Small-scale wood enterprises: MSc field work in Ethiopia

My name is Alexander Koch and I am a Master of Science student at the Rhine-Waal University of Applied Sciences. Here I study “Biological Resources”, which is a program that aims at studying the sustainable development of the Bio-Economy. Since my Bachelor studies in Resource Management, I have been convinced that solutions are most sustainable when considering them in a holistic manner and life cycle and value chain methods are good ways to do this. When I was given the opportunity to study the wood value chain in Ethiopia for my master thesis, I didn’t hesitate to take that opportunity.

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Interviewing a Eucalyptus pole trader during the WoodCluster Field School (©WoodCluster)

Ethiopia’s rapid wood consumption rate is causing reason for concern. The rate of deforestation has long surpassed the rate of tree planting and the growing population will further drive this trend with the expansion of agricultural and urban landscapes. The supply gap does not only impact the households that depend on wood to support their livelihoods but also the businesses that depend on a stable supply of wood for their daily operations. One growing sector that links to the wood supply chain is the furniture sector.

I have been to Ethiopia before and remembered it as a country with warm people and great food. I was excited to discover more of the country but also to see how things have changed over time. I arrived in Ethiopia in end of July 2019, participated in the WoodCluster Field School and stayed until the end of October. I spent most of my time there in the City of Hawassa, which is where my study site was. I was accompanied by Kendisha, a PhD student from the TUD Chair of Tropical Forestry, who was conducting a feasibility study on Eucalyptus wood marketing cooperative amongst small-scale farmer in Chefasine. The idea was that I would study collective action opportunities within further downstream wood value chain stages and Kendisha would tackle the issue from a wood production angle. As our topics were closely linked, we were able to support each other’s work.

At the beginning, little was known about the situation on the ground, which is why I planned to assess the situation first before narrowing down my method and target group. I knew I wanted to study the wood value chain at stages of trade and/or processing, and wanted to find out how entities at these stages cooperate in order to deal with certain challenges they face. I soon found out that there are a lot of small-scale carpenters scattered throughout Hawassa and these generally process timber into different types of furniture in unfavourable conditions. Production usually took place in the front yard of a residential household. Often, when space was limited, production spilled out onto the street. They often lacked appropriate machinery, were challenged with supply fluctuations and were missing a stable market linkage.

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Furniture production spilling out on to the street due to the limited space of the production site (©Koch)

But how do collective actions help overcome such challenges? What even are current forms of collective action and what were they purposed for? And if they don’t exist, what are potential forms of collective action? Is it a relevant value upgrading tool for small-scale furniture producers in Hawassa? These are questions I sought to answer. I followed the general steps of a value chain analysis: (1) Identifying constraints and their underlying systematic causes; (2) Identifying incentives of market players and agents of change; (3) Formulate a vision for sustainable systematic change. Such research is the basis for value chain development.

To answer such questions, I focused on the furniture enterprise’s perception by interviewing the leaders of the enterprises but I also interviewed diverse stakeholders also linked to the furniture enterprises’ value chain, including government development services, a microfinance institution, furniture traders and timber traders. Gaining access to them turned out to be more challenging than I thought. Due to the currently tense political situation in the Sidama Zone (Sidama seeks for more regional autonomy), it was hard to gain access to the relevant people in charge at city administration offices and get a list of small-scale furniture enterprises to be interviewed. In the end, I abandoned this route of access and with great help from my interpreter, Desta, who knew Hawassa well, I was able to locate several furniture enterprises. With the initial sample group, we continued with a snowball sampling method.

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A timber market in Hawassa. Many furniture producers source their wood here (©Koch)

Interviewing the furniture entrepreneurs also was quite challenging. These were most extremely busy with finishing orders. Many also doubted the purpose of my study. Some information, such as information on prices, costs, value of capital or even their critical perception of government services, were considered sensitive and were not always easily provided. It took me several initial interviews to develop a method that would first build a certain level of trust before inquiring about sensitive information.

Nevertheless, many of the enterprise leaders made the experience very enjoyable. Most were curious about my work and wanted to help me as best as possible. With the network of the Wondo Genet College of the Hawassa University, I was also able to get a hold of people who helped me gain access to interview partners, especially for the key informant interviews.

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A small-scale carpenter in his cramped working space (©Koch)

Overall, I got to know that in Ethiopia people still strongly depend on their social networks. This was also true for small-scale furniture producers in Hawassa. Especially in early stages of incubation and development, entrepreneurs depend highly on the social capital they have with other stakeholders operating in the same sector. Financial capital, machinery or labour were often observed to be shared amongst enterprises located close to each other. This was meant to help enterprises with limited starting capital. The sharing of market information and the sharing of larger product orders is a way enterprises help each other establish market linkages. Enterprises also often taught each other methods of production or ways to make more innovative products. The fact that these entrepreneurs operated in the same sector and underwent similar challenges at different stages of development often facilitates their willingness to support each other. Another facilitating factor is that many already knew each other beforehand because of a longer time of joint working experience at larger furniture enterprises.

Most small-scale enterprises were built purely on such past experience. They often do not have any formal training related to the sector or to entrepreneurship in general. Government development services for such enterprises incorporate training services, but these seem to be at early stages of development and currently hard to access for already established furniture enterprises.

The various observed forms of collective action were all informal and occurred sporadically and often out of necessity. Incentives need to be placed to establish more sustainable and formal forms of collective action. Training of the entrepreneurs can play a major role, as it comes down to them to recognize the benefits of collaboration and proactively establish formal partnership in order to make long-term use of the benefits.

The furniture sector is establishing itself as key sector for the growth of Ethiopia’s economy. It is giving many, especially the younger generation, the opportunity to set up their own business. Yet, many in the business are exposed to insecure supply sources and fluctuating demand. Cooperation mechanisms can act as a stabilizing element.

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Me and a young entrepreneur after an interview (©Koch)

As I am currently still analysing my data and writing my thesis, these results are preliminary and more detailed results will be available at a later point in time. If you wish to know more, do not hesitate to contact me: alexander-david.koch@hsrw.org

At this point I would like to thank everyone who supported me during my fieldwork. Firstly, I would like to thank Kendisha Hintz, for being a great friend and research partner throughout the entirety of my stay. I would also especially like to thank my interview partners for the inspirational discussions and for being particularly supportive towards my work. Lastly, I would like to thank my close friend Desta Fichala for the guidance and interpretation during all the interviews.

In the last week of my stay, I decided to spend six days in the Bale Mountains. Here I enjoyed beautiful natural landscapes that were seemingly untouched by locals. In the park endemic wildlife is plentiful, with Nyalas, molerats, bushbucks and baboons. I also got the rare chance of sighting the Ethiopian wolf in one its last remaining natural habitats. All in all, the entire trip was an amazing learning experience, not only for the research but also on a personal level. I highly recommend a similar experience to anyone considering it.

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The Finch’ Abera waterfall in the Bale Mountains national park (©Koch)

By Alexander Koch

 

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