inventory of dairy policy - ethiopianaic national artificial insemination centre ... status,...

Dairy Policy Inventory of Ethiopia

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Ethiopia

SNV Ethiopia

Target Business Consultants Plc

www.targetethiopia.com

Getachew Felleke, Medhin Woldearegay

& Getnet Haile

Inventory of Dairy Policy - Ethiopia

Dairy Policy Inventory of Ethiopia SNV Ethiopia

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TABLE OF CONTENTS

ACRONYMS ..........................................................................ERROR! BOOKMARK NOT DEFINED.

1. EXECUTIVE SUMMARY.........................................................................................................................1

2. REVIEW OF MILK AND DAIRY PRODUCTION .......................................................................................5

2.1. OVERVIEW OF MILK AND DAIRY PRODUCTION AND UTILIZATION IN ETHIOPIA ...............................................5

2.2. ETHIOPIAN MILK AND DAIRY PRODUCTION SYSTEMS ...............................................................................9

2.3. Milk and dairy products consumption........................................................................................14

3. MILK AND DAIRY PRODUCTS VALUE CHAIN ......................................................................................15

4. FEED RESOURCE ...............................................................................................................................18

4.1. Overview..................................................................................................................................18

4.2. Feed availability – implications on milk and dairy production.....................................................20

4.3. Forage and feed development initiatives...................................................................................22

4.4. Challenges, constraints and recommendations..........................................................................23

5. BREED IMPROVEMENT AND ADOPTIONS...........................................................................................25

5.1. Overview..................................................................................................................................25

5.2. Breeding practices and service delivery system.........................................................................28

5.3. Breed improvement and use of dairy stock ...............................................................................29


6. DAIRY HEALTH AND VETERINARY SERVICES.....................................................................................31

6.1. Epidemiological situation ..........................................................................................................31

6.2. Health control practices and delivery system ............................................................................33

6.3. Disease prevalence and control ................................................................................................35


7. MILK AND DAIRY PRODUCTS UTILIZATION AND POST HARVEST LOSSES.........................................36

7.1. Milk and dairy products utilization.............................................................................................37

7.2. Market outlet and post harvest losses.......................................................................................37

7.3. Challenges, constraints and policy recommendations................................................................39

8. DAIRY EXTENSION SERVICES............................................................................................................40

8.1. Overview of agricultural services ..............................................................................................40


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8.2. Dairy extension and research ...................................................................................................41

8.3. Challenges, constraints and recommendations in extension services .........................................42

8.4. Challenges, constraints and recommendations in reference to research ....................................43

9. DAIRY FARMERS ORGANIZATIONS AND COOPERATIVES...................................................................44

9.1. Overview..................................................................................................................................44

9.2. Organization.............................................................................................................................47

9.3. Challenges, constraints and recommendations in reference cooperative organization................47

10. BUSINESS AND PROFESSIONAL ASSOCIATIONS ......................................................................48

10.1. Business associations ...............................................................................................................48

10.2. Professional associations ..........................................................................................................49

11. MILK SAFETY AND STANDARDS ...............................................................................................51

11.1. Overview..................................................................................................................................51

11.2. Improving and institutionalizing dairy quality control ................................................................53

11.3. Challenges, constraints and recommendations - milk and dairy products standards and quality 54

12. FINANCIAL SERVICES...............................................................................................................55

12.1. Banks 55

12.2. Microfinance institutions ...........................................................................................................56

12.3. Insurance.................................................................................................................................56

12.4. Challenges, constraints and recommendations in reference to loan...........................................56

12.5. Challenges, constraints and recommendations in reference to insurance ..................................57

13. PROMOTION OF MILK CONSUMPTION .....................................................................................57

13.1. Challenges, constraints and recommendations in reference to milk consumption ......................59

13.2. Dairy information system..........................................................................................................60

13.3. Challenges, constraints and recommendations in reference dairy information ...........................60

14. THE DAIRY INDUSTRY (COMMERCIAL DAIRY FARM AND PROCESSORS)..................................61

14.1. Challenges, constraints and recommendations -to milk processing, packaging and marketing...62

14.2. Informal milk marketing ...........................................................................................................63

14.3. Business environment...............................................................................................................64

15. INSTITUTIONS IN DAIRY DEVELOPMENT.................................................................................64

15.1. Public institutions for dairy development...................................................................................64


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15.2. Hierarchical structure of public institution relevant to the livestock/dairy sector ........................66

15.3. Duties and responsibilities of the main public actors .................................................................68

16. ROLE OF NGOS IN THE DAIRY SECTOR....................................................................................70

17. THE POLICY ENVIRONMENT.....................................................................................................71

17.1. General ....................................................................................................................................71

17.2. National development policies and their relation to dairy ..........................................................72

17.3. Draft livestock development policy............................................................................................73

17.4. Existing development strategies ...............................................................................................75

17.5. Rural development policy and strategies...................................................................................76

17.6. Sustainable development and poverty reduction program.........................................................77

17.7. The ethiopian poverty reduction strategy..................................................................................78

17.8. The national food security strategy...........................................................................................79

17.9. Agricultural marketing strategy.................................................................................................79

18. RECENT LIVESTOCK DEVELOPMENT PROGRAMMES.................................................................80

18.1. National livestock development program ..................................................................................80

18.2. The livestock development master plan study...........................................................................81

19. LEGAL FRAMEWORKS RELATED TO LIVESTOCK .......................................................................82

19.1. International regulation on trade in livestock ............................................................................82

19.2. Country level proclamations and regulations on livestock and dairy ..........................................82

19.3. National development policies and programs and their implications in dairy development.........85

19.4. Adequacy and relevance...........................................................................................................86

19.5. Compliance of the policies in light of dairy sector......................................................................88

19.6. Effectiveness of strategies on the dairy sector ..........................................................................89

19.7. Need for an institution..............................................................................................................90

19.8. Challenges on the enforcement of the existing policies .............................................................91

20. CROSS-CUTTING ISSUES .........................................................................................................92

20.1. Environment.............................................................................................................................92

20.2. Gender ....................................................................................................................................93

21. BENCHMARKS ..........................................................................................................................93

21.1. Kenya dairy policy ....................................................................................................................93

21.2. Pakistan dairy policy.................................................................................................................97


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21.3. Indian dairy policy ....................................................................................................................98

21.4. Swaziland...............................................................................................................................101

21.5. Botswana ...............................................................................................................................103

ANNEXES 105

annex 1: animal disease prevention and control..................................................................................107

annex 2: suggested role of dairy board ...............................................................................................109

annex 3: milk value chain map (variant 1) ..........................................................................................110

annex 4: milk value chain – variant 2..................................................................................................111

annex 5: summary of challenges, constraints and recommendations.................................................112

REFERENCES ..................................................................................................................................120


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ACRONYMS ADB/ADF African Development Bank/African Development Fund ADLI Agricultural Development Led Industrialization AEDD Agricultural Extension Development Directorate, AFRDA/D Animal and Fisheries Resources Development Authority/Department AGDP Agricultural Gross Domestic Product AISD Agricultural Investment Support Directorate AMDD Agricultural Marketing Development Directorate APHRD Animal and Plant Health Regulatory Directorate, ARDU/ CADU Arsi Rural Development Unit/ Chilalo Rural Development Unit BoARD Bureau of Agriculture and Rural Development CIDA Canadian International Development Agency COMESA Common Market for Eastern and Southern Africa CSA Central Statistics Authority DDA/E Dairy Development Agency/Enterprise DRDP Dairy Rehabilitation and Development Project EAFPA Ethiopian Animal Feed Producers Association EAVA Ethiopian Assistant Veterinarians Association EIAR Ethiopian Institute of Agricultural Research EMDTI Ethiopian Meat and dairy Technology Institute EMPPA Ethiopian Milk Producers and Processors Association EPID Extension and Project Implementation Department EPRS Ethiopian Poverty Reduction Strategy EQSA Ethiopian Quality and Standards Authority ESAP Ethiopian Society of Animal Production EVA Ethiopian Veterinarians Association F1LDP First Livestock Development Project F4LDP Fourth Livestock Development Project FAO Food and Agricultural Organization FINNIDA Finnish International Development Agency FTC Farmers Training Centres GDP Gross Domestic Product HACCP Hazard Analysis and Critical Control Point ILRI International Livestock Research Institute IPMS Improving Productivity and Market Success of Ethiopian Farmers KDB Kenya Dairy Board LMPS Livestock Master Plan Study LN2 Liquid Nitrogen

LPS Lactoperoxidase System LSR Livestock Sector Review of AACM, 1985 MFI Micro Finance Institutions MoA Ministry of Agriculture MoFED Ministry of Finance and Economic Development MPP Minimum Package Program NAHDIC National Animal Health Diagnostic and Investigation Centre NAIC National Artificial Insemination Centre NDDB National dairy Development Board of India NEIP National Extension Intervention Program


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NGO Non Government Organizations NLDP National Livestock Development Project NVI National Veterinary Institute PADEP Peasant Agriculture Development Programme PADETES Participatory Demonstration and Training Extension System PASDEP Plan for Accelerated and Sustainable Development to End Poverty RDPS Rural Development Policy and Strategy SDDP Smallholder Dairy Development Project SDPRP Sustainable Development and Poverty Reduction Program SIDA Swedish International Development Agency SNNP Southern Nations Nationalities and Peoples Region SNV Netherland’s Development Agency SPDDPP Selale Peasants Dairy Development Pilot Project TLU Tropical Livestock Unit TVET Technical and Vocational Education and Training UHT Ultra High temperature Milk UNIDO United Nations Industrial Development Organization WADU Welaita Rural Development Unit WARDO Wereda Agriculture and Rural Development Office WFP World Food Programme WHO World Health Organization WTO World Trade Organization


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1. EXECUTIVE SUMMARY This study is conducted with the objective of inventorying policies relevant to the dairy sector

in Ethiopia, taking into account the current situation and ongoing efforts in this regard, and

reviewing the gaps in the policy landscape that cause bottlenecks, constraints and limitations to

arise in the dairy sector. The report will provide input for further discussion on policy

development needs and the way forward. The document addressed and thoroughly discussed

issues of the dairy system as to their background, status, challenges, gaps and opportunities.

The Ethiopian dairy system can be paraphrased by the statement that “though there is huge

livestock population with high potential for milk and dairy production and ever more people

tend to drink milk and consume more dairy products, yet milk production is still too low in the

country to satisfy the needs, which is hampered by bucketful of paradoxes, hopes and

heartbreaks”.

Category of the Dairy system: The Ethiopian dairy systems can be categorized under five

systems of operation; pastoral (traditional pastoral livestock farming), Agro-pastoral

(Traditional lowland mixed livestock farming), mixed crop livestock system (traditional highland

mixed farming), Urban and Peri-urban (the emerging smallholder dairy farming) and

Commercial (specialized commercial intensive dairy farming)

Dairy products: In the Ethiopian context the type of milk and dairy products that needs to be

considered are whole milk (liquid milk, Ititu, Ergo, buttermilk etc) and other dairy products

from fermented processing (butter, ghee, Ayib, Metata Ayib etc.),

Production: From the overall Ethiopian milk production, the rural dairy system, which includes

Pastoral, Agro-pastoral and Mixed crop livestock system, contributes 98%, while the peri-urban

and urban including the commercial dairy farms produce only 2% of the total milk production

of the country. Indigenous stock produce 97% of the milk produced from cattle and the

remaining 3% from improved exotic crosses and pure grade cattle. Most of the milk produced

in the rural dairy system is retained for home consumption and it is non-market oriented.


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Although the total amount of milk produced has increased with increases in human population,

the per capita milk production has declined for some years. Based on the 2008/09 survey of

CSA, milk per capita, increased to 37.62 liter. Based on other estimates however, the per capita

milk is much lower than this.

Marketing: Of the total milk produced in the country only 5% is marketed as processed fluid

milk due to the underdevelopment of the infrastructure in rural areas. The volume of

pasteurized milk and other dairy product sales is increasing.

Overall, the value chain encompasses all direct and indirect actors from the point of production

up to the point of consumption of the dairy products. The direct actors are rural traditional

small holder producers, improved market oriented, dairy farmers and dairy cooperatives and

Unions, milk collectors, small scale dairy Processors, dairy input suppliers, commercial dairy

farms, commercial dairy processors, retailers, consumers. Indirect actors and support/service

providers are government offices at all levels, dairy and livestock development projects, Non

Governmental Organization, Producers associations , professional associations, Financial

institutions are among the list.

Feed: In general the feed supply is not adequate. characterization of the Ethiopian feed

situation and feeding system reveal that deliberate production of feed for dairy cattle is

unusual, Policies on land tenure and access to land are based on cropping area requirement,

i.e., the absence of land use plan for pasture land and grazing areas and/or bias on crop

production, Lack of breeding strategy to align with seasonal feed availability, and feed, usually

based on fodder and grass, are either not available in sufficient quantities, or if available the

feed are nutritional poor quality, scarce grazing land, inferior quality of processed feed quality

supplies and high cost of processed feed and processing residues and natural feed.

Breeding: Generally deliberate selection of cattle for milk and dairy is not well practiced. Milk

is produced mainly from indigenous zebu cows (82%), the remaining coming from does and

she camels and insignificant amount from sheep of the same origin. As indicated above, the

exotic crosses and pure grade cattle are representing about 3% of the total milking cows.

Short supply of improved dairy breed, uncontrolled breeding practice and inefficient artificial


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insemination service are among the major constraints in extensive use of improved dairy

breeds. To alleviate the problem, policy options include promoting communal groups/private

involvement on bull breeding schemes, AI services and bull rearing centers, establishment of

public bull rearing and bull service stations, develop and enact breeding strategy on and

controlled breeding are suggested.

Diseases: Mastitis and retained placenta are known diseases that cause heavy economic

losses to milk producers and the dairy industry. The animal health service organized under the

Federal and Regional Governments had contributed to the national economy through reducing

the negative impacts produced by epizootic and zoonotic diseases.

Lack of inspection and quality control services of livestock products to safeguard the public

from diseases, uncoordinated veterinary drugs administration, efficacy and quality problems

are major constraints. Prevention and control of diseases through development of veterinary

infrastructures and manpower, design and implements appropriate control and prevention

strategies, and encouraging of the private veterinary drug dispensing are recommended.

Consumption and Post harvest losses: Urban consumers buy milk for direct consumption

mainly from the urban and peri-urban dairy farmers near settlement areas where demand for

milk is high. Absence of organized marketing network has made the large amount of milk

produced unable to reach the consumer. Together with the perishable nature of milk post-

harvest losses is thus high due to spillages and spoilage. In some case studies losses of up to

20-35% have been reported from milking to consumption for milk and dairy products.

Inconsistency of demand and supply of milk are among the main factors which affects the dairy

value chain. Promoting extended shelf life dairy products, generic (non-brand specific)

advertisement and promotions, promotion of school milk feeding programme, and aggressive

involvement by Government and the private sector on dairy industry are among the suggested

intervention for the improvement of milk consumption at the national level.

Extension service: Definitive approach of extension service was developed late in 1960’s.

Since then a number of extension packages has been introduced. With all these years effort,

extension package performance indicators show that the livestock husbandry extension

package in particular have not been operating efficiently and effectively as expected. The

extension service was not available for urban and large scale farms.


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Farmer organizations: There are a number of milk marketing cooperatives who also started

their own small and medium scale processing. Some of the cooperatives played prominent role

in strengthening the dairy value chain and in the improvement of the livelihood of their

members. Limited capacity on management and marketing of their respective cooperative,

limited capital, and weak communal thinking are the challenges that should be over come to

develop the cooperative promotion.

Quality standards of Dairy Products: The quality standards set by the Ethiopian Quality

and Standards Authority are not enforced and no mandatory certification or regular inspection

and quality control are not in place.

Financial institutions: Challenges and constraints from financial institutions to the dairy

sector are poor loan access by small holders, cooperatives and unions, lengthy process in

getting investment loan approval for industries, no or low collateral value of machines and

cattle and unsuitable insurance policies.

Policies: All the relevant policies which are related to the dairy sector, or affects the sector in

one or another way in terms of production, marketing, consumption, quality, breeding, feed etc

are thoroughly reviewed in this document. Policies are reviewed in light of the identified gaps

and challenges analyzed in the dairy sector actors. Inventory of the existing policies and

strategies at sectoral level and programs developed thereof in Ethiopia had indicated that the

overall objective of the policies and strategies are more or less comprehensive in addressing

basic principles of development with a the exception of few items. Intuitional capacity,

ownership, follow-up, coordination and continuity are among the main challenges which deter

the effectiveness of these policies.

Benchmarking: Dairy policies of countries like Kenya, Swaziland, India, and Pakistan are

reviewed and best practices are identified and incorporated as a recommendation.

Finally, the output of this study is summarized and presented in a tabular form in Annex 5 of

this document indicating challenges, constraints and proposed policy level interventions.


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2. REVIEW OF MILK AND DAIRY PRODUCTION

2.1. Overview of milk and dairy production and utilization in Ethiopia

The paradox - Large livestock Population versus low milk per capita consumption:

The Ethiopian dairy system can be paraphrased by the statement that “though there is huge

livestock population with high potential for milk and dairy production and there are ever more

people tend to drink milk and consume more dairy products yet milk production is still too low

in the country to satisfy the needs which is hampered by bucketful of paradoxes, hopes and

heartbreaks”. The Ethiopian livestock population is the highest in African continent and there

has been efforts exerted to develop the sector, but the outcomes are insignificant (the

paradox). There is increasing population with improved disposable income at some sectors of

the society, especially in the growing urban areas, to absorb the produce (the hope). Despite

the different technological advances and increasing efforts of the government and the private

sector as well as bilateral, international and development oriented NGO’s involvement, the

change expected could not be realized and is frustrating (the heartbreaks).

