YUUNIYEENII H.G OMISHTOOTA AANNAN SALAALEEYUUNIYEENII H.G OMISHTOOTA AANNAN SALAALEESELALE DAIRY COOPERATIVE UNION(SDCU) LTDSELALE DAIRY COOPERATIVE UNION(SDCU) LTD

Experience of Cooperatives in Dairy Experience of Cooperatives in Dairy Development in Ethiopia the case of Development in Ethiopia the case of

Selale Dairy cooperative unionSelale Dairy cooperative union

By Tadesse Ketema and Hailu TadesseBy Tadesse Ketema and Hailu Tadesse National dairy forum, Addis Ababa, Ethiopia, 23-24 November 2010 National dairy forum, Addis Ababa, Ethiopia, 23-24 November 2010

OverviewOverview

1. Historical Back ground of SDCU 1. Historical Back ground of SDCU

2. Major Challenges and opportunities 2. Major Challenges and opportunities

3. Lessons learnt3. Lessons learnt

4. Conclusion and Recommendations4. Conclusion and Recommendations

1. Back ground of SDCU1. Back ground of SDCU Selale dairy cooperative union (SDCU) was established in June Selale dairy cooperative union (SDCU) was established in June

2001. It is one of the vibrant milk union in the country, located in 2001. It is one of the vibrant milk union in the country, located in Oromiya National state in Chancho town, about 40 km north of Oromiya National state in Chancho town, about 40 km north of Addis Ababa .Addis Ababa .

Currently, the union covers 6 districts in the zone and all dairy Currently, the union covers 6 districts in the zone and all dairy farmers in these districts are eligible to be member of the union, farmers in these districts are eligible to be member of the union, with possibilities of further expansion to other three districts with possibilities of further expansion to other three districts (which have high milk potential). (which have high milk potential).

The union was initially established with 9 primary dairy The union was initially established with 9 primary dairy cooperative societies consisting of 512 household members (M cooperative societies consisting of 512 household members (M 472 and 40 F)with 39,000.00 birr capital. Today, the membership 472 and 40 F)with 39,000.00 birr capital. Today, the membership of the union has grown to 27 Primary Dairy Cooperatives and 30 of the union has grown to 27 Primary Dairy Cooperatives and 30 milk collection points, comprising 1,700 active members milk collection points, comprising 1,700 active members distributed within a 150 Km radius along the highway. distributed within a 150 Km radius along the highway.

Back ground Cntd….Back ground Cntd…. The production capacity of the union is 8,000 and 10,000 The production capacity of the union is 8,000 and 10,000

liters of milk in dry and wet seasons respectively. Nowadays, liters of milk in dry and wet seasons respectively. Nowadays, the milk is collected from suppliers (primary cooperatives) the milk is collected from suppliers (primary cooperatives) near to the road and it is quickly transported to two private near to the road and it is quickly transported to two private processors in Addis Ababa: Berta and Family Milk. processors in Addis Ababa: Berta and Family Milk.

The union aims to develop itself into a strong service The union aims to develop itself into a strong service provider to its members, and the same time that it becomes provider to its members, and the same time that it becomes a profitable and competitive enterprise in the dairy market in a profitable and competitive enterprise in the dairy market in EthiopiaEthiopia

Current services provided by the union to its members include quality Current services provided by the union to its members include quality management and control, animal feed Veterinary drug and ,supply of management and control, animal feed Veterinary drug and ,supply of equipments. In the following years, we expect to add the supply artificial equipments. In the following years, we expect to add the supply artificial insemination, animal health and financial services for the member. insemination, animal health and financial services for the member.

Activities carried outActivities carried out

The union engaged mainly in milk collection and input The union engaged mainly in milk collection and input provision for the member and in the past years it provision for the member and in the past years it achieves :-achieves :-

Total milk collected and sold 18.1 million littersTotal milk collected and sold 18.1 million litters Animal feed supplied to P. cooperative 19,696.8 quintals Animal feed supplied to P. cooperative 19,696.8 quintals Veterinary drug supplied 914 packetsVeterinary drug supplied 914 packets Total dividend paid to cooperative 1.04 million ETBTotal dividend paid to cooperative 1.04 million ETB Training given on milk quality management, financial Training given on milk quality management, financial

management, leadership for board of directors and feed management, leadership for board of directors and feed preparation 2,507 individual was train locally and 5 preparation 2,507 individual was train locally and 5 individual from abroad individual from abroad

