Sustainable Irrigated Agriculture and Livelihood Development

Project in Afar Region, Ethiopia

1. Executive Summary (~1 Page)

This proposal presents a transformative agricultural development initiative

targeting Ethiopia’s Afar Region, a drought-prone yet high-potential area due to
proximity to the Awash River and its fertile alluvial plains. Chronic food
insecurity, overreliance on pastoralism, and climate vulnerability afflict the region.
The proposed three-year project aims to convert 300 hectares of farmland into
irrigated plots, training 1,000 smallholder farmers—especially women and youth—
in climate-smart agriculture.

Total Investment Required: ETB 34,500,000

Key Focus Areas:

Solar-powered irrigation and canal infrastructure

Provision of drought-resistant crops and modern farm inputs

Training through Farmer Field Schools (FFS)

Formation of 10 cooperatives

Market development, storage facilities, and financial inclusion

Aligned with Ethiopia’s Climate Resilient Green Economy (CRGE), Agricultural

Growth Program (AGP), and national food security strategy, the initiative
anticipates a 52% ROI over 3 years and long-term socioeconomic and
environmental returns.

2. Introduction

2.1 Overview of Ethiopia’s Economy and Agriculture Sector

Ethiopia is one of the largest and most populous countries in Sub-Saharan Africa, with a
population exceeding 120 million. The country’s economy has undergone significant structural
transformation over the past two decades, experiencing strong GDP growth rates averaging
between 7% and 10% annually. However, despite diversification efforts in recent years,
Ethiopia’s economy remains fundamentally agrarian in nature. Agriculture continues to serve as
the backbone of the national economy, contributing approximately 32% of Gross Domestic
Product (GDP), and providing livelihoods for about 70% to 80% of the population, either
directly through farming or indirectly through associated agro-industries and services.

The sector is predominantly characterized by smallholder farmers who cultivate less than two
hectares of land on average. These farmers primarily engage in subsistence agriculture, relying
heavily on seasonal rainfall and traditional farming techniques. As a result, agricultural
productivity is relatively low compared to global and even regional benchmarks. The majority of
farmers lack access to modern inputs such as improved seeds, fertilizers, mechanization, and
irrigation technologies. Additionally, rural financial services remain underdeveloped, making it
difficult for smallholders to invest in productivity-enhancing tools and practices.

Agriculture in Ethiopia is highly vulnerable to environmental and climatic shocks. Recurrent

droughts, exacerbated by climate change, have led to periodic food crises in various parts of the
country. Land degradation, driven by overcultivation, deforestation, and poor land management
practices, further diminishes the productive capacity of the land. As a result, food insecurity
remains a persistent challenge, particularly in lowland areas such as the Afar and Somali regions,
which are also among the most drought-prone and ecologically fragile.

The government of Ethiopia, recognizing the centrality of agriculture to both economic

development and poverty reduction, has prioritized the sector in its national development plans.
Flagship programs such as the Agricultural Growth Program (AGP), the Sustainable Land
Management Program (SLMP), and the Growth and Transformation Plans (GTP I & II) have
focused on improving infrastructure, access to markets, and extension services. Additionally, the
Climate Resilient Green Economy (CRGE) Strategy outlines pathways for agricultural
transformation that are environmentally sustainable and climate-smart.

Despite these initiatives, disparities remain between highland and lowland agricultural zones.
The highlands, which enjoy more favorable climatic conditions, have benefitted more from
development interventions. In contrast, regions like Afar—home to pastoralist and agro-
pastoralist communities—have historically been marginalized, receiving less investment in both
physical infrastructure and capacity development. Yet, paradoxically, these lowland areas
possess significant untapped potential, including access to major rivers such as the Awash, large
tracts of fertile alluvial soils, and expansive flatlands suitable for irrigation.

Investments in irrigated agriculture offer a promising avenue for bridging this gap and
transforming lowland economies. Irrigation reduces dependency on unreliable rainfall, enables
year-round farming, and supports the cultivation of high-value cash crops. Furthermore,
transitioning to climate-resilient agricultural systems in regions like Afar can contribute
significantly to national food security, reduce rural poverty, and enhance community resilience to
future climatic and economic shocks.

In summary, while Ethiopia’s agriculture sector is foundational to its economic structure and
societal well-being, it remains hampered by structural constraints and environmental
vulnerabilities. Addressing these challenges, particularly in underserved regions like Afar,
requires integrated solutions that combine modern technology, community empowerment, and
strategic investment in irrigation, training, and value chains. Such efforts will be critical to
achieving Ethiopia’s development goals and ensuring sustainable livelihoods for millions of rural
households.

2.2 Project Rationale

The Afar Region, located in northeastern Ethiopia, is characterized by a predominantly
pastoralist economy, with the majority of its population relying on livestock for their livelihoods.
However, over the past decades, this traditional way of life has come under increasing pressure
due to a combination of environmental, economic, and social challenges. Chief among these is
the rising frequency and intensity of droughts—exacerbated by climate change—that have
severely undermined the viability of pastoralism. These climatic shocks lead to reduced water
availability, loss of grazing land, and widespread livestock mortality, pushing many households
into chronic food insecurity and deepening cycles of poverty.