Based on recent surveys the total milk production has increased significantly (300%) from what

it has been reported by CSA for the year 2000. i.e CSA (2000) indicated national milk

production was 1.2 million where as agricultural Sample survey result of 2007 (CSA, 2008) had

result of 3.2 million litres. The milk per capita, based on the 2008/09 survey is 37.62 litres

(CSA 2009). However, according to the forecast of FAO, the annual production is far below the

survey made by CSA. During the period from 2001 to 2007, based on FAO forecast, cow milk

production is growing at an average rate of 2.6%, which is equivalent to the Ethiopia’s

population growth rate of 2.8% (2007 census). The recommended per capita milk consumption

according to FAO/WHO is 200 litres per capita per annum. The average per capita consumption

of milk in Sub-Saharan African is 25kg, where our neighbor Kenya is consuming about 90kg

and global average is 190 kg. Comparatively Ethiopia’s per capita milk consumption is

estimated to be about 20 kgs.

Socio-economic importance of milk to Ethiopia

Milk, similar to other societies, is our first food and we were raised on our mother’s milk. The

statement made by Author Amadou Hampate Ba of Mali “the baby at the mother’s breast

drinks more than milk, but mercy and love too” (quoted in Spore Magazine of December 2002)


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indicates that milk may have its mythical dimensions and development of the mind. We have to

admit the importance of milk in our social development, besides, it is our traditional food,

especially in the agro-pastoral and pastoral areas. It is the basic need the country should avail

for the betterment of its people.

Where milk is a widely accepted most complete food for human beings and is highly regarded

and most essential in the diet, it is important to promote the utilization of milk on public health

and human development perspective. The public has the “right to milk” and the Government

should have the road map to develop the sector and avail enough milk and dairyproducts. The

public is also obliged to get adequate milk and dairy products both qualitatively and

quantitatively for healthy and productive performance with affordable price that suit the socio-

economic situation of the population. Due to its intrinsic nature to be converted to variety of

products through the wide range of technologies available, the type and quality of milk and

dairy products for market are diverse and humans have plenty to bargain for and choose milk

in its unique diverse form to suit the society’s requirement.

If not the same in our country, milk has become an icon of consumption for urban population.

Generations of urban consumers in other countries have acquired a taste of it through

distribution schemes at schools and through advertisements praising its beneficial effects. More

over milk and dairy products are found in all types, shapes, and sizes on market stalls and shop

shelves for the consumers to select from to maximize their need for the product. Pasteurized

milk, UHT milk, cans of evaporated milk, condensed sweetened milk; full and skimmed and non

fat milk, butter milk yoghurt, cream, butter, ghee, powdered milk, baby formula, too many

sorts of cheeses to choose are available for market for whoever needs it. However this practice

of availing all sorts of dairy production and the culture of milk and dairy products promotion is

not practiced in our country. Despite the potential for market outlet for the various milk and

dairy products, with increased population, urbanization and improved standard of living the

formal market is not well developed in Ethiopia. Notwithstanding the need to supply children

and vulnerable sector of the population with this most important food, it is important to

develop the market outlet to avail clean and standard milk and dairy products in different

brands for all consumers to choose from to satisfy requirements at affordable prices.


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Challenges and Constraints

Milk hasn’t ever been plentiful in our country due to intermittent drought and less milk available

during the dry season. Other factors for deficit are low potential for milk production of local

breeds; backward and low management knowledge at the farm level (feeding, etc,), and

discontinuous and ineffective public interventions, dictating the existing low productivity and

overall production. Even in the pastoralist and agro pastoralist community only the children,

pregnant women, and the elderly drink it regularly, others getting it on rare occasions. Even

though milk may be produced in many areas and parts of the country, the difficulties in the

smooth transportation of the product to consumption site on time (providing clean milk, both

quality and safety guaranteed) had effect on equitable distribution to provide sufficient amount

due to under developed dairy production and weak marketing system and its linkages. We

need to improve productivity and overall production with efficient marketing system to satisfy

the national demand for milk and dairy products.

Other features of milk and dairy products development in the country are the characteristics of

under developed milk processing and marketing situation, predicament on price and cost of

both raw milk and dairy products for the producer and consumer respectively. Level of

importation and its impact on local production and the issue of affordability and standard of

living are the important considerations.

As milk is highly perishable with variations in temperature and bacterial load, it has short shelf

life that needs care and maintaining its quality to make it available to the consumer on clean

and healthy form. As it is a good media for microbial multiplication with increased temperature

and extended duration, it is prone to contamination with zoonotic and other bacteria, which

causes ill effect for humans. Unless collected on time and consumed, processed and/or

converted to other dairy products accordingly it is prone to wastage and loss. Inefficient

handling that causes loss is major factor that negate increased production and development of

the sector.

The presupposition milk is too cheap to sell (rural) in respect to the producer and too costly to

buy (urban) with respect to consumer are the two dilemma in the extremes of the value chain.

Milk producers especially in the rural areas fetch lower price which could not induce them to

produce more and efficiently to make available steady supply to the milk marketing chain.

Prices as low as less than three Birr are reported in rural areas of Ethiopia while farmers in the


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peripheral areas of urban centres are getting up to six Birr a litre based on location and

demand. On the other side consumers are complaining of buying, specially pasteurized milk at

a cost of more than twelve Birr a Litter which is unaffordable for most groups of societies.

Where is the bigger margin is going?

Too little raw milk to collect and too small supply and few varieties of choices in milk and dairy

product are also scenario of concern for the market to operate efficiently. Demand and supply

in both respects are challenges that face and affect all stakeholders in milk production and

market value chain and the overall dairy sector. Both producers and consumers in the

respective end of the milk value chain, blame the market not to be conducive.

Demand for milk products especially in urban areas are mostly met with imported products.

Import has increased from about 3.1 million USD in the year 2001 to the level of USD 9.3

million in the year 2008, which is about 300% growth from what is has been in 2001 (UNIDO,

2009). In terms of quantity it has increased from 1,716 tons (2001) to 2,087 tons (2007) with

steady increases every year except the depressions in two years. On average there is annual

16% increase ranging from decreases in 2003 (-37%) to 59% in 2001.

Prospect

Overcoming the competition of land for crop production and other resources, realization of

increase in local milk production through improved productivity and organized market linkage is

essential to improve minimum level of milk and dairy products consumption requirement for

the 74 million, populations growing at 2.6% per annum (2007 Census).

The growth in production can provide a satisfactory supply of milk and dairy products and help

generate more income for farmers and thus trigger development in the sector. Options for the

development of the dairy sector are bound from the minimum setting of creating chain of

smallholder dairy farms up to commercial farms, forming milk shed areas and developing dairy

colonies (group of farmers located in strategic areas) around towns and helping to form

cooperatives (including mini-dairies) to better target their integrated milk value market linkage

with long term effect of policy direction by the public interventions. These polices has to

encourage private investments to develop large scale dairies, cooperatives to bring economies

of scale and building strong investment capacity and the public to adhere to its commitment to

enacting on conducive policy environment for the overall development of the country.


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2.2. Ethiopian Milk and dairy production systems

Dairying in Ethiopia practiced almost all over the country with the intensity of small or medium

or large-sized, subsistence or market-oriented farms. According to Getachew and Gashaw

(2001) the dairy system of the country is categorized based on agro-ecology characterization of

the area or climate, socio-economic structures of the population and holdings and type of

breed and species used for milk production and the integration with crop production as

criterion

Broadly the country’s milk production system can be classified into two major systems, namely:

1. The rural dairy system which is part of the subsistence farming system and includes

Pastoralists,

agro-pastoralists, and

mixed crop–livestock producers;

2. The peri-urban; and urban dairy systems

With the similar approach and reason of identifying the dairy system the Livestock Master Plan

study (MoARD, 2008) has categorized the dairy system specifically into five dairy system from

extensive grazing at one end to zero-grazing at the other end.

The production system can also be further categorized under three systems of operation:

based on level of inputs. These are Low inputs; Medium inputs and high inputs (State of

Ethiopia’s Animal Genetic Resources-Country Report, 2004).

This way of classification with the augmentation from the Getachew (2001) and review

consideration of the study team and for the purpose of this study the following classification

was used to address the dairy development and polices inventory in Ethiopia. This includes:-

1. Pastoral:- The traditional pastoral livestock farming,

2. Agro-pastoral:- Traditional lowland mixed livestock farming,

3. Mixed crop livestock system:- Traditional highland mixed farming,

4. Urban and Peri-urban:- The emerging smallholder dairy farming,

5. Commercial: - The specialized commercial intensive dairy farming;


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2.2.1. Pastoral milk production system

This is the major systems of milk production, practiced in the lowland regions of Ethiopia

where the livelihood of the transhumance population is dependent on their stock. Cattle

dominate the livestock population followed by camel, goats, and sheep, (Coppock, 1993). Of

the estimated cattle population cows constitute about 40% of the herd indicating that the

pastoral population considers cattle primarily for increased income there by use these for milk

production. Area extends from the northeast Afar lowlands to the western lowlands including

Somali Region, Borana area and Southern Omo areas.

Because of the erratic rainfall pattern and related reasons resulting in shortage of feed milk

production of milk per unit area is low and highly seasonal. More milk will be produced in the

wet season where they would mostly convert the surplus milk into butter and trade off with the

highlanders in the peripheral markets for grain. Milk is primarily used as fresh whole milk for

consumption followed by sale to urban centers and for fermentation to process it into butter.

Milk storage and use can be either in the form of milk fermented for a short term for lower

than five days (used mainly for family consumption or butter making). The remaining milk will

be stored to be fermented for a longer term for up to 30 to 60 days used as ititu, a social food

commonly reserved for guests (Getachew, 2003).

2.2.2. Agro-pastoral: Traditional lowland mixed livestock farming

The system has similar but gradual to sedentary ecological characteristics and cattle type to

the pastoral area. Its specific identification is livestock dependent but growing of crop and its

further expansion in crop farming gradually allocating the pasture land to crop production. The

crop residue and aftermath of crop farming is used as a feed source for animals in the area in

addition to communal pasture grazing. As compared to the above system, the system have

better consideration for milk market and its access for additional inputs such as animal health

services and supplementary feed from industrial by products and development of forage to

calves and milking cows near to the newly started farm land to some extent.

2.2.3. Mixed crop livestock system: Traditional highland mixed farming

Milk-production is an integral part of the production system of small-scale, non-commercial

subsistence-farms which represent among the 83.9% of the population and are responsible for

the major part of 98% of the total milk produced and 75% of commercial, liquid milk-

production (Getachew, 2003; Tsehay, 2001).


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The animals on these farms produce between 400 and 600 liters of milk per cow per lactation.

Indigenous stock are the typical animals maintained within this system; the system is largely a

system of extensive husbandry; that is, the stock are for the most part expected to feed for

themselves, making the best of natural pasture and crop residues. Such a system does not

entail investment in the improvement of stock or of lands. Cash outlays for purchased inputs

are minimal; supplementary feeding is not practiced; and drugs and vaccinations of use much

lower, those medicines required for the handling of indigenous stock are typically provided on a

highly subsidized basis by the Veterinary Department of the Regional Agricultural Bureaus and

sometimes through project finance. Typical extensive milk-producer can thus expect minimal

cash expenses per unit of milk produced, but only a very limited milk output per cow (low input

versus low output).

Milking cows in the traditional sector have an average lactation length of 190 days and an

average milk yield of 1.9 liters per day (excluding what the calf has suckled). (MOA, 2005).

Although the figures represent very low levels of productivity, the genotype of these cows

cannot be totally blamed for such a limited level of productivity under the present standards of

feeding and management. Although the genetic potential of the milk-yield of most indigenous

zebu-cattle is too low to support the investment required in commercial dairying, they will

continue to be the principal source of milk for a long time.

Although this sector is largely based on indigenous breeds, some progressive small-scale

farmers in the various milk sheds are now maintaining cross-bred cows that are capable of

producing 800 to 1200 liters of milk/cow/lactation and sale milk to co-operative societies and

commercial milk collectors (MoARD, 2008).

2.2.4. Urban and Peri-urban: The emerging smallholder dairy farming

The introduction of crossbred dairy heifers into the mixed farming system in the development

of an integrated agricultural production has proved successful in the highland regions of

Ethiopia. This system of dairy production is mainly located in the potential highland areas of

the country where farmers in the peri-urban and some rural areas not distant away urban

centers practice market oriented milk production. They tend to be developed mainly in the

Addis Abeba milk shed area and some other urban centers where market for fresh milk is

readily available and adequate (Getachew, 2003).


12

Due to limited land holding and the need to complement the crop production in increasing

efficiency of agricultural production the emerging smallholder dairy farming using crossbred

and improved dairy stock will be the most important feature in dairy development.

It is a production system which is expanding and is largely found in the highlands where

mixed-crop livestock-farming is practiced as well as within urban centers. Economic factors

have been dominant in determining the locations of exotic dairy-cattle in these urban and peri-

urban areas since the milk-production of exotic cattle far exceeds that of indigenous stock. The

animals used in this system are capable of producing 1,120 to 2,005 liters over a 209 day-

lactation (Azage et al, 2002).

The dairy farms in this system rely mainly on purchased feed. They are commercially oriented

and will respond to improved technical, input supply and marketing services. The owners of

dairy cattle in these intensive peri-urban systems are mainly small farmers, but businessmen

and retired civil servants who depend, wholly or partly, on hired labor, are also common.

Urban smallholders are mainly supplying to households though house to house delivery. Most

of them are using plastic jerry can for handling the milk. The main end consumers of house

delivery are infants and children. The delivery is often on a monthly contractual basis with

minimum delivery size of half litre. Some urban smallholders are also supplying to cafe’s and

restaurants. Recently these urban smallholders are facing a pressure from the municipality to

shut off their small farms because of health and environment issues. Based on the discussion

with the chairman of EMPPA, it is estimated that 20% to 30% of these farms are closed in the

year 2009. Based on the information of Vet service provider of Akaki district of Addis Ababa,

the numbers of cows vaccinated in the year 2008/09 are about 600 as compared with that of

the year 2007/08 which was about 1000 cows. The decline in the size of smallholding urban

farmers is believed to be one of the contributing factors (UNIDO, 2009).

2.2.5. Commercial: - The specialized commercial intensive dairy farming

On specialized dairy farming milk production is on a commercial basis and is concentrated in

the central highland plateau. The system comprised of small and medium sized dairy farms are

based on the use of purebred exotic or high grade and crossbred dairy stock. They are mostly


13

operating in the urban and peri-urban areas and around major cities and towns with high

demand for milk having population of more than 10,000.

The system is labour and inputs intensive as compared to the other systems. Most of the feed

sources are based on purchase and some part of the feed requirement being fulfilled from own

source (LSMP, 2006).

The potential for significantly increasing dairy production in Ethiopia lies with the commercial

market oriented production systems in the central highlands in which crossbred and pure exotic

dairy breeds can be used. The simultaneous expansion of small-scale and commercial dairy

development would then be part of the adjustment of agricultural production patterns in areas

where livestock stocking rate is high and smallholder farmers have been facing with shrinking

arable land and higher population density and rising income/and wage rates favor higher

production.

Based on the above classification and the characterization of the systems the milk-production

systems represent a gradually-increasing management level and investment in improved dairy-

cattle-management. The higher levels of investments are found near the main urban markets

where the higher milk prices are obtained (Sintayhu, 2008).

On contribution to the milk production level the rural dairy system, which includes Pastoral,

Agro-pastoral and Mixed crop livestock system, contributes 98%, while the peri-urban and

urban including the commercial dairy farms produce only 2% of the total milk production of the

country (Ketema, 2000). Eighty three percent of milk produced is from cattle and the

remainder from goats and camels. Indigenous stock produce 97% of the milk produced from

cattle and the remaining 3% from improved exotic crosses and pure grade cattle (LSMP, 2006).

Most of the milk produced in the rural dairy system is retained for home consumption and it is

non-market oriented. Different reasons determine the amount of surplus milk found and to be

used for the traditional dairy products processing such as butter, ghee, Ayib and sour milk are

usually marketed through the informal market after the households satisfy their needs

(Getachew, 2003; Tsehay, 2001).


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2.3. Milk and Dairy Products Consumption

In the Ethiopian context when dealing with consumption of milk and safety of milk and dairy

products the type of milk and dairy products that needs to be considered are whole milk

consumption (liquid milk, Ititu, Ergo, buttermilk etc) and use of dairy products from fermented

processing (butter, ghee, Ayib, Metata Ayib etc.), (Getachew and Asfaw, 2004).

The growth in milk production in Ethiopia has been slow. Although the total amount of milk

produced has increased with increases in human population, the per capita milk production has

declined from 26 liters in 1980 to 22 liters per annum in 1993 and then to 19 liters per annum

in 2000. Based on recent surveys the total milk production has increased significantly (300%)

from what it has been the year 2000. The milk per capita, based on the 2008/09 survey is

37.62 litre (CSA, 2009). According to the forecast of FAO, the annual production is far below

the survey made by CSA. During the period from 2001 to 2007, based on FAO forecast, cow

milk production is growing at an average rate of 2.6%, which is equivalent to the Ethiopia’s

population growth rate (2007 census). The production growth rate in Sudan in the same period

has sharply declined to 2.9%, where as Kenya is registering growth rate of 10.4%.

Of the total milk produced in the country only 5% (Getachew and Asfaw, 2004) is marketed as

processed fluid milk due to the underdevelopment of the infrastructure in rural areas. Even in

regions with favorable climates for dairy production, participation of smallholders in liquid milk

markets by means of collecting, processing and distributing it to consumers has always been

limited. The recent growths in road constructions create better market access to peri-urban

and rural small holders. This in turn increases the volume of milk available for sales. Typical

milk production and its utilization and the paths of transaction are illustrated in Figure 1.

