Dairy Market Value Chain Assessment Report
Outline
1. Executive
Summary
2. Context
3. Methodology
4. Dairy Market
system Map
5. Seasonal
Calendar
6. Who does Who
Pays Matrix
7. Key findings
7.1. Milk
Production
7.2. Milk
Marketing
8. Response Options
9. Conclusions and
Recommendations
10. Annexes
1. Executive Summary
PRIME( Pastoralist Resilience Improvement Through Market Expansion) is a five-year, USAID-funded initiative designed to
support resilience among pastoralist communities in Ethiopia, and thus enhance prospects for long-term development in
Ethiopia’s dry land landscape where the pastoralist livelihood system prevails. To design relevant intervention system, PRIME
aspired to train technical staff from a consortium of four organizations, and assigned these trained technical people to undertake
field level value chain assessment around eight commodities, among which milk is one.
Dairy Value chain team is a multidisciplinary team assigned to undertake milk value chain assessment in the Eastern, Dire
Dawa (DD), Afar and Southern cluster of PRIME operational areas. The assessment is aimed at mapping market for milk Value
Chain & diagnoses of milk market system in the identified areas. The key analytical questions designed by the team, to be
answered during the assessment include;
1.
2.
What market system support as a key leverage point is required to improve household income gain from the dairy
sector?
What are the dairy value chain major constraints, opportunities and leverage points which can improve the livelihood of
pastoralist’s?
The field assessment has been undertaken around the actors involving in the milk value chain, relationship currently prevailing
among the chain actors and factors constraining the milk value chain, and recommendation for intervention.
Though the actors in the milk value chain in the study area have different features, the chain is built around six major chains;
producers, collectors, aggregators, exporters/importers, retailers and consumers. Actors such as input suppliers,
producers/mostly pastoralists, collectors/mostly cooperatives, aggregators, transporters, Exporters/Importers, retailers and
consumers are involving in the milk value chain in all visited areas But mixed role of the actors was also realized in some places.
In some places such as Jigjiga there is a case where the transporter acts also as an aggregator and exporter. On the other hand
pastoralists in some areas of the Borana community act as collectors in which they (Ollas) hire the truck for transpiration, jointly
and sell it in towns, which make the chain itself shorter. Milk production is mostly undertaken by pastoralists in most of the areas
considered under this assessment, but there are few urban dairy small holders in areas such as Jigjiga, Dire Dawa, Awash & its
feeder cities such as Metahara. Through this assessment actors taking part in the milk value chain, factors affecting the market
chain and the relationship among the actors have been identified.
The relationship between the actors in the milk value chain hasn’t been built on long-lasting mutual trust and transparent
business communication. For instance the first level collectors who receive the produce from the producers do not allow the
counterpart to get the existing market information and exhibit the tendency of information hording. On the other hand the
producers practice a sort of adulteration practices to compensate what they might loss due to price cutting practice of the
collectors. That is to mean the relationship between milk chain actors has no standard code of conduct which every chain player
require obeying. In some places the contract signed between aggregators and processing enterprises is incomplete, legally
invalid and lacks some specific details, which finally ends up the contracts with failure and conflicts.
Factors that challenge the milk value chain in all clusters can be summarized into natural, institutional and social factors which
include seasonality of production due to shortage & erratic rainfall, disease outbreak & poor health service, poor infrastructure
facilities, poor market linkage between actors, poor internal coordination & organizational capacity among milk cooperatives,
poor storage/transportation & handling, uncertainty/unpredictable weather, poor technological scaling up & related services, poor
market orientation of pastoralists, lack of financial services, no/limited market information, persistent clan conflict and other
factors. There is high availability gap of milk across all PRIME intervention areas, as the availability of milk highly depend on
pasture & water availability which in turn is depending on rain fall. The rain fall condition in most of the visited areas has erratic
nature; milk is hardly available for 2-3 months in the eastern cluster and up to 4 months in the southern cluster. Seasonality in
the availability of milk makes price movement also highly seasonal.
Opportunities up on which the future interventions can be based have also been proposed. Good milk consumption habit, strong
social capital and high women involvement in the milk value chain are few of several opportunities available in the assessment
area. To addresses challenges constrain the milk value chain and gain existing opportunities the team propose the following
major intervention options:





Building entrepreneurial and institutional capacity of major actors such as cooperatives, processing enterprises and
aggregators
Leverage coordination among supporting institutions including woreda level sect oral offices, NGOs and traditional
institutions to jointly work towards improvement of the sector
Support input suppliers such as feed lot owners, vet. Pharmacy owners and so on and link them with the producers, to
foster continuous availability of feed for the milking cows and animal health services for the whole livestock.
Mobilizing woreda level government bureaus concerned towards improvement of service in the dairy development.
Raising awareness of pastoralists market orientation & improve attitude of chain actors on hygienic practices
2. Context
Livestock production is the dominant livelihood system of pastoralist in Somali, Afar and Borana areas. Though the sector is
constrained by several natural, institutional, social and technical factors, milk production and marketing has a paramount
importance for HH economic & nutritional purpose.
Regardless of high potential and paramount economic importance, the dairy value chain in these areas is not well organized.
The roles and functions of all the actors in the value chain are not sufficiently clear and there is a weak link between the actors.
The pastoral dairy sector is constrained by various socio-economic, institutional, organizational and technical problems. Shortage
and high cost of feed, lack of organization that provides dairy related information, difficulty to get land for urban dairy farmers,
disease prevalence, lack of technical support, and lack of dairy related technologies are the major constraints related to milk
production whereas problems related to milk marketing include lack of quality control of milk, lack of cooling and storage facilities
as well as its transpiration at/to milk vending sites, poor quality of milk supplied from rural areas, sale of raw milk, inappropriate
milk handling and storage vessels, and spoilage of milk due to lack of preservation and processing facilities.
