International Food Policy Research Institute (IFPRI) and Ethiopian Development Research Institute (EDRI). Conference on "Towards what works in Rural Development in Ethiopia: Evidence on the Impact of Investments and Policies". December 13, 2013. Hilton Hotel, Addis Ababa.

1. ETHIOPIAN DEVELOPMENT
RESEARCH INSTITUTE
Cows, missing milk markets and nutrition in
rural Ethiopia
John Hoddinott, Derek Headey and Mekdim Dereje
IFPRI ESSP-II EDRI
December 13, 2013
Hilton Hotel, Addis Ababa
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2. Structure of Presentation
 Introduction
 Data
 Estimation strategy
 Results and Discussion
 Summary
 Policy recommendations
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3. Introduction
 In rural areas, is child nutrition affected by what goods the
household produces?
 Conceptually, if there are complete markets, production and
consumption decisions are separable
=> production decisions do not affect consumption
 But if markets are missing, this will no longer be true
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4. Introduction, cont’d
 Milk is an instructive good to consider
 Missing markets are widespread because product is perishable
• In Ethiopia, 85% of all milk produced is consumed by the
producing household
• Domestically processed milk is largely available only in
urban areas
 Milk is important for growth in early life
• Cow’s milk contains insulin-like growth factor I (IGF-I).
• Also important source of animal-sourced protein, amino
acids, calcium, iron, B-12 and other micronutrients
 Reducing undernutrition is important for both intrinsic and
instrumental reasons
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5. Data
 This study is based on Agricultural Growth Programme (AGP)
baseline survey data (in high potential agricultural localities)
 Very large (n=7,930) household survey fielded in 2011.
 Data collected on agricultural assets, agricultural production,
foods consumed by children in previous seven days,
anthropometry of children 0-60 months
• Around one quarter of children consumed milk in the last 7
days; one of the most important sources of protein for
young children, in what is otherwise a highly undiversified
diet
• About 64% of households own at least one cow
• High level of stunting (47%)
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6. AGP enumeration areas(red) , major markets (yellow) and population density
Source: http://www.gafspfund.org/content/ethiopia. Market towns (light circles) are from FEWSNET, and population density at the woreda level is
from the 2007 National Census of Ethiopia.
Notes: Population density categories (in persons per square kilometer) from lightest to darkest are 0-31, 31-101, 101-139, 139-195, 195-537, 537 and
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above.

7. Estimation strategy
 We use our cross sectional data to look at associations between
owning at least one cow and:
• Whether a child 6-24m consumes milk in the 7 days prior to
the survey
• The number of days that the child consumes milk in the 7
days prior to the survey
• Anthropometry, i.e. HAZ (Height-for-Age) and stunting
 We use regression techniques, controlling for child, maternal,
household head, household and location characteristics
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8. Estimation strategy , cont’d
 Outcome variables:
• Child (age 6-24m) consumed milk in last 7 days
• Number of days child consumed milk in last 7 days
• Anthropometry (HAZ, stunting)
 Use regression techniques that can take care of the nature of
the outcome variables and different sensitivity tests to establish
the basic results.
 Include as controls: child sex and age; care givers education and
age; characteristics of the head (age, education, sex); region
dummy variables; and capital goods for agriculture - land
operated by the household for cultivation and the ownership of
at least one cow.
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9. Basic results
Household owns at least one cow.
Impact on:
Marginal effects on
Anthropometry:
6-24m
Anthropometry:
12-24m
Any milk
consumption
in last 7 days
# days milk
consumed in
last 7 days
Stunted
Stunted
22.5%***
1. 3 ***
-5.5%*
-9.9%***
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10. Basic results: Looking for missing markets
Household owns at least one cow. Impact on:
Food Market in village
Any milk
consumed
18.9%***
No food market in village
# days
Stunted Any milk
# days
milk
12-24m consumed
milk
consumed
consumed
0.7**
11.4%
22.2%***
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1.3***
Stunted
12-24m
-12%***

11. Discussion of the results
1. Cow ownership considerably increases likelihood of milk
consumption and frequency of milk consumption
2. Cow ownership greatly reduces the likelihood of stunting
3. When missing foods market in the village, higher effect of
cow ownership on both milk consumption and nutrition
4. To test the validity of the basic results, we run different tests:
 Including additional controls
 Different specifications
 Different estimation strategy
 Different data set (EDHS-2000): Increased probability of
daily milk consumption by 28 per cent points; Reduced
stunting by 5.8 percentage points
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12. Summary
 Evidence that ownership of cows is associated with higher milk
consumption by children 6-24m and in this age group, and
especially in children 12-24m, improvements in HAZ and
reductions in stunting
 Magnitudes of effects are large – reduction in stunting of
approximately 6-10 percentage points
 Some evidence that the existence of food markets can partially
substitute for own production
 Need to be cautious; not an experimental study, though
results are robust to a number of checks and alternative model
specifications
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13. Policy recommendations
 Chronically undernourished children accumulate less human
capital in school and likely economically less productive as adults
 This implies that interventions that reduce chronic undernutrition
have high economic returns
 Given our results, we see three possible classes of intervention:
1. Intervention to increase cow ownership
 Rural households commonly have the skills to keep milk cows
 The nutritional value of cow ownership is large
 But with continued human population growth and increasing
competition for feed and water, this is not sustainable
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14. Policy recommendations
2. Intervention to increase dairy productivity
 More research on the sector; the current budget allocated to
the livestock sector is proportionately low
 Encourage adoption of foreign breeds and hybrids
3. Intervention to increase dairy market development
 Introduction of technologies for reducing perishability and
health risks of milk products
 Encourage establishment of milk cooperatives and monitoring
the quality of their products.
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15. Policy recommendations
Investments in improving dairy production and
value chains may be a “win-win” proposition:
 Providing higher incomes to producers
 Making milk more widely available for consumption by
pre-school children
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16. Thank you!
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