When considering the likely prioritization of milk production and utilization in rural producers’

prior objective is for home use as liquid milk. Then sales as an income generation will be the

second priority whenever there is access to market. The third priority is processing of the

remaining milk to other milk products. Processed milk products (household level, Butter and

ayib) are primarily made for sales and the remaining will be for household consumption. The

proportion of consumption, processing and sales vary among the type of producers and their

access to market. Surplus milk produced in pastoral or other remote areas is virtually

unmarketable.


15

Figure 1: The Ethiopian Milk Flow

Source: Getachew and Asfaw, 2004

3. MILK AND DAIRY PRODUCTS VALUE CHAIN The dairy value chain starts with the raw product/milk supply at the farm level and ends with

consumers who make the choice to buy, or not to buy, the finished product. The value chain

have three major actors, these are the micro, meso and macro actors. The micro actors are

also called the direct actors of the value chain. These direct actors in the dairy value chain

have several links between the farm (production) and the consumer (consumption). These

actors involve in activities like procurement (collection), transportation, processing and

packaging, storage and distribution, retailing, and food services. (See Annex 3 and 4 for Value

chain map)


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3.1.1. Micro (Direct) Actors

In the direct value linkage the major direct actors identified are:-

i. Raw milk producers, this includes rural traditional small holder producers (pastoralists, agro

pastoralist, high land mixed farmers) and improved market oriented (urban, peri- urban

and commercial) dairy farmers and dairy cooperatives and Unions,

ii. Input providers, this mainly include; feed processors, veterinary drug and dairy equipment

suppliers, vaccine, Artificial Insemination and health service providers, knowledge and skill

providers,

iii. Milk collectors,

iv. Dairy Processors(small scale cottage and industrial),

v. Distributors and retailers, and

vi. Milk and dairy products catering or service providers (café, hotels and restaurants).

3.1.2. Meso level value chain actors

The Meso level value chain actors are those organizations which provide support to the sector

in the development and strengthening of the direct actors. These are:-

i. Federal and Regional Agricultural and Trade offices (Ministry of Agriculture and rural

Development, Ministry of Trade, Bureau of Agriculture and Rural Development),

ii. Dairy or livestock development projects such as National Livestock Development Project

and Livestock Master Plan Study,

iii. Non Government Organization (Local, Regional and Global) addressing dairy development

such as SNV, FAO, WFP, Land O’ lakes, etc.,

iv. Professional association such as Ethiopian Society of Animal Production and Ethiopian

Veterinarians Association,

v. Producers associations such as Ethiopian Milk Producers and Processors Association and

Ethiopian Feed Processors Association,

vi. Federal, Regional and international Agricultural Research institutions such as EIAR, ILRI,

etc., and

vii. Financial institutions such as Banks, Micro Finance Institutions and Insurances;


17

3.1.3. Macro level actors

The Macro level actors are those organizations or institutions which provide conducive dairy

development environment by issuing different Ruler, laws, procedures , guide lines and the like

to facilitate the development, strengthening and regulation of the dairy sector. These are:-

Federal and Regional Agricultural, public health and Trade offices,

Federal and Regional cooperative Offices,

Quality and standard Authority,

Ministry of Finance and economic development,

Federal and regional customs Authorities,

Federal and Regional investment offices;

3.1.4. Market and dairy products Outlets

The dairy farmer has three market-outlets apart from his own consumption.

The milk producers can sell surplus milk to neighbors in the informal marketing channel.

The informal market involves direct-delivery of raw, fresh milk to consumers in the

immediate neighborhood and sale to itinerant traders and nearby institutions. The informal

marketing channels are of low cost and use short-cut marketing routes between the

producer and consumers and are thus believed to be more efficient than the formal

marketing systems,

The milk producers can sell to dealers. The dealers also collect milk from farmers and

transport it to nearby urban centers for direct sale to consumers (in some cases to

retailers),

The milk producers can also sell to milk group or co-operative to which he may or may not

belong or he can deliver to a milk-collecting center of the dairy industries mainly supplying

pasteurized milk and dairy products to Addis Ababa and other nearby towns,

The availability of these market-outlets through the establishment of milk groups and co-

operatives as well as the milk-collection centers have given dairy farmers a broader choice of

marketing their milk instead of depending on local traders and neighborhood buyers. These

developments have also encouraged many traditional farmers in the rural and peri-urban areas

to market their surplus milk. It is also suggested that the increasing pressure for cash has

encouraged many cattle holders to sell small quantities of milk normally consumed in the farm

household or fed to calves.


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4. FEED RESOURCE

4.1. Overview Both crop agriculture and livestock rearing are the main stay of the 83.9% Ethiopian rural

population. From the total area of 112 million hectares the country has, 45% is arable.

Cultivated area in 2007/08 accounted for about 10.55 million hectares of the land. According to

CSA (2008) of the arable land area annual crops cover approximately 74.2%, while perennial

crops covers 6%, pasture lands 8.7%, fallow 7.6%, woodlands 0.8% and others 2.7%.

Characteristically agriculture is practiced mainly by smallholder farmers, numbered 12.5 million

and 13.2 million for the years 2006/7 and 2007/8 respectively (CSA, 2008/9). Average land

holding is estimated to be 0.93 hectares in the settled highlands where there is slight increase

in peripheral areas.

The pastoral and agro-pastoral areas cover more than 60% of the total landmass inhabiting 10

million people in seven Regional States (Beruk, 2007). Here land is communally owned and

range conditions dominating land per human inhabitants and livestock are high with low

carrying capacity and seasonally abundant forage and browsing condition. These areas situated

in the peripheral regions of the country are characterized by unpredictable and unstable

climatic conditions; and very fragile environment where livelihood is at risk.

Ethiopian agrarian perspective and production system dictates the scope of animal production

and the associated feeding situation where the type of feed available and the feeding system

are largely functions of the agro ecology, the type of farming system and purposes of livestock

keeping.

In general livestock feeding depends mainly on grazing and browsing. In the highland grazing,

mostly on communal, is augmented with crop residues and agro-industrial by-products which

account substantially to the feed availability for oxen and to some for milk producing animals. To

some extent, dairy production in the highland areas use introduced (new and improved variety)

pasture and forage species.

In this respect grazing and browsing account for nearly 84.8% of the total feed supply from

permanent grazing lands, fallow and stubble following crop harvest. It is estimated that some

62.5 million hectares of land is regarded as grazing and browsing area (MOA, 2000; Azage,


19

2009). The trend in feed availability is decreasing with largely in response to increasing land

pressures, land degradation and declining productivity of grazing land. Where there is over

stocking, communal grazing land, it would result on overstocking and cause land degradation and

lower yield on both forage and expected output on milk and the associated livestock products.

Whereas livestock is playing the major role in the agricultural production of the country and its

high potential and opportunities, shift in land use noticed is not in favor of livestock. In this

connection, early studies (FAO, 1989) on land use indicated that the amount of land covered with

permanent pasture showed a 1.1% decline over a 16-year period from 1973. In early 1980’s

contribution of native pasture to the total feed supply was estimated at 80-85% (Alemayehu,

1998). More recent estimates indicate considerably lower contribution. To indicate regional

differences Central Statistics Agency’s (CSA, 2003) estimates for Tigray, Amhara, Southern

Nations and Nationalities (SNNP) and Oromiya were 45.3%, 59.7%, 70.7% and 72.2%

respectively. The trend holds true with the current situation, the shift noticed in emphasis to crop

production both on the highland and lowland areas due to population pressure and expansion of

large scale agricultural production respectively.

In the cropping areas, aftermath and fallow land grazing is estimated to provide 7.1% of the

total feed supply (6.3 million tones of dry matter) as supplement to grazing and browsing. Cereal

straws of Teff, barley and wheat are increasingly used for ruminant livestock diet. Crop residues

currently account for 14.9% of the total feed supply in the country (Getachew, 2003), and

becoming increasingly important in the annual feeding cycle, already accounting up to 50% of

total feed in some areas. The extent to which crop residues are being used has increased

considerably. In SNNP, Oromiya, Tigray and Amhara regions use of 18.9%, 21.6%, 34.2% and

35.3% are reported respectively (CSA, 2003).

Agricultural and industrial by-products (principally bran, molasses, and oil seed meals and

cakes) have greatly increased in cost value; they are primarily used within fattening and

dairying programs. In some areas there has been tradition of stall feeding and there is now a

dramatic shift towards this kind of feeding systems, inspired both by increasing land pressures

and profitable livestock production. Though their use is increasingly important availability and

ever increasing price is limiting the wide use of this locally produced feed ingredient (ESAP,

2008) Feed sources other than grazing and crop residue account for less than 0.3% of the total

feed supply.


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4.2. Feed availability – implications on milk and dairy production

The different milk production systems from intensified (commercial dairy farms, urban and peri-

urban farms) to traditional (highland crop/livestock farmers, agro-pastoral and pastoralists) exhibit

their own characters and challenges in their cattle feeding system. This requires acknowledgment

of these differences and the prospects of improvement for addressing proper feeding for efficient

milk production.

When dealing with issues in feed production and utilization for the dairy production, mainly milk

from cattle, the different sources of feed in terms of roughage and concentrate should be treated

separately. Feed from pasture, conserved feed and crop residue as herbage source and use of

concentrate feed to provide supplement and gap fill the necessary feed ingredients for complete

feed. Furthermore use of feed conservation for efficient utilization and storage for use throughout

the year and specially in lean periods, herbage and crop by-products improvements for quality and

nutritional value to improve palatability, increased intake and grazing management both on

intensive (use of best grazing management and feed utilization on forage based dairy production)

and in extensive management (use of rangelands and grazing management cum destocking)

should be key areas of concern for increased feed availability and efficient utilization.

In intensive dairy production, stall feeding is mostly practiced where herbage from hay or crop

residues are used to satisfy the forage requirement. Pasture based dairy is rarely practiced due

to land limitations. Home produced hay production is seldom practices in rural areas. While the

majority of intensive dairy farms are either in the peripheral urban areas and sub urban areas

land for grazing and hay production is not adequately provided. Purchased feed is

characteristically is the mode of feeding dairy cattle in this system. Though supply of concentrate

feed or the feed ingredients is limited farms use the expensive and meagre amount to

supplement for high milking and early lactating cows. Supplementation is not according to

production or productivity.

Small holder farmers who practice dairy using improved stock follow the same trend in livestock

feeding but they tend to use crop residues and agro-industrial by-products, more of conserved

feed in the form of hay and balanced feed, the magnitude inclining more to high energy feed

depending on the intensity of their dairy production system.


21

In general the feed supply is not adequate. To illustrate the feed balance, with estimates of

livestock population projected up to the year 2025 (Getachew and Gashaw, 2001) to be around

35.4 million, 37.1 million, 38.8 million, 40.7 million, 42.2 million and 44.7 million TLU by the year

2000, 2005, 2010, 2015, 2020 and 2025 respectively the subsequent feed requirement

(assuming 3% of the body weight per day for DM) suggested that a supply of 96.4 million, 101.7

million, 106.3 million, 111.5 million, 115.6 million and 122.4 million tons of dry matter feed to be

required in the respective years. The implication for the future trend in livestock population and

associated feed requirement indicated that more livestock would be competing for feed from the

limited resource which is beyond the expected stocking rate or will not be able to stock leading to

diminished production or forced de-stocking. Hence considering the existing situation, the annual

availability of the forage produced, estimated at 60,524,175 metric tones (WBISSP, 2001 in

Adugna, 2009) and the likely supply of feed from the other sources would likely not satisfy

requirement based on the existing potential carrying capacity of the land and the decline in

grazing areas.

The situation on natural grazing lands, in spite its low quality and inadequate availability has

limitation on herbage grazing for 4 or 5 months of the year (MOA, 1985). This causes fluctuation

in the production of milk, reflected in the variation during the different seasons. Furthermore the

natural pasture is seriously deteriorating due to high stocking rate and improper utilization.

With the rapid increase of human population and high demand for crop food, natural pastures

are steadily being converted to agriculture.

In general, shortage of supply, its seasonality and low quality are major problems for livestock

development in Ethiopia. This is more pronounced in the highland areas where modern dairy

development is expected to expand. In the extensive areas feed requirement is growing with

increased livestock pressure where people tend to keep more cattle for social security. Hence,

these result in annual feed deficit that precludes slower growth rate and lower productivity

performance of the livestock.

In particular, characterization of the Ethiopian feed situation and feeding system reveal that:

Feed, usually based on fodder and grass, are either not available in sufficient quantities due to

fluctuating weather condition or, when available are of poor nutritional quality,

Forage sources are unimproved species and are from overgrazed common grazing and fallow

lands,


22

Deliberate production of feed for dairy cattle is unusual,

Agricultural and industrial by-products utilization is low as compared to its potential availability,

Use of alternative sources of feed from silage making and conserved residue are limited,

There is improper and inadequate government policy on grazing use right in the highlands.

Policies on land tenure and access to land are based on cropping arearequirement, i.e., the

absence of land use plan for pasture land and grazing areas and/or bias on crop production,

Lack of breeding strategy to align with seasonal feed availability, and

Research on adaptive and high yielding grass legume is limited in scope and application.

4.3. Forage and feed development initiatives Although there have been encouraging results from the efforts made to promote the

development of improved forage in research and development, through F4LDP and NLDP,

endeavors, wide adoption of the technology and intensity of utilization is in its infancy.

Introduction of high yielding forages for both annual and perennial plantation and the different

strategies employed for producing high biomass herbages could have effect on the ample and

year round supply of feed. However, the potential could not be realized even in dairy

production areas and the technology implemented not sustainable.

Ago-industrial by-products which include oil seed cakes and flour milling by products as well as

sugar industry by products are also important dairy cattle feed, although their current

contribution to the total feed requirement is negligible. The existing feed processing plants are

very limited in number and are found around Addis Ababa. Shortage of supply for the industry

and the limited output of feed ingredients from the food processing mills and factories and ever

rising cost of the feed ingredients and compounded rations indicated the need for further

development and fair distribution.

According to Alvarez (2006) quoted by Adugna, (2009), production capacity of nine state and

181 private owned flour mills the total production of wheat bran was 269,238 tones working

under capacities of 20-50% due to shortage and high price of wheat. On the other hand due

to oil seeds being the most important export commodities earning foreign exchange growing

at a rate of 66% in 2005/2006 local extraction of the oil seed was limited thus cake production

capacity was lower in this respect. It was estimated that from annual production of oil seeds

with 80-90% processed and 42- 58% cake extraction rate 102, 225 Metric tones could be

produced for local consumption and export (Adugna, 2009). Given the sever feed shortage in


23

the county, it was envisaged that the private sector would be encouraged to be involved in the

establishment of feed processing and manufacturing plants.

In the lowlands, although the total quantity of feed available (54.7 million tons DM) from native

pastures do seem to supply adequately to the estimated maintenance requirement, natural

pasture in this area grow fast during the rainy season and decline in quality rapidly after

maturation. Therefore, due to low quality of the feed and shortage of water, the feed resource

of the lowland areas is not efficiently utilized. Average forage yield in Borana area is estimated

at 2 ton per hectare

On milk and dairy production perspective there is an increased demand for purchased feed for

both roughages and concentrates not only for commercial urban and peri-urban farmers but

also by those farmers with highland mixed farming and agro-pastoralist semi intensive in rural

areas due to limited land area for forage production. This calls for the improvement of both

supply and quality of the feed for the dairy cattle to be productive and to attain improvement in

the sector.

Institutionally forage development has been constrained by poorly developed mechanisms for

exchange of ideas at all levels, between farmers, between kebeles and Wereda, and very

significantly between regions. There is also poor coordination between regions and the federal

level, with federal groups increasingly constrained by structural readjustment to deliver support

by manpower and funding limitations.

4.4. Challenges, constraints and recommendations

From the above background and descriptions of feed production, conservation, value adding

and feeding system the challenges, constraints and recommendations are summarized as:

Challenges

Feed, usually based on fodder and grass, are either not available in sufficient quantities, or if

available the feed are nutritional poor quality,

Inefficient utilization of Agricultural by products,

Low and uneven supply of industrial by-products,

Scarce grazing land,

Inferior quality of processed feed (concentrate) quality supplies,


24

High cost of processed feed and processing residues and natural feed (hay);

Constraints

Sources are from overgrazed common grazing and fallow lands,

Overstocking beyond the carrying capacity of the land,

The existing land use policy doesn’t consider grazing use right. Policies on land tenure and

access to land are based on cropping area,

Absence of enforcement of quality standards on processed feed supply,

Low dissemination and adoption of improved feed technology and inputs,

Uneven distribution of feed processing plants in the country,

Low support to commercial feed processors;

Policy recommendation

Deliberate production of feed for dairy cattle,(commercial!!)

Promotion of production on cultivated forages through the different forage development

strategies employed which fit into the farming system such as conservation based forage

development strategies (technology transfer and input supply),

Improve pasture use through appropriate grazing land management system,

More research and development activities and dissemination of improve feed value of locally

available feed resources,

Use of alternative sources of feed from silage making and conserved residue,

Breeding strategy to align with seasonal feed availability,

Research on adaptive and high yielding grass legume in scope and application,

Revising of the land policy to incorporate the forage production and grazing areas and to

consider livestock development on the land use plan,

Research and extension services to develop and strengthen improved feed conservation

strategy to ensure year round feed availability,

Encourage and assist establishment of feed processing plants,

Develop feed quality control system,

Encourage self regulation of quality standards on processed feed supply through the

Ethiopian Animal Feed Industries Association,


25

Impose livestock tax and assign quota (stock control) for controlling overstocking based on

stratification of livestock production system,

Encourage forage bank establishment in feed deficit prone areas,

Forest utilization as animal feed resource in expansion of agro forestry,

Develop and enact Animal Feed Resource Strategy,

Integrated water and pasture resources development strategy,

Encourage and provide incentive for feed processers in the livestock development potential

areas;

5. BREED IMPROVEMENT AND ADOPTIONS

5.1. Overview The population growing at 2.8% per annum necessitates unprecedented growth in agricultural

production particularly in the foods of animal origin to satisfy the food (nutrient) requirement

of the growing population. To satisfy the increasing requirement of milk and meat, with

existing productivity being low, production has to come from increased number of animals.

