News » 09.05.2025 - Mekonnen Solomon, Ministry of Agriculture explains Ethiopia: The struggle to realize Bahir Dar’s potential

Over the past decade, Ethiopia aimed to scale up production and improve logistics—particularly through the Bahir Dar Horticulture Development Cluster in the Tana River Basin. With ideal conditions for crops like flowers, the area was supported by a modern perishable cargo terminal built in 2006 to enable direct flights to Liège, Belgium. The goal was to reduce transport costs and boost competitiveness. Yet today, the terminal remains underutilized, and direct flights never took off. Instead, the government continues to subsidize costly inland transport, an approach critics call wasteful, arguing that land should be better allocated to private companies. In this article, Mekonnen Solomon W., working at Ethiopia Ministry of Agriculture reflects on the project's missed potential, calling it a "collective weakness of will."

Mekonnen Solomon deliberating on logistic challenges

Horticulture export perspective plan
The horticulture export perspective plan, formulated over the past ten years, was driven with a view of scaling up export performance through expansion of cultivable land and diversification of cool logistics corridors across different river basin of Ethiopia. One of the strategic river basin areas selected for this purpose was Tana River Basin. Bahir-Dar horticulture development cluster is parts part of this River Basin which is noted for its tremendous potentials for cultivation of wide range of high value exportable horticultural commodities including Flower, Blue Berry, Ras Berry, Strawberry Herbs, Asparagus, Avocado etc. In Ethiopia land being government property, the possibility of expansion of cultivable land for scaling up horticulture export were not been a cause of concern for selected Bahir-Dar horticulture development cluster.

Ethiopian cargo freighter.

Perishable cargo built for direct flights from Bahir Dar cluster to Liege
As part of its effort to support horticulture foreign trade. the Ethiopian Airlines have built big perishable cargo terminals and facilities at Bahir-Dar horticulture development cluster in 2006. "This terminal facility is designed to handle flower, herbs fruits and vegetables which are a major exportable commodity of the basin. The terminal is well equipped with the right technology like cooling and refrigeration equipment, truck docks, and other features for efficient handling. According to previous study Bahir- Dar perishable cargo terminal has a capacity of 16,000 tons per year. The Airlines has also 19 Cargo freighters with a capacity to load 50 to 100 tone. This capacity and good number of freighters are pretty significant, as it allows the Bahir- Dar airport to handle a substantial amount of horticultural products and transport it directly to Europe."

This perishable Cargo terminal was basically built with intention to undertake a direct flight from Bahir Dar cluster to Europe particularly liege, one of the largest flower importers destinations. "The overall attempt of the plan was to reduce unnecessary inland transport cost which otherwise force farms to incurred huge amount of cost to transport horticultural products from Bahair-Dar to Bole airport and there by Liege. The core strategy to make this goal to happen was to allot required land to private investors that enable them to produce sufficient volume of perishable horticultural required for cargo freighter requirements or to reach out liege market destinations."

The potential is there – less expensive
Solomon emphasizes that the potential is there: direct cargo flights from Bahir Dar to Liège are less expensive than those from Addis Ababa's Bole Airport. "As is well known, Bahir Dar is located at a mid-altitude of 1,821 meters above sea level, whereas Bole International Airport sits at a higher altitude of approximately 2,334 meters. Various studies indicate that mid-altitude locations, like Bahir Dar, offer several advantages for aircraft. First, they require significantly shorter runway lengths due to higher air density, which provides more lift and requires less ground speed for takeoff. Studies also show that takeoff at mid-altitude results in lower fuel consumption compared to high-altitude locations. Shorter runway requirements and reduced fuel use translate into lower operating costs for airlines."

Not enough volume of product
According to Solomon, despite its importance and potential, the plan for direct flights has not materialized. "This failure stems from our inability to allocate sufficient farmland for private investors who were supposed to produce the required volume of horticultural products for cargo freighters. The lack of adequate product volume limits Ethiopian Airlines' ability to transport a sufficient quantity of flowers directly from the Bahir Dar Horticultural Development Cluster to Europe at the lowest possible cost."

