Dairy Value Chain Development In Ethiopia: The Experience of FAO


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Presentation by Emmanuelle GuerneBleich at the National dairy forum, Addis Ababa, Ethiopia, 23-24 November 2010.

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Dairy Value Chain Development In Ethiopia: The Experience of FAO

  1. 1. Dairy Value Chain Development In Ethiopia: The Experience of FAO, 2010National dairy forum, Addis Ababa, Ethiopia, 23-24 November 2010 <br />Emmanuelle GuerneBleich<br />Livestock Officer FAO/SFE, Addis Ababa, Ethiopia<br />Emmanuelle.guernebleich@fao.org<br />photo M.Bleich<br />
  2. 2. SFE and biosecurity/HPAI<br />SFE Sub-Regional Office<br />
  3. 3. SFE-multidisciplinary team/Equipemultidiciplinaire<br />  - Farm Management and Agribusiness/ commercialisation<br />  - Land Tenure and Rural Development/ developpement rural<br />  - Livestock Sector Development/ production animale<br />  - Crop Sector Development/ production vegetale<br />  - Policy Assistance/ politiquesagricoles<br />  - Investment/ centre d’investissement-liens bailleurs<br /> - Fisheries/ peches<br />  - Forestry/ foresterie<br />  - Programme development/food security/ securitealimentaire<br /> - Administration/ administration<br />Mandate to look at regional aspects in a multidisciplinary perspective<br />
  4. 4. Background<br /><ul><li>FAO/SFE intervention areas
  5. 5. General intervention areas: food security and the agricultural sector
  6. 6. Active project: Crop diversification and marketing development project
  7. 7. Promoting economic growth in rural areas of the Arsi zone
  8. 8. Livestock development / intervention areas / dairy production with the major objective of raising subsistent smallholder production to commercial level
  9. 9. Major activities
  10. 10. Dairy Value chain actors support from production to consumption
  11. 11. Increase milk production through distribution of crossbred heifers, AI support and forage development
  12. 12. Improving marketing of milk and milk products / improving milk quality, marketing system, linking cooperatives with consumers, and providing support to milk marketing cooperatives</li></li></ul><li><ul><li>FAO is also engaged in short term fact finding and need assessment studies in the dairy value chain
  13. 13. Two instances
  14. 14. Improving smallholder marketed supply and market access for dairy products in the Arsi zone and its surrounding areas. Focus:
  15. 15. Smallholder milk producers,
  16. 16. Dairy marketing coops and
  17. 17. Consumer purchase and consumption patterns
  18. 18. Innovations, actors and linkages in the dairy value chain. Focus - understand:
  19. 19. The major innovations in use in the dairy value chain
  20. 20. The actors involved in the dairy value chain
  21. 21. The linkages among the different actors</li></li></ul><li>Major challenges/opportunities<br /><ul><li>Major constraints
  22. 22. Low milk supply
  23. 23. Inefficient AI service delivery system and poor quality semen
  24. 24. Shortage of crossbred heifers/cows
  25. 25. Feed and water shortages
  26. 26. Shortage of skilled manpower
  27. 27. Lack of market information and outlet for milk and milk products
  28. 28. Limited access to market and market information ⇨ seasonal fluctuation of demand and price for milk ⇨ Economic loss
  29. 29. Limited animal health and AI services – high turnover of AI technicians due to inadequate incentives
  30. 30. Absence or very weak linkages among the major actors in the dairy value chain</li></li></ul><li><ul><li>Inadequate involvement and contribution of higher learning institutions
  31. 31. Absence of well organized input supply system – business hub
  32. 32. Absence of coordination and a responsible party to create, develop and sustain linkages among the different actors
  33. 33. Other challenges
  34. 34. Limited involvement of professionals in the private sector
  35. 35. Limited access to the required resources – lack of capital; when capital is available, no access to the required facilities
  36. 36. Lack of a functional appropriate policy in place and
  37. 37. Inadequate dairy infrastructure
  38. 38. Development opportunity
  39. 39. Low per capita consumption level ⇨ increased milk production and market expansion for milk and milk products </li></li></ul><li>Lessons learnt<br /><ul><li>Driving forces of cooperative establishment
  40. 40. Lack of market outlet for milk
