Market Assessment Study for Ethiopian Nile Irrigation and Drainage Project

The Eastern Nile Subsidiary Action Program (ENSAP), which includes the countries of Egypt, Ethiopia, and Sudan, is a regional program of cooperative investment that seeks to initiate a regional, integrated, multi-purpose program through a first set of investments. The Eastern Nile riparian’s have identified sub-projects in the areas of integrated water resources management, flood management, power generation and interconnection, watershed management, and irrigation and drainage.
A detailed market assessment study has been carried out as part of the project preparation process. The objectives of the Market Assessment Study were to:
1. Provide accurate information and guidance for the Government of Ethiopia (GOE), and subsequently, to participating farmers, on the most financially and technically viable crops and production systems for the proposed investment in irrigation facilities in each of the identified sites (Megech Pump, Ribb and Anger schemes).
2. Identify opportunities for agri-business processors, service providers and related operators to participate in production and marketing activities as a result of the investment in irrigation facilities in the proposed schemes.
3. Identify means to encourage agri-business entities to participate in commercial activities related to the proposed investment in irrigation facilities.
4. Provide information that would allow for timely modifications to project design, incorporating measures that would improve opportunities for sustained financial and technical viability.
The consultancy team consisted of:
1. An Agricultural-Marketing Specialist /Team Leader- International recruitment)
2. An Agri-Business Specialist (International recruitment)
3. An Irrigated Crop Specialist (National recruitment)
4. An Agricultural Economist (National recruitment)

The role of the Agricultural-Marketing Specialist /Team Leader was to have the overall responsibility for leading the study, directing the work of other members of the team, inter-acting with the client, and ensuring that all deliverables are provided in a timely manner. He was responsible for ensuring that the objectives of the study were fully met, and that all stakeholders were made aware of the implications of the findings of the study. In particular, he advised the GoE and, as requested, the World Bank and other Project Consultants/Contractors, on the technical and financial factors which may require consideration in order to enable the best possible financial returns from the investment, both at the national level and at the level of participating farmers.

The main role of the Agri-Business Specialist was to provide guidance to GoE and project designers on the most appropriate types of agri-business entities which would most efficiently enable profitable marketing of production derived from project investments. He also provided guidance on practical steps that could be implemented to encourage participation in marketing and processing by such entities.

The role of the Irrigated Crop Specialist (ICS) was to conduct an examination of the main cropping opportunities that would be made possible through the investment in irrigation facilities in the proposed project areas. This examination was done through site visits and discussion with farmers, examination of existing crop production data and reports, visits to relevant Research institutes within the country, examination of the main production parameters (soils, climate, altitude), against technical norms. The examination of possible crops would include appropriate crop rotations and crop intensity

The main role of the Agricultural Economist (AE) was to construct financial models of the crops and possible farm models being identified by the ICPS in the proposed project areas. The purpose was to identify the most financially attractive agricultural development patterns, taking into account the technical suitability of the various crops and farm models. In this, the AE worked closely with the AMS, who was responsible for identifying the commodities with the best market potential and matching these with possible production systems that provided superior financial returns. The study also covered field crops, high value horticultural crops, fodder crops and livestock production that were found to be technically viable by the ICPS. The financial analysis was carried out to evaluate the financial sustainability of alternative farming systems particularly their ability to provide for profitable enterprises while covering all operating costs, including the costs of operation and maintenance of irrigation water supply systems.