SNV Netherlands Development Organisation 1 Case Studies 2011

I MPACT OF CERTI FI CATI ON ON SUSTAI NABLE

MARKET ENTRY FOR HONEY
Author: Meskerem Shiferaw
Country: Ethiopia
Sector: Agriculture

Ethiopia is endowed with agro climatic variability and unique flowering plants.
That has given it a great potential for production of, among others, varieties of
organic honey and other bee products. The essence of practicing traditional
beekeeping by Ethiopian small farmers, along with other farming activities, has
been meeting basic subsistence needs but does not provide profit and capital
growth. Given the very low productivity of the traditional beehive which weighs 5
6kg on average (MOA), the effective domestic demand pushes domestic honey
prices higher than that offered at the international market. However, in the
developed international market the trend in demand for, amongst others, quality
organic table honey and other bee products meeting ISO and HACCP (food safety)
requirements has been on the increase. Neither processors nor suppliers of
organic honey and other bee products have been benefiting from the prevailing
positive domestic and large international markets. This is because of the tough
international competition and stringent standards and food safety requirements,
which Ethiopian honey and beeswax processors cannot readily meet. This in turn
is the result of the traditional subsistence beekeeping and post harvest
management skills practiced at farm level on one hand and the processing and
marketing skills exercised at plant level on the other. This impedes the
processors attempting to enter the international market (Beza Mar Agro
Industry P.L.C. Second Round Training Report to SNV - Ethiopia, May 2008).
To meet the international market access requirements cited, Alem Honey, Comel
Pvt Ltd Co and EHBPEA with support from SNV Ethiopia and Beza Mar and Tutu
Mar with their own financial resources have therefore embarked on, amongst
other things, managing projects for organic, ISO and HACCP certification and
international accreditation to overcome supply side constraints that had been
arresting sustainable market entry for Ethiopian honey. This has been done in
tandem with the delivery of skills training and critical supplies to farmer
beekeepers.


Ethiopian Honey and Bees Wax Processors and Exporters Association (EHBPEA),
Beza Mar Agro Industry, Tutu and her Family Commercial P.L.C, Alem Honey
and Beeswax Processing Industry, Ethiopian Ministry of Agriculture (MOA) Ministry
of Trade and Industry (MOTI), Ethiopian Standard Authority.


The approach and methods of SNVEthiopia have been to provide support to
Ethiopian honey and beeswax processors and exporters individually and to their
association collectively in the form of project ideas and proposal development,
and technical advice and financial grants that could help them develop and
implement improvements to support the growth of their enterprises. Examples of
initiatives include, amongst others, systems for:

The construction of collection centres to address the needs of farmer and
beekeepers, as they do not have their own commercial apiaries.
The processing of honey and bees wax at plant level.
Building the capacities of small farmer beekeepers in modern bee keeping and
post harvest management skills so that they can commercially observe
organic honey supply ISO and HACCP requirements. Building the capacities
of small farmer bee keepers has been achieved by supporting the delivery of
skills training programmes by the processors. These programmes aimed at
getting trainees certified as organic honey suppliers. In addition, the facility
to trace back to the supplier honey and bees wax deliveries made to the
processors, should the need arise has also been discussed for
implementation. This training was supported by SNVEthiopia to help them
meet the requirements of the certification and accreditation process.

CHALLENGE
CLI ENTS
METHOD / SNV
I NTERVENTI ON

SNV Netherlands Development Organisation 2 Case Studies 2011

The process included:
The system of the organization; staffing and knowledge on honey processing
and handling
Keeping the processing plant and storage from any contamination
Quality Management System (QMS) and HACCP awareness training was given by
the professional consultants provided by SNV.
Training was provided on HACCP planning, implementation and related issues.
On gap analysis, strength and opportunities for improvement were identified and
due attention was given on the Good Manufacturing Practices (GMP)
improvement.
Documents were prepared, coded and distributed on procedure for control,
customer satisfaction measurement, internal communication procedure,
identification and traceability, training procedure, data analysis, storage and
handling, system audit procedure as well as corrective and preventive action
procedures.
System audit training.
Internal audit and first management review mentored by consultants.
Compliance audit which is final assessment.