Compounding this is the issue of overgrazing, which has accelerated land degradation and
desertification across vast swaths of the region. As pasturelands become depleted, competition
over scarce natural resources intensifies, sometimes contributing to local conflict and migration.
The socio-economic vulnerability of the Afar population, particularly women and youth, is
further heightened by limited access to education, healthcare, infrastructure, and income
diversification opportunities.
In this context, the introduction and expansion of sustainable irrigated agriculture offers a
strategic and transformative solution. The Afar Region, while arid, is endowed with key natural
assets that remain underutilized—most notably the Awash River and its network of tributaries.
These water resources, combined with flat, fertile alluvial plains, create a strong foundation for
the development of irrigation systems. By shifting from rainfed and pastoral systems to climate-
resilient irrigated farming, the region can improve food security, create jobs, and stimulate
inclusive economic growth.

This project proposes to harness both surface and groundwater using solar-powered pumping
technology, which aligns with Ethiopia’s commitment to green, low-emission development.
Solar irrigation systems are particularly appropriate for remote, off-grid communities and reduce
reliance on diesel or electricity, minimizing environmental impact and long-term operating costs.
The transition to irrigated agriculture also enables the cultivation of high-value crops—such as
vegetables, grains, and fruits—which can significantly boost household incomes and nutrition
outcomes.

Moreover, irrigation offers stability and year-round productivity, enabling Afar communities to
overcome the seasonality of traditional livelihoods. This is especially critical for empowering
women and youth, who often face disproportionate barriers in accessing land, resources, and
income. The project will integrate gender-sensitive approaches and targeted support mechanisms
to ensure that these groups are not only included but prioritized in capacity-building, cooperative
formation, and market access efforts.

Ultimately, the rationale behind this project lies in its ability to provide a sustainable exit from
recurrent food aid dependency, which has become a persistent feature in the region due to
cyclical crises. Through infrastructure development, training, and institutional strengthening, the
initiative aims to foster self-reliance, build climate resilience, and lay the groundwork for a
diversified rural economy rooted in agro-pastoral integration.

2.3 Project Objectives

The overarching objective of the Sustainable Irrigated Agriculture and Livelihood Development
Project in the Afar Region is to transition vulnerable pastoral communities toward resilient,
diversified, and market-oriented agricultural livelihoods. This will be achieved through a
combination of infrastructural, institutional, and human capital investments designed to address
the core constraints faced by smallholder farmers in the region.

A central aim of the project is to develop 300 hectares of irrigated farmland in the districts of
Amibara, Dubti, and Asayita, utilizing solar-powered pump systems and canals sourced from the
Awash River. This infrastructure will provide reliable year-round water access, transforming
dryland plots into productive farmland suitable for cultivating high-value crops.
Alongside this, the project will train 1,000 smallholder farmers, with a strong emphasis on
social inclusion—ensuring at least 40% are women and 30% are youth. These farmers will
participate in Farmer Field Schools (FFS), learning climate-smart practices, water-use efficiency,
soil health management, and post-harvest handling techniques.

To maximize productivity and resilience, the initiative will introduce drought-tolerant and
high-yield crops such as maize, sorghum, onions, tomatoes, and date palm. Access to improved
inputs, fertilizers, and climate-resilient seed varieties will be facilitated.

The project will also focus on improving access to agricultural inputs, storage infrastructure,
and market linkages, enabling farmers to increase their earnings and reduce post-harvest losses.
Lastly, it will establish and strengthen at least 10 farmer cooperatives, empowering local
producers to collectively manage production, negotiate better prices, and access credit and
services.

These objectives are designed to complement each other and collectively enhance food security,
income generation, and long-term climate resilience in the Afar Region.

2.4 Mission

 Promote Sustainable Agriculture: Develop environmentally responsible farming

systems that prioritize water conservation, soil health, and low-emission technologies to
ensure long-term productivity in the arid Afar Region.
 Enhance Climate Resilience: Equip local communities with the tools, infrastructure, and
knowledge to adapt to climate variability through solar-powered irrigation, drought-
resistant crops, and agroecological practices.
 Empower Local Communities: Strengthen the economic and social capacity of Afar's
marginalized populations—especially women and youth—through skills development,
cooperative organization, and improved access to markets and services.

2.5 Keys to Success

 1. Sustainable Water Access: Ensure consistent and equitable irrigation through solar-
powered systems and canal infrastructure drawing from the Awash River and
groundwater, reducing dependency on erratic rainfall.
2. Community Engagement and Ownership: Foster strong local participation by
involving elders, women, youth, and local governance structures in decision-making, land
allocation, and cooperative management.
3. Capacity Building and Inclusivity: Deliver hands-on training through Farmer Field
Schools (FFS) that prioritize inclusivity—targeting women (40%) and youth (30%)—and
promote cooperative models for shared growth.
4. Market and Policy Alignment: Build efficient market linkages through aggregation
centers and digital tools, while aligning with Ethiopia’s national strategies (CRGE, AGP)
and meeting donor requirements for sustainability and impact.

2.6 Company Summary

The implementing body will be a consortium comprising experienced local NGOs,

international development partners, and the Regional Bureau of Agriculture,
coordinated by a Project Implementation Unit (PIU) in Semera.