In the milk market system of the assessment areas, there were significant involvement of Non- Governmental Organizations
(NGOs) through cooperative establishment, financial support, collection and processing center construction, supplying milk
containers and processing equipment and others. However, it is obviously observed that their impact did not sustain beyond their
project life in improving dairy market system.
Major challenges in the milk value chain are summarized into:
 Weak market integration & orientation , poor facility and infrastructure
 Seasonality & inconsistency of supply and lack of knowhow for proper coping-up
 Lack of standard hygienic practices and milk quality control system
 Absence of private processors and undeveloped market for processed products
 Attitudinal problem to commercialize camel milk and involvement of women in milk selling(Afar)
 Land locked potential woredas without market outlet
Nevertheless, the sector has a wide range of opportunities to grow and get out of the aforementioned challenges. The major
opportunities that need to be exploited for upgrading of milk value chain are the following:
 High livestock potential in the pastoral areas( regardless of climate hazards and other constraints)
 High social capital(strong network and trust among milk traders, transporters, pastoralist milk producers) and high role
of women in the production and marketing of milk
 Good & long term milk consumption habit in area the ( specially Somali region )

Introduction of information communication technology, for instance Mobile(could be used for price information
dissemination, direction and location of livestock migration)

Interventions of NGOs & better attention from the government than before
 Emerging of strong large scale private processors( in Afar, DD and Jigjiga areas)
 Communal herding of milking cows in the Afar pastoral area, ease for gathering and aggregation, as huge number of
milking cows are kept together.
3. Methodology
Literature review: The assessment team reviewed documents relevant to the assessment, existing study documents and
other background information.
Briefing and consultation with small respondent groups: Interactive and brief discussions were made with milk cooperative
committee members, small & micro enterprise owners, few pastoralists and GO offices to generate valuable data with regard to
market actions, constraints and opportunities in the milk market.
Interviews of key informants: An interactive and semi-structured questionnaire survey was undertaken with existing & potential
actors in the dairy market chain. Telephone conversation was also made to generate data with some actors.
Rapid Consumer preference survey: A rapid survey of consumer preference has also been assessed in Yaballo town; 30
respondents were interviewed to dig-out the ‘no milk-no market’ paradox.
Selected Market System

Dairy Market System
4. Market System Map
Chain Actors
Eastern Cluster: Actors in the eastern cluster includes producer/, collectors/Cooperatives, Aggregators/Exporters, Retailers
and consumers.
 Producers- include pastoralists and small dairy farms (Berwako). Pastoralists supply their milk to local collectors (on
business transaction base or kinship base to bring milk to woreda town collectors/retailers). Some pastoralists also sell
their milk directly to consumers in nearby woreda town or on the high way to Jigjiga (Babile). Regarding small dairy
farms- Berwako- it sells its milk and processed products to Jigjiga.
 Collectors – includes village collectors who directly collect milk from producers and bring it to the nearby towns for
town based collectors. Some of these collectors also sell the milk to consumers directly. And town collectors who
aggregate the milk in bigger volume than the previous one from many village collectors based on their customer and/or
kin ship linkage and send it to bigger market centers like Jigjiga and sell it to retailers. Cooperatives in Eastern cluster
are observed as passive actors in the chain. Unlike collectors in towns like Fafan which have big market (Jigjiga), some
town collectors (w/ro Shamsa Arab in Kebribayah) sells their produces mainly for town consumers (individuals, hhds,
tea shops, and some time for refugees) acting as retailer as well.
 Aggregators – Aggregators in Jigjiga play multiple roles in the chain (as collector/aggregator, transporter and
exporter). These chain actors actively involved in collecting milk from village and town collectors, from where they
brought the milk toTog-wajale Somali land. They sustain the supply of milk even in dry season by extending their
geographic coverage; hence stimulate the milk market regardless of season.
 Retailers – includes producers (who sells their milk directly to consumers), town collectors (who have no big market to
send their milk (like the one in kebribayah) and tea /milk shops. Producers and collectors sell row milk and tea/milk
shop either sells boiled milk, soured milk, and other form.
 Consumers – are mostly households, city and town dwellers, restaurants, cafeterias, universities, refugee camps,
drivers and others
Dire Dawa: In Dire Dawa the chain structure has a bit shorter stage; Pastoralist/small holder producer/ commercial farmer,
processors, retailers and consumer. Producers (pastoralists) mostly sell their milk directly to consumers. On the other hand,
smallholder’s dairy farms sell their milk for both processors and consumers. Commercial processing farms (DPRIMO - DP) in
addition to their own produced milk they buy milk from trusted producers and increase their milk volume for further processing.
They sell few amounts of raw milk to the local community and pasteurized milk and other milk products for consumers in the city.
Afar: important actors in this cluster include pastoralist/small holder, cooperatives/ collectors, Processor/Aggregator, Retailers
and consumers. Pastoralists in most cases do not bring their milk to market centers. Few cooperatives in Mullu and Herdin
supplies milk to the sole aggregator in Awash by public transport to mieso. The sole aggregator/processor in Awash of Afar also
acts as a trans-border trader; using truck drivers to Djibouti (Yoghurt and butter). Milk collected from areas around Asayita is
collected from villages and sold in Asayita town (it doesn’t go long distance).
Southern Cluster: Milk value chain in southern cluster comprises actors such as pastoralist/producers, village level collectors/
also act as small aggregators, Retailers, trans - boardersand consumers. Market corridors around Teltele,Elwaye, Arero, Filtuare
locked market areas though high milk potential is available, mainly due to high distance from main road.