  41. 41. Low milk prices/low quantity produced per hhs
  42. 42. High milk price variability
  43. 43. Low producer bargaining power
  44. 44. Comparative advantages of cooperatives
  45. 45. Reliable and regular outlet for milk
  46. 46. Better dairy farm input supply
  47. 47. Technical capacity building
  48. 48. Cooperative members keep more crossbred cows
  49. 49. Crossbred cows kept by cooperative members produce more milk
  50. 50. Cooperative members produced, consumed and sold more milk
  51. 51. Better bargaining power</li></li></ul><li> Attention to - Cooperative or primary collection centres<br />Dairy Cooperative Limo Bilbilo (Dairy and forage development)<br />
  52. 52. <ul><li>Technical support needed (cooperatives’ perspective)
  53. 53. Providing Input
  54. 54. Packaging
  55. 55. Record keeping
  56. 56. Financial management
  57. 57. Quality control
  58. 58. Marketing
  59. 59. 67% of the cooperatives are ready to pay for the services
  60. 60. Low per capita milk consumption at household level
  61. 61. Milk 4.44 l/m; Ayib 0.41 kg/m; edible butter 0.44 kg/m; cosmetic butter 0.11 kg/m
  62. 62. Low per capita expenditure for milk and milk products at household level
  63. 63. Milk 14 birr/m; Ayib 4 birr/m; edible butter 16 birr/m; cosmetic butter 2 birr/m</li></li></ul><li><ul><li>Major actors in the dairy value chain
  64. 64. Smallholder producers
  65. 65. Ministry for Agriculture
  66. 66. Relevant regional, federal and international development partners
  67. 67. Higher learning and research institutions
  68. 68. The private sector
  69. 69. Coops and unions
  70. 70. Major innovations
  71. 71. Collective action
  72. 72. AI
  73. 73. Improved forage crops
  74. 74. CAHWs
  75. 75. MNB
  76. 76. Farmers are central to the innovation system
  77. 77. The Ministry for Agriculture interacts the most with producers and cooperatives</li></li></ul><li><ul><li>Other actors are involved in one or more of the following activities
  78. 78. Forage development
  79. 79. Financial support for material and technical capacity building
  80. 80. Market development through encouraging cooperative action and creating market linkages</li></li></ul><li>13<br />Results<br />■ Major innovation actors and their involvement<br />
  81. 81. 14<br />Results<br />Training<br />NGOs and Development partners <br />Farmers<br />Research<br />Coops.<br />■ Linkages among the different actors<br />Private sectors<br />Extension<br />Two way and fair linkage<br />One way and moderate to weak linkage<br />No or very weak linkage<br />
  82. 82. Conclusion and recommendation<br />Cooperatives under Unions - key actors in the dairy sector:<br /><ul><li>Cooperative/Union membership / essential determinant factor for the development of the sector through commercialization as well as providing essential inputs.
  83. 83. Cooperative unions / vertically integrating producers and cooperatives to local and regional markets / creating market linkages - linking dairy cooperatives with existing milk processing plants and other significant outlets for milk and milk products.
  84. 84. Low consumption - milk and milk products - an opportunity for increased milk production and expand milk marketing / Dairy unions could also provide credit facilities for group action
  85. 85. Dairy Unions could establish a simple market information system (demand and supply, price, market location, category of potential buyers…)- appropriate strategy to encourage milk marketing.</li></li></ul><li>Innovations actors and the coordination of the sector:<br /><ul><li>The dairy value chain is a system involving many actors - important - well coordinated manner from production to consumption and - to have ‘a responsible and operational party’ in place.
  86. 86. Despite their strong human resource capacity base, higher learning and research institutions – limited impact in the rural communities. Results of field research works undertaken by PhD and MSc students should be communicated to partners
  87. 87. ‘Ethiopian Dairy Board’- very crucial step to assure a proper lead and coordination of the sector’s development as well as mobilizing funds from donor communities -much hoped amongst the majority of dairy stakeholders. The board - aforementioned recommendations into consideration - and functional policy in place.
  88. 88. FAOhopes that the conclusion of the ‘National Dairy Forum’ will allow the first step of the creation of the ‘National Dairy Board’. </li></li></ul><li>Thank you!<br />