1. Liquid Milk and Feed Value Chain Analysis
for Wolmera District
Dairy Team
Holeta Agricultural Research Center

2. 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

3. 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.

4. Results of Value Chain Analysis

5. Input supply Production Raw milk marketing Processing Retailing Consumption
•Semen
•Bulls
•Feed ingredients
•Land
•Labor
•Seed
•Drugs
cow rearing
Feeding
Milking
Collection
Refrigeration
transportation
Delivery to
processors
Milk chilling
Pasteurization
Packaging
Products making
Quality assessment
Selling
Transporting
Quality
assessment
Quality
assessment
Core functions and activities in the fluid milk value chain

6. Fluid Milk VC Actors and Major Channels
RawMilkMarketing RawMilkMarketing
ProcessingProcessing
ProductionProduction
ConsumptionConsumption
Smallholderdairyfarmers Smallholderdairyfarmers
Unions/coopsUnions/coopsIndividualtradersIndividualtraders Collectorsofmilkprocessing
plants
Collectorsofmilkprocessing
plants
Smallscaleprocessors Smallscaleprocessors ProcessingplantsProcessingplants
Retailing(processedmilk) Retailing(processedmilk) Smallshops Smallshops
Hotelsand
restaurants
Hotelsand
restaurants
SupermarketsSupermarkets
InstitutionsInstitutionsHouseholdsHouseholds
InputSupply
Extension
services
Vetservices Creditservices SeedssupplyAIservices Knowledge&
Skills
EnablingEnvironmentEnablingEnvironment
Landavailability
Rulesand
Regulations
Drought

7. 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

8. Core functions and activities in the feed value
chain
Input supply Production Processing
Marketing
• seed supply
• Supply of
fertilizers
• Supply of wheat,
noug, linseed,
cotton seed etc
•land preparation
•planting
•weeding
•harvesting
•Baling
•Stacking
•Storage
•Grinding/crushing
•Mixing
•Branding
•Packaging
• Feed Formulation
• Treatment
• Supplementation
• Feeding
Consumption
• Transportation
• Storage
• Retailing
• Distribution
• Quality assessment

9. Feed VC Actors and Major Channels
MarketingMarketing
ConsumptionConsumption
Enabling
Environment
Enabling
Environment
ProductionProduction
Smallholder farmersSmallholder farmers
Agro-processing industriesAgro-processing industries
TradersTraders
Unions/coopsUnions/coops
Small holder rural
farmers
Small holder rural
farmers
Institution/colleges, research
centers etc
Institution/colleges, research
centers etc
Urban & peri-urban
farmers
Urban & peri-urban
farmers
Input Supply Extension
services
Provision of Planting
materials & fertilizer
Credit
services
Technology
Land availability
Rules and
Regulations Drought

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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

17. Filed level Monitoring Evaluation

18. Thank you !!