 Producers- are pastoralists and agro pastoralists who directly sell their products to consumers and some of them give /
sell milk to local milk collectors and cooperatives.
 Collectors-/ village level collectors and cooperatives/ are pastoralist and milk traders or purely milk traders who collect
milk from ‘olas’(villagers) and bring it to aggregating and transporting site to send and sell it to their customers in
Moyale. Cooperatives on the other hand collect milk from their members and nonmembers in the area and conduct
semi processing. After butter is made the cooperative sell skimmed milk to the local community (the problem of
skimmed milk market)
Retailers- include individual retailers in towns, milk shops, and some time producers. Individual retailers, particularly those found
in Moyale are engaged in sell of raw milk, butter and skimmed milk (after homemade processing), they sale all the products to
consumers in moyale town. The others only sale raw milk either to consumers in Moyale or to trans-boarders who brought the
milk to Gambo- Kenya. Based on the discussion made with these retailers most of the milk is transported to Gambo- Kenya
individually.
5. Seasonal Calendar
Market System
Sep
Oc
Nov
Dec
Jan
L
M
M
M
M
Months
Marc April
Eastern Cluster
L
L
H
H
L
L
M
M
M
M
M
M
M
M
M
M
M
M
H
L
L
Volume of
production
Mkt price
Sales Volume
Ava. of Pasture /
water
Need for vet.
Service
Infrastructure
Cost of
production
DD level
Festivity &
Holiday
Conflict
School fee &
year beg
Volume of
production
Mkt price
Sales Volume
Ava. of Pasture
/water
Need for vet.
Service
Infrastructure
Cost of
production
DD level
Festivity &
Holiday
Conflict
School fee &
year beginning
Volume of
production
Mkt price
Sales Volume
Ava. of Pasture
/water
Need for vet.
Service
Infrastructure
Cost of
production
DD level
Festivity &
Feb
H
L
L
May
June
H
L
H
H
Jul
August
H
L
H
H
H
L
H
H
H
L
L
H
H
H
L
L
H
H
H
H
M
M
M
M
M
M
M
M
H
H
H
H
L
L
L
L
L
L
L
L
H
H
H
H
M
M
M
M
H
H
H
L
H
L
H
L
L
H
H
H
M
M
M
M
H
H
L
L
L
L
H
H
H
L
L
L
L
Southern Cluster
L
H
H
M
M
M
L
H
H
L
H
H
H
L
L
H
L
L
H
L
L
H
L
L
L
H
H
L
H
H
M
M
M
M
M
M
M
M
M
H
H
H
H
H
L
L
L
L
L
L
H
H
H
H
H
H
H
H
H
H
L
H
L
H
M
M
M
M
M
M
L
H
L
H
H
H
H
H
H
L
H
L
H
M
M
M
L
L
H
H
H
H
H
H
L
L
L
L
L
H
M
M
M
M
L
L
M
M
M
M
M
M
M
M
M
M
M
M
H
L
L
H
L
L
Afar Cluster
L
L
H
L
L
H
M
H
H
H
H
L
L
M
M
M
L
H
H
L
H
H
L
H
H
H
H
M
M
M
M
M
M
M
M
H
H
H
H
H
H
H
H
M
M
L
L
L
L
L
L
M
H
M
M
M
H
H
H
H
H
H
M
H
L
L
L
Holiday
Conflict
School fee &
year beginning
M
H
M
M
M
M
H
M
H
H
H
L
L
L
6. Who Does Who Pays Matrix for Core Dairy Initiatives
System Initiatives
Training/expo.visit
Input Supply
Seed Capital
Monitoring & follow up
Mkt Linkage
Info. Assimilation
Research & Technology
Transportation
Org, Licensing
Infrastructure
Enabling environment
Who does
NGO/GO
NGO/GO/PS
NGO
NGO/GO
NGO/GO
NGO/PS/GO
NGO/EIAR
PS
GO
GO/NGO/PS
GO
Current
Who pays
Donor/GO
Donor /PS
Donor
Donor/GO
Donor/GO
PS/
Donor/GO
PS
Donor/GO
Donor/GO/PS
GO/Donor
Who does
PS/GO
PS/GO
PS/GO
GO/PS
GO/PS
PS/GO
GO/PS
PS
GO/PS
GO/PS
GO
Future
Who pays
PS
PS
PS
PS
PS
PS
PS
PS
PS
GO/PS
GO
7. Key findings
7.1. Milk Production
Though pastoralism and semi-pastoralism are the predominant livelihoods in the southern Oromia, north & eastern Somali and
the Afar regional state, their livelihood is constrained by various calamite factors, as they are living in arid & semi arid areas.
Profound climate changes are now taking place – the result of which is increased vulnerability due to more frequent climatic
hazards and reduced mobility, which represented one of their major coping strategies. In the normal condition pastoralists follow
mobile lifestyle according to seasons in search of pasture and water that enables them to produce & sale milk in order to
generate cash to purchase grain and feed their families. Though the secondary data reviewed has some controversies on the
percentage of milk consumed at home and sold to the market, it is more understood that sales of milk has a paramount
importance for family income and household food. Cow, Camel and Goat milk is consumed in these areas, where cow & camel
milk are only used for marketing.
Pastoralists’ production lacks necessary technological, organizational and institutional capacity for successful participation in the
value chain. Except in few places there is no experience of separately feeding milking cows, though it could be a good coping
mechanism to sustain availability of milk during the dry season. They are less organized and distant from market,
lack economies of scale, face higher transaction costs and lack institutions for risk transferring & management. Hence, they
could be left out from the value chain due to inability to meet the required volume, quality and consistency of supply. Yet, these
problems are not insurmountable with appropriate organizational and institutional innovations. Among several constraining
factors lack of genetic development services, seasonality in feed availability, poor health management, poor husbandry practices
and lack of other technical knowhow are the critical problems that the dairy sector is experiencing. Local government sectors
which are supposed to provide all necessary technological, extension, monitoring & support services has very limited capacity to
reach these mobile community, which together contribute to low productivity of the dairy sector. Practical problems were
observed in Dire Dawa, Awash, Metahara, Jigjiga and the southern cluster major cities with regard to access to AI services, poor
health services and limited experiences of developing drought resistant feed varieties.
