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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.
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