Salasel: A Chain of Great Value

Farmers working in a muddy field
Small farmers join hands to increase their bargaining power and improve their access to markets.

Rural Upper Egyptians are the poorest in the country. While Upper Egypt represents 25% of the population, its share of the extreme poor is around 66%, with 95% of the poorest villages.

Following land reform policies in the sixties, 90% of the agricultural land in Awlad Yahia village in Sohag governorate, in Upper Egypt, is owned by small farmers. In that aspect, Awlad Yahia is typical of all Egyptian villages today.
The fragmentation of land ownership led to a fragmentation in crop plantation. A feddan (a local land measure equivalent to 4,200 square meters) of okra or green beans would have different crops in neighbouring fields, ranging from tomatoes to maize.

This fragmentation has a very negative impact on the levels and quality of production. Worse yet is that farmers market their crops individually to middlemen who buy the produce at the lowest price possible.

Highlights

  • Salasel Company signed a deal to supply a major food-processor with 1,000 tons of onions with a gross profit of EGP 900,000 for farmers (US$150,000)
  • This deal involves around 80 farmers and is also introducing onions as a new crop in Sohag based on the demand of a market partner
  • The newly established company also managed to sign a second deal to market the village farmers' green beans crop

“We only think of our needs and what is missing,” said Abu ElSaoud Abd ElMonem, a farmer in his mid-forties from Awlad Yahia. “We don’t think about our life choices and what really makes us happy.”

Abu ElSaoud was addressing forty other small farmers, both men and women from the governorates of Qena, Sohag and Luxor in a life coaching workshop organized by SALASEL, a Millennium Development Goals Fund-sponsored joint UN programme involving UNDP, UNIDO, ILO and UN Women.

Held in 2011, the workshop involved a process of self-reflection intended to help the farmers respond positively to new ideas and methodologies introduced by the programme.

In 2012, the farmers are already making a number of drastically different choices.
67 small farmers from Awlad Yahia village joined hands and resources to establish their own shareholding agri-business company, with a total capital of EGP one million (equivalent to US$165,000). The company, which they named “Salasel Co.” after joint programme, has an established strategy based on helping small farmers grow demand-driven crops.

“When the idea was proposed back in 2011, we did not even consider it to be feasible, but look at us now," says Abu ElSaoud, one of the proud founders of the newly established company.
The new company is closely collaborating with the SALASEL joint programme to promote contract farming, emphasizing its contribution to economies of scale as well as increasing the farmers’ bargaining power and improving their access to markets.

Today, Salasel Co. farmers are no longer involved only on the production side. They are more involved in the business side, growing into agricultural entrepreneurs, as opposed to mere producers.

In Egypt, like in most developing countries, smallholder farming is important in efforts addressing poverty reduction, food security and wider rural economic development. Their importance derives from their prevalence and the concentration of poverty in rural areas.
Entitled “Pro-poor Horticulture Value Chains in Upper Egypt—SALASEL,” the US$7.5 Million UN joint programme funded by the MDG Fund aims to forge viable equitable partnerships between small farmers and private sector investors in Upper Egypt, hence its short name, SALASEL, which literally means ‘chains’ in Arabic and which is used in reference to ‘value chains.’

The programme is fostering a new culture of group farming. During this past summer season, programme experts succeeded in encouraging 50 of Salasel Co. farmers to grow collectively 100 feddans of Okra, offering technical advice on post-harvest processing and helping the farmers get a credible position in the local wholesale market and consequently, higher prices.

SALASEL‘s technical assistance programme, reached out to more than 130 farmers and offered guidance to all okra producing members of the association. The programme also helped link the okra Farmers with trustworthy input suppliers on one hand, and with six food-processing companies on the other, who offered even higher prices worthy of the high quality of the farmers’ produce. And, since there were no middlemen it was still a competitive price for the processors.