However as resources, particularly land is scarce to raise as many livestock as possible to

produce the requirement all increases in production have to come from improved productivity

of inputs. Increased productivity per animal and per unit of investment or area is option for

increased production where genetic improvement is basic for maximum performance and

productivity.

As has been reported frequently milk and dairy production is common practice in Ethiopia

involving a vast number of Pastoralists, Agro-pastoralists, smallholders (high land mixed, urban

and pre-urban) and medium sized farms using mostly indigenous stock. Modern dairy

production with use of specialized dairy breeds of animals is rare and is confined to large scale

dairy farms.

In reference to the mixed crop-livestock system of the Ethiopian highlands, traditionally

livestock is an important source of draft power for crop production, deriving cash income from

sale of live animals, milk and other animal products for household consumption. Deliberate

selection for milk and dairy is not practiced. As result milk and dairy products, though

important source of income, are considered as by-products of agricultural production. However,

when we consider the milk value chain and market situation for urban and rural consumers,


26

smallholders’ and their local breeds’ contribution is significant. Rural areas produce about 85%

of the milk (Bennett, A., 2001), and hence smallholders are by far the largest in number who

produce and supply milk to the formal market and sell part of their traditional dairy

products(butter and Ayib) to urban consumers.

Pastoral and agro-pastoralists rear about 30% of the indigenous livestock of the country to

produce mainly milk which serve as the major source of food at their locality. Milk production in

this system is characterized by low milk yield and there is seasonal availability (Sintayehu, et al,

2008). In contrast in the highland smallholder farming system milk and dairy production is part

of the subsistence mixed crop and livestock farming, though main emphasis being given to

crop production. The indigenous stock raised in this system have the same genotypic and

generally have low performance with average age at calving of 53 months, average calving

interval of 25 months, and average lactation yield of 524 liters (Zegeye, 2003; Ahmed et al,

2003).

Peri-urban and urban milk production are emerging as main suppliers of milk and dairy

products to the cities. They possesses dairy animals ranging from 50% First dairy crosses to

high grade Friesian breeds in small and medium sized farms mainly in urban areas. Large scale,

though small in number as compared to smallholder, are found in peri-urban areas (Azage and

Gebrewold, 1998; Azage, 2003). The peri- urban dairy farming though mainly involve

smallholders is characterized by commercial dairying expanding in the highland area. Among

the most pronounced dairy production sites are the mixed farming areas in Selale, Holeta etc.

(Alemu, et al 2000).

The introduction of different exotic dairy breeds (Friesian, Jersey, Holstein, Brown Swiss,

Guernsey, Ayrshire, and Simmental etc.) in the highlands of Ethiopia had proved that these

dairy breeds and their crosses are adaptable provided that the management level is adequate.

The potential performance of these breeds has been evaluated by research (Holeta and

Debrezeit research stations), teaching Institutions (Alemaya and Ambo), CADU/ARDU (Asela

dairy farm) and their performance on private and state dairy farms since 1947. By virtue of

their production and adaptation Friesian and Jersey are important breeds introduced and has

got wide acceptance. As recommended, based on the research and production performance,

the draft breeding policy of Ethiopia had used these breeds as base for intensive and semi

intensive farming using high dairy blood or crosses and grade respectively (Getachew and


27

Gashaw, 2001). These are the exotic dairy breeds that are widely present in the country

distributed within the commercial, urban and peri-urban private dairy farms as pure and grade

and smallholder farms as crossbreds.

The introduction of crossbred cows and complementary feeding as well as management

technology adopted for increased production had paved the way in commercialization of

smallholder farms. Milk produced is then treated as a cash commodity and integration into the

market occur as deliberate milk production for sale is expanding. Community of smallholder

dairy farmers had emerged which encouraged cooperation among them and to be organized for

marketing of their produce. Such specialized and market oriented dairy production and

cooperation substantially raised milk production that look for lucrative market and make the

smallholder farming system more viable and sustainable.

During the last four decades genetic improvement has been recognized in the design and

implementation of development programmes and projects in the country. F1LDP had distributed

grade dairy cattle imported from Kenya and established Abernosa cross breed cattle production

Centre, DRDP had imported 400 cross Friesian Boran cross bred heifers from Kenya and 92

Pure Jersey from Zimbabwe and Expanded and rehabilitated the cattle breeding ranches of

Abernosa, Gobe, Andasa, Metekel, Didtuyura and Sodo, SPDDPP and SDDP as well as Ethiopian

Red Cross had imported 350 cross bred cattle. The production and distribution of crossbred

heifers, provision and dairy stocks, provision and strengthening of AI services and/or bull

services were major components of the development projects implemented.

Urban dairy production is characterized by use of improved dairy stock either purposely

selected indigenous stock/cross/grade/improved dairy stock of European dairy breed

specifically Friesian. These breed combination integrated with intensive management has

significant contribution to the milk supply of urban areas. In Addis Abeba milk shed area, for

instance, smallholders by supplying 73% of the milk marketed produced the largest amount of

marketable milk. Further more from the 6,813 small producers identified in 1993 by Addis

Abeba Dairy producers Association only 177 are large producers (Staal, et al 2005; Getachew,

2003) which indicate their significance. When we consider other urban areas the same trend in

milk supply holds true (Sintayehu, et al, 2008), that milk supplied to urban population is mainly

through smallholder dairy farms within the urban limits. Most households own cows to produce

milk for family needs and or sale as source of income. It can then be concluded that the


28

smallholders in all section of the population, urban, peri-urban and rural, are the main actors in

the milk supply system of the country and the main suppliers of milk are mostly the indigenous

breeds (97%) of cattle followed by 3% improved crossbreds and grade and pure dairy breeds

of cattle.

Use of improved and pure (exotic) dairy cattle for high production and as a farm business is

well recognized in urban, pre-urban and mixed highland areas where market favors sale of

milk. As a result the need for the supply of these improved dairy breeds is increasing. With

limited sources, inefficiency of breeding services both natural mating and artificial insemination

and difficulty to import such foundation stock, it is imperative to address the breed

improvement and introduction issue accordingly.

5.2. Breeding practices and service delivery system An efficient breeding system with adequate provision of services is vital for sustainable

development of the dairy industry. A well regulated and strategically implemented breeding

system could be used to maintain the genetic make up for desired character. These actions

should be for improving dairy character of local cows (through selection or increase in exotic

dairy blood) and to keep dairy blood level of those already proved productive animals to the

desired level for optimum production.

In Ethiopia where establishment of large scale dairy farming using exotic breeds is possible in the

highland, smallholder market oriented dairy farming in urban and peri-urban are emerging and

market outlet for milk produced is not constraint, introduction of pure and grade dairy cattle and

use of these and their crosses for milk production are practical. In this regard breeding services

to upgrade the milk character and maintain the desired blood level using either natural mating or

artificial insemination services is empirical.

Despite controlled breeding is rarely practiced using selected and proven bulls for desired

product, there are alternative technologies available to accelerate effective breeding such as use

of artificial insemination and other technologies to be adopted. However, it has to be noted that

an efficient and practical practice of bull selection is being carried in the lowland area of Ethiopia,

where bull selection and traditional breeding is effective.


29

Historically establishment of bull stations for cross breeding and maintenance of exotic blood

were interventions introduced through ARDU and WADU and later expanded by SDDP and NLDP.

Their approach in provision of the bulls and modalities for services differs. The earlier two were

using cooperative while SDDP used individual farmers as venue for the service. Outcomes in

terms of number of services and increase in improved stock production were encouraging but

sustainability of the approach was hampered as they were only implemented by projects but not

taken as public intervention.

The National Artificial Insemination Service since its establishment in 1981 would have been the

choice of best breeding practices in providing reliable, efficient and effective insemination

services upto mid 1990’s after decentralization. The mandates and responsibilities of the

institution were in recruiting bulls of high pedigree records locally for semen production;

importing semen and bulls of high pedigree records, collecting, processing, preserving and

distribution of semen, producing and dispatching liquid nitrogen (LN2,) training of AI

technicians and farmers, monitoring and evaluation of the overall AI service, among others .

With eight sub centers in selected regions and the AI field service run by Regional Agriculture

and Rural Development Bureau and Wereda Agriculture and Rural Development Office with 791

technicians trained to provide the service the expectations are high.

To date, though strengthened with assistance from FINNIDA and financial support from NLDP,

services provided is considered to be not satisfactory due to low number of inseminations

provided, low conception rate (1.88 number of services per conception by Desalegn (2009)

with ranges from 2.48 as reported by Abate (2006), 1.7-2.7 reported by Bacha (2007), both

values as referred by Desalegn (2009). It was revealed that coordination is loose by all

responsible bodies from Federal to Wereda levels. As far as the constraints associated with the

AI service at national and regional levels is concerned, absence of national livestock breeding

policy and lack of clearly defined share of responsibilities among stakeholders in artificial

insemination were identified as the most important constraints.

5.3. Breed improvement and use of dairy stock Although the country owns the potential agro-ecologically of suitable environment and

abundant livestock resources for milk and dairy production existing performance is low and

there is insignificant contribution to satisfy nations’ requirement for the product. Milk from its

selected indigenous breeds and those from adaptable introduced and improved dairy breeds


30

through adoption and use of proper management could have the contribution to the overall

production. Low productivity and hence inadequate production from the herd needs measures

to expand appropriate programmes to realize the potential. Conditions that contribute to this

low genetic potential include:

Traditional livestock breeding system characterized by uncontrolled grazing and breeding

where different classes of livestock are allowed to graze together,

Selection on merit not practiced for efficient breeds (Breeding is carried out without

selection or controlled breeding),

Absence of breeding centre for exotic dairy herd as source of bull and heifers,

Limited number of modern dairy farms which could serve as alternative source for heifers

and bulls ,

Lack of public and private institutions to multiply improved dairy stock,

Low improvement in genetic improvement of indigenous animals,

Animal breeding and development research not adequate to satisfy the need of improved

animals in the country,

Lack of record keeping for livestock breeding and improvement;

5.4. Challenges, constraints and recommendations

Improved and pure dairy cattle supply as foundation for increase of herd size is main constraints

for the expansion of dairy development in the country. The limited local sources are not capable

of providing sufficient number of stock and the prices are escalating making affordability factor of

choice to involve on local cattle for subsistence production. There is thus a pressing need to

produce more dairy animals and maintain sustainable sourcing locally.

Challenges

Low genetic potential for increased milk production of local breeds,

Short supply of improved dairy breed,

Uncontrolled breeding practice,

Inefficient Artificial Insemination service

Few private participation in artificial insemination service providers;

Constraints

Low capacity for genetic improvement of indigenous animals,

Animal breeding and development research not adequate to satisfy the need of improved


31

animals in the country,


Selection on merit not practiced for efficient breeds (Breeding is carried out without

selection or controlled breeding),


Limited number of modern dairy farms which could serve as alternative source for heifers

and bulls,

Low supply of artificial insemination inputs such as liquid nitrogen, equipments and logistic,

Low level of staffing and career development scheme for Artificial Insemination Technicians

in the organization structure,

Uncoordinated artificial insemination services at all level of the system,

Low semen quality due to inefficient production and preservation,

Uncontrolled breeding bull selection due to poor recording;


Establishment of a local market structure for improved stock,

Promotion of enabling farmers to buy and sell cows directly from each other through short

term credit facility that would be available at low collateral,

Farmer based crossbreeding program using group breeding scheme and bull station,

Encouraging private AI services of the Artificial Insemination Service not only on crossbred

and grade cattle but also for crossbreeding the local animals to produce the required

number of dairy animals,

Promote communal groups/private involvement on bull breeding schemes, AI services and

bull rearing centers,

Establishment of public bull rearing and bull service stations

Develop and enact breeding strategy on and controlled breeding,

Encourage private artificial insemination service provision;

6. DAIRY HEALTH AND VETERINARY SERVICES

6.1. Epidemiological situation There is widespread prevalence of livestock diseases and parasites in all agro-ecological zones

of the country that causes direct economic losses through mortality and morbidity. The impact

of these diseases also contributes to the poor reproductive performance of the animals.


32

These diseases categorized under epizootic, reproductive and zoonotic conditions represent one

of the important constraints to increased livestock production in general and dairy in particular.

Though the intensity varies along the production systems and among the breeds and exotic

blood level, diseases are responsible for high mortality, morbidity and zoonosis. These clinical as

well as sub-clinical diseases reduce reproductive and productive performances, quality of

products and growth rates of young animals. Mortality of 8-10%, 14-16% and 11-13% has been

reported for the indigenous cattle, sheep and goats respectively (MoARD, 2007). Morbidity has

indirect effect which is manifested by slow growth rate, reduced mature weight, poor

reproductive performance and decreased milk production. This is true with improved dairy

cattle breeds which are inherently more susceptible to infections and reproductive diseases

compared to the indigenous cattle.

A number of diseases both endemic and pandemic affect dairy cattle. The major diseases

diagnosed are Contagious Bovine Pleuro-Pneumonia, Foot and Mouth Disease, Lumpy Skin

Disease, Anthrax, Blackleg, Haemorrhagic septicemia, mastitis, Streptothricosis (Cutaneous

dermatophilosis), Tick-borne diseases including Anaplasmosis, Babesiosis, and Heartwater,

infertility due to Brucellosis, Trichomoniasis, Campylobacteriolosis and Anoestous, Calf

Pneumonia, Calf scour, Helminth parasites, tick infestations, and metabolic disorders.

Prevalence and risk factors of major clinical reproductive health problems like repeat breeding,

retention of placenta, abortion, dystocia, anoestrus, and prolapses were among the many that

causes loss of calf and inefficient reproduction. The major clinically manifested diseases were

mastitis, retained fetal membrane, infectious disease, abortion, milk fever (hypocalcaemia),

dystocia, lameness, bloat, diarrhea, simple indigestion, metritis, mange mites (Regasa, et al,

2009; Behailu H. and Abebaw G, 2009). Different authors have demonstrated similar clinical

problems such as mastitis, retained placenta, milk fever (hypocalcaemia), ketosis, displaced

abomasum, laminitis, digestive disorders, nutritional deficiencies, skin problems and parasitic

infestations (Matthewman, 1993; Gary, 2001; Lema et al, 2001) that affect intensive dairy

production. Among the above mastitis and retained placenta are known diseases that cause

heavy economic losses to milk producers and the dairy industry. This mainly by reducing the

quantity and quality of milk output increased veterinary expenses due to excessive use of

medications. These diseases also reduce the milk and meat products with consequent public

health hazards.


33

The extent of productive diseases in dairy cattle like mastitis is high and farmers’ awareness of

the problem and control practiced is low. The prevalence of mastitis in dairy farms is reported

to be high (42.1% for sub clinical, 3.8% for clinical and 2.1% for blocked teat cases) (Girum,

2009). According to the study it was significantly higher in large size herds (53%) than small

holder farms is high (30%) the major causes being lack of attention and low management

level. Hence the economic loss will continue to increase in farms with subsequent effect on milk

production at the national level.

Tuberculosis, Brucellosis and Listeriosis are major zoonotic diseases in Ethiopia due to their

endemic nature in domestic stock and poor implementation of adequate measures to reduce

the incidence. Studies conducted so far indicate an increase in the prevalence of Bovine

Tuberculosis, particularly in dairy farms practicing intensive animal husbandry and raising

crossbred and exotic cattle.

In extensive, small holder and intensive dairy farming the mean prevalence of Bovine

Tuberculosis is 9.1% (75), 8.1% (221) and 27.8% (1,316) respectively (Mahlet, 2008). A nine

years record on TB patients in St Peter Hospital indicates high proportion of extra- pulmonary

TB in human.

Different studies conducted in four regions of Ethiopia indicate the wide existence of brucellosis

in the country. The infection rates range between 0 - 0.69% in different districts of Amhara

region, 0.2%-5.19% of Oromiya region while 2.46% is the highest infection rate recorded in

Southern Nations Nationalities and Peoples Regional State (SNNP).

6.2. Health control practices and delivery system Diseases negatively affect the productivity and economic goal of animals reared to produce

milk and other food products and are among the constraints of dairy development crucial to

many of the management decisions of milk production enterprise, be it smallholder or large

scale farmer especially in high-producing dairy cows.

The major clinical diseases are expected to hinder the dairy development. Especially, high herd

prevalence together with incidence rate of mastitis and pneumonia are important. So far efforts

have been attempted to minimize the negative impact of the clinical problems focused on

treatment of clinical cases rather than prevention. Hence, to alleviate the health problems of


34

smallholder dairy cows both treatment and preventive measures should be practiced. Decision

making process in disease control and prevention starts from investigation of existing

problems; necessitating the designing and implementation of appropriate control and

prevention strategies.

The animal health service organized under the Federal and Regional Governments had

contributed to the national economy through reducing the negative impacts produced by

epizootic and zoonotic diseases. In this regard the regional governments have responsibilities

of ensuring the accessibility of animal health services to all citizens in affordable manner

(Berhe, et al, 2009) while at the Federal level on disease surveillance, research and regulating

the services.

At national level, there have been progresses with establishment of 2,275animal health clinics

including 1,628 animal health posts and 647 animal health clinics (MoARD, 2006). The

respective number of Animal Health Clinics for the four major Regions of Oromiya, Amhara,

SNNP and Tigray being 215 clinics, 115 clinics, 49 clinics and 110 clinics. In addition 2,490

Community based Animal Heal Workers were trained and 1,654 are functionally involved in

primary animal health care services in pastoral and agro pastoral areas of Ethiopia namely Afar,

Amhara, Gambela, Harari, Somali and Tigray Regions. The private sector is also involved in the

provision of clinical services and sell of veterinary drugs (MoARD, 2007). In this respect 47

animal health clinics, 4 animal health posts, 28 veterinary drug importers 376 veterinary

pharmacies and 172 rural drug shops are operational through out the country.

