LIVES dairy value chain development: Distinguishing between fluid milk and butter channels

Dirk Hoekstra, Azage Tegegne, Berhanu Gebremedhin, Aklilu Bogale and Yasin Getahun

21st Annual Conference of Ethiopian Society of Animal Production (ESAP), Addis Ababa, 28-30 August 2013

LIVES Zones/Districts selected for dairy value chain development

Assessment dairy value chains

LIVES Dairy value chain system

Research Education

POLICY

Input

Producer/ Supplier

Output Producer

Trader/ Processor

Value chain actors

Knowledge and capacity service providers

Public and private

service & input

suppliers

Rapid assessment dairy value chains

PA/Districts Zonal Regional/federal

Production X

Input/services X X X

Processing/marketing

X X X

Knowledge & capacity

X X X

Policy X

Community (PA) baseline data

• Sample PA level data from potential dairy Districts/PAs– 8 Zones– 25 Districts– 368 potential rural PAs– 93 sample PAs

• Focus group discussions, • Key informant interviews, • Review of agricultural records of the district Office of

Agriculture (OoA) and Kebele administration, • Records held by development agents (DAs), and other

sources

Household level base line data

• Questionnaire developed• Implementation scheduled for Sept to

Dec

Findings

Relative importance of fluid milk and butter system in LIVES dairy sample PAs

Revenues

Milk Sale

s19%

Revenues

Butter

Sales

81%

Sales Revenues

No of HH selling dairy products

Key role women in butter processing and sale

Spatial distribution fluid milk and butter system in LIVES sample PAs

< or = 1 hr > or = 1 hr -

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

Revenue of milk sold (Birr)

Revenue of butter sold (Birr)

Key production findings/constraints

• Limited number of improved cows• Poor fertility management - long calving intervals• On farm feed production/collection/storage and

treatment inadequate• Limited use of supplementary feeding • High incidence of diseases leading to reduced

production and food safety problems• Roles man and women in production based on

traditional systems, but evolving

Key input supply and services findings/constraints

• Inefficient AI service system, concentrated around major milk consumption centers

• Inadequate supply of supplementary feed and sales outlets

• Poor grazing system land management structures

• Access to services and inputs by man and women still based on traditional systems, but evolving

Key processing/marketing findings constraints

• Price ratio butter/milk = 1 to 16 • Conversion rate milk/butter local breeds 16/1 • Local butter processing farm based (women),

private sector involvement in purchase and sales• Insufficient collective and private action to

purchase and process fluid milk• Access to and role man and women in processing

and marketing based on traditional systems, but evolving

Key knowledge and capacity development findings/constraints

• Inadequate linkages between dairy value chain partners

• Inadequate market oriented extension services• Inadequate research system for action research• Insufficient involvement educational system in

development activities• Access man and women to knowledge and skills

based on traditional systems, but evolving

Key policy findings/constraints

• Government policies/strategies emphasize market orientation

• Various government/NGO initiatives/programs to address constraints

• Lack of overall livestock dairy development strategy

• Inadequate harmonization of dairy development activities

Dairy value chain development strategies

Three spatially different dairy systems

• Farms within 1 hr walking distance from major consumption centers (pop >5000)

• Farms within 1 hr partly motorized travel distance from major consumption centers

• Farms more than 1 hr partly motorized travel distance from major consumption centers

Use of GIS to determine spatially different dairy systems

• Travel time models to main consumption centers (> 5000 population)

• Walking speed humans 5km/hr• Speed modifiers– Slope – fixed – Land use - fixed– Road network – variable for different scenarios

• Walking only scenario: all roads 5 km/hr• Partly motorized scenario: primary roads 40 km/hr,

other roads 5km/hr.

Farms within 1 hr walking distance from major consumption centers (pop >5000)

•The short term development strategy would be to assist producers and other value chain actors in improving their fluid milk and local butter production/marketing system. The longer term strategy will be to focus on fluid milk value chain specialization.

Farms within 1 hr partly motorized travel distance from major consumption centers

•The short and long term strategy for such areas is to build up the fluid milk marketing system while maintaining/improving the butter marketing system. A critical factor for the implementation of this strategy will be collective action (bulking, cooling) of milk and transportation interventions.

Farms more than 1 hr partly motorized travel distance from major consumption centers

•The short and long term project development strategy for these areas is focusing on commercial sale of butter, while fluid milk can be used for domestic consumption to improve the livelihood of farmers.

Dairy value chain development interventions

Key production value chain interventions

• Appropriate on farm breeding and fertility management depending on development direction (breeds, nutrition, heat detection)

• Improved on farm production of forages– Grazing areas– Crop residues– Planted fodder

• Improved use of produced fodder– Conservation (hay/silage)– Treatment (chopping, urea/molasses)

• Improved production methods – feeding, housing, milking hygiene, health

Key input/service supply interventions

• Introduction of hormone assisted mobile mass insemination system

• Strengthening/establishing of agro business dealerships for supply of feeds/veterinary drugs thru coops and private businesses

• Creating linkages between producers and agro businesses

• Development of public (FTCs) and private forage seed multiplication system

• Establishing improved management systems for communal grazing areas

Key processing/marketing interventions

• Promotion of dairy product consumption• Fluid milk processing marketing– Stimulate collective and private action to purchase

and process milk within the 1 hr travel distance– Improve milk quality – milk collection cans, cooling,

quality testing, certification of vendors• Butter processing marketing– Stimulate collective and private action for butter

processing by women– Explore collective action for sale of butter

Key knowledge and skills development interventions

• Creation of linkage mechanisms between dairy value chain actors at and between different levels

• Use of ICT based information systems, technologies• Contribute dairy value chain development info thru

EAP and promotional activities• Use of market oriented extension system, based on

gender equity, sustainable environment and entrepreneurial small holders

• Use of skills and knowledge on improved production and processing technologies

Key policy development contribution

• Contribute to livestock strategy/policy development

• Contribute to dairy program harmonization

• Participate in dairy value chain for a, including Dairy Board

Summary conclusion

• Avoid blanket approach to dairy value chain development

• Pay attention to local butter value chain

• While the use of genetically improved animals is key to the development of dairy value chains, additional production, input/service and processing/marketing , capacity/knowledge interventions and policy contribution are required to reap the full benefits