Thursday, November 10, 2011


If the new initiative in Ethiopia to address the country's perennial branding as a poverty ridden country, is viewed from any angle, it must be a win-win situation for all stakeholders in that country. Most MNCs have a poor image regarding their sensitivity to the sufferings of poor people, being too much obsessed with profits. In a sharp departure from the above reputation, Pepsico, the giant beverage MNC seems to be getting into an act to help farmers in Ethiopia to strengthen their economic foundation through contract farming. Of course it is not entirely a charitable move but based on sound economic principles of mutual benefit. With support from the USAID and WFP, there is every chance that this project might succeed in achieving the objective of bettering the lot of Ethiopian farmers in particular and the population there in general. Those involved in and committed to the welfare of people in poor countries, an understanding about the Ethiopian project may be useful.   

"At PepsiCo we are constantly seeking ways to create new markets, invest in emerging economies, advance healthy nutrition, ensure environmental sustainability, and drive the long-term growth and profitability of our company. PepsiCo's work in Ethiopia was triggered by a discussion between PepsiCo, the World Food Program (WFP), and USAID which led to the signing of a Memorandum of Understanding on Jan. 28 at the World Economic Forum at Davos. The idea behind Enterprise EthioPEA was initiated at the request of Ethiopian Prime Minister Meles Zenawi, who wanted to use local crops to solve nutritional problems and build his country's export market. Knowing the nutritional benefits of chickpeas and considering our long term business, we worked closely with the prime minister, as well as other partners like the Ethiopian Institute for Agricultural Research, to make the vision a reality. Given their health benefits, chickpeas are an important, innovative ingredient for new ready-to-use supplementary foods (RUSF)—often called food aid. At a time where 13 million people are suffering from famine and malnutrition in the Horn of Africa, there is both an acute and a long-term need to address famine and chronic malnutrition in the region. With our chickpea project, not only will we be helping to alleviate famine and malnutrition, but we will also ensure that local farmers will get more work and guaranteed income while enabling our long-term growth, innovation, and relevance among customers. Consumers worldwide are demanding that healthier food options be made more available and affordable. PepsiCo is looking at every point of the supply chain to meet our consumers' demands, with the aim of developing sustainable agriculture that benefits communities, farmers, consumers and business. Enterprise EthioPEA will work with smallholder chickpea farmers to increase the productivity and value of their crop and grow the domestic market and export markets for chickpeas. With the expected growth of our business in chickpea-based products such as hummus, we expect to source at least 10 percent of our supply from Ethiopia, which amounts to at least 2,000 tons of chickpea per year".

While there is no doubt that the MNC will benefit hugely from this deal, whether the farmers can be initiated into sustainable agricultural practices on a permanent basis remains to be seen due to many factors. After all sound agriculture needs appropriate infrastructure with substantial investments of permanent nature and for an enduring effect the MNC must have a long term perspective to stay in the region and pursue the goal relentlessly. Choice of chick pea is indeed a sound decision from both the nutritional and economic angles and if there is encouraging indication about the success of the project in Ethiopia, International agencies must try to replicate such models in many countries using the agriculture as the foundation for building them. No doubt this is the surest way to build bridges between the intensely business focused industry and the economically down trodden and famished farmers in the third world!


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