ANALYSIS OF DAIRY VALUE CHAIN: THE CASE OF HARAMAYA WOREDA, EASTHARARGHE ZONE OROMIAREGION, ETHIOPIA

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