Major role of the Regulatory Directorate in providing the input, manpower and service delivery

process for the prevention and control program in animal health are:-

In the production of different vaccines by the National Veterinary Institute,

manpower training by Animal health Assistants School and Veterinary Faculty of Addis

Abeba University which now involves six more Universities and the Alage TVET (current

animal health personnel under the Ministry and the Regional Bureau being 353

veterinarias,1452 animal health Assistants, 1622 Animal health Technicians, 228 meat

inspectors, and 202 laboratory technicians (MoARD, 2007) and

On quality control and disease investigation the establishment of the National Animal

Health Diagnostic and Investigation Centre as well as the nine Regional veterinary

laboratories played a major role.


35

6.3. Disease prevalence and control Direct loss from mortality and morbidity are high with fertility hampered, reproductive

performance reduced, growth rate decreased (retarded). Constraints to veterinary services in

Ethiopia with special reference to dairy production on technical, organizational and

management capacity which encompass infrastructure, budget and human resources were

reviewed and discussed with the different stakeholders including milk and dairy producers,

veterinary input suppliers, public and private veterinary service providers, public entities and

milk and dairy consumers and association. The lack of appropriate and consistent veterinary

policy and program and institutional arrangement and comprehensive capacity for action are

main constraints identified in the country.

6.4. Challenges, constraints and recommendations From the background on disease conditions and discussions on veterinary services for

sustaining healthy animals for increased production and improved productivity as well as in

light of producing safe milk and dairy products for the public the challenges, constraints and

recommendations in this respect are summarized as:

Challenges

Widespread prevalence intensification and spread of livestock diseases and parasites in all

agro-ecological zones of the country

Lack of inspection and quality control services of livestock products to safeguard the public

from zoonotic diseases,

Uncoordinated veterinary drugs administration and control, assurance on drug safety,

efficacy and quality;

Constraints

Lack of proper livestock movement control, quarantine and surveillance systems to prevent

the dissemination of dangerous diseases and to prevent exotic diseases from becoming

established in the country;

Insufficient staffs and high turnover of man power of the respective bodies (federal and

regional) to perform actives and responsibilities given to them by law or proclamation,

Increased problem on external parasites and internal parasites,

Shortage and high cost of veterinary drugs,


36

Direct economic losses through mortality and morbidity,

Poor reproductive performance of the animals due to diseases,

Weak national animal health information system,

Weak and un-harmonized veterinary extension delivery,

Limited regional and international co-operation in information exchange and in the control

of trans-boundary diseases,

Lack of record keeping on livestock ill/health (vaccination, treatment) and other related

activities,

Extended time for veterinary products registration and import permit processing and import

bans for some very important vet drugs;


Need for integrated public and private to undertake adequate disease prevention and

control through essential veterinary infrastructures and man power development,

Design and implement appropriate control and prevention strategies for all public and

economic important milk born diseases such as TB and mastitis,

Strengthening the institutional capacity of the pubic to implement what has been given by

veterinary services proclamation and regulations,

Encouraging the private veterinary drug manufacturers to invest on the sector,

Encourage promotion of private veterinary drug dispensing;

7. MILK AND DAIRY PRODUCTS UTILIZATION AND POST HARVEST

LOSSES

About 81.2% of the total milk produced in the country is from cows; where as the remaining

6.3% and 7.9% is from she camels and does respectively. Indigenous cows' contribution is

about 97% to the total milk production from cattle, the rest 3% coming from improved dairy

stock (Getachew, 2003). As the major source of the milk being from local cows and as 85% of

the population are agrarian it indicates that milk production is practiced widely scattered even

to the remote part of the country where market outlet is a limitation in this respect. Thus, the

milk produced in the rural areas is either used for direct consumption at home or soured and

processed into butter and “Ayib” to be sold to farther areas and urban centres (Getachew and

Gashaw, 2001).


37

7.1. Milk and Dairy products Utilization

Based on studies as reported by Tefera GebreMeskel (2003) in reference to the works of

Belachew (1994), Getachew (2003), Staal and Shapiro (1996) and Milk production and

Marketing Plan (2003, Draft in Amharic), on the milk flow through different marketing channels

(from production to consumption), it can safely be indicated that 68.4% of the annual milk

production is used for rural consumption and only 14.6% is marketed leaving 17% for calves

suckling.

The National Agricultural Sample Enumeration Results of 2001/2002 (CSA, 2003) indicated that

at national level 48.2% of the milk is consumed as whole fresh milk or in fermented form

where as 46.6% is used for butter making and only 5.2% marketed (CSA, 2003). Milk

utilization in rural areas did not vary much from the national average. Significant difference

exists for urban produced milk, which shows home consumed, used for butter making and sale

are 77.3%, 11.8% and 10.1% respectively. However, the high value of coefficient of variation

for home used milk, milk for other purpose/use (butter making) and milk used for sell indicates

that there is wide variation in percentage utilization of milk between regions and socio

economic structure of the society in this respect and hence the data indicated earlier as quoted

by Tefera (2003) for can safely be used to indicate the milk flow and estimate the amount of

home retained milk.

It was noted also that regional differences in the milk utilization pattern, which also indicates

the type of market outlet and the pattern of dairy production. The country is mainly known for

butter production. Taking the extreme and widely used profile as " milk used either as food

source or processed to be sold in farthest areas" the higher home utilization indicates where

people are forced to consume milk above their requirement or process it to butter and Ayib

using locally available technology, prone to high level of post harvest losses.

7.2. Market Outlet and Post Harvest Losses

Those farmers near urban centres have advantages in getting their milk an outlet. Urban

consumers buy milk for direct consumption mainly from the urban and peri-urban dairy farmers

near settlement areas where the elasticity for demand for milk is high. There is also variation

between location of producers (rural, intra-urban and peri-urban dairy producers) and amount

sold. Belachew (1997) as referred by Getachew Asfaw (2004) indicated that per-urban farmers


38

and intra-urban producers sell 59% and 74% of the daily milk produced respectively in fresh

form in the Addis Abeba milk shed area.

Absence of organized marketing network has made the large amount of milk produced unable

to reach the consumer. Together with the perishable nature of milk post-harvest losses is thus

high due to spillages and spoilage. In some case studies losses of up to 20-35% have been

reported from milking to consumption for milk and dairy products (Getachew, 2003).

The various instances that enhance the post harvest spillage and spoilage of milk are either

resultants of low technology used and/or lack of market outlet for the produce. The wastages

may be either of potential losses i.e. wastage of milk due to mishandling, uneconomical use; or

efficiency losses which could be attributed to use of low level of technology in preservation and

conversion of milk to other dairy products (Getachew, 2005).

Losses can be quality losses by storing in unclean storage utensil, handling during and after

milking where milk is exposed losses through spillage and contamination. Milk transportation

dominated by hand carrying or packing on donkey/horses or using public transport and long

distance traveled, may cause spoilage due to the high ambient temperature and time taken.

The type and level of post harvest milk losses differ with the various actors in the milk value

chain; producer-seller, milk collector-seller (individual and cooperatives or user groups),

processors and retailers levels. Generally the reasons given for milk losses were either due to

spillage during milking, milk transferring and transportation at premises; adulteration of milk

rejected by the consumer; use of poor containers liable for pathogenic bacteria to foster and

poor hygiene that causes continuous deterioration of the milk quality from the milk let down up

to the time it reaches at consumer table (Getachew, 2005). Hence the magnitude of milk to be

contaminated and be losing to the producer and supplier had a geometric progression that

affects the volume and quality of milk and dairy products. The commonest reason for milk

spoilage was unhygienic practices especially originating from the farm. As reported by Getachew

and Asfaw (2004) losses due to spillage and over consumption increased with increasing number

of handlers along marketing channels. It ranged between 2.9% and 4.2% at household level.

Production to consumption losses of milk also shows increased value considering the transaction

from the farm collector to the retailer, 1.8% and 3.6% each respectively. At farm level lose of


39

2.9% (0.6% for spillage and 2.3% for consumption above requirement) shows significant losses

due to high rural household numbers that exist in the country.

7.3. Challenges, Constraints and Policy recommendations The different challenges facing proper utilization of milk and dairy products and in minimizing

post harvest losses are summarized and Policy recommendations in this respect are outlined as

follows:

Challenges

There is high post harvest milk loss from farm to consumer level;

Constraints

Lack of proper knowledge on milk handling,

Use of improper milking and milk handling equipment,

Under developed milk collection and milk cooling facility,

Poor infrastructure and lack of proper milk transport facilities,

Few processing plants and their uneven distribution,

Unavailability of regulatory system on quality control,

Policy recommendations

To avoid and minimize the post-harvest losses of milk and dairy products actions needed are

mainly training and provision of appropriate inputs as well as introduction of regulatory

measures. These are as:

Avoiding delay and incomplete milking: Timing and complete removal of secreted milk

is essential to increase the volume of milk produced per day per cow in order to gain the

efficiency other wise could have gone unnoticed.

Using proper milking utensils: Avoid predisposing factor of both spoilage and spillage by

using proper and cleanliness and safe guarding the utensils from contaminants

Using proper storage: Proper milk preservation technologies at house hold, collection site,

milk unit, and in the vehicle should be promoted.

Using proper means of transportation: Proper and fast transport and Chilling centres

installed near to potential villages; vehicles used to transport milk should be equipped with

cooling facilities.

Milk collection, processing and marketing: Care should be taken from production

through consumption including activities during collection; transportation, chilling,

processing and distribution to reduce post harvest losses and improve quality.


40

Awareness raising: Awareness creation should be done on basic milk handing conditions,

Quality control: To keep the quality of milk from deteriorating and reduce product losses,

introducing quality consciousness to milk producers, collecting centers, processors and

distributors and consumers and milk sampling and testing kits have to be introduced to

effectively control milk quality

Promotion of clean milk production: Awareness creation and training of producers on

hygiene care at storage and during transportation, at milk processing and distribution, milk

testing, quality control and safety, etc.

8. DAIRY EXTENSION SERVICES

8.1. OVERVIEW OF AGRICULTURAL SERVICES The Ethiopian extension service has undergone a number of changes in organization,

management styles and approaches. During these different periods, the amount of budget

allocation, the number of extension personnel and farmer’s participation and area coverage has

increased significantly (Sintayehu, 2009). Progress in crop productivity is well recognized.

However, impact of the extension programs in increasing productivity in livestock hampered by

shortage of input and emphasis is considered negligible. Major causes for the poor

performance of the extension programs are attributed to the poor rural infrastructure,

insufficient resource allocation; poor staffing, the repeated restructuring of and transfer of

trained personnel at all levels.

Definitive approach of extension service was developed late in 1960’s when the Minimum

Package Program (MPP) under Extension and Project Implementation Department (EPID) and

Peasant Agriculture Development Program (PADEP) under MoA were adopted as alternative

models for the extension delivery services. The approaches promoted larger farmer’s

participation and wider area coverage than the models that preceded them.

MPP and PADEP were then replaced by the Participatory Demonstration and Training Extension

System (PADETES) in the early 1990’s. This was adopted as the “National Extension

Intervention Program” NEIP with the express intention of eliminating the problems and

deficiencies of the previous programs.


41

8.2. Dairy Extension and Research

Specialized dairy extension was introduced by Dairy Rehabilitation and Development Project

(DRDP) during its five years of implementation (from 1985 to 1993). In the early period of the

project target of intervention was on producer cooperatives. Along with working on improving

milk production through the production and provision of improved crossbred cattle, the project

was involving on addressing technology dissemination of improved husbandry practices by

producing Dairy Technology Manual for Extension staff. Delivery of the service was through its

Dairy Extension component with the assignment of a Chief Dairy Officer at HQ, 5 Senior Dairy

Officers at Administrative Regions level and several Dairy Officers at Woreda level in 17

Woreda. They were responsible for cooperative dairy farms but later through the mixed

economy and early in 1990 their service shifted to individual peasant holders.

The performance of smallholder farmer extension was progressive as many farmers were

participating on Dairy Colony concept of cross bred heifer distribution. The area of operation

for a Dairy Colony limited within a Milk Shed Area. As the number of participating farmers

increases in specific Dairy Colony members will then be organized to deal with marketing

where the small scale milk processing technology introduced. The User Groups (the term used

to replace the name cooperative as farmers were reluctant to use the name due to bad

experience of the past producers cooperative) were engaged in milk collection from members

and non members, process the milk to butter and Ayib. An exemplary performance was in

Bakelo (North Shewa) and Bilalo (Arsi), where in Bakelo 92 farmers were members of the user

group under one Dairy Colony. Milk collection and performance of the group was satisfactory

during the time. The first dairy show in the country after Janmeda dairy show, held during the

Imperial period, was exhibited in Bakelo, Debre Berhan in 1993.

The extension packages that were developed by the Federal MoARD have been implemented

by the Regional Extension Departments and Woreda Extension Teams. The extension packages

were implemented under three different agro-ecological zones, namely:

areas with adequate moisture,

moisture stress areas, and

Agro-pastoral areas.

Under the current set up each Demonstration area will have Farmers Training Centres (FTC)

and three Development Agents each from Crop agronomy. Livestock husbandry and natural


42

resources will be assigned where as one Animal Health Assistant will be deployed for the

Development areas.

Woreda administration has the power to administer, distribute and control the use of funds

allocated to extension activities and hence priorities are set accordingly to the needs of each of

the Wereda.

Dairy development package was one of the six livestock husbandry extension packages. But

significant obstacles had limited their effective implementation. The major limitations are

shortage of genetic materials, insufficient supply of forage crop seeds and feed supplements.

In addition inadequate supply of credit, insufficient training and advisory services in

management techniques had consequences. The livestock extension package program

formulated for agro-pastoral areas are currently being applied in several Wereda in Afar and

Somali regions but limited to small ruminants and cattle fattening programs. Despite the need

for specialized livestock extension including dairy as a commodity that need production

improvement, the service rendered has bias towards crop even in the late stages. This should

be highlighted as most important issue for low adoption performance.

In general, all extension package performance indicators show that the extension package

program in general and the livestock husbandry extension package in particular have not been

operating efficiently and effectively as expected.

8.3. Challenges, constraints and recommendations in extension

services In reference to the review made on the extension services in Ethiopia and the prospects of

developing the system for effective dissemination of appropriate technology for improved

productivity the following challenges and constraints addressed and the recommendations

forwarded are summarized as:

Challenges

Inefficient and absence of extension services on dairy development for rural and urban and

large scale farms respectively;


43

Constraints

It is largely biased to food and cash crops, leaving livestock extension as "filler" of the

system,

There is no service provided for large scale and urban dairy farmers,

Low supply of improved technological input for distribution,

Solely public service and frequent restructuring of extension institutions and policy signals

in terms of focus and priority,

Lack of coordination and harmony of extension services rendered by multi-actors, including

NGOs, and Regions,

Technical applications are more on enhancing productivity, ignoring such important fields

as marketing, agribusiness, communication and facilitation,

Low knowledge of the dairy producers about important dairy inputs such as concentrated

animal feed, vet medicine.


Establish strong research, farmer and extension linkages,

Formation of specialized dairy extension service,

Adequate supply of improved inputs,

Develop extension and advisory service for private dairy farms as well,

Encourage private extension service and advisory service;

8.4. Challenges, constraints and recommendations in reference

to research

Based on the reviews made on the research developments in Ethiopia several limitations and

prospects for enhanced productivity were identified. For effective identification, introduction

and adaptation of technology for improved production the following challenges and constraints

addressed and recommendations forwarded are summarized as:

Challenges

Limited and biased research output on different profiles of dairy production and utilization

Constraints


44

Limited scope of research strategy,

Low emphasis on need assessment and basis on problem solving

Focus limited on productivity enhancement on applied research on nutrition

Peace meal approach of research on dairy production,

Impact of long generation interval of cattle on research output,

Inadequate and absence of high technology utilization to enhance research out put;

Policy Recommendation

Encourage embarking on comprehensive dairy research,

Strengthen research- extension –farmer linkage to foster applicable research on dairying,

Encourage research on development of appropriate milk processing technology,

Promote applied research on preservation of dairy products and render extension services

for the adoption of the technology,

Develop and promote the technology of improving the efficiency of traditional butter

churning techniques,

Promote use of high technology, like embryo transfer and genetic manipulation etc, to

improve impact of generation interval to accelerate and increase research output;

9. DAIRY FARMERS ORGANIZATIONS AND COOPERATIVES

9.1. Overview Farmers’ organization on dairy production can be considered recent intervention in Ethiopia. There

had been establishment of Producers Dairy Cooperatives during the Derg Regime, These were

short lived as they were owned and operated communally, the efficiency of which was very low

and lack responsibility and accountability. As their primary objective was to deal with production,

knowledge on market development (market accesses) was limited, and were not operating cost

effectively.

Since the early 1990’s dairy cooperative formation followed two different modes to suit their need.

In urban areas dairy farmers were organized with primary objective of solving input supply,

specially concentrate and feed ingredients for their cattle. The Addis Abeba Dairy Producers

Association could be one where in the later stage milk marketing was introduced as part of their

activity. In rural areas milk marketing was the basis for organizing farmers. Farmers were

organized to market milk, get steady outlet for their surplus milk after satisfying homestead


45

needs. These groupings later transformed to use of small scale processing technology, introduced

as an object to add value to the milk with production of butter (ghee) and Ayib, which help to

reduce wastage and increase dairy income. These were operating in peri- urban areas with

exception of Selale and Arsi areas, where mostly known as User Groups involved in milk collection,

dairy processing and marketing.

