Abstract:
In developing countries like Ethiopia, improving the market linkage of smallholder farmers
is one of the strategies to improve agricultural productivity and production of agricultural
outputs. However, there is a lack of studies conducted on how smallholder dairy farmers are
integrated in to the value chain for their production. The study was initiated with the
objectives of analyzing dairy value chain in Haramaya woreda of Oromia National
Regional State, in Eastern Ethiopia. The study encompasses both rural and urban kebeles of
Haramaya district. Particularly, the study aimed at mapping the dairy value chain,
assessing the constraints and opportunities in the sector, and identifying factors affecting
producers’ level of participation in dairy markets in Haramaya woreda. Data were
collected from123 producers, three input suppliers, five collectors, seven wholesalers, seven
retailers, and 15 consumers. Both descriptive and econometric analyses were employed to
analyze data. The descriptive result of the study revealed that the channel choices available
to producers include selling to collectors, wholesalers, retailers, and directly to consumers.
From this the largest and longest chain which accounts for about 33% was Producers
Rural collectors Wholesaler Retailers consumers. The descriptive statistics result
also show that 98% of producers were market participants and out of this 96% of the milk
produced were sold in liquid form without adding value, hence only 2% of the milk
produced were sold in value added form. The Multiple OLS model output indicated that
variables having significance influence for the level of market participation in milk
marketing were family size, size of milk output, age of the household head and credit access
were the significant factors affecting volume of milk sales. The major recommendations
include provision of credit access, disseminating family planning, encouraging value chain
actors to add values and enhancing collective actions of producers to increase dairy
production and productivity
