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
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.
Results of Value Chain Analysis
Core functions and activities in the fluid milk value chain
Input supply
Production
Raw milk
marketing
cow rearing
Collection
•Bulls
Feeding
Refrigeration
•Feed ingredients
Milking
transportation
•Semen
•Land
•Labor
•Seed
•Drugs
Delivery to
processors
Processing
Retailing
Milk chilling
Selling
Pasteurization
Transporting
Packaging
Quality
assessment
Products making
Quality assessment
Consumption
Quality
assessment
Fluid Milk VC Actors and Major Channels
Individual traders
Collectors of milk processing
plants
Unions/coops
Small scale processors
Processing plants
Small shops
Enabling Environment
Hotels and
restaurants
Rules and
Regulations
Households
Super markets
Institutions
Drought
Input Supply
Consumption
AI services
Retailing (processed milk)
Credit services
Extension
services
Processing
Smallholder dairy farmers
Seeds supply
Vet services
Raw Milk Marketing
Knowledge &
Skills
Production
Land availability
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
Marketing
Input supply
Production
Processing
• Baling
• seed supply
•
Supply of
fertilizers
• Supply of wheat,
noug, linseed,
cotton seed etc
•land preparation
• Stacking
•planting
• Storage
•weeding
• Grinding/crushing
•harvesting
• Mixing
• Branding
• Packaging
Consumption
• Transportation
• Feed Formulation
• Storage
• Treatment
• Retailing
• Supplementation
• Distribution
• Feeding
• Quality assessment
Feed VC Actors and Major Channels
Enabling
Environment
Consumption
Land availability
Small holder rural
farmers
Rules and
Regulations
Drought
Institution/colleges, research
centers etc
Urban & peri-urban
farmers
Marketing
Unions/coops
Traders
Production
Input Supply
Agro-processing industries
Smallholder farmers
Extension
services
Provision of Planting
materials & fertilizer
Credit
services
Technology
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 !!