Flower bouquet gift of Bahir Dar

Disappointment across the chain
This situation has led to disappointment among many value chain actors. "Ethiopian Airlines feels the loss, as the expensive and large perishable cargo terminal built for international commercial purposes remains idle or underutilized. According to current estimates, these seven farms produce approximately 3,986 tons of net horticultural products annually. When compared to the ideal capacity of the Bahir Dar perishable cargo terminal, the utilization rate is less than a quarter of its capacity, meaning nearly 75% of the facility remains underused. The underutilization of the terminal means that the investment and operational costs are spread over fewer units of perishable horticultural products, increasing the average fixed cost per unit. This, in turn, reduces the profitability of the airline and potentially makes the air cargo business less competitive."

The absence of a direct flight from Bahir Dar to Liège has had negative consequences for existing horticultural farms. "Due to the lack of a direct flight, farms are forced to transport their products from Bahir Dar to Bole Airport Cargo in Addis Ababa using cold trucks. The long distance, about 552 km, combined with poor road conditions, creates several challenges. Rough roads and vibrations cause mechanical damage and expose the products to climatic factors that accelerate spoilage and loss. For flowers, this also leads to aesthetic degradation."

The lack of sufficient horticultural product volume required for cargo freighters to operate direct flights from Bahir Dar to Liège has created a situation where existing farms are unable to fully utilize their export capacity or compete with other horticultural companies located in the Hawassa, Wolketa, Holeta, Beshofetu, and Sebeta clusters, which are closer to the Bole International Airport Cargo Terminal, he continues. "Additionally, companies in Bahir Dar face higher costs for land transport, including cold truck rentals, fuel, lubricants, maintenance, and overhead expenses—costs that the existing flower farms are unwilling to pay."

Government subsidy for land transport
As flower farms were unwilling to cover the high costs of inland transport, the government began allocating substantial public funds to subsidize the transport of perishable horticultural products from Bahir Dar to Bole Airport. In July 2015, the Ministry of Finance and Economic Development introduced the Inland Transport Subsidy Directive (Directive No. 36/2013), originally intended as a short-term measure for the 2014 fiscal year. However, due to the ongoing lack of sufficient production volume to justify direct cargo flights to Europe, the subsidy has remained in place for over 11 years. As of early 2025, approximately seven farms (five flower farms and three producing fruits and vegetables) in the Bahir Dar Horticulture Development Cluster continue to receive these annual transport subsidies.

Weakness of will
The challenges facing this cluster appear to stem from a collective weakness of will, Solomon says. "While it is widely recognized that allocating sufficient land for high-value export crops is essential to achieving the required production volumes, land continues to be diverted to other ventures. Despite the clear profitability of a direct cargo route from Bahir Dar to Liège, reliance on inefficient and quality-compromising inland transport persists. Ending government transport subsidies through proper land allocation and investment is crucial to reducing public spending, yet these subsidies have continued indefinitely. Likewise, fully utilizing the Bahir Dar cargo terminal is vital for the profitability and competitiveness of Ethiopian Airlines, but the lack of coordinated action prevents these cost-saving opportunities from being realized."

Solution: allocation of adequate land to private sector
Many critics argue to only possible solution of Bahir Dar horticulture Development cluster is allocation of adequate farm land to private sector who will directly convey their produce directly to liege through well-equipped Bair-Dar Cargo terminal. "Transport subsidies are unnecessary government funding. It was considered as a reckless and wasteful spending."

"This requires the regional government to take action by transferring the already reserved Kunisada Hort Park land—estimated at no less than 455 hectares—to private flower producers and exporters, as originally planned. In addition, the cluster should allocate 1,100 hectares to qualified private entrepreneurs with a proven track record in the sector, strong financial capacity, established market access, and the technological capabilities needed to produce and export high-value horticultural crops, including summer flowers, roses, rooted and unrooted cuttings."

"Transforming the Bahir Dar Horticultural Development Cluster into a robust production and logistics hub—and launching direct flights to Liège in the near future—would significantly enhance the competitiveness, reliability, and sustainability of Ethiopia's export sector, particularly in floriculture", he concludes.

 

Source: www.flordalily.com

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