January 02, 2024

Nurturing Young Agripreneurs through Sustainable Partnerships in Ethiopia’s Poultry Sector

Animal Production Related

Ethiopia

In Ethiopia’s poultry industry, a revolution is underway, driven by the enthusiasm and innovation of its young entrepreneurs. Two young men, Robel and Yonas, are spreading their wings and helping others do the same through their micro-enterprise, Yo-Farm, and it all began with their vision for affordable chicken meat in Ethiopia.

Robel and Yonas, the dynamic duo behind Yo-Farm, had dreams of expanding their poultry business to include broiler production and hatchery operations. However, they faced significant challenges, including the high market risks associated with broilers and limited access to hatchery equipment and parent stock.

In 2017, a pivotal meeting between Robel and Chico Meat Ethiopia’s (CME) Chief Executive Officer paved the way for an innovative partnership that would prove to be mutually beneficial. Before joining hands with Chico Meat, Yo-Farm's poultry business was limited to layers and egg production. The two enterprises entered a contractual marketing arrangement that allowed Yo-Farm to establish a hatchery business and provide Chico Meat with quality broilers through their out-growers.

Supported by 2SCALE, Chico Meat works with approximately 47 broiler out-growers and micro-enterprises, focusing substantially on youth and women. Yo-Farm plays a crucial role by providing hatchery services and Day-Old-Chicks (DOCs) to these out-growers as per their agreement with Chico Meat. The out-growers, in turn, supply grown chickens to Chico Meat, who deduct the cost of DoCs and Yo-Farm's service charge before compensating the out-growers. Chico Meat then pays Yo-Farm for their hatchery services and DoCs distribution.

Impact of the Partnership

The partnership between Yo-Farm and Chico Meat has been transformative for both entities. For Yo-Farm, it marked a shift from being solely an out-grower business to a thriving hatchery business. This created a stable market for Yo-Farm, the out-growers, and Chico Meat. The partnership also brought about enhanced transparency in pricing, ensuring everyone knew the selling price and profit margins. Yo-Farm managed to boost its hatchery capacity, increasing the distribution of DoCs from 10,000 to over 30,000 per month. This success underscores the win-win nature of this business partnership.

While working with the out-growers system, collaborating with Yo-Farm has created efficient value chain coordination and helped to build trust among out-growers and Chico Meat, ensuring sustainable business.

The promotion of chicken meat in various forms at roadside stalls and restaurants sparked a surge in demand for poultry products. This surge in demand strengthened the out-growers’ bargaining power, driving growth in the poultry industry across all levels.

Jaco Dekker, Chico Meat's General Manager explains.

Empowering the Next Generation of Agripreneurs

The impact of the Yo-Farm and Chico Meat partnership extends far beyond the poultry farms. It's about empowering the next generation of agripreneurs, giving them the tools they need to succeed. With 60% of Chico Meat's out-growers being young agripreneurs, 2SCALE recognized the untapped potential and facilitated social and business skills training through the partnership with Chico Meat Ethiopia. This initiative aimed to equip youth, targeting 50% women, with required and marketable skills and provided capacity-building support to improve their know-how, organization, coordination, and business relationships within the poultry value chain.

This approach not only enabled them to produce, transform, and supply quality and affordable poultry products to various markets but also stimulated the interest of Business Champions in working with successful, well-skilled young entrepreneurs. These youth entrepreneurs added value to the poultry partnership through innovation, contributing to stronger and long-term business growth and sustainability. Robel Ephrem, Yo-Farm's Manager, elaborates,

The partnership between Yo-Farm and Chico Meat has created a win-win business relationship. Moreover, beyond establishing a DoCs linkage system, Chico Meat’s commitment to strengthen Yo-Farm's hatchery operation ensures sustainability.

While the partnership between Chico Meat, Yo-Farm, and the out-growers has been a resounding success, it has not been without its challenges. The COVID-19 pandemic severely disrupted the business arrangement, posing significant hurdles. Additionally, issues like a shortage of parent stock, foreign currency constraints, and the rising cost of poultry feed have affected the operation's continuity. Moreover, government policies, such as restrictions on importing parent stock from certain countries, have added complexity to the mix.

Despite these challenges, their journey continues, and with each obstacle they overcome, they inch closer to their goal of making affordable chicken meat accessible to all. The partnership between Yo-Farm and Chico Meat showcases the potential of well-structured, inclusive agribusiness partnerships to benefit all actors involved. The story of Robel, Yonas, and the many young agripreneurs in Ethiopia is a testament to resilience, innovation, and the incredible power of youth empowerment for the future of agriculture.

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