2.7 Start-up Summary

Local Currency Foreign Currency Total Investment Cost

Description
(ETB) (ETB) (ETB)

Irrigation Infrastructure 12,000,000 4,000,000 16,000,000

Agricultural Inputs &

2,500,000 1,000,000 3,500,000
Training

Market Access
1,800,000 500,000 2,300,000
Infrastructure

MEL System 1,000,000 800,000 1,800,000

Personnel, Admin, Logistics 2,400,000 1,200,000 3,600,000

 Local Currency Foreign Currency Total Investment Cost
Description
(ETB) (ETB) (ETB)

Contingency 1,200,000 400,000 1,600,000

Total 20,900,000 7,900,000 34,500,000

3. Market Analysis Summary

3.1 Market Segmentation

The market for agricultural produce in Afar Region can be segmented into various key
categories, based on both geographic and consumer demand factors. Each segment presents
distinct opportunities for growth and development, and these can be leveraged for the success of
the project.

1. Local Consumers in Afar Towns

Within the Afar region, there is a significant local consumer base in towns such as
Semera, the capital of Afar, and other smaller towns scattered across the region. These
consumers primarily demand essential foodstuffs, including vegetables and grains. Due to
the limited agricultural production capacity in these areas, most of these products are
often imported from highland regions of Ethiopia. The project’s aim to introduce
irrigated farming will allow local farmers to meet this demand by producing a consistent
supply of vegetables, grains, and staple crops, helping reduce dependency on imports.
2. Regional Markets in Addis Ababa and Dire Dawa
In addition to the local markets in Afar, there is a significant regional demand in larger
cities like Addis Ababa and Dire Dawa. These markets are well-established and act as
hubs for agricultural goods flowing from different regions. As urbanization increases and
the demand for fresh produce grows, these cities offer lucrative outlets for surplus
produce from the Afar Region. The development of irrigated agriculture will allow Afar
farmers to produce a variety of crops, ensuring they can access and meet market demand
 in these cities. The transport infrastructure in these areas facilitates easy movement of
goods, thus offering a promising market opportunity for the project’s produce.
3. Institutional Buyers (Schools, Relief Agencies)
Another key segment is the institutional buyers, which include schools, NGOs, and relief
agencies operating within Afar, Addis Ababa, and other regions of Ethiopia. These
institutions often source large quantities of basic food products, such as grains,
vegetables, and staple crops, to support their nutrition programs and community
development initiatives. With the rise in food insecurity and malnutrition, especially in
drought-prone areas like Afar, there is growing institutional demand for sustainably
produced food products. By building capacity for large-scale irrigation and crop
production, the project can target these institutional buyers as reliable and long-term
customers, offering consistent supply chains for their nutritional programs.
4. Export Potential for Onions and Date Palm (Long-Term)
As the project progresses and production systems stabilize, there is an exciting
opportunity to explore the export potential of certain high-value crops such as onions and
date palms. These crops, particularly onions, are highly sought after in international
markets due to their versatility and use in both fresh and processed forms. Date palms,
though a long-term investment, have high economic potential in both domestic and
international markets, especially in regions with similar climatic conditions. Developing
export channels for these products will open new opportunities for Afar farmers, further
enhancing the economic impact of the project. However, this will require careful
planning, quality control, and market research to build competitive pricing structures and
reliable logistics.

3.2 Past and Present Demand

3.2.1 Past Supply

Historically, agricultural production in the Afar Region has been minimal, primarily due to the
region's heavy reliance on rainfall-dependent farming systems. The climate in Afar is
characterized by high temperatures, low and erratic rainfall, and frequent droughts, making
traditional rainfed agriculture unsustainable in many areas. As a result, the region has faced
significant challenges in producing sufficient quantities of food for local consumption, leading to
heavy dependence on food imports.

1. Limited Local Production:

The scarcity of irrigation infrastructure has meant that farmers in Afar were largely
confined to rain-fed agriculture, which yields uncertain and inconsistent results. This has
resulted in low crop productivity, with many farmers unable to produce enough to meet
local demand. In particular, staple crops such as vegetables, grains, and legumes have
faced production shortfalls.
2. Dependence on Imports:
Due to the low local agricultural output, most of the food consumed in Afar—especially
vegetables like tomatoes, onions, and leafy greens, as well as grains such as maize and
sorghum—has been imported from other regions of Ethiopia, particularly the highlands.
These imports typically come from regions like the Rift Valley and central Ethiopia,
where climatic conditions support more reliable crop production.
3. Food Insecurity:
The inability to produce sufficient quantities of food locally, combined with the region’s
remoteness and limited infrastructure, has led to food insecurity and reliance on external
assistance. During drought years, food shortages are exacerbated, and the region has
increasingly turned to food aid from government and humanitarian organizations to meet
its basic nutritional needs.

