Most farmers in Northwest Ethiopia do not do the cost-benefit analysis of their farm activities. This is mainly because of the fact that farmers have limited or no habit of recording their income and expenses. In fact, some farmers try to calculate their profitability depending on their memory. These farmers, however, either tend to forget the costs that they spent for some activities or they may not consider depreciation and family labour costs.

To address this challenge, Benefit-SBN support programme, in collaboration with nine farmer cooperative unions, has been rolling out financial literacy training in 12 sesame producer woredas of Amhara and Tigray regions. The main objective of this activity is to capacitate farmers on financial literacy so that they can record their costs in cash-books and calculate whether they get profit or loss from their farm activities.

Recording costs and incomes help farmers to see their farm activity as a business; do cost-benefit analysis and make informed decisions for their future farm activities. This practice may also help farmers to present an accurate financial overview of their farm business to formal loan providers, which may shorten the loan review process.

What has been done?
Drawing lessons from the experience of previous years and working together with the relevant stakeholders, this year’s financial literacy rolling out activity has been done differently. First, cashbook manuals and cash recording books were improved. 7,750 manuals and 15,500 cost recoding books were produced in Amharic and Tigrigna languages. Afterwards, 220 farmers were trained as trainers in July 2017. The topics covered were: cost recording, farm cash inflow, and outflow; end balance; profit or loss, credit costs and stocks, decisions for next season and in-depth farm analysis.

Subsequently, the trained cooperative members went back to their localities and trained over 7,000 farmers drawn from 71 cooperatives. Following the training peer-to-peer discussions have been organised to support farmers in the recording.

Participants feedback
Farmers and their cooperatives have given positive feedback on the training and peer-to-peer discussions.

Mr. Abera Abeyu, from Hayelom Multi-purpose Cooperative, is one of the participants of the ToT which was organised in Sheraro town. Mr. Abera said: “the training is very good as it helps us fill the gaps we have in keeping records. In doing their agricultural activities, farmers are not giving attention to the costs that they incur. Almost all farmers are not recording their costs. They do their activities in a very traditional way. This training will help us change farmers traditional practice.” He further added: “I feel that I am trained very well and I am going to share what I have learnt to farmers in my kebele”.

Emebet Bekele, a woman farmer who attended the training with 24 male farmers in Swatamp kebele, Jawi woreda, said: “Previously, I tried to remember my costs and compare with what I gained but I often got confused. Since I was busy with different farm activities, I forget things. This year, however, based on the lessons that I have learnt, I have been recording all my costs. It will be easier for me to calculate my costs and see my profitability in the end.”

Women farmers were involved in this innovative activity. Out of the 220 trainers, 39 were women and of the 7,000 trainees, 888 were women (769 from Tigray and 119 from Amhara regions).

Mr. Awoke Nega, a sesame farmer from Sanja said though his wife was not trained she is the one who registers the costs that they incur for production activities in the family.

As more women are showing interest, it is important for farmers cooperatives to select more women in future endeavours of scaling out the financial literacy training.

Stakeholders involvement
Evaluation of last year performance, as well as planning and implementation of the 2017 activities, have been done together with the relevant stakeholders such as farmers’ primary cooperatives, unions and woreda cooperative promotion offices (CPO). These contributed to the effective implementation and continuation of the activity. However, not all relevant stakeholders were equally committed.

Some unions, primary cooperatives and offices of agriculture showed limited participation and involvement. In some woredas, the unions did not transfer the allocated budget to the respective cooperatives on time; due to this training sessions were organised a bit late. Lack of commitment and staff turnover are the reasons mentioned for the problems observed in unions. It was also a challenge to get farmers for training as they were busy with their farm activities. Farmers were complaining about the timing of both the ToT workshop and other cascaded training sessions.

To ameliorate this situation, discussions have been made with woreda CPOs. Following the discussions, focal persons have been assigned from the CPOs. A small budget has been allocated to motivate trainers. For some cooperatives, the programme contributed 50% budget to hire employees who will follow the activities. Staff members from Benefit- SBN have been closely following up the progress of the activity and they are providing support to the focal persons and trainers in all the woredas.

The efforts, however, are not enough. In order to ensure success and sustainability of the programme, the unions, cooperatives, and CPOs need to understand the fact that capacity building of their farmer members in financial literacy will help strengthen the cooperatives and unions themselves.