General background information of Sustainable Meat Ethiopia (SME)

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1 The consumption of raw beef is usual in Ethiopia General background information of Sustainable Meat Ethiopia (SME) Introduction The foundation SME was established op the 12 th of April On that date the Memorandum of Association was signed at the office of the civil law notary in Deventer, The Netherlands. The board of SME consisted at that date of 4 persons with different expertise backgrounds. Around the board is a network of involved people with useful experience and expertise. The goals of SME The project has idealistic goals, but also goals for improving and innovating business areas in the field of meat processing. 1. Contribute to the construction of modern supply chains for meat processing in the context of the Ethiopian society. Building up a good quality care system will be a central activity in the process. 2. Contribute to the socio-economic development of relevant target groups like (small) farmers, women and young people. A better entrance to the labour market supporting training and education will be part of that. 3. Support the research and development of markets for new and high quality meat products. 4. Contribute to awareness and knowledge of sustainable and fair business processes. SME does not have an aim for making profit, but just wants to support the sector of meat to improve the conditions for better business processes and more income for (poor) farmers. SME will realize its goals by cooperation with existing enterprises and farmers in the sector of meat production and meat processing. Cooperation with relevant ngo s and TVET can also be beneficial to realize its goals.

2 Motives SME: vision and mission Ethiopia is a developing country with a lot of possibilities on economic growth in the agro industrial area. The project must support this economic development in which also poor farmers and labourers get opportunities for a better life by training for improving vocational skills and entrepreneurship. Production of sustainable meat can contribute to a long term improvement the food situation for several groups in the society. Introduction of a systemic quality care system in the field meat production and processing can contribute to a healthier life for men and animal. Attention in the whole supply chain for hygienic, veterinarian conditions will contribute to food safety. Guarantees for food safety can acquire new markets in retail, hotels and big (international) organizations. Sustainability and fair trade SME wants to contribute to awareness and knowledge about sustainability and fair trade. The way of working is normally not by instruction, but by cooperation in daily life in business and farms. We hope that stakeholders in supply chains of meat will develop their own values and norms about these global accepted issues. They can also learn that for the longer time sustainability can help to make business and trade stronger. In all kinds of areas of meat production sustainable topics are relevant like use of energy, transport, hygiene and use of medicine and antibiotics. Animal welfare is a point of attention. SME will emphasize that animals should have a good life. For example SME can help to make better life conditions by advising about the quality of stables and transport. Smallholder farmers should be assured to get a good price for their animals, so that they have the benefit of a strong supply chain. Conditions for a well-developed meat supply chain Stakeholders in a supply chain are connected to each other by appointments and contracts. In a supply chain one company or association should be leading. That can be an association of retailers or butchers, but also a meat processing company. The present situation in Ethiopia makes the choice for a company in which slaughter- and meat processing activities are done the most effective. Other conditions for a strong supply chain are: Good quality care system for the whole chain from fodder production to the consumer. SME will help to make an integrated quality care system. A laboratory which can do the monitoring and analysis is part of this. A good hygienic system as part of the quality care system like HACCP, Hazardous Analysis and Critical Control Point System. The retailer and customer should be assured of safe food. This also concerns the limited use of medicine and antibiotics. Knowledge and skills should be on a good level in all areas of the chain. SME will help in instruction and training, directly linked to the need of stakeholders. Also young women and men will get a possibility to realize a better position in the labour market. A supply chain which will guarantee good and enough products needs good entrepreneurs as participants. This makes it necessary to have a good selection for admittance. A welldeveloped supply chain has a strong market position: farmers, entrepreneurs, retailers, etc.

3 should be eager to become a member. It stimulates a sound competition in delivering the needed quality. A good supply chain also offers opportunities for developing a quality label, which has criteria for the quality framework. A license can be given to every entrepreneur who meets these criteria. Goats are resting before being slaughtered for the international market (Debre Zeit) Present situation in Ethiopia concerning meat in general Ethiopia has one of the largest livestock populations in Africa. According to government statistics, there are approximately 50 million cattle, 50 million goats and sheep, plus an assortment of horses, donkeys, camels and chickens. The cattle and meat sector is very important for the national income. The export of beef is the most important; poultry meat is not or hardly exported. The Ethiopian government stimulates export of meat and has more or less a quality care system for the international market. The system is rather weak and needs to be improved. For the national market there is not a (good) system at all. Big foreign enterprises are not allowed to produce for the national market. They would like to do so, because the prices of the national market for example for beef are 2 to 3 times better than for exported beef. SME has analyzed the situation for beef and poultry. The organization Fair & Sustainable did this research.