There are also progresses on organizing cooperatives. As a result of efforts made on dairy

development there are a number of milk producers and marketing cooperatives and small scale

milk processing and marketing user groups organized in the different regions mainly in

Amhara, Oromiya, Addis Ababa and Southern Nations and Nationalities.

There are also large numbers of small scale individual processors who are operational

especially in Addis Ababa milk shed area which produce/collect and process milk. There are

three dairy producer cooperatives and three small scale milk processing Cooperative in the

SNNP region. In Oromiya the Selale milk marketing cooperative Union encompasses the eleven

small-scale milk processing cooperative and the Chancho milk producers and Marketing

cooperative. Adaa Milk Marketing Cooperative with main aim to collect milk from its members and

other farms to sell whole milk to the commercial dairy processors and to urban consumers in

Debrezeit and Addis Ababa. The cooperative has established milk processing plant recently

(2008). In addition there are 20 milk cooperatives established by SDDP and by the Region

through NLDP.

The Addis Ababa Dairy Producers and Marketing Cooperative, established in 1991 has 252

members of small-scale intra-urban dairy farms of which 104 (42%) are female. In Tigray

seven small scale milk processing units are present.

In the absence of major improvements in milk collection, processing and distribution,

marketing activities may remain stagnant unless

Milk processing industry enters the market,

Aggressive demand creation promotion,

Diversification different dairy products of better shelf life;

These in general provides higher returns and encourage the farmers to expand their milk

production. This may not be practical in the short term. The smallholder as both the producer

and marketing outlet is then much pronounced in the current stage of dairy development


46

(Getachew, 2003) and organizing them into producer and marketing will be the driving force

for dairy development.

Cooperatives and unions are known for their limited organizational capacity mainly in the

following are:

They are lacking managerial and marketing skills and exposures because of their low level

of educational background,

As many of the members and executive committees are busy with their own private issues,

absenteeism and delay in committee meetings are common. Because of this, decisions are

slow, and some functions of the committee are left undone,

They are shy away from employing of paid manpower when the size of their operation

increases because, they often worried on the amount of salary they are paying than looking

at the potential increase in the volume of sales (or return) as they employees staffs to fill in

their gaps,

Limited capital base is a limiting factor for many of the cooperatives not to expand their

volume of transactions and extension of their services to their members;

Farmer’s organization, as producers and marketing agent of their own product, should then be

encouraged because its aims are increasing income of its members. This would provide steady

product outlet, increase the quantity and quality of milk and dairy products offered for consumers,

decrease reliance on imported products by producing quality and diversified products. As a result

this safeguards the well being of consumers by supplying fresh, hygienic and quality milk and

dairy products. The organization can also assist to follow strict quality control at primary

production level involving large but separate entities from production to distribution.

Production and marketing organizations are essential for the sustainable development of the

sector. In this respect production units could assist in the delivery of government services and

creation of self- reliance among producers while marketing units could be involved in

promoting output through milk collection, transportation processing and distribution.

Establishment of farmer’s organizations, registration and licensing with acceptable minimum

requirement could assist in developing the dairy sector. As actors of change participation of

organized producers is important in promoting milk production and utilization, in providing

services in marketing. In addition these cooperatives serve as a forum for promoting quality


47

control and act as a quality testing facility, assist in promoting training and serve as a collective

action media for procurement of goods and services

9.2. Organization

Rare presence of organized bodies for milk production and marketing (dairy farmers associations)

in the rural areas in particular is one of the major drawbacks in facilitating the development not

only on marketing but also on addressing even for problems in production.

Strong and well organized dairy farmers associations could create effective and efficient market

outlet for milk, and facilitate and supply feed, vet drugs, heifers and other inputs and services

required for efficient dairy production. They even can cater for installing milk handling, processing

and marketing facility. Farmers need to form dairy associations and be organized on commodity

(dairy) at primary, secondary (union) and Federation in local, regional and national level. The

transformation of farmers associations from one level to a higher level should be based

progressive maturity at each level.


Cooperative Organization From the background and experiences of cooperative organizations in augmenting agricultural

development in general and dairy development and marketing of milk and dairy products in

particular the challenges, constraints and recommendations are summarized as:

Challenges

Limited capacity on management and marketing of their respective cooperative,

Limited capital,

Weak Communal thinking;

Constraints

Governance system is not enabling for continuity of leadership and management


Review of the governance part of the cooperative law,

Continuous trainings on marketing and cooperative management,

Engagement of the right personnel;


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10. BUSINESS AND PROFESSIONAL ASSOCIATIONS

10.1. Business Associations

10.1.1. Ethiopian Milk Producers and Processors Association (EMPPA)

Ethiopian Milk and Milk Products Producers and Processors Association (EMPAA), was

established in September 2006. The major objective of the association is to create a

platform to discuss the major business problems of the member companies and to improve

the capacity of their members to deliver a sufficient supply of milk and milk products in

good quality. Deemed importance of the association are:

Ensuring that external assistance can be achieved in an organized manner,

To request assistance in jointly carrying out (market) studies and promotional activities

which will benefit the sector as a whole,

To attract partnership for Public Private Partnership activities,

Organizing of policy forums with other value chain stakeholders, such as the Chambers

of Commerce’s are appropriate and powerful;

Since its establishment, the association coordinates the provision of trainings and facilitation

of access to supplies to its members. Currently the association is weak in terms of

organizational capacity in addressing the critical issues of its members and the industry as a

whole.

10.1.2. The Ethiopian Animal Feed Producers Association (EAFPA)

The Ethiopian Animal Feed Producers Association with the vision of to improve productivity and

profitability of the members and contribute to the overall agricultural development of the

country has the objectives among others to engage in activities designed to enhance

understanding and cooperation between the members and the public sector regarding

livestock feed industry needs, organize and provide technical assistance , education and

training in feed production, marketing distribution and management, improve the quality and

availability of necessary production inputs, enhance the availability credit facility to members

and provide members with market information.


49

10.2. Professional Associations

There exist four professional associations in relation to livestock which have stakes in dairy

development. These are the Ethiopian Society of Animal Production (ESAP), Ethiopian

Veterinary Association (EVA), Ethiopian Assistant Veterinarians Association (EAVA) and

Ethiopian Agricultural Professionals Association (EAPA). Among the above ESAP and EVA have

major role to play not undermining the pioneer and significant contribution.

10.2.1. Ethiopian Assistant Veterinarians Association

The first association was the Ethiopian Assistant Veterinarians Association inaugurated in 1966.

This was followed by the Ethiopian Veterinarians which was established in 1974.

EVA has 90% of the veterinarians working in Ethiopia and abroad (Government, academia,

private and corporate practices, industry and NGO). With its official scientific 0rgan, Ethiopian

Veterinary Journal as a medium of communication with professionals in the field of animal

health and production and other related disciplines had played major role in promoting animal

health, production and agricultural development in Ethiopia. EVA has developed strategic plan

to achieve its objective of equipping its members with advanced science and art of veterinary

science including its relationship with public health biological sciences and agriculture through,

among others (EVA, 2009):

Serve as a voice of information conduit to the veterinary profession through its journal,

Newsletter and proceedings, interacting with Government and NGO regarding animal and

public health issues, influencing animal health, livestock production including veterinary

public health policy (lead and involvement in Livestock Production strategy development),

strategy and plan development (e.g. Influence on the issue of veterinary drug

administration and control),

Maintain and improve professional standards and excellence in generation of EVA

professional policies and medical ethics, and influence policy, strategy in training and

research,

Advocate and promote high standard professional ethical practices

10.2.2. The Ethiopian Society of Animal Production

The Ethiopian Society of Animal Production (ESAP) was established in 1990 with the objective

of promoting the advancement of livestock production through sustained scientific research,


50

development and extension. ESAP provides common forum to exchange scientific ideas and

research outputs in animal science and publishes these in various forms and disseminate to

users. It has been working towards fostering interest in research and development in animal

production; as well as safeguarding professional quality, academic standards and relevance in

research. It has been fostering interaction and promoting discussions towards appropriate

policy options for the advancement of livestock production in the country.

ESAP has an official journal Ethiopian Journal of Animal Production (EJAP), and A Newsletter.

Besides these special publication on thematic areas have been published like forage

development.

During the last 20 years of ESAP’s existence, 18 Annual Conferences were held. Currently, it

has about 600 regular and associate members. ESAP realizes (ESAP, 2003) that there exist a

number of future challenges for research and development in animal production in Ethiopia.

These include:

Emerging global issues such as climate change, environmental pollution, food security

and safety and the HIV/AIDS pandemic;

Need for manpower and institutional capacity development at all levels;

Worsening poverty in rural and urban areas of the country;

Environmental degradation and associated influences on animal production;

Wastages and inequity in the use of available livestock genetic resources in the country.

Lead and advocate for the creation of a consortium of civic societies in agricultural

research and development,

Rapidly growing demand for livestock products,

Opportunities in the fast growing information technology and knowledge management,

Opportunities with the use of the emerging biotechnological tools for livestock

improvement and production,

ESAP has contributed a lot in facilitating various research papers in related with dairy

development including animal feed production. In addition, the association had spear

headed the drafting of livestock breeding policy development;


51

11. MILK SAFETY AND STANDARDS

11.1. Overview From the standpoint of the highly perishable nature of milk, care should be taken to reduce

post harvest losses and improve efficiency to convert the milk to products likely to value add

during processing from production through consumption including activities during collection,

transportation, chilling, processing and distribution.

Prompt cooling or chilling of milk at a temperature of 5°C or below is necessary to minimize

microbial growth and prevent milk quality deterioration during handling, storing and

transporting before the raw milk being processed. In order to facilitate bulking of raw milk

supply and transport the incoming milk, refrigeration facilities are provided at points of

collection and transport means to maintain the temperature as much as possible.

Furthermore care should be taken at reception and processing in order to supply the consumer

with milk, which is clean, sweet, and free from unacceptable odor and flavor, and which does

not carry or transmit diseases. Hence proper quality control at every stage of production,

collection, storing, transportation, processing and retailing is essential. This could be achieved

if the Government leads the implementation of official controls through legislation and

directives and the organization of associated capacities on enacting on quality control which

calls for certification, inspection and control in the level expected are in place.

For safe use of milk and dairy products and increased efficiency of production of quality dairy

products, setting standards and minimum load of essential bacterial concentration with

acceptable threshold levels must be set. It should then be acceptable internationally and needs

to be harmonized with Common Market for Eastern and Southern Africa COMESA and World

Trade Organization (WTO).

In addition, to minimize losses of milk and dairy products and safeguard the population from

health hazards, proper setting of legislations on production, processing and marketing is

essential. On formal setting, this should follow the WHO/FAO code of practice and use of

Hazard Analysis and Critical Control Point (HACCP) system. This would require the support or

back up of a food control laboratory capable of a range of milk quality and safety tests.

Awareness creation of the public in quality and healthy food products utilization and training of

all value chain actors is also vital in implementation of the safety measures.


52

Hence development and existence of standards on milk and dairy products are required at

national level and to cope up with international requirements. The need for quality and

standards as stated in published data by the Ethiopian Quality and Standards Authority, among

others are hence:

to protect the health and safety of the end users,

to establish on effective basis for commercial transactions,

to enable order to be placed in terms that have clear and common understanding to both

producers and consumers,

to create confidence to competitiveness in the regional trade like COMESA and global

market,

to enhance greater product quality, better production and delivery efficiency and

To enables producers to produce safe and wholesome product;

In this conjunction the Ethiopian Quality and Standards Authority (QSAE) had developed milk

and dairy products standards in the year 2001. These standards were then revised in 2005 to

be harmonized with the Common Market for Eastern & Southern Africa (COMESA) accepted

Standards. QSAE in collaboration with other stakeholders had prepared a Recommended Code

of Practice for General Principles of Food Hygiene, Code of Practice and standards for

Pasteurization and handling of milk and Specifications for Whole Milk (pasteurized and fresh

whole milk). In the revision new product standards like Ultra High temperature Milk (UHT milk)

are included and consideration was also made to address health and safety issues like pesticide

residue, Antibiotics residue and microbiological requirements on most of the revised Standards

specification. In addition, most of the test methods in this revision of milk and dairy product

standards are ISO adopted standards.

However, since Certification is not mandatory for milk and dairy products in the country as it is

not included in Regulation No. 12/1999 of the Ethiopian Quality and Standards Authority,

regular control on the industry is not practiced and is left for voluntary inspection. Quality

control on milk collection and reception is not practiced and self-regulated by collectors and

processors driven by demand and supply rather than on standard terms.


53

11.2. Improving and institutionalizing dairy quality control

For clean milk production, at least two stages of control mechanism are essential. These are

certification and inspection where proper food production, processing and marketing following

the WHO/FAO code of practice and use of HACCP could be applied.

In a country where formal milk and dairy marketing is not developed and Certification is not

mandatory on the process quality control on the process and product would be futile exercise.

It was reported that certification is only on voluntary and request basis, and it is only done

when any milk processing industry feels that it is ready and has satisfactory standards as set

by the Authority and the HACCP.

Identification of cause of risk or hazardous conditions done early and at every stage in the milk

and dairy products manufacturing chain should be the prime objective for safe guarding the

health and supplying standard abundant milk and dairy products for the population.

This would require the support or back up of a food control laboratory capable of a range of

milk quality and safety tests. Awareness creation of the public in quality and healthy food

products utilization and training of producers, processors and milk and dairy products handlers

are also vital in implementation of the safety measures. Inspection on the other hand is rare

exercise as there is no standard food quality control laboratory.

Hence, critical issues to be addressed and support services required for efficient production of

clean milk should be:

Quality control

An effective health service for regular vaccination and health check of animals against

diseases,

Well equipped collection centers should be set in strategic areas and coverage,

Organize producers both smallholders and the private to form milk collection and marketing

for ease of quality controls,

Provide extension and education on importance of clean milk production and animal health

care,

Create awareness among the public on clean milk utilization,

Empower women to be involved in milk production, processing and marketing since the

milk belongs to them;

Inspection


54

hygiene and safety established on critical control points (HACCP),

Establishment of standard quality control laboratory,

mandatory certification and inspection service,

Implementation of standards and legislations on milk quality and assurance;

The presence and enforcement of standards and procedures and their enforcement ensures

production and processing of hygienic, safe and high quality product to be available for the

public.


to milk and dairy products standards and quality

Quality and safety of milk and dairy products are central to production enhancement and for

safe guarding public health point of view. Based on the background presented and the

requirements for clean milk production and hence minimizing post harvest losses the

challenges, constraints and recommendations are summarized as:

Challenges

Safety and standard of milk and dairy products supplied to the consumer not guaranteed,

Post harvest handling problem causes quality deterioration of milk and dairy products;

Constraints

High disease prevalence of zoonotic livestock diseases,

Lack of aggressive livestock disease control,

Lack of effective quality control at different stages of milk production and transaction,

Lack of efficient liquid milk collection and cooling facility and transportation means to

processing sites,

Poor infrastructure, road access etc

Under developed milk processing and marketing system,

Lack of enforcement of quality control regulations and standards;

Policy Recommendation


55

Quality control

An effective health service for regular vaccination and health check of animals against

diseases,

Well equipped collection centers should be set in strategic areas and coverage,

Organize producers both smallholders and the private to form milk collection, processing

and marketing for ease of quality controls,

Provide extension and education on importance of clean milk production and animal health

care,

Create awareness among the public on clean milk utilization,

Empower women to be involved in milk production, processing and marketing;

Inspection

Hygiene and safety established on critical control points (HACCP),

Establishment of standard quality control laboratory,

Mandatory certification and inspection service,

Implementation of standards and legislations on milk quality and assurance;

12. Financial Services

12.1. Banks

There was no private bank in the socialist regime. Since 1991, about 12 private banks are

opened. There are three state owned banks. Commercial banks have different types of loan

products, including overdraft facilities, terms loans and loans for letter of credits. Development

Bank of Ethiopia is granting loans for long term investments, especially to sectors privileged by

policy. Commercial Bank of Ethiopia (state owned) is the largest bank of all operating in many

parts of the country. Major Private Investments are financed by this bank.

In terms of flexibility and speedy decision, some of the dairy sector managers are complaining

at all banks, mainly those of state owned. For any loan, all types of banks are demanding

marketable collaterals to secure the loan. Based on the interviewed made with some dairy

sector managers, some banks do not consider machinery and livestock as collateral for the

dairy processors. Low level of understanding of the sector by banks for the purpose of rating

proposals was one of the factors which make bankers to be reluctant in providing loan facilities

to the sector.


56

The recent loan cap with the objective of reducing the price surge impact (inflation), has

affected a number of industries including the dairy sector.

12.2. Microfinance Institutions

For small holders, microfinance institutions are the most suitable source of finance. Because of

size and single borrower limit issues, the amount of loan to be granted to a single borrower is

often too small for further investment at small scale level. In Ethiopia there are about 29

microfinance institutions. The interest rate of the microfinance institution is relatively higher

than the regular banks, which is about from 16% to 18% per annum. In addition, because of

low level of area coverage there are not accessible to many of the needy.

