General intervention areas: food security and the agricultural sector

Active project: Crop diversification and marketing development project

Promoting economic growth in rural areas of the Arsi zone

Livestock development / intervention areas / dairy production with the major objective of raising subsistent smallholder production to commercial level

Major activities

Dairy Value chain actors support from production to consumption

Increase milk production through distribution of crossbred heifers, AI support and forage development

Two instances

Improving smallholder marketed supply and market access for dairy products in the Arsi zone and its surrounding areas. Focus:

Smallholder milk producers,

Dairy marketing coops and

Consumer purchase and consumption patterns

Innovations, actors and linkages in the dairy value chain. Focus - understand:

The major innovations in use in the dairy value chain

The actors involved in the dairy value chain

Low milk supply

Inefficient AI service delivery system and poor quality semen

Shortage of crossbred heifers/cows

Feed and water shortages

Shortage of skilled manpower

Lack of market information and outlet for milk and milk products

Limited access to market and market information ⇨ seasonal fluctuation of demand and price for milk ⇨ Economic loss

Limited animal health and AI services – high turnover of AI technicians due to inadequate incentives

Absence of well organized input supply system – business hub

Absence of coordination and a responsible party to create, develop and sustain linkages among the different actors

Other challenges

Limited involvement of professionals in the private sector

Limited access to the required resources – lack of capital; when capital is available, no access to the required facilities

Lack of a functional appropriate policy in place and

Inadequate dairy infrastructure

Development opportunity

Lack of market outlet for milk

Low milk prices/low quantity produced per hhs

High milk price variability

Low producer bargaining power

Comparative advantages of cooperatives

Reliable and regular outlet for milk

Better dairy farm input supply

Technical capacity building

Cooperative members keep more crossbred cows

Crossbred cows kept by cooperative members produce more milk

Cooperative members produced, consumed and sold more milk

Providing Input

Packaging

Record keeping

Financial management

Quality control

Marketing

67% of the cooperatives are ready to pay for the services

Low per capita milk consumption at household level

Milk 4.44 l/m; Ayib 0.41 kg/m; edible butter 0.44 kg/m; cosmetic butter 0.11 kg/m

Low per capita expenditure for milk and milk products at household level

Smallholder producers

Ministry for Agriculture

Relevant regional, federal and international development partners

Higher learning and research institutions

The private sector

Coops and unions

Major innovations

Collective action

AI

Improved forage crops

CAHWs

MNB

Farmers are central to the innovation system

Forage development

Financial support for material and technical capacity building

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.

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

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

‘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.