Value Chain Analysis of Smallholder Dairy Production in Debark District, Ethiopia

Abstract

IntroductionMilk production in Ethiopia is done largely by the smallholder farmers in the high lands and in low land areas of the country. However, the Ethiopian dairy production and market systems face severe constraints like poor genetics, insufficient access to proper animal feed and poor management practices all contribute to the low productivity levels. Similarly, dairy producers and downstream actors in the value chains face many challenges in getting milk to market. Hence this study analyzes dairy products value chain. MethodsValue chain analysis framework and financial analysis were used. Result and conclusionThe dairy value chain is complex involving multiple actors and their interaction. The major direct actors include input suppliers, small holder farmers, village collectors, cooperatives, semi processors, hotel and cafés and consumers. Besides indirect actors such as supportive and regulatory service providers are also involved. Though all actors have positive profit margin, the largest share goes to hotel and cafés. The financial analysis along the entire value chain shows that Producing and marketing of dairy products is profitable and creates higher value added. Concerned body should improve access to services and collective actions to enhance local value additions and Smallholder milk producers must be organized into dairy cooperative groups and subsequently into dairy unions.

Commercialization of Cow Milk Production in West Hararghe Zone, Oromia National Regional State, Ethiopia

“…The result from Table 5 indicated that for one additional contact of the extension agent, the level of output sales increases by 4.4%. This result is consistent with the findings of [22] who found that extension contact significantly and Agricultural Sciences positively influences the quantity of milk supply to the market.…”

“…The survey result revealed that the households being members of farmers' cooperatives increase the level of commercialization by 2.0%. This finding is consistent with the results of [22] which suggest that strengthening dairy cooperatives, can play an increased role in milk collection, processing, and supplying processed dairy products to consumers, would help to modernize the milk production and marketing system.…”