Established in 2005, Soreti International Trading Company (SITCO) is a medium-scale edible oil and oil cake processor and exporter located in Adama town, Oromia region, 98 km from Addis Ababa. With over 200 permanent and daily employees, SITCO has a strong management and leadership structure led by a board of directors, owner/CEO Mr Bulbula Tulle (in photo), and an operational manager. It supplies crude soybean oil and soy cake to domestic and international markets. Additionally, SITCO is a member of the Ethiopian Pulses, Oilseeds, and Spices Processors Exports Association (EPOSPEA), exporting agricultural commodities to African, Asian, European, and Middle Eastern markets.

Prior to the CASA partnership, the raw material was sourced mostly on the open market from aggregators (accounting for 80% of the total supply), with the remaining amount procured from the Ethiopian Commodity Exchange (ECX). The company’s main sources of raw material, i.e., soybeans, are the Jimma and Buno Bedelle zones. The plant was then operating at only 33.3% capacity due to insufficient raw material supply throughout the production year. The company planned to reach its full production capacity within two production seasons (by 2026) by extending the soybean sourcing period to ten months annually. This increase in production capacity was to be achieved by (a) shifting from soya crude oil production to more refined organic edible oil to supply the domestic market, and (b) increasing the volume and quality of organic soy cake supplied to the export market.

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Improving the Production System of Smallholder Farmers through Promoting Organic Contractual Farming Practices to Ensure Sustainable Supply Linkages

This project demonstrated that improving the production system of smallholder farmers through promotion of intermediary climate-smart contract farming practices can ensure sustainable supply linkages.

CASA signed an agreement with SITCO, which in turn planned two separate agreements with aggregators and cooperatives, including Limu Inara Farmers Multipurpose Cooperative Union (LIMFCU) (photo). Running from July 2024 through December 2025, the CASA partnership with SITCO aimed to address dysfunctionality in the supply linkage with smallholder farmers and farmers’ cooperatives. The project facilitated demand-based technical assistance for producers, improving their adaptive capacity and resilience to climate change through introducing contract farming. The collaboration offered SITCO a significant business opportunity to source higher quality and increased quantities of organic raw materials by working with smallholder farmers in a contract farming arrangement and through existing channels (aggregators and ECX). The approach aimed to be cost efficient and improve profit margins through economies of scale.

The total project cost was £113,331 with CASA’s contribution in technical assistance and a grant of £65,211. CASA support included hiring a contract farming expert to design and develop contract templates appropriate for organic soybean production at LIMFCU, and a finance expert to help design the financial flows through the model. There was support in providing organic GAP training to SITCO and LIMFCU staff for cascading to linked smallholders. SITCO was linked to Cooperative Bank of Oromia to use their FarmPass application for supplier profiling and CASA also supported the development of a Farmer Marketing Group (FMG) operational manual through short-term consultancy services. The manual was prepared both in English and Oromifa languages for ease of reference and use by the company and local stakeholders, such as agricultural extension agents, cooperative promotors and aggregators in the operational areas. The FMG approach has proved effective in facilitating a direct input-output market linkage with reliable input suppliers and buyers without the interference of other market intermediaries to substantially maximise farmers’ benefit. These FMGs are also helpful for disseminating extension services and improved agronomy practices, including integrated disease and pest management and post-harvest handling techniques.

The contract farming trial with LIMFCU in Jimma zone, Oromia region, engaged 460 (16 women) farmers within ten primary cooperatives in Limu Seka and Limu Kossa woredas and governed the roles of all parties including SITCO, LIMFCU, aggregators and relevant government institutions (i.e., agriculture, cooperative and trade offices). Embedded services included inputs, training, extension and advisory services provided to target farmers. Improved seeds and rhizobium inoculant were promoted to improve the production capacity through adapting to climate change. Minimal application of pesticides and herbicides were practiced as per expert recommendations, with preference for Integrated Pest Management (IPM) where appropriate. Awareness was also raised among target farmers on climate adaptation and environmental protection measures through the agricultural extension agents. 

Though it was an agreed element at inception stage, the company later resisted formalising the aggregator sourcing model because such arrangements had never been tested before and carried too high a quality risk. Thus, only the organic contract farming with smallholder cooperatives was tested. SITCO strives to be a trustworthy leader in agro-processing and a major exporter of Ethiopian agricultural products in both domestic and foreign markets. By improving farmers’ production systems to secure quality and adequate input, and procuring additional edible oil refinery and packing machinery, SITCO plans to expand this business model, ensuring sustainable supply linkages with various parties through partnerships with financial institutions, investors, and other organisations.

The shortened project piloting period did not give the CASA an opportunity to critically capture, review learnings and to re-strategise for successful business development. However, it was observed that the company would do well to implement a high-quality business development process to enhance strategic oversight of long-term and sustainable business relationships with potential business partners (e.g., organic fertiliser suppliers, cooperatives, aggregators and seed enterprises). This would include improving business relationships with key public-private stakeholders such as LIMFCU, Oromia Seed Enterprise, organic input suppliers (e.g., BBM), Cooperative Bank of Oromia, aggregators and agricultural extension agents, to expand organic farming practices.

It is also recommended to retain the contract farming expert supported by CASA to ensure the overall coordination of the organic farming practices in collaboration with certification bodies and to sustain digitalised business operations such as the FarmPass application to enhance efficiency gains on input distribution, product collection and aggregation, and safe financial transactions among key business partners.

Updated: March 2026