Africa / Dairying / Ethiopia / ILRI / IPMS / Livestock / Marketing / Value Chains

Smallholder dairy development case study demonstrates power of value chain linkages in Ethiopia

This IPMS case study reports on project experiences with Smallholder dairy value chain development in Ada’a woreda, Ethiopia.

In the past decades, public sector support for dairy development in Ada’a mainly focused on dairy production and supply of inputs/services, with limited involvement of the private sector and partners. There was also no clear distinction between the dairy system development potentials in urban, peri-urban and rural areas.

With the help of a participatory commodity value chain development approach, introduced by the Improving Productivity & Market Success (IPMS) project, the Ada’a Office of Agriculture managed to address some of these issues in the peri-urban dairy production system. Training, including sharing of knowledge with experienced farmers and follow-up events, especially field days, was used to build capacity of extension staff and farmers. This has helped to promote linkages between producers and input suppliers/service providers.

With the help of Ada’a Dairy Cooperative and the Cooperatives Promotion Office, it was possible to organize collective action for marketing of fluid milk by diary producers in three peri-urban locations. Production of backyard fodder was successfully linked to 143 peri-urban farmers involved in commercial livestock production. The artificial insemination (AI) service delivery system during the project’s life changed from public sector dominated system in 2005 (100%) to a private sector dominated system in 2010 (98%). Still considerable efforts need to be made to further improve the effectiveness and efficiency of the system, while the recently IPMS-introduced hormone assisted mass insemination approach should be further explored, especially since pregnancy rates improved by 100%.

As a result of increased demand for dairy products in Addis Ababa and other major urban centres, many more private agribusinesses for supply of inputs and processing of milk established themselves in Ada’a, which can be instrumental in leading development. Government can and should increase its capacity to develop, promote and regulate these new actors to ensure quality of services/inputs and processed products. The impact study conducted by the project in the peri-urban system showed that in 2010 annual gross production value from fluid milk reached over three million Ethiopian birr (ETB), a fiftyfold increase. Annual income/household also increased from less than ETB 1000 in 2005/06 to ETB 19,000 in 2010.

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