12.3. Insurance Most private banks have related insurance companies. There are nine insurance companies and

one of them is the biggest of all, which is state owned. Insurance companies have different

types of policies for property and in relation to manpower. Most of the insurance companies

have not insurance policies for livestock. Some of the insurance companies have livestock

insurance policies. However, their policies lack flexibility and suitability to address the

peculiarities of the various livestock holders. In addition no insurance policies are available no

potential losses on unexpected natural disaster or to cover potential perils for milk products in

transit or storage.


to loan Challenges and constraints related with financial institutions in dairy development anf Policy

recommendations are:

Challenges

Poor loan access mainly by small holders, cooperatives and unions,

Lengthy process in getting investment loan approval from Development Bank of Ethiopia for

loan requests by commercial Dairy farms and processors;

Constraints

Complicated procedures and formalities,

High value collateral demand,


57

Absence of a system which guaranty financiers to consider livestock (milking cows and

other stocks) as a collateral for securing loan,

Limited individual borrowing limit of MFI,

High interest rate of MFIs,

Absence of qualified dairy expert in commercial bank to assess proposals,

Though commercial banks are regarding the agriculture sector as their top priority, dairy

sub sector is not often pronounced;


Enhancement of the capacity of state owned banks in administering Dairy related loans,

Considering a system to use livestock and processing machines as collateral in such a way

that risks of the financiers will be properly mitigated,

Increasing the single borrowing limits of MFIs and creating a conducive environment to the

MFI to accept as collateral,

Attention given or priority to the dairy sector;


to Insurance

Challenges

No suitable policy for livestock insurance to cover potential risks to the dairy farm holders

and to use these assets as a collateral for bank financing

Constraints

Insurance company has not suitable livestock insurance for different types of livestock

holdings.


Encouraging insurance companies to have customized and suitable insurance policies for

dairy farm owners, which is also will be a basis for using the livestock as collateral.

13. PROMOTION OF MILK CONSUMPTION Consumption at the buyers’ level has increased with the expansion of dairy processing industry

and the infrastructure development on road and communication which create conducive

environment for market linkages.


58

The growth of consumption at the buyers’ level is not however big enough to absorb seasonal

increases in milk supply. As stated in different parts of this document, wet seasons coupled

with fasting period of the Christians are accountable for short lives demand deficit.

As stated above, despite absolute growth in total milk consumption at country level, the growth

in per capita consumption is very low and varies among the urban and rural population.

Consumption of milk and other diversified products can be improved as long as there is

possibility to have longer shelf life products.

Consumption at the household level of small holder producers increases as producers are

engaged in marketing of their products. Excess milk left over from marketing, sometimes

because of substandard quality, are consumed by the family.

The major factor for the weak consumption growth is the low level of demand for milk and

dairy products compared to other liquid products. Though some blame increasing price of milk

as a factor for low level of demand, based on our rapid assessment, the volume of potential

consumers which could afford to pay for milk is enormous. High volume of liquor and other

drinks sales is evidence of buying ability of substantial size of the population than despite the

fact that milk has great nutritional value. Table-one indicates scope and variation in utilization

of milk and dairy products with other manufactured liquid products. The trend shows that high

proportion of soft drinks and beverages are produced and eventually consumed than milk. Table 1: Status of Ethiopian manufactured liquid food and beveragesfrom200/04 to2006/07

Type of product 2004/05 2005/06 2006/07

Pasteurized milk (hecto litre) 135,077 162,103 134,617

Butter (ton) 394 588 354

Cheese (ton) 104 122 408

Beer (hecto litre) 1,462,775 1,560,683 1,733,570

Wine (hecto litre) 64,526 51,378 52,866

Liquor (hector litre) 54,132 71,776 74,635

Soft drinks(hecto litre) 1,069,126 2,061,683 978,415

Source: CSA, 2008


59

Commercial advertisements of other drinks outweigh the brand advertisement of dairy

industries. No conscious effort is made in the development of on the demand for milk by the

public, industries and NGOs than the tremendous effort made on the development of dairy

production.

13.1. Challenges, constraints and recommendations in

reference to milk consumption Challenges and constraints in relation to demand and consumption situation in milk and dairy

products and policy options to develop the demand perspective and possible policy options are:

13.1.1. Demand

Challenge

Seasonality of demand for dairy products;

Constraint

Low level of consumption by non-fasting communities including non-fasting orthodox

Christians;


Promoting production of dairy products with extended shelf life extended shelf life dairy

products,

Promoting consumption of children, as children are not required to fast from dairy products,

Promoting generic (non-brand specific) promotion of dairy products consumption;

13.1.2. Consumption

Challenge

Low per capita consumption of milk;

Constraint

Weak habit and poor understanding on the importance of milk, Though, there is a general

understanding that milk has something good to our body, the level of knowledge about the

comprehensive nutritional value of milk is not well understood by majority of the

community.


Promoting milk consumption and nutritional value,

Promotion of school milk feeding programme,


60

Aggressive involvement by Government and the private sector on dairy industry;

13.2. DAIRY INFORMATION SYSTEM Lack of accurate, timely and reliable information on dairy sector remain a challenge for many

years. Data available from the Central Statistical Office are known for inconsistency. For

example, the annual milk production of the country was estimated at 3.22 billion liters in the

year 2008, and reported in the following year (2009) with estimation of 2.76 billion liters

despite the increase in cattle population in the same report.

Pedigree data on dairy cattle and other milking animals are inexistence. For improved

production performance of existing animals and improve the breeding value, record keeping

and analysis on milk and reproductive performance is vital to select high performing cows to be

dams of the future progeny. Record at farm level is limited to farm use only.

No compiled report of production and productivity information at level (at all value chain

actors) which makes it difficult to undertake various research and policy interventions and of

measuring of the impacts of any sort of interventions in the sector.


Dairy information Challenges and constraints related with the development of dairy information system and Policy

recommendations are:

Challenge

Unavailability of dairy information of production, marketing and consumption;

Constraint

No organized body in charge of collecting, summarizing, archiving, analyzing and

disseminating;


Organizing or establishing an institution for dairy information system;


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14. THE DAIRY INDUSTRY (COMMERCIAL DAIRY FARM AND

PROCESSORS)

As discussed in the previous sections, severe shortages of animal feed supplies, the cost of

running a dairy farm is becoming more expensive. Ever increasing cost of feed was the primary

reason that one of the companies assessed for this study has closed its dairy farm and

continuing processing by outsourcing the milk.

Similarly some small holders in regional towns have also closed their farms because of the

scarcity of feed supply or excessive cost of feed. Transportation cost is the other additional

extra costs paid by regional farm holders, as they are buying majority of the feeds from Addis

Ababa. Low productivity of cattle because of their Generic makeup increased the running and

investment cost per unit.

Value Added Tax is applicable on feed ingredients and the feed itself where as liquid milk is

exempted from tax. Hence VAT paid for input is remained part of the cost of production of

milk. Cost of packing, spare parts and machinery has increased highly because of the

devaluation /deflation of Ethiopian Birr. The imported duty for feed and industrial inputs such

as premixes, additives and other, is up to 53% of the CIF price.

Demand side: Low consumption behavior is blamed by many writers for the low level of

demand pressure to the dairy sector as compared with neighboring countries (Sudan and

Kenya). In addition, consumers prefer the traditional products than pasteurized and factory

produced products. Extended fasting days of Ethiopian Orthodox Christian greatly affects

the demand for milk. During fasting time most of the processors sales volume will decline.

Ethiopian Orthodox believers constitute 41% of the total Ethiopian population (2007

Census).

Management: Lack of modern animal husbandry and management, limited skilled

manpower in dairy technology and marketing, inadequate distribution systems and limited

packaging choices, has affected the sector.

Recent Power Cut: Ethiopia has faced the worst power cut in its recent history. For about

six months, there was a power cut for almost 50% of the day time. As a result of this many

of the processors were using generators, which cost them higher than the regular electric

power source. The power cut also affects the shops and small kiosks that do not have a


62

power backup. When there is no power, they do not collect packed milks as refrigerators

are not working. ADA dairy cooperative is one of the enterprises whose sales volume is

dropped drastically during the power cut period.

Unfair competition: Many of the milk processors, unions and cooperatives are

complaining and blaming each other for unfair trade practices, including frequent breaches

of contracts. In addition, a product rejected by one company will be accepted by another;

processors renegotiate with members of cooperatives while they have agreement with the

cooperative, rivalries pushes the prices of milk at a higher rate than the rate of increase in

pasteurized milk are among challenges in the marketing area.

Access to Land: Land is the crucial challenge in the sector, especially for the dairy farm

owners and feed processors. Land allocation for dairy farm establishment usually would not

consider forage production as part of the input to produce enough feed and is limited to

small sizes.

Availability of breeds: Scarcity of improved and exotic breeds is a challenge for the

existing dairy farmers and new entrants in the business especially for intensive production

which calls for use of high producers as productivity is factor for increased production and

profitability.

Absence of policies: Essential policies like land, livestock breeding and dairy

development strategy in the country except for the draft policy incorporated in the general

agricultural policy and the draft breeding policy of 1986, neither of which are yet finalized.

Past dairy development efforts were based on projects related to purpose- and area-

specific dairy strategies, without any national policy aimed at setting out a comprehensive

dairy development strategy or programme (staal 2008).


to milk processing, packaging and marketing

Challenges and constraints related with milk processing, packing in dairy processing and

marketing and the associated policy options for development are:


63

14.1.1. Milk Processing

Challenge

Operating under capacity;

Constraint

Low level and uneven supply of liquid milk to processors with the required quantity and

quality,

Low level of demand for processed milk;


Promotion of collection, chilling and transportation facilities in order to increase the supply

of raw milk to processors,

Promotion demand for pasteurised milk;

14.1.2. Packaging

Challenge

Uneven supply and high cost of packing materials,

Use of substandard packaging materials;

Constraint

Few suppliers in the market and low level of capacity of the individual industries,

High cost of packing materials, this is aggravated by the devaluation of Ethiopian Birr and

foreign currency rationing;


Facilitation by government in forming clustering to producing and printing of low cost but

with a minimum standard of quality;

14.2. Informal Milk marketing

The challenges and constraints associated with the informal market and Policy

recommendations sited to transform or structure the marketing system are:

Challenge

Inferior quality and health hazard;

Constraint

Poor collection, handling and transportation,


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Lack of sufficient knowledge on milk quality and risk on zoonotic disease transmission,

Presence of unregulated and uncontrolled milk supply to the society;


Registration and special licensing of milk traders,

Provide basic knowledge on milk quality and safety,

Provisions of standard milk collection, handling and transportation equipment,

Transformation and promotion of raw milk trade to small scale milk preservation and

processing technology;

14.3. Business Environment The challenges, constraints and Policy recommendations associated with dairy business

environment are summarized as follows:

Challenges

Breach of contractual agreements and unfair competition,

Unfair business competition among processors,

Poor and weak market linkage of the dairy farms or milk producers at different categories

with different level of actors in the value chain;

Constraints

Lack of experience in the milk marketing - by cooperatives, unions and processors Poor

culture of settling disputes in the rule of law,

Weak market information system and infrastructure,

Weak and poor institutional support and organization of the dairy farmers and dairy

cooperatives from the relevant institutions and support organizations;


Introducing code of ethics,

Promoting business practices, contracts and contract enforcement and low cost and

dependable dispute resolution mechanism;

15. INSTITUTIONS IN DAIRY DEVELOPMENT

15.1. Public institutions for dairy development

History of public livestock development services indicated that early and initial emphasis was

on reducing the incidence of diseases. For rendering such animal health services the Imperial


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Animal Health Service was structured as an autonomous Government structure and served

between 1943 and 1963. From then until 1972, its status was reduced to a department under

the same Ministry. Between 1973 and 1976, the Ministry was structured into the Ministry of

Agriculture and Forestry; and the Animal Resources Development Department emerged and

became one of its main divisions.

Major structural changes were: the Ministry of Agriculture and Settlement was organized, under

which the Animal and Fishery Authority comprising the animal health service department and

the Livestock and Meat Board (LMB), were instituted. The structural change, made after a year,

brought back the Ministry of Agriculture (MoA) and the Animal and Fishery Resources

Department (AFRDA). National Animal Health Institute and the Trypanosomiasis Prevention

and Control Centre were separated from the animal health service, and thus the status of the

latter was downgraded into a Team, all three being accountable for the Department (AFRDA).

Between 1985 and 1994, animal health service was with the status of a Department parallel

with the Animal and Fisheries Resources Development Department, under the MoA. In 2004,

the status of the animal health services was then downgraded to a Team and made

accountable for AFRDA.

Animal, Animal Products and By-products Marketing Authority (renamed as Livestock Marketing

Authority) was then instituted, under the Ministry of Trade and Industry, and operated

between 1998 and 2004, it was the second breakthrough, after the formation of the then

Livestock and Meat Board (LMB).

During the restructuring of the Ministries of Agriculture and Rural Development into the

Ministry of Agriculture and Rural Development (MoARD) as well as livestock Marketing

authority, livestock development get impetus and three Departments were formed to deal with

Livestock production, veterinary services and livestock marketing under two sectors. The prior

two Departments were under Agricultural Development Sector and the later under Agricultural

Marketing Sector. It is during this time that dairy development was upgraded to a Team level

under AFRDD.

Currently with the civil service reform and revision of the duties and responsibilities of MoARD,

level had scattered and degraded. Livestock development, let alone dairy have structured to be

part of Case Team under the Agricultural Extension Development Directorate, Animal and Plant


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Health Regulatory Directorate, Agricultural Investment Support Directorate and Agricultural

Marketing Development Directorate. Recently duties and responsibilities of the Agricultural

Investment Support and Agricultural Marketing Development Directorates of MoARD have just

been transferred to the Ethiopian Meat and dairy Technology Institute, which is instituted in

January 2008 (Regulation number 143/2008). The Ethiopian Meat and Dairy Technology

Institute is a major institution whose duties are focused to commodity based development

where milk and meat are on innovations to increase their productivity.

15.2. Hierarchical structure of public institution relevant to the

livestock/dairy sector

15.2.1. Federal

As a country and in respect to direct responsibility three tiers of government - the Federal,

Regional and Woreda, the smallest administrative structure being Kebele under the Wereda,

are structured. Leading institutions for the development of livestock and specifically to dairying

are the Federal MoARD and Regional Bureau of Agriculture and Rural Development (BoARD).

Under the Federal structure current responsibility for the development of livestock falls under

two Sectors headed by State Ministers. Those entities accountable to State Minister of

Agricultural Development are the Agricultural Extension Development Directorate, Animal and

Plant Health Regulatory Directorate and Agricultural Investment Support Directorate where as

Agricultural Marketing Development Directorate is under Agricultural Marketing Sector. In

addition the Ethiopian Meat and Dairy Technology Institute, National Artificial Insemination

Centre, National Veterinary Institute and National Animal Health Research Centre are

specialized agencies dealing with livestock.

Institutions that deals with overall mandate on national development and have influence on

livestock development also exist and include,

Ministry of Finance and Economic Development (MoFED) which provides policy and

strategic guides, budgetary allocation, and evaluation,

Pastoral Development Department under the Ministry of Federal Affairs (MoFA), which

coordinates pastoral development in the country and

Animal Science Research Directorate of the Ethiopian Agricultural Research Institute under

Ethiopian Institute of Agricultural Research.


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Micro and Small Enterprise Development Agency, which guides and supports development of

entrepreneurship through micro and small enterprise development with Livestock is one of the

institution with target activities on post harvest technology development which could be of vital

importance on the processing chain enhancement.

15.2.2. Regional Level

Institutional arrangements at Regional and Wereda levels are almost a reflection of the federal

arrangements with slight modifications, if any. In most cases, common regional-level

institutions related to livestock mainly include Bureaus Agriculture and Rural Development with

two main departments charged with responsibility for livestock development namely

Agricultural main departments (under it, livestock and extension & training departments),

Agricultural marketing and input office (in SNNP) or Department (in Tigray), Pastoral

development and food security commission, in regions with pastoral areas which plays a role of

leading and coordinating actors involved in development of pastoral areas and food security

programs. Recent development in livestock development structure is in Oromiya is the

establishment of Oromiya Livestock Health and Marketing and Development Agency. Other

agencies in support of livestock development are Bureau of Finance and Economic

Development and Micro and Small Enterprise Development Agency

15.2.3. Zonal Level

Most regions have zonal level structure as a status of Branch Office to the Regional Bureaus of

Agriculture and Rural Development. The office is comprised of a multi-disciplinary staff,

including experts in animal health and/or animal production, and extension.

15.2.4. Woreda and Kebele levels

Wereda Office of Agriculture and Rural Development is the core institution, within which

Agriculture is the direct unit in charge of livestock development. There are two or three teams:

animal health, animal production, and/or forage development. Development areas with

Farmers Training Centres (FTC) at kebele level are the smallest unit in charge of agricultural

and rural development. This unit is accountable to the Kebele Council.


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15.3. Duties and responsibilities of the Main Public Actors

15.3.1. Ministry of Agriculture and rural Development

In accordance with the Executive Organs of the Government Establishment Proclamation

(4/1995), the powers and duties of the Ministry relevant and in relation to livestock

development among other include:

Assist in the direction and expansion of agricultural development,

Encourage and assist provision of agricultural extension services to peasants,

Facilitate agricultural inputs and credit to peasants,

Establish and direct research and training establishments to assist enhancement of the

development of agriculture and improvement of rural technologies,

Encourage organization of peasants and the development of peasant cooperatives,

Encourage agricultural investment, issue agricultural licenses to, and supervise foreign

investment in agricultural activities,

Ensure conducting of quarantine control of plants, seeds, and animal and animal products

brought into and out of the country,

Ensure extension services to pastoral people;

15.3.2. Ethiopian Agricultural Research Institute

Under Proclamation (No. 79/1997), the powers and duties of the institute among other include

Generate, develop, and adapt focused agricultural technologies,

Coordinate research activities of research centres, higher learning institutions, and others,

establish an effective system for coordination between the federal research centres and the

end users,

Collect, organize and disseminate information on agricultural research activities and results

available in the country or abroad, and develop and coordinate information exchange

mechanisms;

15.3.3. Institute of Biodiversity Conservation and Research

Proclamation 120/1998 requires possession of permit issued by the Institute for collection,

dispatch, import and export of any biological specimen/sample.


