Raya Wakena - cooperative union in Ethiopia

Organisational strengthening of Raya Wakena, a cooperative union in Ethiopia. The union provides mechaniszation services, seed cleaning

Introduction

Raya Wakena Farmers’ Cooperative Union was established March 2004 as a Cooperative Union with 9 legally registered primary cooperatives. Currently, the union has 44 primary cooperative members and the total membership of the cooperative reaches 18.145 (16.276 man and 1.869 women). Most of the primary cooperatives produce linseed and niger seed (nug). The core-business of the union is distribution of inputs such as fertilizers and seeds to the farmers through the primary cooperatives. Furthermore the union provides mechanisation services, seed cleaning

Assignment

The key objectives of the 2013 Action Plan were to access organisational strengthening support in the form of training, coaching, and advice designed and coordinated by Agriterra. The cooperative planned to assess the establishment of a joint wheat processing venture, and finalising the business plan for a flour mill project business plan. Focus would be on Internal capitalisations and mobilising the Union's own equity and bank loan. The final goal was the acquisition of equipment and construction of factory.

Result

Internal capitalisation
Information about the share campaign was spread by means of awareness meetings with Primary Cooperative Societies (PCSs), government and cooperative promotion agents. The number of shares sold to date have a value of one million ETB (38,000 euro).

Raya Wakena established a businessplan training programme among PCSs. Although not every PCS was able to prepare a business plan, Raya Wakena was able to formulate a consolidated business plan.
A forecast of output marketing capacity was made, based on the working capital requirements of primary cooperatives and on marketable surplus plans. As a result, a contractual agreement was made between the Union and the Ethiopian Grain Trade Agency (EGTA). Up to now, about 19,000 quintals of wheat have been channelled through the Union to EGTA using commission based marketing methods.

To merge or not?
Possible legal options for three Unions, namely Raya Wakena, Gedeb and Galema, to jointly establish the wheat factory were assessed and included in the business plan. The positions of the potential partners of Raya Wakena remained uncertain at the end of 2013.

Finance

In 2014, Raya Wakena union mobilised 41,100 USD in the form of shares. In 2015, after supporting Raya Wakena with a feasibility plan and a business plan, and with mobilising finance and implementing the factory, the wheat processing plant is almost operational. The factories inauguration is expected in October and will offer many small-scale farmers a more guaranteed wheat market.