7.2. Milk Marketing
Demand and consumption patterns are critical for the success of market-led dairy development. Consumers express their
demand through the price they are willing and able to pay; and market transmits the price signal to producers for them to
respond accordingly. With respect to this, there are a number of restraining factors. Per capita consumptions of milk and milk
products in the assessment area just like the national level is very low due to economic and cultural reasons. The assessment
team has conducted an interview in towns like Yaballo in the southern cluster, and has realized that the per capita milk
consumption is very low and not significantly improving, mainly due to limited purchasing power of consumers and problems
related with milk quality, mostly in the scarce season.
Milk marketing in the pastoral society is challenged by several factors such as low market orientation of the pastoralists, low
entrepreneurial skill among the market chain actors, weak institutional capacity of the market its self, seasonality of the marketing
due to less/no produce during the dry season, low accessibility to market due to poor road conditions and wastage of products
due to poor handling & storage. For those producers who are residing far beyond the reach of road infrastructure, it is more than
difficult to bring their produce to the market due to spoilage of milk after few time. In such cases the producers obliged to process
their milk locally and sell the processed product; obviously butter through the informal market channel. On the other hand it is
difficult for the collectors or aggregators to buy & transport small amount of milk to the marketing center, as a small quantity of
milk transacted unable to meet economy of scale due to high transpiration and transaction costs. These all together are
challenging the sector to stay at its high subsistence-orientation. Most of the cooperatives visited by the assessment team in
Mullu woreda, Gursum, Fafan, Kebribayah of Somali regional state and in the Yaballo, Dire, Surupha, Miyo and other villages in
Borana zone of Oromia regional state are operating at very minimum scale due to lack of developed market linkage, lack of
support & follow up from local government, low demand for skimmed milk as the consumers’ preference is more for fresh milk
and high seasonality of milk availability. It was observed by the team that cooperatives in the southern cluster are more active
than those cooperatives in the eastern cluster that they are operating in a clear cooperative set up. As coping mechanism
cooperatives in several areas engage in alternative petty trade such as sales of sugar, coffee and other consumables, because
there is no possibility to fully engage to milk business during the scarce season. Other than seasonality in the availability of milk
these entities are being challenged by lack of business communication and management skill, lack of technological facilities, lack
financial services and weak integration with big actors. Though members are using cooperatives as a means to qualify for
cooperative licensing, the businesses are mostly undertaken through informal business practices, mostly through kinship. The
team has observed milk cooperative in Gursum and Fafan has a Coop legal personality, where as the business is done at an
individual level, unless the truck they rent in common to transport milk to Jigjiga is the only thing they share in common,
otherwise working capital and cost/benefit of the business is owned individually.
On the other hand there are strong private actors in the eastern cluster and they are stimulating the market in a better condition
as compared to the southern cluster, where we haven’t seen even single private actor. Dire Dawa and Awash of Afar also have
strong private actors which are currently involving in the chain. In Jigjiga and Dire Dawa there is an involvement of big milk
processor, namely Mama; which is dominant in the high land market. But Mama pasteurized milk is not competitive in these
areas as its price rises due to high transport & transaction costs. Though the milk market obviously stretches beyond the terminal
market at Moyale and Tog-Wajale the assessment team hasn’t get sufficient information with regard to the market in the
counterpart countries due to legal limitation to enter into those areas and therefore the triggering factor for increase or decrease
of milk demand beyond the boarder is unknown.
No Milk No Market Paradox
There is ‘no milk-no market’ paradox in several places which the team assessed. Collectors such as cooperatives and individual
producers in Shinile, Amibara, Surupha, Elwoye, Dubluk, Mio and Tuka areas are complaining, there is no market for their
produces. On the other hand consumers in major cities such as Awash, Yaballo witness that there is high milk demand, but the
availability is a problem. For Awash the team understands the conflicting idea is because of factors like long distance from the
market site and transportation problem (eg. Halaydege of Amibara), attitudinal problem to sell camel milk and women
involvement in milk marketing, weak market linkage and actors (No collector at production site and transporter to market site).
The complaint from the producer’s side (Yabello) tells that though they supply large amount of milk to the towns around them,
they have been realizing irresponsive market and they are obliged to back the produce home. The consumers in these cities also
state that the milk supplied by the pastoralists or aggregators doesn’t reach them at a proper time when they want to buy it.
Besides, lately arrived milk to the market lacks quality.
To identify contradicting ideas raised by milk suppliers and consumers (No Milk No Market Paradox), the team has developed a
semi- structured interview questions and gathered data from consumers in Yaballo town, in addition to pre-set EMMA
questionnaire. Accordingly, it was confirmed Out of 30 consumers interview in Yaballo, 26 of the respondents have replied that
milk quality (Adulteration) is a major issue which limits consumers to buy milk around Yaballo town. More than 12 people have
also responded to the interview that they have experienced stomach complications after consumed poor quality milk. Most the
respondents cited that milk supplied to Yaballo town from nearby kebeles is highly adulterated. The adulteration practice
committed by some milk business practitioners highly affected consumer attitude & forced consumers to perceive that milk from
nearby areas is totally adulterated. The other cause for low demand from the consumer side is that the time at which suppliers
bring milk to the market doesn’t fit with a time consumers want to buy.
