Mama Fresh Injera plc, Ethiopia has signed a Memorandum of Understanding and contract with the Erer Farmers Cooperative Union, the Oromia Regional Agriculture Bureau, the Ethiopian Agricultural Transformation Agency and the Oromia Regional Cooperative Promotion Agency.
The agreement will establish a partnership to launch and implement contract farming projects in Ad’a that will allow Mama Fresh Injera to source 730 MT of teff for the 2012 planting season. The agreement is planned to extend the collaboration for several years on the basis of the success of the effort and the lessons learned said the joint statement released by the stakeholders.
The agreement establishes that the Erer Farmer’s Cooperative will deliver the teff in three phases using the Burayu market price as a reference to determine the price of teff at the time of each delivery. Mama Fresh Injera will pay a 100birr premium per quintal above the market price to ensure that the teff meets the quality standards specified in the contract.The collaborative is planned to create and test a transparent and enhanced output market for Teff allowing farmers to engage in contract farming with built in end markets. The guaranteed market will also offer farmers to earn a higher value from their products and to achieve the desired quality standards to encourage value addition.
The buyer will also reduce transaction costs by establishing a sustainable and consistent Teff supply with shared risks and a comparative advantage in price.
Source: The Reporter