It is the application of ISO and HACCP standards by processors in all phases of
management of traditional beekeeping, honey and beeswax collection, processing
and marketing, which has moved the industry away from the traditional standards
which prevented, until now, access to international markets for Ethiopian honey
and other bee products. These results can be expressed as:
a) The percentage of honey and beeswax processors practicing scientifically
established beekeeping and post harvest management skills at the bee products
collection stage at the farm level. In addition the processing and packaging skills
at the company level, where the companys staff and employees have been
trained and prepared by certified consultants.
b) The percentage change in the quantity of bee products exported by accredited
and certified exporters. This demonstrates that traditional practices have
underpinned the inability of Ethiopian processors to access the international
market, and have now been sufficiently substituted with modern apicultural
practices to the satisfaction of international certifiers, including, amongst others,
the EU.

According to the responses of managers of EHBPEA, Beza, Tutu, Alem Honey and
Beeswax Processor P.L.C:
Beza and Tutu as certified honey processors have been collecting, processing
and marketing honey and beeswax on the basis of systems established for
standards and food safety approved by international ISO and HACCP certifiers
and these companies form 29 % of the processors who are members of
EHBPEA.
There has been a value chain established between European honey importers
and these Ethiopian honey processors and exporters and in addition the
certification has enabled them to access other potential international markets.
Beza Mar P.L.C. collected organic honey from south western Ethiopia paying
19 Birr to 30 Birr for a kilo and, after having it processed and packaged,
exported it to the EU market in quantities of 30, 44 and 100 tonnes of organic
table honey in 2008, 2009, and 2010 respectively. The exports made in 2009
exceeded by 47% the exports of 2008. The produce exported in 2010
registered an increment of 127% over that of 2009. The increase in beeswax
exports was 17% in 2009 over 2008 and maintained that level in 2010.
According to the manager of one company, these increments have been
brought about by about 8 to 10 Birr investments made on a kilo of post honey
purchase activities (i.e. organic, ISO and HACCP certification, accreditation
and renewal, processing, packaging, transporting, insurance and delivery at
port /FOB price/ - Djibouti).
Tutu P.L.C reached the EU market in 2009 and 2010 with 20 and 60 tonnes of
organic table honey in that order. The amount exported in 2010 exceeded
that of 2009 by 200%. The company has plans to export up to 60 to 80
OUTCOME

SNV Netherlands Development Organisation 3 Case Studies 2011

tonnes of honey in 2011 to the same market. On that average that would be
an increase of 17% compared to the performance in 2010.
According to information from an interview with a manager of the COMEL
Company, operating in northern Ethiopia Tigrai Regional state; it has in this
year (end of 2010), an order and agreement signed with a Yemeni importer
to export to Yemen, at a rate of $5.50 per kilo, 1200kg of yellow honey in
2011. At current farm gate prices the purchase of a kilo of this honey costs
COMEL Birr 68.


The success in the organic honey and beeswax ISO and HACCP certification
process that has been pioneered by Beza Mar Agro Industry P.L.C as of 2008,
has made a significant impact on the interviewed Ethiopian honey processors and
exporters. The newly acquired accreditation and certification has supported them
in their efforts to break through the constraints that impeded their entry to the
international EU markets. The marked differences or impacts that a successful
certification process made on the processors interviewed is here measured in
terms of a rise in income, which is in the form of earning foreign currency. In
addition, there has been an improvement in the financial capabilities of the
exporters to collect and process more and higher quality bee products from
traceable farmer beekeepers, whose own income has consequently increased
markedly.
Beza Companys income measured in foreign currency earnings was $120,000
at a rate of $4 per kg in 2008. This grew by 25% and 28 % in 2009 and
2010 in that order, though the international price offer dropped to $3.40 per
kg in the last two years. The fall in unit price was compensated by an
increase made in the quantity of organic honey collected, processed and
exported.
For Tutu in 2009 the return from the sale was $170,000, which grew three-
fold in 2010. That increase is expected to rise by 32% in 2011 compared to
that of 2010 and the agreed selling price for the processor is $3.70 per kg.
Success in certification and working towards it motivates the interviewed
processors to continuously improve their systems.
a) Supporting farmer beekeepers with skills training, essential equipment
and finance and establishing business relationships with them as business
entities on their own.
b) Collecting more and higher quality honey from traceable and trained
organic bee product suppliers, thereby contributing to the marked
improvement of their household income (see case study on Embedded
Services in the form of Training for Skills Improvement of Beekeepers,
Linking to Finance and inputs in Long term Relations Building between
Processors and Suppliers and the expansion of Out Growers Schemes,
January 7, 2011).
c) At the plant level, processing and marketing honey while observing
ISO and HACCP requirements.
d) It has also made them see the importance of establishing their own
commercial apiaries, serving not only as honey suppliers, but also as
outreach centres for farmer beekeepers in the catchment area.


