Does value addition at oilseed production and, or spreading the gain from export of oilseed products increase the income of primary producers?

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Oilseed is a key export in Ethiopia, showing significant growth in both volume and value. While farmers are the main producers, they struggle to benefit from this market due to their position at the end of a lengthy supply chain, receiving only a small fraction of the final sale price. Additionally, farmers lack experience in processing oilseeds into edible oil and oilcake, limiting local economic value retention. This research employs a global value chain approach to explore ways for primary producers to enhance their income, either by selling directly to exporters or by processing oilseeds locally. Findings suggest that establishing a modular relationship among international buyers, exporters, and farmers can increase producers' income. Improvements in product quality, organic offerings, market information systems, infrastructure, and access to microcredits are also vital. However, challenges such as low demand for local products, competition from imports, and the economic advantage of established local processing firms hinder the viability of small rural processing plants. The research emphasizes the need for farmers to form cooperatives to take collective action for income improvement. These cooperatives should adopt a corporate governance structure with elected farmer representatives on the board, while independent management handles daily operations.