Actors and linkages
The dairy value chain involves several activities from production of the milk through reaching to the final consumer in the market,
though the chain structure differs across the clusters. These activities include input supply, milk production; Raw milk
transportation, bulking and cooling, processing, transporting processed milk and milk products and retailing it to the final
consumer. Involvement of the actors may be direct or indirect in the pastoral dairy value chain. The key actors include
milk groups / cooperatives, Aggregators, Retailers, private and public veterinary service providers, saving and credit institutions,
feed suppliers, private processors, exporters and milk and milk product consumers. The Livestock Production and
Development, Animal Health and Cooperative Promotion Departments at woreda level, Food Security Office, and Development
Agents (DAs) with the Farmers’ Training Centers ( FTCs) as well as Kebele administration are key local actors. Other
important actors include agricultural research and education institutions, Non-Governmental Organizations (NGOs)
and development projects. The interaction and coordination among the aforementioned service delivery government
departments as well as NGOs was observed to be negligible and extremely weak & coordinated. The situation alarms that key
actors should be brought together and strategize the intervention to transform the commodity. It requires to form a platform of
actors in the dairy sector that coordinates actors and leads the innovation processes for a transformed and sustained market
system of the dairy sector.
Transportation
Though the milk transportation task in the eastern and southern clusters has similarities in terms of transportation process, there
is minor difference in the transfer of the product. The transportation task in the southern cluster has two segments. The first
involves transferring the milk packed in 5-20 liter jerry cans from the production areas to the roadside bulking and collection
centers. This is mainly done on the donkey and women backs by the producers themselves. In the second segment milk is
transported from collection centers to the terminal market (mostly moyale) and less often Yaballo, traveling up to the distance of
30-240 kilometers. During milk transportation in this segment the producers are not travel with their milk. They send their milk by
the drivers putting unique marks of string tied, color of the containers etc on the jerry can which enables their corresponding
client in moyale to easily identify the container. In this segment the activity is done by two transporters. Two important
transporters are Mohammed Amin and Abdi Boru Frighters association. Mohamed Amin mostly serve in Bukuluboma and Tuka
area by his cars to the Moyale Market, this one serves the before noon market demand. The Abdi Boru frighters association
Trucks transport milk from Finchuwa and Surupa, mostly to Moyale and rarely Yaballo which mostly serve the afternoon market
demand, as they reach around 12 PM.
In the eastern cluster the transportation of milk which is collected by few business agents come to the aggregator, which in
some cases can be cooperatives, will be transported to Jigjiga from Fafan, Gursum, Babile and other villages around Jigjiga. The
milk transported to Jigjiga either will be processed in Jigjiga town or being supplied to the retail trader in Somali land towns such
as Harghessa. Due to seasonality of demand for milk in Somali land and/ Jigjiga area channel of milk marketing also varies,
meant there is a time when demand in the counterpart towns reduced because of abundance of milk, mostly at the wet season,
Jigjiga will be a terminal town. Another time when milk demand hikes in Somali land, trans-boarder transportation of milk
increases and demand highly increase in Jigjiga. In the case of Diredawa and its surrounding the marketing channel is from
pastoralist villages to Diredawa town to serve the milk need of HHs, cafes, restaurants, university students, intuitions and so on.
During the wet season produce from dairy farms in DireDawa plus milk transported from surrounding kebeles by
collectors/mostly women milk cooperatives fully address the existing demand of milk in the town. During the dry season when
milk shortage is happened in the surrounding pastoral areas, scarcity of milk also occurred in Dire Dawa town. In the Awash
area of Afar regional state and bordering woredas of Somali & Oromia, market channels to Awash town, mostly to Addis Kidan
Milk processing enterprise; an enterprise which started with small capacity before five years and currently reached the daily
buying capacity of up to 1000 liters & also under expansion to up-scale its capacity to the daily processing capacity of 10,00020,000 liters.
Poor Cooperative organization
Rare presence of organized cooperative bodies has been observed in all clusters. In terms of presence the southern cluster has
much higher number and better organizational capacity as compared to the Afar and the eastern cluster, but all the cooperative
bodies visited have some major problems in common. These problems include weak institutional capacity, poor managerial skill,
lack of market link because of no/limited linking, follow up and mentoring services.
Multiplicity of actors and coordination challenges
In all the PRIME operational pastoralist areas there is a multitudes of heterogeneity of actors in the dairy development. There
has been continuous ‘pouring in’ of resource by donors, directly through NGO projects and, indirectly, through government food
security and productive safety net programs. A significant amount of public money is also being invested in infrastructural
development, human capacity development and dairy research and extension. Nonetheless, there is no mechanism of ‘pooling
in’ of resources which leads the intervention to duplication of efforts and inefficient use of scarce resource. The entire
intervention arrangements in both GO & NGO programs promote organizational independence rather than institutional
interdependence. For instance Dairy development initiatives which has been supported by NGO actors ends up at its inception
level without enabling & institutionalizing the initiatives & without making proper linking to local government arrangement. The
supply driven approach of NGO interventions initiate business entities such as cooperatives where there is no/limited sense of
ownership among the members of these entities. Most of the milk cooperatives observed in all clusters have been initiated by
the NGO actors, but non of these initiatives are fully functional at the moment, except few ones in the southern clusters.
Multiplicity in intervention and lack of coordination alarms for coordinated intervention in future.
