Liquid Milk and Feed Value Chain Analysis for Wolmera District

Dairy TeamHoleta Agricultural Research Center

Introduction

Wolmera woreda is among the highland areas categorized under the Addis Ababa dairy milk shed

It has conducive agro-ecological conditions suitable for improved dairy animals

Its proximity to the large consumer base in Addis Ababa Dairy is an important means of livelihood for the farmers in

the area There are different market outlets for liquid milk: cooperative

unions, processors and private tradersThe purpose of this study is to understand the dairy value chain

test tools developed for this purpose

Objectives

The major objective of this study is to assess fluid milk and feed value chain in Wolmera woreda . It is conducted with specific objectives of:

(a) understanding the core functions and major actors involved in each value chain

(b) Identifying major constraints and opportunities in each value chain

(c) Testing and further refining of the VCA tool for wider scale use in the future.

Results of Value Chain Analysis

Input supply ProductionRaw milk marketing

Processing Retailing Consumption

•Semen

•Bulls

•Feed ingredients

•Land

•Labor

•Seed

•Drugs

cow rearing

Feeding

Milking

Collection

Refrigeration

transportation

Delivery to processors

Milk chilling

Pasteurization

Packaging

Products making

Quality assessment

Selling

Transporting

Quality assessment

Quality assessment

Core functions and activities in the fluid milk value chain

Fluid Milk VC Actors and Major Channels

Raw Milk Marketing Raw Milk Marketing

Processing Processing

Production Production

Consumption Consumption

Smallholder dairy farmers Smallholder dairy farmers

Unions/coops Unions/coopsIndividual traders Individual traders Collectors of milk processing plantsCollectors of milk processing plants

Small scale processors Small scale processors Processing plants Processing plants

Retailing (processed milk) Retailing (processed milk) Small shops Small shops

Hotels and restaurantsHotels and restaurants

Super markets Super markets

Institutions InstitutionsHouseholds Households

Input SupplyExtension services

Vet services Credit services Seeds supplyAI services Knowledge & Skills

Enabling Environment Enabling Environment Land availabilityRules and Regulations

Drought

Major milk marketing channels identified

– Channel 1: Total milk produced retained for home consumption

– Channel 2: Milk reaching the consumers through formal marketing

– Channel 3: Milk reaching the consumers through informal market

Core functions and activities in the feed value chain

Input supply Production ProcessingMarketing

• seed supply

• Supply of fertilizers

• Supply of wheat, noug, linseed, cotton seed etc

• land preparation

•planting

•weeding

•harvesting

•Baling

•Stacking

•Storage

•Grinding/crushing

•Mixing

•Branding

•Packaging

• Feed Formulation

• Treatment

• Supplementation

• Feeding

Consumption

• Transportation

• Storage

• Retailing

• Distribution

• Quality assessment

Feed VC Actors and Major Channels

MarketingMarketing

ConsumptionConsumption

Enabling EnvironmentEnabling Environment

ProductionProductionSmallholder farmersSmallholder farmers

Agro-processing industriesAgro-processing industries

TradersTraders Unions/coopsUnions/coops

Small holder rural farmersSmall holder rural farmers

Institution/colleges, research centers etcInstitution/colleges, research centers etc

Urban & peri-urban farmersUrban & peri-urban farmers

Input Supply Extension services

Provision of Planting materials & fertilizer

Credit services

Technology

Land availabilityRules and Regulations Drought

Channels Identified for Feed– Channel 1: Total feed produced and retained for own consumptions – Channel 2: Feed produced reaching the producers through traders– Channel 3: Feed produced reaching terminal markets with/out

coops/unions

Constraints along the milk value chainInput Supply-Shortage of feed supply-Poor quality feed-Lack of awareness about feed formulation-Inadequate supply of improved dairy stock and AI-Inefficient AI and vet services-Shortage of vet drug supply -High interest rate and demand for collateral for credit

Production• High investment cost to start dairy farms• High feed cost• Low productivity of dairy cattle• Poor management skill from milking to selling• Lack of training in dairy production and management

Processing- Shortage and seasonality of raw milk supply - Supply of poor quality milk to processors- Low technical skill of staff - Poor marketing in labeling and distribution- High cost of packaging

Marketing• Long distance poor road infrastructure to reach

markets• High cost of transportation• Lack of chilling facilities (most of the traders)• Improper milk packing and handling• Shortage of processed milk for distribution

Consumption• Long fasting days of the Orthodox Christian followers • Wrong assumption that milk is meant only for kids• High milk price • Lack of consumers’ knowledge on milk quality• Low enforcement of milk quality standards

Constraints in feed value chainInput Supply-Land shortage-Shortage of seed and other planting materials-Lack of training on forage production and pasture management-Shortage of raw materials for agro-industries and feed processing plantsProduction- Low productivity of pasture-Lack of forage production skill-In-effcient feed preservation practices-High cost raw materials for agro-industries and feed processing plantsProcessing-Few processing plants that are congested around Addis-Most of them operate under their installed capacity-Vat + other taxes on feed-No quality control on feed

Cont’dMarketing-Seasonality in availability and price of feed-High transportation costs-Non market oriented production of improved forage and seed -Absence of feed quality control in the market- Few actors monopolizing the concentrate feed market

Consumption-High feed price-Shortage of supply-Lack of awareness on improved feeding-High adulteration-High transportation cost -Low level of understanding of feed quality by consumers

Opportunities identified• Suitable agro-ecology for dairy & feed production• High domestic and export demand for milk & feed• Large number of emerging dairy and feed processing

industries• Availability of relatively cheaper labor force• Strong government support • High population growth with better income and

demand for better quality food• Expanding livestock industry with high demand for

better quality feed• Good and reliable road connectivity

Lessons Learned

• The VCA tool for dairy should have been developed separately

• The feed and dairy value chains should have been studied independently of each other

• VCA demands more time and well organized group

Filed level Monitoring Evaluation

Thank you !!