and exporters.

1.2. Objective

The general objective of the seminar review is to understand the spices production and marketing in Ethiopia with the following specific objectives:

1. To review the major challenges and opportunities in spice production and marketing in Ethiopia for end users.
2. To identify the major marketing channels of spices.
3. To discuss the factors affecting the growth and yield of spices

2. LITERATURE REVIEW

2.1. Theoretical Concepts

The term spice refers to any dried plant product used primarily for seasoning, be it the seed, leaves, bark/peel, or flowers. Spices are essential oils that give foods and beverages flavor, aroma, and sometimes color. They can be marketed whole, ground to a powder or in the form of essential oils and oleoresins. Many spices are also used for other purposes. Plants such as turmeric/erid (Curcuma longa) are increasingly in demand for natural therapies, while others such as peppers (Capsicum spp.) serve as substitutes for chemical dyes or pesticides (Masresha Yimer, 2010). Another definition indicates: spice is a dried seed, fruit, root, bark, or vegetative substance used in nutritionally insignificant quantities as a food additive for the purpose of flavoring, and sometimes as a preservative by killing or preventing the growth of harmful bacteria. Many of these substances are also used for other purposes such as medicine, religious rituals, cosmetics, perfumery, appetite, or eating as vegetables. For example, turmeric is also used as a preservative; licorice as a medicine; garlic as a vegetable and nutmeg as a recreational drug (Masresha Yimer, 2010).

2.1.1. Marketing

Marketing is the process of bringing sellers and buyers together for the purpose of exchanging title to goods and services (Kilingo and Kariuki, 2001). According to Kotler (2003) marketing is defined as a social and a managerial process whereby individuals and groups obtain what they need and want through creating and exchanging products and value with others. The American Marketing Association representing marketing professionals in the US and Canada states that marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives (Eric and Kerin, 2000).

According to Raphael Kaplinsky and Mike Morris (2000) value chain describes the full range of activities which are required to bring a product or service from conception, through the different phases of production (involving a combination of physical transformation and the input of various producer services), delivery to final consumers, and final disposal after use.

A value chain isan alliance of enterprises collaborating vertically to achieve a more rewarding position in the market (Nisku, 2014).

2.1.2. Spices Production

Ethiopia has tremendous potential for growing many spice crops (Herms, 2015; Hordofa and Tolossa, 2020; Titus & Wojtek, 2020). The country mainly produces; chillies, turmeric, ginger, cumin, fenugreek, coriander, black pepper, cardamom and so forth (EMI (Ethiopian Ministry of Industry), 2015; Herms, 2015; ITC (International Trade Centre), 2020; Titus & Wojtek, 2020). More than 50 spice crops are grown in Ethiopia and a total potential for cultivating lowland spices is estimated at 200,000 hectares (GIT (Gatefarms International Trade), 2016; ITC (International Trade Centre), 2020). According to GIT (GIT (Gatefarms International Trade), 2016), the annual average land covered by spices and annual production is around 222,700 ha and 244,000 tons per year, respectively. The production of spices in Ethiopia was expanded during the years from 1995 to 2011 from 107,000 to 153,000 tons with annual growth rate of 9.5%, following global and domestic consumption (FAO (Food and Agriculture Organization of the United Nations), 2013; EMI (Ethiopian Ministry of Industry), 2015). Inspite of the fact that the country has favorable or conducive environments for various spices production, the production of spices in Ethiopia is mostly performed on little plot of land by small holder farmers conventionally (Herms, 2015; Tesfa et al., 2017). As a result, the level of spices production and productivity in the country is far below the expectations.

During the year, 2005 to 2013, black cumin, cardamom, chillies, ginger and turmeric accounted for 97% volume of the national annual average spice production in Ethiopia (ENTAG (Ethiopia- Netherlands Trade for Agricultural Growth), 2018; Herms, 2015). The average spice production shares in Ethiopia during the production years from 2005 to 2013 are shown hereunder (Figure 1).

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Figure 1: Average Spices Production Shares from 2005 to 2013 in Ethiopia

Source: (Herms, 2015 ).

Inspite of the reality that the country is rich in having suitable and diverse agro-ecological zones over its whole regions, 94% of the production comes particularly from Southern Nations, Nationalities and People' (SNNP), Oromia and Amhara regions (ENTAG (Ethiopia-Netherlands Trade for Agricultural Growth), 2018; Herms, 2015). In Ethiopia, the total area and production of spices was estimated at 150,000 hectares and 234,000 tons in 2013, which was increased to 207,000 ha and 356,000 tons in 2018 (Titus & Wojtek, 2020). The share of Ethiopian spice production in 2018 is depicted hereunder (Figure 2). The share of chilli peppers and turmeric increased in 2018 (Figure 2) while that of ginger significantly reduced as compared to average spices production shares shown in 2005 to 2013 in Figure 1.

Figure 2: The share of Ethiopian spices production in 2018.

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