Liquid Milk and Feed Value Chain Analysis for Wolmera District Dairy Team Holeta 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 traders The purpose of this study is to understand the dairy value chain test tools developed for this purpose

It is conducted with specific objectives of: 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

Core functions and activities in the fluid milk value chain Input supply Production Raw 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  

Fluid Milk VC Actors and Major Channels Raw Milk Marketing Processing Production Consumption Smallholder dairy farmers Unions/coops Individual traders Collectors of milk processing plants Small scale processors Processing plants Retailing (processed milk) Small shops Hotels and restaurants Super markets Institutions Households Input Supply Extension services Vet services Credit services Seeds supply AI services Knowledge & Skills Enabling Environment Land availability Rules 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 Processing Marketing   Consumption 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   Transportation Storage Retailing Distribution Quality assessment Feed Formulation Treatment Supplementation Feeding

Feed VC Actors and Major Channels Marketing Consumption Enabling Environment Production Smallholder farmers Agro-processing industries Traders Unions/coops Small holder rural farmers Institution/colleges, research centers etc Urban & peri-urban farmers Input Supply Extension services Provision of Planting materials & fertilizer Credit services Technology Land availability Rules 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 chain Input 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 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 High cost raw materials for agro-industries and feed processing plants Processing 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’d Marketing 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 !!