Outlook Dairy Development EthiopiaNational Dairy Forum, Addis Ababa, Ethiopia, 23-24 November 2010

Bram Wouters Jan van der LeeWageningen UR Livestock Research

Content of the presentation

Global trends and characteristics

Perspectives and approach for Ethiopia

Priority issues along the value chain

Some global trends in dairy development

Demand for dairy products is increasing

Protection of the dairy sector in developed countries decreasing (EU, USA)

Emphasis on sustainable production and processing systems and food safety

Dairy sector in developing countries

Some major characteristics: Many informal market channels besides formal

channels Economic development > increasing demand for

a larger variety of good quality dairy products Milk mainly produced by small holders with

implications for inclusion in modern chains: Raw milk quality Milk collection >>> high transaction costs

Present situation in Ethiopia

Long tradition in consumption and use of (traditional) dairy products

Consumption per capita of dairy products is low The formal dairy value chain is small (mainly limited

to the milk shed of Addis Ababa) Milk mainly produced by small scale producers The import of dairy products is growing Growing interests of private investors (local and

foreign)

Informal chain

Formal chain

Perspectives for dairy development Ethiopia

Increased demand as result of Population growth>>> rural demand Economic growth & urbanization>>>> urban demand

Market-oriented business environment developing Contribution to sustainable development :

Inclusion of small holders in dairy development more resilient and contribute to rural development

Contribute to economic development (income generation)

Import substitution

Possible pathways for the Ethiopian dairy sector

Which approach to take for development?

Lessons learnt from other countries/ experiences indicate:

Dairy development needs an integrated approach For example: a value chain approach

Possible options for development should take into account the local context

Stepwise development is more sustainable

Value chain approach means:

Taking the market and/or development of the market as starting point

Taking sustainability as a condition for development

Take into account the development stage at local level

Adopting an integral approach when developing the chain at local/regional level

Cooperation and coordination among actors in the chain

export chains

formal value chains New Zealand

informal chains subsistence

Stages in dairy value chain development

Development

Stage

Food security

Meeting urban demand

+++++++++++++++++++++++++++--------------

-------------------------+-+-+-+-+++++++++++++++

Value added ---------------+-+-+-+-+-+-+-+-+-+++++++++++++

Ethiopia

Transition Challenges in Chain Development

Transition from subsistence to informal chains

access to markets and resources

Transition from informal to formal chains

investments and quality

Inclusion of small holders in formal chains transaction costs and quality

Priority issues along the value chain

Market Reliable market for commercial dairy production Improved distribution and promotion Inclusion of small holders in formal dairy chain Development of local value chains

Milk processing Diversification of production of dairy products Improvement of quality of products (also traditional)

Priority issues along the value chain

Milk collection Organization and efficiency of milk collection

Milk production Feeds and feeding: water, roughage/forage supply Breeds and breeding Animal health

Input supply and services Feeds, AI, Animal health and extension

Priority issues along the value chain

Enabling environment for value chain development Supportive government policies and instruments for

private sector development Capacity building of institutions, associations,

cooperatives, groups, individuals Good interaction research-extension-education Coordination and leadership in the value chain

The outlook: the future Ethiopian farmers and consumers

Thank you for your attention