Short term Plan (2011-2012 )Short term Plan (2011-2012 )

Establishing dairy business hub:- Establishing dairy business hub:-

AI service , Vet service , Micro finance ,concentrated AI service , Vet service , Micro finance ,concentrated feed, and chilling center near by collection centers feed, and chilling center near by collection centers

Introducing Quality based payment Introducing Quality based payment Establishing feed mixer mill Establishing feed mixer mill Establishing Milk quality monitoring laboratory Establishing Milk quality monitoring laboratory Establishing dairy processing plant of capacity 10,000 Establishing dairy processing plant of capacity 10,000

letter/dayletter/day

2. Major challenges and opportunities 2. Major challenges and opportunities

2.1 Challenges2.1 Challenges Poor collection equipment and collection centers Poor collection equipment and collection centers High post harvest loss in transportation (absence of cold High post harvest loss in transportation (absence of cold

transport system)transport system) Lack of educated man power Lack of educated man power Poor infrastructure and distance of Milk collection Poor infrastructure and distance of Milk collection

centers (MCC) centers (MCC) Lack of quality standard and monitoring body in the Lack of quality standard and monitoring body in the

sectorsector Critical scarcity of crossbreed animalsCritical scarcity of crossbreed animals Very poor AI system in the area Very poor AI system in the area

Challenges CntdChallenges Cntd….….

Lack of access to financeLack of access to finance Poor feed and feeding system of the producerPoor feed and feeding system of the producer Insignificant breed improvement programInsignificant breed improvement program Informal market structure for dairy and dairy product Informal market structure for dairy and dairy product Un availability of basic equipment and technology in the Un availability of basic equipment and technology in the

local marketlocal market Low demand during fasting seasonLow demand during fasting season Absence of basic infrastructure such as Chilling center , Absence of basic infrastructure such as Chilling center ,

recommendable transportation facility recommendable transportation facility Un reasonable price of milk that desecrated the producer Un reasonable price of milk that desecrated the producer

Opportunities and challenge cntd…Opportunities and challenge cntd…

2.2 opportunities2.2 opportunities Conducive environment for the dairying In the areaConducive environment for the dairying In the area Proximity to Central Market of the area to Addis AbabaProximity to Central Market of the area to Addis Ababa The growing demand for dairy and dairy productThe growing demand for dairy and dairy product Well organized cooperatives and collection system of Well organized cooperatives and collection system of

dairy product to the market.dairy product to the market. The ownership of the members gradually increased and The ownership of the members gradually increased and

better management system is in pleasebetter management system is in please Bargaining power of the cooperative and its member is Bargaining power of the cooperative and its member is

significantly improved from the previous onesignificantly improved from the previous one

3 Lesson learned 3 Lesson learned

Quality and Quantity is the role player of the market to Quality and Quantity is the role player of the market to compute and stay in the business. compute and stay in the business.

The provision of input supply, training and updating The provision of input supply, training and updating information to producer is the key element to increase information to producer is the key element to increase production and productivity.production and productivity.

For small holder producer to form an entity like For small holder producer to form an entity like cooperative increase their bargaining power, means of cooperative increase their bargaining power, means of fund mobilization and way of experience sharing.fund mobilization and way of experience sharing.

Combining different cervices required by the producer at Combining different cervices required by the producer at one center play great role for the development of the one center play great role for the development of the value chain value chain

4. Conclusion and Recommendations4. Conclusion and Recommendations

Dairy is one of the commodity that believed to bring food security in the Dairy is one of the commodity that believed to bring food security in the selale area, so that the government has given the due attention for the selale area, so that the government has given the due attention for the sector.sector.

For the better achievement and health friendness of the dairy product For the better achievement and health friendness of the dairy product for the society their should be a quality standard and regulatory body for the society their should be a quality standard and regulatory body in the sector.in the sector.

The gap between the challenge and opportunities should be bridged The gap between the challenge and opportunities should be bridged through the involvement of different stake holders in the sector.through the involvement of different stake holders in the sector.

Financial institutions have to revise and develop frame works to leaned Financial institutions have to revise and develop frame works to leaned seed capital for their business expansion up on their feasibility.seed capital for their business expansion up on their feasibility.

Arrangement should made between stake holders in the sector for Arrangement should made between stake holders in the sector for provision and availability of inputs and equipment.provision and availability of inputs and equipment.

The government and producer associations should have to the frame The government and producer associations should have to the frame work to regulate the quality of animal feed produced. work to regulate the quality of animal feed produced.