Certification encourages processors and producers to be stringent with regard
to quality control along the whole chain of production, collection, processing
and marketing. For example, in ensuring the traceability of the organic honey
and the maintenance of the collection, processing and packaging standards at
the certified level supported by regular quality control actions. The process
has improved the companys internal management systems, and that of their
suppliers of traceable organic bee products, to new standards acceptable to
international certifiers.
Certification also strengthens the business relationships of processors and
producers, with regard to meeting ISO and HACCP requirements, which are in
turn, building relationships with international buyers.
The creation of these modern business conditions has in turn paved the way
for processors and suppliers to enter international markets for Ethiopian
LESSONS
LEARNED
I MPACT

SNV Netherlands Development Organisation 4 Case Studies 2011

organic honey.

To acquire certification on ISO/HACCP, companies should be prepared to pay
for the certification themselves or look for partner organizations that could
contribute in financing the process and reap the benefit from international
market. They should also know that it is not a onetime process but the need
to renew the certification every year


Both the ISO and HACCP certification of processors for organic honey, and third
country listing by pertinent bodies of international markets, has enabled the
companies analyzed to raise to scientifically accepted standards and requirements
their internal management systems for quality honey and beeswax collection,
processing, packaging, labeling and marketing. The effect is that they meet the
expectations of international buyers, and thereby are able to enter the
international market for Ethiopian honey.
The certification process and subsequent outcomes and impacts have also
revealed that investing in improvements in the division of labour and skills of
organic bee products suppliers and processors, results in:
a) Efforts for acquisition by farmer beekeepers of cost effective improved
production and post harvest capital inputs, and machineries, equipment and
instruments supplied on business terms by processors as enablers of the traceable
beekeepers.
b) Innovations that improve economies of scale of both processors and suppliers
and the technology they pursue.
c) Implementation of strategic actions that raise the processing firms institutions
and their expressions (i.e. plants organization and that of bee keeping
communities) which have been the missing links in or predictors of getting the
Ethiopian traditional beekeeping and post harvest and processing management
skills transformed into modern ones. It is the sustained application and
improvement of the modern skills that allows the trained, well skilled and honest
enterprising processors and suppliers to enter into, and keep on increasing their
share of the international markets.
The principal constraints of the impact of certification that have come out
strongly are the complexities of the certification process for the Ethiopian honey
and beeswax processor that attempt to undergo the certification process and the
knowledge, skills, experience and the start up capital and recurrent costs the
certification process demands from the would be candidate. These
aforementioned requirements are still beyond the capacities of the certified
processors. That puts the impact of certification on sustainable market entry
under a question mark.

The recommendation in this regard is that SNV Ethiopia needs to keep its
support provision momentum intact with much more emphasis on financial and
regular follow up support for honey value chain development ventures. These
need to target the supply side constraints and decision processes, principally
those related to:
Development of dynamics of internal institutional capacities of existing
processors and members of EHPEA and that of processors outside of EHPEA
and organic bee products suppliers to levels acceptable to ISO and HACCP
certifiers and market entry accreditations.
Growth in business to business relationships, economies of scale and
technology pursued by both potential and effective processors and suppliers
of organic honey and beeswax and other bee products that would result in
the highest productivity of a bee hive and supply of quality organic bee
products to the international markets, backed by internationally competitive
price offers as the countrys apicultural resource potential suggests. It is
envisaged that the previously mentioned conditions would result in a higher
income and improved level of quality of lives for processors, farmer
beekeepers, consumers and other partners operating in the honey value
chain.

CONCLUSI ON