Milk quality:
Cause for poor quality of milk & milk product could be multiple, but it mostly starts from milking. Milk production in the pastoralist
society is being influenced by several poor handling practices which also could be exposed to severe contamination. Most
pastoralists did not tie the cow’s tail during milking, had no appropriate and permanent milking place, most of the pastoralists do
milk animals on treatment, did not wash hands before milking, did not cover the milk and had no potable (boiled) water for
washing hands and utensils. Container for milk storage and transportation among most of the chain actors is plastic Jerry can in
all the clusters. The reason for all the actors to use plastic Jerry Can is that it is easy to collect milk from pastoralist villages to
road side aggregation centers and also to the terminal market. But Plastic container by its nature is a cause for milk spoilage as it
has highly susceptibility for high temperature. This poor handling and container facility together with adulteration practices highly
damage quality of the product.
This Poor hygienic practices, together with inefficiency in milk handling, absence of cooling facilities, limited awareness of the
actors towards the risks related to poor hygienic condition leads to spoilage of the product. These all pose health risk to the
consumers.
Milk Marketing and Gender:
Milk and milk product marketing is entirely done by the women in the pastoral area. Not only milk and milk product marketing but
also management of these products at home is an exclusive responsibility of women. From Physical observation made by the
assessment team and few informal discussions done with producers and aggregators, it is being confirmed that it is even taboo
for a pastoral man to ask how his wife allocates milk and milk product in the household. There is an opportunity to mainstream
gender issue & more empower women ( economically), so that they take the driving seat of the milk VC management, mostly in
the milk cooperatives through various entrepreneurial & management trainings.
Customer preference
Rural household consumption patterns include fresh and fermented (sour) milk and ghee on a seasonal basis. However, the
local customers’ preference in general is for fresh milk. Since it is very difficult to get fresh milk in the market, most cafés offer
reconstituted milk ( fresh milk with unfresh milk). Among 30 people interviewed in Yaballo town 26 respondents have replied that
they prefer to get fresh milk early in the morning to serve house hold demand for HHs and customers in business units. Most of
consumers prefer to buy milk which comes from far away, perceiving that producers at far do not practice adulteration. In the
eastern cluster households prefer to feed powdered milk for their kids to the fresh milk. Otherwise every consumer in all clusters
prefer to consume fresh milk. Customer demand for powder milk in the southern cluster is totally insignificant while in the eastern
cluster the demand is significantly high i.e consumers in Jigjiga revealed their preference for powder milk, as they believe it is
safer for infants.
Pricing and Profit Margin
Milk prices along the market chain
Seasons have a very important impact on the availability of locally produced milk. This is because of the effect the season has
on the reproduction pattern of each individual species, movement of the livestock and the amount of milk produced per animal
due to varying availability of pasture for grazing. Seasonality in milk supply would actually favour processing of milk as a means
of preservation, enabling sales in times of scarcity, however this is not practiced. Milk prices vary according to seasons. In the
wet season, production is higher and most households have some excess milk and prices tend to go down.
Pricing and Seasonal calendar
Cluster
Eastern Cluster
Afar
Southern Cluster
Unit
Price at Producer
Wet Season
8 ETB
Dry Season
12
Wet Season
8
Dry Season
12
Wet Season
11
Dry Season
14
Price at trader
Retailer price
12
13
15
16-
11
13-14
15
16-19
13
15
16
18-21
Remark
Profit Margin:
As indicated on the above table, high profit margin is available among traders (small & large traders) as compared to retailers.
On the other hand even if we were unable to get sufficient quantitative data for major production costs among
pastoralists/producers, the profit margin for the producers is highly insignificant according to secondary data we obtained, mainly
due to high input costs & low productivity.
8.
Conclusions and Recommendations
The pastoral dairy sector is constrained by various socio-economic, institutional, organizational and technical problems. Shortage
and high cost of feed, lack of organization that provides dairy related information, difficulty to get land, disease prevalence, lack
of technical support, and lack of dairy related technologies are the major constraints related to milk production whereas problems
related to milk marketing include lack of quality control of milk, lack of cooling and storage facilities as well as its transpiration
at/to milk vending sites, poor quality of milk supplied from rural areas, sale of raw milk, inappropriate milk handling and storage
vessels, and spoilage of milk due to lack of preservation and processing facilities.
Actors along the market chain include pastoralist producers, traders and consumers. However there is no clear line drawn in the
roles of the actors, as producers also often act as collectors and sellers, and traders also own livestock and produce milk in
some cases. Even the consumers who are mainly urbanized people keep livestock in a smaller scale and produce milk. However
their milk production is not sufficient for the household needs; hence they do purchase milk from the local market. Other
consumers include hotels and restaurants. In general this study revealed that hygiene standards among the actors along the
market chain are very poor starting with personal hygiene to equipment used for milking, storage and transport. Equipment used
for milking, storage and transport include mainly traditional gourdes, plastic jerry cans and in few numbers aluminium cans.
Traditional gourds that are usually smoked after usage pass hygiene standards, however the milk is often transferred to plastic
jerry cans for transport and contribute to milk spoilage as they are difficult to clean. Though the sector is being constrained by
several challenges, there is still opportunity to improve the sector.
9.
Response Options
After thoroughly making an inventory on the factors constraining the milk value chain the assessment team has proposed the
following intervention options:
Matrix for Response Options
Intervention option
Activities
Advantage
Disadvantage
Support productivity
improvement through
genetic improvement &
rangeland management
.Support selection of high
yield indigenous breeds
.Support cross breeding
.Support access to AI
.support
integrated
rangeland mgt practices
.productivity increased
.Volume of produce
increased
.Milk Quality improved
.stable availab.of produce
.Susceptible
to
disease & env.
hazards
. Loss of indigenous
genetic make up
Improve availability of
feed &
management of milking co
ws
.Introduce drought resistant f
odder seed var.
