BEEF AND FEED VALUE CHAIN STUDY IN ADAMA AREAS By Dr. Solomon Mengestu Addisu Abera Solomon Abeyi Fantahun Dereje May, 2012 EIAR

Introduction Adama Area: One of the major beef animal source for the domestic markets of Adama-Addis Ababa areas Its proximity to the large consumer base in Addis Ababa, Farmers of the area have got Long tradition in Fattening cattle It is an important means of livelihood for the farmers, In the study villages, cattle are the dominant livestock species having multiple functions i.e. traction, income source Feed scarcity is a major problem that limits animal productivity, Improvement in livestock productivity can be achieved by alleviating feed constraints,

The scope of the study is limited to small scale beef producers. Scope & Objectives The scope of the study is limited to small scale beef producers. The major objective of this study is to select the best bet Feed technologies Describe and map the core functions and major actors involved and their market channels in each value chain, Identifying major constraints and opportunities in each value chain, Testing and further refining of the VCA tool for wider scale use in the future,

Methodology Sampling procedures: Adama was selected Two kebeles based on their proximity to input & output market were purposively selected with wereda staff thus, The two villages were kechema & Kuriftu wenji A total of 40 producers participated Source of data Secondary data and review of relevant literatures were undertaken, PRA was conducted with producers for production and marketing issues, A focused group discussions using a checklist prepared for this purpose. Key informant interview conducted with, Input suppliers, traders, processors, retailers and consumers, Data analysis was conducted using simple descriptive statistics,

METHODOLOGY Adama District Kechema Wonji Kuriftu And Targeted value chain actors as well

Methodology Selection Criteria: Districts Village Sites Kuriftu Kechema 15 M 5F 11M 9F Selection Criteria: One near market (input & Outputs source) the other Relatively far from market (input & Outputs source) Districts Village Sites

Methodology of The VCA Tool Review of Available Information Group discussion with farmers: Kechema 20 (15 men and 5 women) kuriftu 20 (11 men and 9 women) PRA Exercise Questioner survey on key value chain Actors Quantitative information Individual actor interview Data gathered synthesized in to report Research results, Previous studies Secondary Data Data Analysis & Reporting

Results and discussion

Core function in Beef Value Chain

Mapping The Actors, Function & Service Providers in Beef Value Chain

Major Beef marketing channels identified #3 Channel one- Beef cattle purchased by Hotels and individual consumers in the Adama areas, 2. Channel two- Beef cattle transported from Adama to Mojo, Zeway, Bishoftu, Dukem and Addis Ababa consumer markets, 3. Channel three- Beef cattle purchased for fattening purpose by farmers of the Adama areas,

Core functions of the feed value chain Input Supply Production Processing Marketing   Consumption Seed supply Supply of fertilizers Supply of Industrial by-products Tillage planting weeding harvesting Transportation Retailing Whole selling Feed Formulation Treatment Supplementation Feeding Baling Stacking Grinding/crus hing Mixing  

Feed VC Actors, functions & Support services Marketing Consumption Enabling Environment Production Smallholder farmers Agro-processing industries Traders Unions/coops Small holder Cattle fatteners Institution/colleges, research centers etc Urban & peri- urban farmers Input Supply Extension services Provision of Planting materials & fertilizer Credit services Technology Land availability Laws Drought Processing

Major Feed marketing channels identified #5 Channel 1- Supply of teff straw from Debrezeit areas to Adama beef fatteners, 2. Channel 2- Supply of grass hay from Sululta and Sendafa areas to Adama area beef fatteners, 3. Channel 3-Supply of Molasses from wonji and Metahara sugar factories to Adama areas beef fatteners, 4. Channel 4- Supply of oil cake and flour mill by products to Adama areas beef fatteners, 5. Channel 5- Supply of crop residues (teff straw, wheat straw and maize Stover for fattening purpose by farmers of Adama areas,

Costs and margins of actors involved in the Beef marketing channel and the Share of producers from final price  Cost description *Export Abattoirs Butchers-IIV Super mart. Hotels Butchers-III Butchers-II Butchers-I Producers selling price (Birr/head) to d/t actors 6000 8000 10000 13000 Selling price (Birr/head) 9000 8500 12000 11000 14000 18000 Marketing cost (Birr/head) 500 450 900 800 600 1000 Marketing margin (Birr/head) 1750 1250 2850 1850 1950 2950 Net margin (Birr/head) 2050 1150 Producer's share of final price (%) 80 85 66.7 72.7 71.4 72.2 *Export Abattoirs , in this case they are producing for domestic consumption , i.e . For supermarkets, hotels, Universities & institutions.

Costs and margins of actors involved in a market channel selling crop residue (Teff straw) and concentrate to users Crop residue (Teff straw) Price per One donkey cart (10 Baler) Producers Small trader/user Selling price (Birr/10baller) 120 200 Marketing cost   30 Marketing margin 80 Net margin 50 Producer's share of final price (%) 60 Concentrate Price per One quintal of (concentrate) straw Producers Small trader/user Selling price (Birr/10baller) 240 310 Marketing cost   30 Marketing margin 70 Net margin 40 Producer's share of final price (%) 77.41

I. Constraints along the Beef value chain Input Supply Shortage of feed supply (quantity & Quality) Lack of awareness about feed formulation Inefficient vet services & supply of vet drug Insufficient provision of credit and problematic collateral arrangements Production High feed cost & low conversion ratio of older animals Lack of skill and knowledge with regard to profitable beef production Processing Low level technology take up, Poor sanitary practices Low level of technical skill & knowledge of the staff

Marketing High cost of sell and unfair distribution of the food item High cost of marketing margin to end actors in the chain Lack of chilling facilities (most of the traders) commodities Few types of salable commodities at retail shelf Fraudulent brokerage in the market places Consumption Presence of fraudulent slaughter and weak regulatory services (Road side slaughter, back yard slaughter Long fasting days of the Orthodox Christian followers Lack of consumers’ knowledge on eating preference (as raw meat)

II. Constraints in feed value chain Input 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 plants Production Low productivity of pasture; Lack of forage production skill In-effcient feed preservation practices Processing Few processing plants that are congested around Addis Most of them operate under their installed capacity No quality control on feed

Cont’d Marketing Seasonality in availability and price of feed High transportation costs 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 High number of cattle population An increasingly high demand for beef meat and animal feed in local markets High population growth with better income and demand for better quality food Expanding livestock industry with high demand for better quality feed resources

Lessons learned Beef and feed production constraints in the study area are identified. Production intervention should focus to solve constraints indicated in the areas of the 5 core functions (input supply, production, processing, marketing and Consumption) Major beef and feed market channels identified by this study.