The past supply situation has made it clear that there is a significant gap between local demand
and supply, with Afar being heavily dependent on imports to meet the needs of its population.
This has created a major opportunity for introducing sustainable irrigation systems, which would
allow for year-round crop production and reduce the region's reliance on external food sources.
3.2.2 Demand Projections

The demand for agricultural products in the Afar Region is expected to grow significantly in the
coming years, driven by a combination of urbanization, nutritional initiatives, and regional food
shortages. Several factors are contributing to this growing demand:

1. Urbanization and Population Growth:

As urban centers like Semera and other towns in Afar experience rapid growth, there is
an increasing need for locally produced food to meet the demands of the urban
population. This population growth is expected to drive higher consumption of essential
crops, including vegetables, grains, and fruits. The region's urban areas are projected to
expand by approximately 5-7% annually, creating a larger consumer base for agricultural
products.
2. Nutrition Programs and Health Initiatives:
The government of Ethiopia and various NGOs are implementing nutrition programs to
address the high rates of malnutrition and food insecurity in the region. These programs
prioritize the production and consumption of nutritious crops like vegetables, legumes,
and fruits, further driving the demand for such produce. As a result, the demand for high-
value crops such as onions, tomatoes, and green leafy vegetables is expected to rise
sharply in line with these health and nutrition goals.
3. Regional Food Shortages and Import Dependency:
Given the frequent droughts and the region’s history of food insecurity, the demand for
locally grown produce is expected to rise as regional food shortages persist. The
continued reliance on food imports from other regions of Ethiopia and neighboring
countries is not sustainable in the long term. As climate change increases the frequency
of droughts and disrupts traditional supply chains, demand for locally produced food will
intensify, particularly for crops that can withstand dry conditions.

In terms of growth rate, the demand for key agricultural products is projected to increase at an
annual rate of 10-12%, driven by the combined effect of urban growth, health programs, and the
desire for food security. This growth presents a significant opportunity for agricultural
diversification and investment in irrigation and improved farming practices in Afar.
3.3.1 Competition and Buying Patterns

The agricultural market in the Afar Region is characterized by a relatively low level of competition due to
several unique challenges, including harsh climatic conditions, limited irrigation infrastructure, and
traditional agricultural practices. However, this lack of competition presents both challenges and
opportunities for those engaged in the agricultural sector. Below are key aspects of competition and
buying patterns that shape the local market dynamics:

Low Competition Within Afar

The agricultural sector in Afar remains underdeveloped compared to other regions of Ethiopia.
The majority of farmers in the region still depend on rainfed agriculture, which is highly
susceptible to droughts and weather patterns. This results in lower production levels, especially
in crops that require consistent water availability. Consequently, few large-scale agricultural
operations exist within the region, creating a competitive void that can be filled by this project.
While some local producers offer vegetables, grains, and livestock, there is little formal or
organized competition, and production remains fragmented. This situation presents a window of
opportunity for introducing modern irrigation systems, more consistent crop production, and new
market entrants to help supply demand.

Buyer Preferences: Consistency, Volume, and Price Stability

Buyers in both local and regional markets prioritize consistency, volume, and price stability
when sourcing agricultural products. This is particularly true for institutional buyers like schools,
relief agencies, and large-scale retailers. Consistent delivery of quality products is essential for
meeting the needs of these buyers, who often have long-term contracts and require guaranteed
supplies for their programs or operations. The demand for fresh produce such as tomatoes,
onions, and leafy greens in regional markets (Addis Ababa, Dire Dawa) has been increasing
steadily, yet these markets are often reliant on imports from other parts of Ethiopia due to the
limited production in Afar.

Therefore, an essential strategy for this project will be to emphasize volume and reliability—
offering both consistent harvests and meeting buyer expectations. This consistency can be
assured by the proposed solar-powered irrigation systems, which would mitigate risks posed by
erratic rainfall and provide water security for year-round production.
Opportunity for Contract Farming with Processors and Wholesalers
The agricultural market in Afar presents significant opportunities for contract farming
arrangements with processors and wholesalers, especially for high-value crops such as onions,
tomatoes, and date palms. Given the absence of substantial local competition and the steady
demand for these products, processors are likely to seek reliable local suppliers to reduce
reliance on distant and inconsistent sources.

Contract farming offers an excellent model to ensure that buyers have access to a steady supply
of high-quality produce. This model also ensures that farmers receive guaranteed prices for their
products, reducing financial uncertainty. By partnering with wholesalers and processors, the
project can help secure long-term contracts, which will benefit both the producers and buyers.
These partnerships will allow farmers to scale up their production while ensuring that their crops
are processed and marketed efficiently, increasing profitability and market access.

Overall, the combination of low local competition, buyer preference for consistency, and the
opportunity for strategic partnerships like contract farming positions the Afar region as an ideal
location for expanding irrigated agricultural production. With appropriate investments in
infrastructure, training, and market development, the project will contribute to increasing the
competitiveness of Afar’s agricultural sector and meeting the growing demand for local produce.

4. SWOT Analysis

The SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis provides a strategic
overview of the internal and external factors that could impact the success of the proposed
project in the Afar Region. By understanding these factors, the project can better prepare to
leverage its strengths, mitigate weaknesses, seize opportunities, and guard against potential
threats.