.promote
hay
making
practices
.Support/strengthen private
feed suppliers
.support separate husbandry
practice for milking cows
.Support local gov’t in
providing vaccination
services
. Support vet service
coverage
.Support
private
vet.practitioners
.Support CBAH service
delivery
.Support
bridging
of
research & extension
.Ensure stable availability
of feed, hence milk
.Strengthen drought
resilience of milking cows
. risk mitigation via herd
division
.Costly approach
. Limit mobility

.Improve resilience to
disease & related hazard
s
.improve participatory ani
mal health care
.Facilitate tech. transfer in
vet service
. Capital intensive

.Support expansion of privat
e input suppliers
.Improve input suppliers
access to financial services
.raising role
of
transformative institutions
to
support
private
input suppliers
.Organize Meso level
dialogue at different levels
.
Propose
alternative
approaches to meso level
actors
.Improve
pastoralists
access to inputs
.increase volume of
produce
. Capital intensive

.Ensure integrated
approach
.It clearly identifies andat
es
.It addresses strategic/pol
icy constraints
.Capacitated entrepreneu
rs
become
change
agents
.Difficulty to coordin
ate
meso level
rganizations

Improve animal health
services
Support input suppliers
Advocate commitment of
Meso level value chain
actors
Building entrepreneurial a
nd institutional capacity of
major actors
.Support institutional CB &go
vernance
.Facilitate skill training in
business management for
Feasibility Level
High
Medi Low
um


Leverage coordination am
ong key institutions at
grass root level
COOPs
.Strengthening entrepreneuri
al motivation of business
actors in the milk VC
.Initiate & strengthen platfor
m of institutions working
towards development of milk
VC
.Facilitate inter stakeholders
experience and learning on
best practices in the milk vc
.Scaling-up best practices
.Mainstreaming best
practices in dairy &
rangeland dev’t via
traditional institutions/
indigenous knowlege
Improve Financial Service
provision systems among
FIs for milk VC
. Identify appropriate FIs
which can establish long
lasting partnership
with milk VC actors
. ID transformative institution
& influence improvement of
financial service provision
system
.Build capacity of FIs to
expand their outreach
services to pastoral
area entrep. In the milk VC
Raising
awareness of
milk VC actors on milk
sanitation & hygiene
issues
. Support mechanisms for
setting appropriate
quality standard
. Support acquisition of
appropriate milk handling
containers
.Support the scheme of
reward for quality milk
supply at processing level
.Organize marketing bazaar
among milk VC actors to
promote quality produce
&processing of milk products
. Support innovative
researches on milk safety
. Support introduction of
SMS based mkt information
. Support mkt information
data base
.Promote
integrated
metrological & early warning
system
.Support action research to
assess
policy
constraints & initiate new pol
Strengthening Milk VC ma
rketing information system
Creating
environment
sector dev’t
enabling
for dairy
.It leverage knowledge
Exchange among
stakeholders
.
.Solve systemic
constraint that hinder
access of small actors to
FSs
.Expand service
coverage of FIs &
enhance inclusiveness of
small actors in the Milk
VC
. Entrepreneurs in the
Milk VC Become
motivated & level of
participation scaled up
. Stimulate demand
among consumers
.Producer attitude becom
e market oriented
.



.Enhance mkt information
among milk VC actors
.Remove policy barriers i
n the dairy sector
.Develops clear implemen

.May be capital
ntensive
.Difficulty in the
i

icy possibilities
. Communicate research
output with all level relevant
gov’t institutions
.
Support
government
commitment in implementing
enabling policy measures
Empower Gender Role in t
he dairy Value chain
Support the existing milk
processing units
Improve pastoralists
market orientation
. Support CB trainings (in
husbandry,
marketing, mgt skill,
sanitation
&
hygienic
standards) and
.Raising awareness of
traditional institutions & the
community on women roles
in the dev’t of dairy sector
.Promote involvement of wo
men entrepreneurs
in
various exposure visits,
learning & sharing events
.Support processors quality
control
.Support mkt dev’t for
processed milk products
.Support business link b/n
input
suppliers
&
processors, as well as milk
suppliers & processors
. Support processors access
to financial services
. Organize community &
woreda level sensitization
meetings to improve
pastoralist mkt orientation
for milk production
.Promoting/Strengthening
small women group in
pastoralist villages to
improve quantity & quality of
milk supplied to mkt
.Support newly emerging
milk groups/Coops as an
entry point to reach large
number of pastoralists to tap
untapped milk marketing
opportunities
.Provision of training for
pastoralists on milk quality
mgt, sanitation & hygienic
practices
.
tation
guideline
&
strategy
.Stimulate actors in the
dairy VC to be mkt
oriented throughout the
whole chain structure
. Strengthens vertical
chain integration
.Women business skill i
mproved
. HH income increased
& nutrition improved
.Attitudinal
change
improved towards gender
sensitivity
.
