Learning Agenda of the FSRE

Bere Sericulture Production Private Limited Company

Working Group: Contract Farming

April 2014

Addis Ababa

Introduction

• Bere Silk Production Company:

–Is aimed at producing & processing quality & natural silk

–Being model in transferring silk technology

– At moment 67 out growers were trained & interred into the system

–It created job opportunity

Introduction

Technology

Adoption of the silk producing technology:Cultivation of mulberry & castor

Rearing of Eri-silkworm & castor silkworm

Mounting the silkworms to spin silk into cocoon

Reeling, spinning & weaving the cocoon

Dissemination of the Technology:o Training of out growers

o Experience sharing

o Invitation of out growers and indirect farmers to attend various events

Technology

Productivity

Organization

Administrative body

M & ETechnical managem

ent Farm & rearing system

Processing & market link

Research & document analysis

Financial managem

ent & secretor

HRM

Employee managem

ent

Marketing

Bere become a market outlet

It has partners such as

o Saba Hare

o Paradise fashion

It started communication with African Silk Company (based at South Africa) to expand its market from East Africa to South

o Share information

o Production and processing scheme

o Market link

Economics

• The investment is going on very well on the company’s farm but poorly on the out-growers

• The real costs of the company is traceable while it is pitfall with regard to out-growers

• The company’s silk production show increase in mulberry and decline in castor silk within the last 4-5 months indicating economic shift in sales per given cocoon or processed silk which accounts:

– 70 ETB/kg (Eri) to 100 ETB/kg (Mul) for unprocessed

– 500 ETB/kg (Eri) to 1000 ETB/kg (Mul) for processed

• It is difficult to determine the out-growers economic status

– There is a problem of developing economic baseline

– They do not want to give real data of their income

Financial efficiency

• Bere has effectively invested 75% of the finance

• All the financial flows run accordingly, except the delay in machine purchase and installation due to processing official documentations

• All the required machines were ordered and payments were conducted through LC statements

• All the machines will be installed and fully start functioning soon

• Documentations are going on well

• However;

– To work with challenges of out-growers, since the technology is new, it requires a break through the traditional work cultures of the out-growers with additional investment and remodeling the approach to them

Environmental issuesThe company does not use chemical such as:

o Insecticides

o Herbicides

o Fertilizers etc

oSince Bere is not using any of these, environmental issues are not our problems

Challenges to cultivate mulberry and castor plants:

o During dry season out-growers were unable to manage this

o Out-growers did have no irrigation system

o The company’s farm has well managed irrigation system

Gender

• The company has created job both for men and women

• But most of the employees are women

• The women has become empowered by the salary they get rather than depending on men

• Issues related to good production and processing are equally allotted to male and women

Food Security

• The involvement of many employees and out-growers in the production and processing:

– They generated income

– They get direct job opportunity

– Production is not season dependent as long as there is irrigation and increase the production per a given land than a usual trend

– These all together ensure the food security.

Entrepreneurship

• The company is built in a commercial manner with best sprit and team work

• There is smooth and interactive relationship b/n employees and management body

• Involvement of locals and out-growers would ensure sustainability of the entrepreneurship

• Participation of employees in all aspect enable them to generate new idea in all aspects of the firm

• Engagement of out-growers and indirect farmers disseminated the concept of entrepreneurship

Conclusions

• Silk production is a new production technology to the place

• It is a production of feed, rearing silkworm & processing cocoon to quality silk products

• The technology is well adopted by the company but needs an important work with regard to out-growers

• The technology brought

– New professions with know how to produce & process silk

– New employee opportunities

– Empower women with financial resource

• Economically it seemingly profitable and feasible however needs systematic investigation

• The main production system & processing system is mastered

Learning questions

• Out-grower ‘s base line

– Unknown labor cost

– Unknown real income

• Working culture of out-growers

– Silkworm rearing is tedious & labor intensive

– Less risk takers

• Plantation in dry season

– Main challenges of out-growers

• Economics of silk production

– Production of mulberry & castor quantity and cost

– Rearing cost

– Cocoon produced per feed

Learning questions

• Out-grower/ the company

• Full coops?

• Market coops?

• Contract farming?

• Open market?

Action plan: what to measure and how to organise this ?

• Out grower’s challenge solving

– Developing base line

– Developing contract farming/deriving employees towards making them contract farming

– Promoting individual farming system

– Promoting available water utilization

• Basis for analysis of economics silk production

– Determining the amount of feed produced per ha

– Determining labor cost for feed production

– Determining the amount of cocoon produced per consumption of a given feed

Thank you