Learning Agenda of the FSRE

1. Learning Agenda of the FSRE Bere Sericulture Production Private Limited Company Working Group: Contract Farming April 2014 Addis Ababa

2. 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

3. Introduction

4. 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: • Training of out growers • Experience sharing • Invitation of out growers and indirect farmers to attend various events

5. Technology

6. Organization

7. Bere become a market outlet It has partners such as Saba Hare Paradise fashion It started communication with African Silk Company (based at South Africa) to expand its market from East Africa to South Share information Production and processing scheme Market link Marketing

8. 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

9. 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

10. The company does not use chemical such as: Insecticides Herbicides Fertilizers etc Since Bere is not using any of these, environmental issues are not our problems Challenges to cultivate mulberry and castor plants: During dry season out-growers were unable to manage this Out-growers did have no irrigation system The company’s farm has well managed irrigation system Environmental issues

11. 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 Gender

12. 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. Food Security

13. 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

14. 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

15. 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

16. Learning questions • Out-grower/ the company • Full coops? • Market coops? • Contract farming? • Open market?

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

18. Thank you