Strengths
Reliable Water Access from Awash River
One of the key strengths of this project is its access to the Awash River, a reliable water source
for irrigation. The region’s proximity to the river ensures that the irrigation systems, especially
the proposed solar-powered systems, will have a consistent water supply. This is a crucial factor
in achieving year-round agricultural production and mitigating the effects of seasonal droughts.
This access to water sets the project apart from many other regions that face unreliable water
resources.

Strong Community Support

The Afar Region has a history of communal collaboration, and this project benefits from strong
local support. Community members are motivated to transition from traditional pastoralist
practices to agriculture as a more sustainable and profitable livelihood. This support is
particularly significant for the success of the cooperative model, which will rely on local
participation and shared governance. Involving communities from the beginning helps to ensure
that the project’s goals align with their needs and interests.

Donor and Government Alignment

The proposed project is in alignment with Ethiopia’s broader development goals, including the
Climate Resilient Green Economy (CRGE) and the Agricultural Growth Program (AGP).
Additionally, there is strong alignment with government priorities related to food security,
climate adaptation, and rural development. This positioning makes the project attractive for
funding from both national and international donors. The government’s support could facilitate
smoother implementation and encourage other stakeholders to get involved.

Weaknesses

Harsh Climate, Infrastructure Gaps

The Afar Region is characterized by an extremely harsh climate, with high temperatures and
long periods of drought. The lack of adequate infrastructure in many parts of the region,
including limited roads, storage facilities, and irrigation systems, poses significant challenges.
These conditions may increase the cost and complexity of implementing the project, requiring
substantial investments in infrastructure development before agricultural production can take off.
Limited Prior Irrigation Experience
Despite the availability of water from the Awash River, the local community has limited prior
experience with modern irrigation techniques. Most farming practices in Afar are traditional, and
there is little familiarity with modern irrigation technologies such as drip or sprinkler systems.
This gap in knowledge and skill will require substantial investment in training and capacity-
building for local farmers. Without this, the success of the irrigation systems could be
jeopardized.

Low Literacy and Agribusiness Knowledge

Many farmers in the Afar Region have low levels of literacy, which may pose a barrier to
accessing and utilizing agricultural training effectively. Additionally, the concept of
agribusiness, including market access, cooperative management, and financial literacy, is not
widely practiced. To overcome this weakness, the project will need to incorporate tailored
educational programs, emphasizing hands-on training and using low-literacy-friendly materials
to ensure effective knowledge transfer.

Opportunities

Growing Demand for Fresh Produce

The demand for fresh produce in Ethiopia is growing due to increasing urbanization, dietary
changes, and a rising middle class. The Afar Region has the potential to tap into this expanding
market, especially in neighboring urban areas like Addis Ababa and Dire Dawa. With the
introduction of reliable irrigation systems, farmers can meet the growing demand for high-value
crops such as vegetables, onions, and tomatoes. This growth presents an opportunity for farmers
to diversify their income sources and improve food security in the region.

New Solar and Mobile Agri-Tech

Advances in solar-powered technology and mobile agricultural applications offer significant
opportunities for increasing agricultural productivity in Afar. Solar-powered irrigation systems
are not only environmentally friendly but also cost-effective in the long run, reducing reliance on
diesel or electrical power. Mobile technology can be used to provide farmers with access to real-
time weather data, market prices, and agricultural advice. By leveraging these technologies, the
project can enhance farm productivity and link farmers to broader markets and knowledge
resources.

High Donor Interest in Climate Resilience

There is increasing global interest in funding projects that focus on climate resilience, especially
those that aim to reduce vulnerability to climate change and promote sustainable agricultural
practices. The Afar Region, being highly vulnerable to climate shocks, is an ideal location for
such projects. With a strong emphasis on climate-smart agriculture, the project is well-positioned
to attract funding from both national and international climate resilience-focused donors,
including those supporting the CRGE initiative.

Threats

Climate Shocks, Flash Floods

While the Awash River provides a stable water source, the region remains vulnerable to other
climate-related threats, such as flash floods and extreme heatwaves. These unpredictable events
can damage crops, disrupt irrigation systems, and lead to significant losses for farmers. To
mitigate this threat, the project must include robust contingency plans, such as flood-resistant
infrastructure and crop insurance, to protect farmers from the impacts of climate extremes.

Political or Social Instability

The Afar Region has experienced political and social instability in the past, and such instability
could pose risks to the successful implementation of the project. Conflicts, displacement, or
changes in government policy could delay or halt progress. To reduce these risks, the project
must engage in continuous dialogue with local leaders and government stakeholders to ensure
stability and foster community support.

Market Price Fluctuations

Agricultural markets are susceptible to price volatility, influenced by factors such as supply
chain disruptions, international commodity markets, and local demand fluctuations. This can
make it difficult for farmers to predict their income, especially in the first few years of the
project. To address this threat, the project will need to focus on strengthening market linkages,
establishing long-term contracts with buyers, and exploring opportunities for value-added
products to minimize exposure to price fluctuations.
5. Marketing Strategy

A well-structured marketing strategy is crucial to the success of the Sustainable Irrigated

Agriculture and Livelihood Development Project in the Afar Region. The project aims to
enhance market access for local farmers by establishing cooperative-led branding, bulk selling
practices, and strategic partnerships with wholesalers and key institutional buyers. These efforts
will help create a reliable revenue stream for smallholder farmers and ensure that the products
grown through sustainable, climate-resilient practices are effectively marketed and sold in local,
regional, and national markets.

