for better

Most farmers in north-western Ethiopia do not habitually record their income and expenses, nor carry out any cost-benefit analyses of farm activities. Some try to calculate profitability without written records, but tend to forget input costs, do not consider depreciation or to include family labour costs, resulting in incomplete financial pictures. To address this, the Benefit-SBN support programme in collaboration with nine farmer cooperative unions, started rolling out financial literacy training in 2015 in 12 sesame-producing woredas (districts) in Amhara and Tigray regions.

Training of trainers

In 2017, changes were made to the financial literacy training, drawing lessons from previous years. Programme staff improved the books and manuals, producing 7,750 cashbook manuals and 15,500 cash recording books in Amharic and Tigreigna languages. Then, 220 cooperative members were trained to teach financial literacy. Topics included cost recording, farm cash inflow and outflow, end balance, profit or loss, credit costs and stocks, decisions for next season, and in-depth farm analysis. Subsequently, the newly trained trainers spread this knowledge to more than 7,000 sesame farmers from 71 cooperatives, followed by farmer-to-farmer discussions to support financial recording. This significantly increased the number of farmers receiving financial record training, compared to the 1,040 farmers reached last year.

Positive feedback

Farmers gave positive feedback on the training and farmer-to-farmer discussions. Mrs Emebet Bekele, a farmer from Swatamp Kebele, Jawi woreda said: “Previously, I tried to remember my costs and compare them with what I gained, but I often got confused. Since I am busy with different farm activities, I forget things. This year, from the lessons I have learnt, I now record all my costs and it will be easier to calculate profitability at the end.”

Recording costs and income helps farmers to see their farm as a business, and conducting cost-benefit analyses helps them make better informed decisions on future farm activities. This also helps farmers prepare accurate financial overviews of their farm business that loan providers require, to shorten the loan review process.

Unfortunately, very few women were involved in 2017. Cooperatives selected only 888 women to take part, out of the 7,000 trainees. Yet Mr Awoke Nega, a sesame farmer from Sanja, said that his wife is now recording costs even though he went for the training. As more and more women are showing interest, it is essential that cooperatives to select more women in future for scaling out financial literacy training.

Stakeholder involvement

Evaluation of last year’s performance and the planning and implementation of 2017 activities was conducted together with farmer cooperatives, unions and woreda Cooperative Promotion Offices. This collaboration contributed to effective implementation, but not all relevant stakeholders were equally committed. There was limited participation and involvement of some unions, cooperatives and agriculture offices. In some woredas, the union did not transfer funds on time so delaying some training, and some unions did not perform as expected due to lack of commitment and high staff turnover. It was also a challenge for farmers to attend training as they were busy with farm activities, with complaints about the timing of the training of trainers workshop and other sessions.

To improve this situation, discussions led to the appointment of Cooperative Promotion Office focal persons, with a small budget to motivate trainers. Staff from Benefit-SBN closely monitor progress, providing support to focal persons and trainers in all woredas. But this is not enough. To ensure success and sustainability, unions, cooperatives and Cooperative Promotion Offices still need to understand that improving financial literacy of farmer members will help strengthen the cooperatives and unions themselves.

Written by Anteneh Mekuria (November 2017)
A result of Experience Capitalization training organized by the Embassy of the Kingdom of the Netherlands in Ethiopia, in collaboration with CTA and Guava Stories.