New Bavarian brewery provides golden opportunity for Ethiopian grain farmers

Within the scope of the 'Small Farmers, Big Deal' campaign, Bavaria and Agriterra are working with Ethiopian farmers' cooperatives to improve local malting barley. The improved barley is destined for the new Ethiopian Bavaria brewery. The aim is to have the brewery running on 100% Ethiopian malting barley within five years.

To achieve this, the next few years will see the establishment of an entirely local barley chain. To this end, a pilot project has been set up with Admas, a union of farmers' cooperatives. The idea is that local farmers will produce better quality barley, and do so in greater volumes; that way, it will soon no longer be necessary to import malting barley. Thanks to higher quality seed, the yield will increase by 20 to 30 percent. This better barley will then be supplied to the new brewery, thereby providing the farmers with a guaranteed sales outlet and thus a higher revenue.

Habesha beer
In 2014, Bavaria opened the new brewery for the production of the local Ethiopian beer, Habesha. One important point for Bavaria, and a requirement of the Ethiopian government, is that within five years, the brewery is running solely on locally farmed malting barley. In order to reach this goal, Agriterra has been called upon for both its knowledge and expertise. This is partly because Ethiopia and the rest of Africa is a completely new market for Bavaria. What's more, the project is financed in a unique way: the new brewery has no fewer than around 8000 local shareholders, many of whom are small business owners in the hotel and catering industry or in distribution.

Local supply is not sufficient 

In Ethiopia, the cultivation of barley is generally the work of small-scale farmers. The quality of the local grain is often insufficient and the cooperatives are lacking in storage facilities. "We want to develop a local raw material chain", explains Stijn Swinkels, chief New Business Development Officer at Bavaria. "But we can't do it alone. Agriterra is an old hand when it comes to this sort of thing, so we're very happy to collaborate with them."

The pilot launched at the Admas union is the starting point for this venture. The farmers have better seed at their disposal; not only that, but they also enjoy the security of a guaranteed sale. Agriterra also assists with: 

• the professionalisation of the company management
• the financial management of the cooperatives
• the establishment of the malting barley supply chain

Late rainfall

Despite the benefits, the pilot faced a few setbacks. In the first year, Habesha purchased a mere 30 percent of the yield from the barley that was sown. Due to a late and short rainy season, farmers suffered a bad harvest and ate a large proportion of the produce themselves. There was also some dissatisfaction with the price, and the quality of the seed provided fell short of expectations.

However, these setbacks are no reason for Bavaria to pull out of future collaborations.

Swinkels: On the contrary, these kinds of obstacles are all part and parcel of it - we're definitely going to keep going." 

The trial project at Admas shall continue for another year. In the meantime, Agriterra is on the lookout for other cooperatives that can also contribute to the local malting barley chain.