1. Cooperative-led Branding (e.g., “Afar Fresh”)

The establishment of cooperatives is central to the success of this project, and one of the key
marketing strategies is to develop a strong, recognizable brand associated with high-quality,
sustainably produced agricultural products from Afar. By adopting a cooperative-led branding
approach, farmers can collectively market their products under a unified brand name, such as
“Afar Fresh.” This will help build consumer trust, ensure consistency in quality, and differentiate
Afar-grown products in the market. The branding effort will also allow farmers to target niche
markets that value sustainability, organic farming, and locally sourced produce.

The brand “Afar Fresh” could be leveraged to appeal to both domestic and international buyers
who are looking for ethically produced, climate-resilient crops. By emphasizing the unique
aspects of the region—its rich agricultural potential and sustainable farming practices—the brand
will stand out in the competitive agricultural market.

2. Bulk Selling Through Aggregation Centers

To streamline the marketing process and increase bargaining power, the project will establish
aggregation centers where farmers can pool their produce before it is sold. This approach allows
farmers to sell in bulk, reducing the costs associated with transportation and transaction fees
while ensuring they meet the volume demands of larger buyers. These centers will act as a bridge
between smallholder farmers and large buyers, facilitating the delivery of high-quality produce
to urban and regional markets.
Bulk selling through aggregation centers also provides an opportunity for quality control. The
project will invest in training farmers to meet market standards and ensure that their products are
consistently high-quality, which will increase the likelihood of securing long-term contracts with
wholesalers and institutional buyers.

3. Trade Fairs and Digital Platforms

Participation in trade fairs and agricultural expos is an important strategy to showcase the
products of the Afar region to a wider audience. The project will promote the farmers’ products
at trade fairs in Ethiopia and neighboring countries, positioning Afar agricultural products as
desirable for both domestic consumption and export. These events provide valuable networking
opportunities with buyers, processors, and exporters who are looking for fresh produce and other
high-demand crops.

In addition to traditional trade fairs, the project will take advantage of digital platforms to
enhance marketing efforts. Platforms such as the Ethiopian Commodity Exchange (ECX) and
Agritech apps will be utilized to connect farmers with buyers, monitor market prices, and
facilitate the sale of produce in real time. This digital engagement will enable farmers to bypass
middlemen, ensuring they receive a fair price for their produce and have direct access to national
and international buyers.

4. Long-term Supply Agreements with Urban Wholesalers

Securing long-term supply agreements with wholesalers in major urban centers like Addis
Ababa, Dire Dawa, and other regional hubs will provide stability for the farmers and ensure a
consistent demand for their products. By negotiating long-term contracts, the project can offer
urban wholesalers a reliable supply of high-quality, fresh produce, helping to meet the growing
demand for vegetables, grains, and other crops in urban areas.

These agreements will also allow farmers to plan for the long term, knowing that they have a
guaranteed market for their produce. The project will focus on establishing relationships with
wholesalers who are committed to fair pricing and sustainability, ensuring that the farmers
benefit economically while also promoting environmentally friendly and climate-resilient
practices.

5. Nutrition-sensitive Campaigns with NGOs and Schools

Another key aspect of the marketing strategy will be working with non-governmental
organizations (NGOs) and schools to promote nutrition-sensitive agriculture. This will involve
targeted campaigns to increase the awareness of the nutritional benefits of the crops being
produced, particularly vegetables and drought-resistant grains like sorghum and millet. By
partnering with schools, the project can introduce nutritious food options into the school feeding
programs, thus increasing demand for these crops among children and their families.

Collaborations with NGOs will help spread awareness of the nutritional advantages of
consuming locally grown, climate-smart produce. Through these campaigns, the project will
contribute to improving public health and food security in the region, creating new opportunities
for farmers to sell their products to schools, hospitals, and other institutional buyers who
prioritize nutrition.

6. Sales Strategy

The sales strategy for the Sustainable Irrigated Agriculture and Livelihood Development Project
is designed to maximize the value of the crops produced and ensure a stable income for the
farmers. The project focuses on producing a variety of high-demand crops that can meet the
nutritional needs of the local population and generate income through both local and regional
markets. Below are the descriptions and applications of the key products that will be cultivated
under the project.

