Assessment Of The Current Status Challenges And Opportunities For Small Medium Scale Edible Oil Processors In Addis Ababa Ethiopia

This study was carried out with the objective to review the current policies, regulations andrnpractices, current status in the small and medium enterprises (SME) edible oil sub sector,rnand identify the challenges as well as opportunities for the SME edible oil processing subrnsector in Addis Ababa (A. A.), based on a descriptive research design, & using quantitativernand qualitative data, from the SME edible oil processors, key informants, pertinentrngovernmental regulatory and support institutions, & Advocacy groups/Associations, byrnapplying the (input-market) value chain approach. The findings of the study indicated that therndemand for edible oils was met predominantly through imported palm and non-palm ediblernoils and insignificant domestic edible oil supply, and distributed through shemachoch retailrnoutlets and private retail shops, and characterized by serious availability and accessibilityrnchallenges for consumers in A. A. The major current policies, regulations & practices,rnchallenges and opportunities across the input-market chain of the SME edible oil sub sectorrnin A. A. were assessed & analyzed. The identified major challenges facing the SME edible oilrnprocessors in Addis Ababa included: the significantly weakened current status of the SMErnedible oil processors; edible oil related policies, regulations and practices biases &rnresulting market distortions, such as import duty and VAT exempted huge import andrndistribution of palm edible oil, focus of support towards large scale processing; applicationrnof VAT tax system on domestic edible oil supply; limitations of palm edible oil in properrnhousehold targeting and existence of distribution malpractices, high export orientation ofrnoilseed crops; regulatory requirement for refining of edible oils; the raw material supplyrn(shortages, quality related problems and rising oilseed crops prices), significantly lowrncapacity utilization, much lower than 50%; significant lack of SME edible oil-dedicatedrntechnical training, capacity building and related supports and incentives, as well asrnprocessing technology & access to financing & infrastructural challenges, …, resulting in thernSME edible oil processors’ marginalization and becoming the ‘missing middle’. Thernidentified opportunities included: increasing population, huge domestic consumer demand,rneconomic growth, well-developed experience in A. A. in SME edible oil processing,rnmarketing and consumption in A. A.; Ethiopia as a major grower, and origin, of some of thernoilseed crops & its conducive agro ecological condition for oilseed crops production, andrnoverall government policy and commitment for agriculture and agro processing investments.rnFinally, the study identified recommendations and strategies for action, includingrnimplementing institutions, in order to address the pressing lack of SME edible oil dedicatedrnpolicy support & incentives, edible oil processing, and food safety and quality managementrncapacity building supports, and a conducive overall business enabling environment to enablernSMEs in A. A. to survive and grow, and contribute to sustainably increase edible oilrnavailability in A. A., to ensure accessibility at the household level, and to attain adequaternfood utilization in edible oils at the individual level in A. A., thereby also contributing to thernimport substitution effort in the country

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