Established in 2011, Kunifira Agro Processing (KUNAP) produces integrated processed products such as edible soya oil and soya meal using mechanical pressing technology. At full capacity, KUNAP can consume 13,440 tonnes of soybean and 19,220 tonnes of maize annually. Operating from Gelan town in the Oromia region, KUNAP sourced about 50% of its soybean demand from smallholder farmers’ cooperative unions. Over the next three years, it plans to grow the supply of raw materials from individual producers to more than 80%. With 100 employees (30% women), KUNAP has the expertise, management, leadership and motivation to scale up its operations. 

Prior to the CASA partnership, KUNAP was buying raw materials primarily through traders and aggregators who were playing a key role in setting prices and had an upper hand in controlling the supply chain. The company plans to triple its consumption as it expands and to secure the necessary raw materials and ensure sustainable market opportunities for smallholder soybean farmers. KUNAP wants to establish contract farming agreements with cooperative unions and provide demand-based technical assistance to producers, helping them improve their adaptive capacity and resilience to climate change.

Contact: Mr Ato Kumssa Shanko (photo), CEO KUNAP Email

Contract Farming between Kunifira and Soybean Smallholders and/or Cooperatives for Reliable Markets and Climate Smart Soybean Seed Multiplication

This project demonstrated that improved access to enhanced seeds to boost soybean production can motivate smallholders and facilitate the expansion of a contract farming business model replicable by other large-scale processors in the country.

The 22-month project (February 2024 – December 2025) aimed to address bottlenecks in the soybean value chain and create supply linkages with smallholder farmers and their cooperative unions, introducing contract farming models and direct raw material sourcing in selected areas of Oromia Region, reducing the influence of traders and aggregators. KUNAP aimed to establish a contract farming model involving climate-smart seed multiplication with smallholders initially through two farmer cooperative unions, Cheweka and Buno Bedele around Jimma, with strong support from the local administration and other organisations. The model started as a pilot and initially planned to contract 138 smallholders. Of the total project cost of £132,520, the CASA contribution for technical assistance and a grant was £51,075.

The support from CASA enabled KUNAP to design and develop contract templates, raise awareness of the contract farming opportunity and its benefits with smallholders, their cooperatives and all stakeholders at woreda level, and negotiate the contracting arrangements with selected farmer cooperative unions. In 2023 the soybean market was depressed, and this had pushed farmers to consider soybean as a non-viable crop, resulting in low production volumes.  However, by 2024 the surging fertiliser price created an opportunity for soybean production due to its low fertiliser demand compared to the potential substitution of maize, thus creating fertile ground for KUNAP’s approach. 

The support also helped identify and compile climate-smart best practices for promotion among the linked farmers to contribute to higher production and share experiences for scale-up in other woredas (districts) and regions. CASA also provided technical assistance to develop a robust and bankable business plan and facilitated linkages to Development Bank of Ethiopia and Awash Bank, enabling KUNAP to secure additional funding for working capital to expand and diversify its existing products and introduce new ones, such as corn-soya blend.

Under the project, 3,989 soybean producing smallholders were mobilised, of which 2,192 were brought formally under the contracting agreement and accessed quality seeds, rhizobium inoculant, and farm business training, as well as technical production skills training in climate smart soybean production via demo plots and extension. An additional 1,600 soybean growers (including at least 40% women, both in female-headed and male-headed households) in Buno Bedele Zone were brought into the schemes and KUNAP is now scaling up annually, increasing the number of farmers and the volume of soybean production and supply. The contract farming partnerships now extend to Assosa, Dabus, Tokuma, Mama, and Baben unions around Assosa areas and are providing market access with stable prices, supply of quality seeds, and provision of technical support, including capacity building on cooperative management and quality collection of products. The active involvement of the government (e.g., cooperative, agriculture, and trade) played a pivotal role in strengthening the partnership and successfully effecting the contract farming.

KUNAP’s pilot contract farming business model proved that it is a viable business solution for the processing companies, contrary to the previous historical known experiences. The new national contract farming framework and the duties associated with it for the government role in contract farming have made a significant contribution to the success of the pilot in addition to the inputs from KUNAP and CASA.

Access to quality and improved seed for both KUNAP and the smallholders remains challenging and smallholder access to finance for inputs is also constrained. However, recent successes by cooperative unions in securing working capital for output marketing have helped strengthen the initiative. These are critical focus areas to ensure the success of contract farming. KUNAP assigned dedicated staff for contract farming follow-up, but also deployed a technical expert to provide production technical assistance to strengthen the success of the business model.

Besides securing raw material supply for itself and reliable markets for producer farmers, the company supports the multiplication of drought-tolerant and disease-resistant soybean seed varieties. It also facilitates access to improved seeds, rhizobium inoculant through Bio-safe Bio Fertilizer Manufacturing Ltd, agribusiness training, technical advisory services (extension services), technical backstopping, access to finance through micro-finance institutions and Cooperative Bank of Oromia, and other resources that contribute to enhanced production and productivity of smallholder farmers.

In addition to edible oil production, KUNAP has started producing soya meal to enrich bread flour, baby food, snacks, and animal feed using the by-product of the oil extrusion process. Catering to market demands and specific customer needs, KUNAP offers various animal feeds formulated to enhance animal health, productivity, and the quality of meat, milk, and eggs.

The company’s expansion programme integrates new products through innovation, dedicating substantial resources to research and development. KUNAP is growing and has already set up two processing facilities for edible oil and feed processing. A corn-soya blending factory is also being established. Plans for super cereal or super cereal plus, wheat flour, maize flour, and corn-soy blended baby food are also being completed.

Updated: March 2026