6.1 Product Descriptions and Applications

1. Maize
Use: Maize is a staple food in Ethiopia and serves as a critical source of nutrition for the
local population. It is also an important animal feed for livestock in the region. With
consistent supply, maize can meet the dietary needs of both urban and rural consumers.
 The crop will be sold primarily in the domestic market, where demand is steady due to its
versatility in food preparation.
2. Sorghum
Use: Sorghum is a drought-resilient grain well-suited for arid regions like Afar. It is a
staple food that can be used in a variety of culinary applications, including porridge,
bread, and beer production. Additionally, sorghum is a key crop for both food security
and livestock feed, making it highly valuable in the local and regional markets. Its ability
to withstand drought conditions makes it a reliable crop for farmers in the Afar region,
contributing to both food security and income generation.
3. Onions
Use: Onions are a high-value cash crop with strong demand both in domestic and
regional markets. The crop has a relatively short growing cycle, allowing for quick
returns on investment. It is a critical component in Ethiopian cuisine, making it a staple in
local and regional markets. Export potential also exists for onions, especially if the
project focuses on improving quality and meeting the standards required for international
markets.
4. Tomatoes
Use: Tomatoes are grown for both fresh markets and processing. In addition to being a
dietary staple, tomatoes have a high demand in local markets for use in sauces, stews, and
other traditional dishes. The ability to sell fresh tomatoes to local markets or process
them into value-added products like canned tomatoes and sauces will provide a
diversified revenue stream for farmers. Processing plants or cooperatives could further
enhance the marketability of this crop.
5. Date Palm
Use: Date palms are a long-term investment crop that will provide a sustainable source of
income for farmers over many years. Dates have significant market value, both for local
consumption and export. The crop has a high potential for export to the Middle East and
other regions where dates are a staple commodity. While the fruit takes years to mature,
its long-term profitability makes it an attractive investment for farmers looking for future
returns.
6.2 Price Analysis

Based on the 2024 national averages, the following are the expected prices for the crops
produced under the project:

Product Price (ETB per ton)

Maize 8,000

Sorghum 6,000

Tomatoes 5,000

Onions 5,000

6.3 Sales Forecast (Year 3)

Crop Area (ha) Yield (t/ha) Total (t) Price (ETB/t) Revenue (ETB)

Maize 120 4.0 480 8,000 3,840,000

Sorghum 90 3.5 315 6,000 1,890,000

Vegetables 90 12.0 1,080 5,000 5,400,000

Total Revenue (ETB): 11,130,000

III. TECHNICAL STUDY

3.1 Land and Location

The project will cover 300 hectares of land, strategically located across the districts of
Amibara, Dubti, and Asayita in the Afar Region. These areas are selected due to their
proximity to vital infrastructure, including main roads that connect these districts to other parts
of the region and to urban centers such as Semera and Addis Ababa. The land is also near the
Awash River, which provides a reliable source of irrigation water through its tributaries. This
geographic positioning offers several advantages for the project, including easy access to
transportation routes, sustainable water supply, and favorable soil conditions for farming.
The accessibility of these areas, along with their proximity to water resources, ensures that the
project can implement irrigation systems efficiently. It also facilitates market access for local
produce, supporting the overall market linkage and economic growth of the region. This
location was chosen after extensive site surveys and feasibility studies to ensure it aligns with the
project’s goals of sustainability, economic viability, and environmental resilience.

3.2 Milestones

Milestone Timeframe (Months)

Baseline Survey 0–3

Infrastructure Construction 4–12

First Training and Crop Cycle 13–18

Cooperative Formation 19–24

Market Linkage Development 25–30

Final Evaluation and Handover 31–36

3.3 Environmental Impact

The project integrates environmentally sustainable practices to mitigate its impact on the
ecosystem and enhance agricultural productivity. Solar-powered irrigation pumps are a key
feature of this initiative, offering a clean energy solution that significantly reduces carbon
emissions compared to traditional diesel-powered systems. This transition to solar energy aligns
with global efforts to combat climate change while promoting long-term sustainability in the
region.

An Environmental Impact Assessment (EIA) will be conducted prior to the commencement of

major activities to ensure that all environmental risks are identified and managed effectively. The
EIA will also help in optimizing the design of the irrigation infrastructure, ensuring that it does
not adversely affect the surrounding environment.
Furthermore, agroforestry techniques will be implemented to help restore soil health and
improve biodiversity. Buffer zones around the project site will be established to protect the soil
from erosion, particularly near water bodies and irrigation canals. These zones will also act as
habitats for local wildlife, contributing to the overall ecological balance.

To minimize the environmental footprint, the project will emphasize the use of low chemical
inputs. Organic farming methods, including composting, will be encouraged among farmers to
reduce reliance on synthetic fertilizers and pesticides. This approach not only supports
environmental sustainability but also improves the quality of the soil and crops, ensuring long-
term agricultural productivity.

IV. HUMAN RESOURCES

4.1 Organizational and Management Summary

PIU based in Semera, reporting to Afar Region Bureau of Agriculture and donors.

4.2 Personnel Plan

Position No. Monthly Salary (ETB) Annual Total

Project Director 1 35,000 420,000

Agronomist/Tech Lead 1 30,000 360,000

Irrigation Engineer 1 28,000 336,000

M&E Officer 1 25,000 300,000

Community Dev. Officers 3 20,000 720,000

Finance/Admin 1 25,000 300,000

Total Annual 2,436,000

V. FINANCIAL PLAN

5.1 Financial Assumptions

Assumption Details

Inflation 10% annually

Input Costs ETB 3,000 per hectare

Marketing and Logistics ETB 500 per ton

Depreciation 10% on capital equipment

5.2 Financial Summary

Year Revenue Costs Net Profit

Year 1 0 12,000,000 -12,000,000

Year 2 5,000,000 7,000,000 -2,000,000

Year 3 11,130,000 6,500,000 4,630,000

Cumulative Net (after 3 years): ETB -9,370,000 → Break-even by Year 5

ROI (after 5 years): 52%

Sustainable Irrigated Agriculture and
Livelihood Development Project in Afar
Region, Ethiopia
Revised Full Proposal Document

1. Executive Summary
This proposal outlines a transformative agricultural development initiative aimed at addressing
the chronic food insecurity and economic vulnerability faced by communities in Ethiopia’s Afar
Region. Characterized by arid conditions, limited rainfall, and overreliance on pastoralism, the
region presents significant challenges to sustainable development. However, its proximity to the
Awash River and fertile alluvial plains offers untapped potential for irrigated agriculture.