4 Project activities of SME Starting situation SME has to build up its activities gradually. Using new experience and applying knowledge in the context of the Ethiopian society is a big challenge. Next to that the budget is limited; much time and energy is needed to come to a budget that will bring the goals nearer. This all brings SME has to the statement of Keep in small and simple in the starting period of the project. The described situation in the big meat sector makes it necessary to make choices. SME made the choice to start with the development of a chicken meat supply chain. The situation in Ethiopia is described in two Rapid Market Assessments (RMA), executed by employees of the organization Fair&Sustainable. One RMA described the situation for beef, the other one for poultry. Next to that the board of SME visited Ethiopia to get a better insight in the situation in chicken farms, fodder production, slaughter houses and the consumer market (super markets, hotels, etc.). Of this visit a report had been made. Why poultry SME will make its first step in supporting the development of supply chains for poultry meat. For this SME will cooperate with existing enterprises and associations. The market for poultry meat is small, but growing. The production is for the national market, which fits to the starting points of SME. Next to that other criteria make the choice for poultry supply chains reasonable: The lifetime cycle for chicken is short, about 50 days. Results of investment are shown in a short time. The conversion from fodder to meat is much better for chicken than for beef. The needed water for meat production is for chicken much less than for beef. Chicken needs 4 liter of water for 1 kg of meat, for beef it is 16 liter. Chicken produces less greenhouse gases like methane than cattle. Poultry meat is white meat and this is considered to have less negative influence health than red beef. Intestinal cancer could be promoted more by red than by white meat.. So from the point of view of sustainability and health chicken has advantages above beef. Situation in Ethiopia for chicken meat production The poultry sector in Ethiopia, both for layers and broilers, is developing relatively rapidly. Main drivers for this sector development are: 1. The Ethiopian government promotes egg and poultry meat consumption, coupled with its strategy of import substitution of chicken meat. 2. Urbanization and demand for fast food type chicken products; major chains are exploring the market but unable to enter as their quality standards are not met. 3. Technology transfer from foreign (often Dutch) companies, stimulated by trade missions and trade facilitation financed by the Dutch Embassy in Ethiopia; 4. Presence of a number of medium to large sized companies of Ethiopian entrepreneurs, that see poultry as a good investment and that are keen to work with smallholder farmers to expand their business.

5 A farm where broilers are fattened Stakeholders in the chicken supply chain SME focuses on medium large companies which are already or can become the centre of a supply chain for poultry meat. There are a few companies who have more or less this position because: They have their own fodder production unit by milling and mixing raw fodder to tailor made fodder. They fatten a relatively large number broilers up to 5000 per cycle They have good contacts with many small holder farmers, who buy the mixed fodder and sell the broilers for being slaughtered. Two big problems are seen: 1. The slaughtering capacity and quality is bad. Some companies intend to build new slaughtering facilities. 2. There is not a good market position to the consumer: retail, hotel, etc.. SME can and will use its expertise to solve these problems by advising companies and by building a good monitoring and quality care system. A good market research is necessary to analyze the complete chain. Chico Meat as partner Chico Meat (CM) is a slaughter house for chicken. CM has a position with farmers who deliver their fattened chicken for slaughtering. It has also a position in the growing market for chicken meat. SME can become a partner of CM in which CM has to become the director of the supply chain for chicken meat. SME will support the stakeholders in the chain with their expertise in the field of hygiene and sustainability. This must strengthen the complete chain such a way that it can contribute to more food security and more food safety. SME and CM are now working on a Memorandum of Understanding (MoU), which should result in a Contract of Cooperation. In the contract the position of SME is working on better conditions in the

6 fields of economic perspectives, find investors, sustainability, research and quality care. SME has no commercial goals; acquired funding is used for improvement of these conditions. To facilitate this improvement money can be used for training, laboratory and monitoring provisions, better housing for chickens and provisions for sustainability, like sustainable energy. Background information More about SME can be found on: The annual reports, also the financial are to be found on this website. More information about the livestock situation in Ethiopia can be found on: Begroting 2018