In Egypt, small farmers embrace the entrepreneurial spirit
When the Arab Spring blew over Egypt in early 2011, most investors predicted chaos and fled, pushing already massive unemployment even higher and plunging the economy into profound uncertainty. But Mohamed Embarak, a farmer in Upper Egypt, saw only opportunity.
With four others, Embarak invested his life savings and created “Goodies for Agricultural Investment”, the first agri-business company in Upper Egypt owned and run by smallholder farmers.
“Many people think that Egypt’s upheaval means instability. To me these are the best times to root in new practices, standards and working culture,” says Embarak.
Advised by a team of agronomists and experts who are part of a UN programme funded by the MDG-Fund, “Goodies” will help other small farmers collectively grow quality horticultural products and connect them directly to markets.
Embarak and his partners are among hundreds of farmers benefiting from the joint UN programme, which aims to encourage an entrepreneurial spirit and improve livelihoods in Upper Egypt, a region that contains only a quarter of Egypt’s population but two thirds of its extremely poor and 95 percent of its poorest villages.
- The SALASEL programme is helping hundreds of farmers become entrepreneurs to improve livelihoods in Upper Egypt.
- Farmers are offered strategic guidance to match their production plans with existing demand.
- Farmers trained by the programme started their own company, and signed a deal to supply a major food-processor for a gross profit of US $150,000.
The programme, “Pro-poor Horticulture Value Chains in Upper Egypt (SALASEL)” incorporates the Arabic word for “chains” – and is based on improving small farmers’ position in the chain of value-adding activities that comprise food production. It helps farmers match their production to market demands, boost their productivity and profitability by reducing food loss after harvest, and improve their positions in export and domestic markets by developing direct links with large agri-businesses, food processing firms and wholesalers.
“To lift small-scale farmers out of poverty, we desperately need to break the long chain of middlemen trading that has for so long eaten up the small farmers’ potential profits; we need to provide the farmers with direct access to the big markets,” says Embarak.
The SALASEL Joint Programme is a collaboration between the Egyptian government and four UN agencies -- ILO, UNDP, UN Women and UNIDO.
The programme offers farmers strategic guidance to match their production plans with existing demand, a market-driven technique known as “contract farming”. “Goodies” plans to provide supplies such as seeds, pesticides and fertilizers to ease the financial burden on farmers at the early stages of cultivation. Advisors will also help farmers market their produce to ensure that they get fair prices for their hard work.
“Relating marketing activities to technical training is a very effective policy. Farmers are hard workers, yet they are mostly used to traditional farming techniques. Contract farming means the prospect of securing a higher profit margin ahead of plantation -- this is a very strong incentive for them to adopt new, more advanced techniques and practices,” said Hany Nashed, marketing officer of the SALASEL programme’s Luxor office, which has six full-time agronomists.
In 2012, 67 small farmers from Awlad Yahia village joined hands and resources to establish their own shareholding agri-business company, with a total capital of US $165,000. The company, which they named “Salasel Co.” after the UN joint programme, has an established strategy based on helping small farmers grow demand-driven crops.
Today, Salasel Co. farmers are involved not only in production but also with the business aspect, signing a deal to supply a major food processor with 1,000 tons of onions, with a gross profit of $150,000.
“When the idea was proposed back in 2011, we did not even consider it to be feasible, but look at us now," says Abu El Saoud, one of the founders of the new company.
The company is closely collaborating with the SALASEL Joint Programme to promote contract farming, emphasizing its contribution to economies of scale as well as increasing the farmers’ bargaining power and improving their access to markets.