Inter sectoral
integration &
coordination
.Product quality improved
.milk consumption pattern
for processed product
improved
. Business integration b/n
actors become strong &
consistent
.Costly intervention
.Consumers taste
may be resistant for
new products
. Quantity & quality of
milk circulate in the
mkt
increased
.Hygienic practice among
pastoralist milk marketing
improved
.Newly adopted
Initiatives may
overburden women

.Institutional/cultural
resistance


10. Annexes
Annex 1
Milk Market Channel in the pastoral areas of eastern, southern and Afar Cluter as well as Dire Dawa
city Council
Key:
Milk Market Channel
Annex 2. List of Actors interviewed for the assessment
S/N
Name
Cluster
1
2
Iskufilan cooperative
Hamdayle Plc
Eastern
Eastern
Specific
location
Muli
Diredawa
3
Primo dairy farm
Eastern
Diredawa
4
Hafkath Plc
Eastern
Diredawa
5
Al-nasri cooperative
Eastern
Gursum
6
7
8
9
10
Alla amin cooperative
Hormud coopeartive
Barwako cooperative
Barwako Milk Processing (Amir)
Barwako dairy farm
Eastern
Eastern
Eastern
Eastern
Eastern
Fafan
Fafan
Dhuxusha
Jijiga
Jijiga
11
12
13
Aleel Adan Riyale
Kadar Jama
Deneke
Eastern
Eastern
Eastern
Jijiga
Jijiga
Jijiga
14
Tawakal cooperative
Eastern
Kebribaya
Role
Full address
Collection
Production and
processing
Production and
processing
Production and
processing
Collection
0923198252
0932202377
Collection
Collection
Collection
Processing
Production and
processing
Fresh milk retailer
Exporter
Powder milk
Importer and
retailer
Collection
0933342826
0915741594
0915228014
0920824377
0915741904
0911603096
0915015600
0915054731
0915774703
0915742875
0924006824
0933414664
15
Alla Mahadle cooperative
Eastern
Heradin
Collection
0915006585
16
17
Abdi rashed
SRS, cooperative promotion
office
Addis Kidan Milk processor
(Gashew)
Eastern
Eastern
Jijiga
Jijiga
0915741594
Afar
Awash
Afar
Amibara
20
21
Amibara woreda cooperative
office
Alaydege coop
Pastoralists in Diba PA
Transporter
Promotion of
cooperatives
Aggregator,
processing and
retailer
Cooperative
Afar
Afar
Amibara
Awash
22
23
24
Betaseb dairy farm
Mister mele cooperative
Arado Cooperative
Afar
Afar
Metahara
Asayta
Asayta
25
Demazo
Afar
Asayta
26
Birhan Dairy SME
Metahara
27
Etafar
Adama
28
29
Southern
Southern
Surupha
Yaballo
Southern
Southern
Elwaye
Dharito
33
34
35
36
37
Surupha cooperative
Gizachew Leta, zone coop
expert
Burka Jirenya
Dharito milk processing
cooperative
Gudisa Ebsa, coop expert
Debo Huka, Coop chair
Halimo Ibrahim
Silesh Yorghot
Faluma Milk retailer
Southern
Southern
Southern
Southern
Southern
Mio
Tuka
Udet
Yaballo
Yaballo
38
39
40
41
42
Firie Yorghot
Consumers
Waqat gargara
Tadelech Teyib, Coop member
Ilama Isak
Southern
Southern
Southern
Southern
Southern
Yaballo
Yaballo
Negelle
Gordala
Filtu
43
Gizachew Leta
Southern
Yaballo
44
45
Debella Geleta
Bare Gelgelo
Southern
Southern
Yaballo
Dubluk
46
47
Mohamed Amin
Dermi Galma
Southern
Southern
Moyale
Moyale
18
19
30
31
Annex. 3 Interview questions for Milk consumers in Yaballo town
Date: May 20-21, 2013
Non functional
Productionand
sales
Production
Collection
Collection
Woreda
cooperative
Officer
Production
Collection,
processing and
retailer
Collection
Facilitation
Collection
Collection and
processing
Collection
Collection
Retailer
Collection
Collection &
retailing
Collection
0911015004
0913194068, Demoze
, organizer
0910020826
0911315620(organizer)
0912182248
0912182248
0913194068
0911315620(
organizer)
091132980
0910062030
0926101568
0912162360
0926620520
0911967009
Collection
0927138237
Producer and
retailer
Zone cooperative
expert
SME office
Cooperative chair
person
Transporter
Trans border
trader
0910062030
0925568122
0912127211
0911808515
Objective: To identify consumer preference in Yaballo town with regard to product quality, taste, ease availability, trust
towards
customer and price. This assessment is used for milk VC, rapid assessment of PRIME Program.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
Do you consume milk and milk products? Yes____________ No___________
If Yes, How frequent you consume it? A) twice a day b) once a day c) once every two days d)once a week
Where do you consume milk mostly? a) in cafes b) In hotels c)At home d) other
What Is your reason to consume it there? A) Socialization & to enjoy outside b)good taste & quality c) good quality and service d)
only good service
How do you identify quality milk/milk product? A) using my own quality tasting b) later reaction of the product on my health c) color
and smell d) other
How do you evaluate the quality of the product /service provider where you take milk/milk product? A) Very Poor b) poor c) Fair d)
good e) v. good
Who do you think is the cause for producing/supplying poor quality milk/milk product? A) some pastoralists/producers b) collectors
c) retailers d) the processor( final service provider)
Is there any cluster/woreda/kebele in your opinion is renowned by it quality milk?--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Is there any cluster/woreda/kebele/village In your opinion is renowned by its adulterated & poor quality product?--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------What is your attitude towards consuming milk/any milk product out of your home? A) I don’t have trust & I am disparate b) Very
good, & I also trust my customer c) I suspect there is some adulteration d) it Is not that much harmful
Is there any time( month or season ) when you stop consuming milk because of price escalation? A) yes b) rarely yes c) No . If yes
please state the time------------------------------------------------------What Is your substitute good for natural milk? A) powdered milk b) pasteurized milk c) tea d) coffee e) I don’t have substitute good
for milk because I extremely like it
Do you consume other milk other than cow milk? A) yes b) No. If yes please state it-----------------Is there any distinguished café/hotel or Yoghurt house somebody canhas to trust in Yaballo town? A) Yes b) No c) I don’t know
If yes please list it/them------------------------------------------------------------------------------------------------------------------- What do you think Is
the reason for its trustworthy? ----------------------------------------Have you ever faced any illness due to poor quality of milk or any milk product?----------a)yes b) No. If yes please describe it----------------------------------------------------------------------------------------------------------------------------------------Thanking you for your cooperation, please add any idea which you suppose is important for this assessment.----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------