News: Gov’t extends olive branch to non-compliant exporters to boost earnings

Exporters who are utilizing the contract farming scheme to source their products are mandated to register their contracts and submit their goods to one of the Ethiopian Commodity Exchange’s wheelhouses for weight and quality assessment (Photo: MoTRI/Facebook)

Addis Abeba – The government is urging oilseed exporters who source products such as sesame, soya bean, and green mung under the contract farming scheme to undergo the necessary legal procedures of registration and assessment prior to shipping their products.

As per legal requirements, exporters utilizing the contract farming scheme to source their products must register their contracts with the Ministry of Trade and Regional Integration and submit their goods to one of the Ethiopian Commodity Exchange’s wheelhouses for weight and quality assessment. Nonetheless, the Ministry has revealed that numerous exporters have neglected to adhere to the prescribed procedure.

In an effort to accommodate these exporters, the Ministry has extended the registration period by an additional 15 days. The ministry has issued a warning to exporters who fail to register within the extended timeframe, stating that they will be disqualified from shipping their products abroad.

Last year, the ministry introduced a regulation to enhance export revenue by addressing what officials characterize as “rampant” under-invoicing and hoarding practices. The government’s goal is to improve export revenues through the effective implementation of the contract farming scheme. The parliament approved a long-awaited proclamation governing contract farming during the same year.

According to the information obtained from the ministry, Ethiopia earned $31.5 from the export of oilseeds in the first quarter of the current fiscal year, achieving 79% of the plan. Although the government planned to ship 17,729 metric tons of oilseeds in the same period, 74.8% of the plan was realized.

Recently, Kassahun Gofe, the State Minister for Trade and Regional Integration, revealed that conflicts in regions renowned for oilseed production, coupled with exporters’ non-compliance with the country’s laws, have contributed to falling short of the export target.

According to the regulation issued by the ministry in September 2022, exporters must dispatch their products within six months after completing the mandatory registration and assessment processes. Exporters who are unable to meet the initial six-month deadline may apply for an additional three-month extension from the ministry. However, such requests must be accompanied by valid reasons and documentation explaining the reasons for non-compliance.

Oilseed exporters emphasize that challenges in the sector span from a lack of security to price disparities between local and international markets. They also highlight that authenticating contracts between farmers and exporters and enforcing these agreements remains a significant challenge.

Two years ago, the ministry banned contract farming for sesame and pulses in six regional states, citing widespread illicit activities such as the submission of counterfeit contracts and documents. AS

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