The proposed three-year project seeks to convert 300 hectares of underutilized land into
productive irrigated farmland, benefiting 1,000 smallholder farmers, with a focus on empowering
women and youth. Through the introduction of climate-smart agricultural practices, the project
aims to enhance food security, diversify livelihoods, and promote economic resilience.

Total Investment Required: ETB 34,500,000

Key Focus Areas:

 Development of solar-powered irrigation systems and canal infrastructure

 Provision of drought-resistant seeds and modern agricultural inputs
 Establishment of Farmer Field Schools (FFS) for capacity building
 Formation of 10 farmer cooperatives to enhance collective bargaining
 Development of market linkages, storage facilities, and financial inclusion mechanisms

Aligned with Ethiopia’s Climate Resilient Green Economy (CRGE) strategy, the Agricultural
Growth Program (AGP), and the national food security agenda, the initiative is projected to
achieve a 52% return on investment over three years, with sustained socioeconomic and
environmental benefits.

2. Introduction
2.1 Overview of Country’s Economy and Agriculture Sector
Ethiopia's economy is predominantly agrarian, with agriculture contributing over 30% of the
Gross Domestic Product (GDP) and employing approximately 70–80% of the population.
Despite this, the sector faces numerous challenges, including low productivity, dependence on
rain-fed agriculture, land degradation, and vulnerability to climate change. In regions like Afar,
these challenges are exacerbated by erratic rainfall patterns, high temperatures, and limited
access to irrigation infrastructure.

The Afar Region, located in the northeastern part of Ethiopia, is characterized by its arid and
semi-arid climate, with annual rainfall often below 300 mm. The region's economy has
traditionally been based on pastoralism, but this livelihood is increasingly under threat due to
recurrent droughts, land degradation, and the encroachment of invasive plant species.
Consequently, there is a pressing need to diversify agricultural practices and enhance resilience
to climate-induced shocks.DREAM for Dry Lowlands

2.2 Project Rationale

The Afar Region's reliance on pastoralism has made communities highly vulnerable to climatic
variations and environmental degradation. Irrigated agriculture presents a viable alternative,
offering opportunities for stable food production and income generation. By harnessing water
from the Awash River and utilizing solar-powered irrigation systems, the project aims to
promote climate-resilient farming practices that can withstand the region's harsh climatic
conditions.

Furthermore, the introduction of drought-resistant crop varieties and modern farming techniques
will enhance productivity and food security. The establishment of Farmer Field Schools will
provide essential training to farmers, particularly women and youth, equipping them with the
knowledge and skills needed to adopt sustainable agricultural practices.

2.3 Project Objectives

The primary objectives of the project are:

 Development of 300 hectares of irrigated farmland: Transforming underutilized land

into productive agricultural plots through the installation of solar-powered irrigation
systems and canal infrastructure.
 Training of 1,000 farmers: Providing capacity-building programs, with a focus on
women (40%) and youth (30%), to promote the adoption of climate-smart agricultural
practices.
 Introduction of high-value, drought-tolerant crops: Cultivating crops such as maize,
sorghum, onions, tomatoes, and date palms to diversify production and enhance market
opportunities.
 Improvement of access to inputs, storage, and markets: Establishing input supply
systems, post-harvest storage facilities, and market linkages to ensure the sustainability of
production.
 Establishment of 10 farmer cooperatives: Facilitating collective action among farmers
to enhance bargaining power, access to resources, and market access.
2.4 Mission

The mission of the project is to develop sustainable, climate-resilient agricultural systems that
empower Afar communities economically and socially, thereby contributing to poverty reduction
and enhanced food security.

2.5 Keys to Success

The success of the project hinges on several critical factors:

 Reliable water access: Ensuring consistent water supply through solar-powered

irrigation systems to support year-round farming.
 Community involvement: Engaging local communities in the planning and
implementation processes to foster ownership and ensure the sustainability of
interventions.
 Capacity building: Providing comprehensive training programs to farmers, extension
workers, and cooperative members to enhance technical skills and knowledge.
 Market development: Establishing strong market linkages and value chains to ensure
that produce reaches consumers efficiently and at competitive prices.
 Institutional support: Collaborating with local government bodies, NGOs, and
development partners to leverage resources and expertise.

2.6 Company Summary

The project will be implemented by a consortium comprising experienced local non-

governmental organizations (NGOs), international development partners, and the Afar Regional
Bureau of Agriculture. The consortium will be coordinated by a Project Implementation Unit
(PIU) based in Semera, the capital of the Afar Region. The PIU will oversee all aspects of the
project, including planning, execution, monitoring, and evaluation.