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15.3.4. Animal and Plant Health Regulatory Directorate

The Animal and Plant Health Regulatory Directorate is organized to lead the Animal Health

Regulatory Group and Plant Protection Group under which four Case Teams on Inspection and

Certification Case Team, Risk Analysis Case Team, Quarantine Stations Case Team and Export

Abattoirs Case Team. The duties and Responsibilities of the Directorate are (Assegid, 2009):

Establish workable system to enable protection of animal from diseases and risks of

occurrence of dangerous diseases through surveillance of animal diseases, inspection of

poisonous chemical additives and toxic substances

Monitor and control plant disease, drug residues, and poisonous additives

Inspection of import and export animal and plant products;

Conduct thorough monitoring and control of export products

Formulate policy and legal documents on sanitary and phyto-sanitary and HACCP principles

ratifying them, updating the current working manuals

15.3.5. Ethiopian Meat and Dairy Technology Institute

The institute is under MoARD and emphasis on meat and dairy production starting from the

primary market (village markets). It is on the process of organizing itself to improve the meat

and dairy sector in the country. It has also a plan to establish modern abattoir for training,

testing, and other services. The major objective of the Institute are provide short training

supported by demonstration and consultancy services in livestock production, products

handling, processing and marketing; and enabling a standard quality production of meat and

dairy products to help improve the productivity and profitability of the commercial livestock

production systems. Currently the responsibilities of Agricultural marketing Directorate and

Agricultural Investment Support Directorate on meat and dairy has been transferred to the

Institute and now the responsibility had expanded to expand to give more comprehensive

services to the private sector on enhancing investments and regulating market for both internal

consumers and export.

15.3.6. Agricultural Investment Support Directorate

Major activities

Formulate policy strategies, rules and regulation that can accelerate the agricultural

investment,

Identify agricultural investment potential lands,

Transfer investment lands to investors,


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Support agricultural investors in the built up of their operational capacities,

Identify specialized development clusters,

Link farm level production with the agro industries,

Link agricultural investor with social and financial service providers,

Bridging role between private investors and out growers,

Provide necessary information and advisory services to agricultural investors,

Create conducive environment to scale up applied technologies and best practices among

investors and out growers,

Monitor and evaluate investment operations and give corrective measures;

16. ROLE OF NGOS IN THE DAIRY SECTOR A number of nongovernmental organizations have been working in the past for the

development of the dairy sector. For the purpose of this study only those which are currently

playing a vital role in the development of the dairy sector are described briefly.

SNV Ethiopia has a project entitled Business Organizations and their Access to Markets

(BOAM). Under this project, it has made a number of value chain studies and assisted for the

formation of Ethiopian Milk Producers and Processors Association (EMPPA). It provides trainings

to private companies, cooperatives and private milk collectors, funding for business plan

development for new entrants in the sector, and support for innovative projects and sector

wide issues and research.

Land O Lakes Inc, funded by USAID, is engaged in a dairy Development project. It is working

in milk shed development, stimulating business development, strengthening market linkages,

supports industries with technical assistance, procurements, and artificial insemination services.

Land O’ Lakes is currently financing the Ethiopian Animal Feed Industry Association (EAFIA).

EAFIA is established with the objective of improving the quality and quantity of livestock feed

production and services for the members.

Improving Productivity and Market Success of Ethiopian Farmers (IPMS) project is also

engaged in value chain development in the dairy sector for Wereda (districts) as a learning

project sites. IPMS with is implemented by ILRI on behalf of the Ministry of Agriculture and

Rural Development (MoARD) in four Regional States of Amhara, Oromiya, SNNP and Tigray. It


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is funded by the Canadian International Development Agency (CIDA) for these 5 years. The

project has four main objectives:

To develop an agricultural knowledge management system that will enable Ethiopian

0institutions, farmers and pastoralists to adopt appropriate technologies from research and

development institutions based in Ethiopia and elsewhere,

To build and strengthen existing institutional capacity and foster institutional learning and

change so that new collaborative arrangements across sectors and levels are developed to

better support the dissemination, use and impact of demand-driven sustainable agricultural

technologies & information,

To increase the capacity of farmers, pastoralists, community-based organizations, and

private organizations for enhanced technology up-take by farmers and pastoralists,

To develop recommendations, policy options and strategies to enhance the impact of public

policies and programs;

FAO’s recent activities include encouraging the commercialization of small farmers in area with

recognized market potentials. The Crop Diversification and Market Development Project funded

by the Italian Government and implemented by FAO in Arsi zone of Oromiya Region has

components in dairy development working on introduction of improved dairy stock and

organization and development of cooperatives in milk and dairy marketing through the

provision of small scale milk processing sets is one of the areas where FAO is currently working

in dairy products in addition to crops.

17. THE POLICY ENVIRONMENT

17.1. General Early dairy development efforts in Ethiopia were basically treated under programs within

livestock sub sector and/or agriculture sector. During the Imperial period these were based on

either reviews carried and the Government’s Five-Year and Annual Plans and on purpose and

area specific dairy projects like the Addis Ababa Dairy Development Project.

There was then a shift in emphasis during the 1980’s when Livestock Sector Review (LSR)

(AACM, 1985) was carried and the Ten Year Perspective Plan on livestock Development was

prepared during the Derg period. The study and development plan had given emphasis and

directions on dairy development through development of projects on dairy (DRDP) and Forage


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and health development (F4LDP) on the state, cooperative and smallholder involvement

underlining introduction of appropriate technology for realization of targeted outcome. Though

the study had highlighted private involvement as key area for improved production it was

basically on smallholder dairy and fattening. These were very much oriented to smallholders

and biased to cooperatives as it was during the Socialist era.

Later development of the Ruminant Livestock Strategy (1993) had given directions of the sub-

sector by underlining the strategy under the two ecological categories and classifying the

constraint areas in animal breeding, health, animal nutrition and marketing. However, this was

used as base but not implemented fully. The National Livestock Development Program

developed in 1997 also served as a base for the implementation of the National Livestock

Development Project, which has components in the constraint areas - namely improving

breeding, forage development and capacity building of veterinary services.

In general policies and strategies aimed at creating enabling environment for investments in

the dairy development in Ethiopia are part and parcel of the Ethiopian rural development

policy. As referred in several documents (MoFED, 2005; Demise et al, 2009) the Ethiopian

Rural Development policy, based on the principles of promotion of labor-based technologies

and land capitalization is the governing policy for agricultural and livestock development in

general dairy development included in livestock. The strategy is basically aimed at increasing

agricultural production for both domestic and international markets; the enhancement of which

is believed to serve as the catalyst for economic growth and could therefore contribute

significantly to achieving food security, creating employment and reducing poverty at the

national and household levels.

17.2. National Development policies and their relation to dairy The constitution of the Federal Democratic Republic of Ethiopia is the base which had provided

the economic, social, and cultural rights for its citizens. The constitution sets the principles and

objectives to govern decisions and actions by the state as well as by the citizens. Basic

constitutional principles that set the scenario and objectively guide the state to formulate

economic, social, and development policies for positive development as present on PASDEP

(MoFED, 2002) are that it:

Provides citizens with the right to engage freely in economic activity and to pursue a

livelihood of one’s choice anywhere within the national territory,


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Provides the right to choose his/her means of livelihood, occupation and profession;

Charges the state to pursue policies and necessary measures that expand job opportunities

for the unemployed and the poor,

Provide enabling environments for farmers to receive fair prices for their products and to

obtain an equitable share of the national wealth,

Provides nationals the right to participate in national development and be consulted with

respect to policies and projects affecting their communities,

Charges the state that all international agreements and relations shall protect and ensure

the rights of the country to sustainable development;

In principle, poverty reduction is the core objective of the Ethiopian Government in its

endeavor to achieve its goal of economic growth. Where poverty is essentially dominant,

affecting the rural population and agriculture is the main source of livelihood and its progress

entails a potential for food security and as source to generate surplus input for other sectors of

the economy to develop. In line with this the Ethiopian Government policies and strategies

developed are to guide the overall development with focus given on rural and agriculture

development.

17.3. Draft Livestock Development Policy The draft document indicated that the policy on livestock development is set with overall aim of

increasing the contribution of livestock to the socio-economic development of the country with

specific objectives of achieving food self-sufficiency in animal products, increasing employment

and income, increasing industrial material supply, and increasing foreign currency earnings.

As component and part of the livestock development the policy dairy development

encompasses strategies on:-

enhancing management of indigenous dairying cows,

improving, multiplying, and distributing improved local breeds,

promoting establishment of dairy farms in potential stratified areas using appropriate pure

and improved dairy breeds,

promoting dairy cooperatives and firms,

characterizing local breeds, developing ranches for production of pure dairy breed and

distribution,

establishing a national centre for dairy Management Information System,


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identifying and prioritizing milk shed areas, and

Enhancing and regulating quality of milk and milk products.

In relation to forage production, strategies include:-

improving productivity and use of pasturelands through limiting carrying capacity,

improvement of livestock water supply facilities, making use of appropriate forage

technologies (low land areas),

expanding and integrating use of improved forage species with soil and water conservation

practices,

identifying, enhancing, and using agricultural residues and industrial by-products, and

Developing mechanisms for keeping emergency feed reserves in dry seasons.

Regarding animal health service delivery the focus given to be:-

control and eradicate epizootic animal diseases through setting priorities for list "A" animal

diseases, and

Establish a functioning information and communication system.

Other key animal health strategies on dairy include:-

strengthening of animal and animal products quarantine and inspection services,

adopting and complying with OIE policies and regulations through harmonizing with the

current Ethiopian situation,

issuance of certificate of competence for processing and exporting institutions ,

health and sanitary certificates for import and export of animals and animal products and

Regulating production, importation and distribution of drugs and equipments in the field

with respect to standards, quality, etc.

Characteristically the development of the dairy sub-sector in the early periods and continued in

the early 1980th, was mostly project-oriented, driven to short-lived objectives. There is

currently no dairy master plan developed on assessing the situation prepare lead document on

the development. Dairy master plan would imply not only on assessment of the demand for

milk and dairy products, status of milk production, processing and marketing of milk and dairy

products but also on policy and institutional issues that would derive its efficient development.

Thus would prepare the way forward (road map) that would have positive effects for

development of the dairy industry. Thus most of the project benefits were not realized and

activities were not sustainable to impact change in output, and were unable to transform the


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dairy industry. It can be concluded as well that most projects were responses to availability of

external assistance, and were geared to address specific issue in the development of the

sector.

17.4. Existing development Strategies

The development strategy of the Government of Ethiopia is based on Agricultural Development

Led Industrialization (ADLI) of 1993. This was designed initially to rehabilitate and revitalize the

economy in general and agricultural development in particular. This was designed to secure

three interrelated visions:-sustainable economic growth, equity and self reliance through the

delineated development priorities of food self-sufficiency and food security, natural resource

conservation and management, expansion of economic and social infrastructure, and

encouragement of private participation. ADLI is centered on agricultural development with the aim of transforming the country’s

economy from agriculture to non-agriculture sector. Agriculture is expected to play a leading

role to enhance its contribution to economic growth in to two way-supplies and demand side.

On the supply side, the sector provides export products, food and industrial raw materials,

while the demand side it stimulate industrial expansion by providing markets for domestically

produced goods. The contribution of the two sides for agriculture is enhanced through by the

improvements in the productivity of peasant farmers, pastoralists, and establishment of large

scale farming.

ADLI also emphasizes progress in terms of commercialization of agriculture with more intensive

farming, increasing proportion of marketable output and correspondingly decreasing ratio of

production for own consumption. This will mean greater market interaction on the part of the

farmer. Extension of credit to the small farmer will gain importance with commercialization of

agriculture, and give impetus to the establishment of rural banks. Cooperatives play important

roles in facilitating input and output marketing as well as in promoting the provision of rural

finance.

ADLI is the lead national economic development strategy which continued to influence the

formulation of successive policy, strategy, and plan documents. The sector specific policy and

strategy documents such as Rural Development Policy (RDP) and Strategy as well as the two

consecutive plans known as Sustainable Development and Poverty Reduction Program (SDPRP)


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and Plan for Accelerated and Sustainable Development to End Poverty (PASDEP) are based on

ADLI. Main national and sectoral policies that have influence on and relate to dairy and livestock as

well are, Rural Development Policy and Strategies, Sustainable Development and Poverty

Reduction Strategy, Food Security Strategy; and Agricultural Marketing Strategy.

17.5. Rural Development Policy and Strategies

The Ethiopian Rural Development Policy and Strategy (RDPS) is an overall policy on agriculture

and rural development pertaining to efficient food production, socio economic transformation

and sustainable and efficient utilization of the natural resources.

The policy recognizes that agriculture is the dominant sector in the economy but trapped by

the low-input-low-output structural problem. Its growth has not been only low but also volatile.

It claimed low levels of income and investment, low technological application, low capacity and

absence of appropriate policies, strategies, and instruments in the past contributed to the

underdevelopment of the sector (MoARD, Vol. D, 2008).

The “agriculture-centred rural development” strategy under RDPS has been adopted as a major

strategy and is expected to assist in the realization of the country’s economic development

objective (MoFED, RDPS, 2003; Demise et al, 2009). The fundamentals of Ethiopia’s rural

development strategy pertaining to agriculture as clearly put in PASDEP are:

Adequately strengthen human resources capacity and its effective utilization,

Ensuring prudent allocation and use of existing land,

Adaptation of development path compatible with different agro-ecological zones,

Specialization, diversification and commercialization of agricultural production,

Integrating development activities with other sectors, and

Establishment of effective agricultural marketing system.

In general policy solution involves structural change, for which major capacity development in

human resource, input supply, technology adoption, and provision of infrastructure is needed.

The policy bases a free market economy, to ensure rapid development, reduce dependence on

food aid, and make the smallholder the main beneficiaries of economic growth. The main

agricultural sector policy instruments relevant to livestock extracted from the policy document

include:


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Introduce menu-based extension package to enhance productivity,

Expand training of agricultural development extension agents,

Expand training of farmers at Farmers Training Centres,

Improve capacity and functions of agricultural inputs and outputs markets,

Organize and strengthen cooperatives to provide better marketing service and serve as

bridges between small farmers and the non-peasant private sector,

Facilitate credit provision and coverage of micro finance institutions,

Develop private business and entrepreneurship,

Strengthen rural-urban linkages,

The strategy classified the country into the major agro-ecological zones for which tailored

development plans and packages need to be adopted and implemented. Specifically it includes

zones and regions with adequate rainfall, pastoral areas, drought prone regions and areas with

significant potential for commercialization and diversification covering areas like the rift valley

and under-exploited productive areas.

17.6. Sustainable Development and Poverty Reduction Program The fundamental objectives of FDRE in its SDPRP are to build a free-market economic system

in the country which will enable the economic development rapidly, the country to extricate

itself from dependence on food aid and poor people, mostly rural, to be the main beneficiaries

from economic growth.

The SDPRP strategy is based on four pillars namely:-

Agricultural Development Led Industrialization (ADLI),

the Justice System and civil service reform,

decentralization and empowerment, and

Capacity building in public and private sectors.

Each of the four pillars is briefly summarized as:

ADLI has been Ethiopia’s long-term economic strategy since 1993 and remains valid as

it places emphasis on raising the income of rural people constituting 83.9% of the

population, who are almost exclusively engaged in agriculture.


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The Ethiopian Government's civil service reform process with a view to improve

the performance of the Civil Service with regard to the management of financial and

human resources, identification and delivery of services to citizens,

Decentralization and empowerment with the devolution of power to the regional

governments where implementation of economic policies and development programs is

shifting, to large extent, from central to the regional is expected to facilitate

development.

The capacity building program comprises the development of human resources,

building and strengthening of institutions, and establishment of effective working

practices. The program is to be implemented in relation to smallholder agriculture, the

private sector, and public sector, Training of farmers, supporting micro-financing

institutions, and strengthening public and private sector organizations involved in the

development of agriculture will be the main activities.

17.7. The Ethiopian Poverty Reduction Strategy

The Ethiopian Poverty Reduction Strategy (EPRS) is framework that bring together all relevant

poverty sector policies, strategies, and programs into an integral whole to take advantage of

their synergies and finally to achieve rapid, sustained, and wide scale based poverty reduction

and growth. The strategy has been in place with two phases "Sustainable Development and

Poverty Reduction Program" and "Plan for Accelerated and Sustainable Development to End

Poverty" and relies on involving a significant injection of external capital, either in foreign direct

investment or donor financing for infrastructure investment. Within the framework of PASDEP, the main objective of agricultural development in the

medium term is to accelerate the "transformation" from subsistence to a more

business/market-oriented agriculture, while at the same time protecting the "essential"

agricultural base upon which the poor depend for their livelihood (Demise et al, 2009). Thus,

the thrusts to the strategy are the commercialization of agriculture, and the continued support

to pro-poor basic agriculture within the framework of the national food security program that

aims to achieve food security within five years.

The current program (PASDEP) strategy is on commercialization, most of the response is

expected to come from the private sector, both by small and large-scale farmers.


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Basically major strategies dedicated to realize the objectives and targets are summarized as:-

Through commercialized agriculture, stipulated government supports, which has influence

on dairy include provision of road access, facilitation of agricultural credit and markets,

provision of specialized extension services for differentiated agricultural zones and types of

commercial agriculture and improving land tenure security and availability to large-scale

commercial farming,

On smallholder agriculture, some of the adopted policy instruments include provision of

intensified extension services at kebele level (deployment of specialized extension staff),

establishment of a network of demonstration centres (Farmers Training Centres), increase

of low-level veterinary services;

17.8. The National Food Security Strategy

The strategy with core objective to increase food availability and access at household level

through increased crop and livestock production and productivity, and increase access to other

non-farm income through agricultural and non-agricultural activities. The targets to be met

through helping farmers use their own resources to overcome food insecurity both through

agricultural improvement, diversification of off-farm income sources.

17.9. Agricultural Marketing Strategy In recognition of the importance of integrating increased production and improving the

marketing system to reduce market failures that put producers at a disadvantage, the

government has developed a long-term strategic framework to improve the agricultural

marketing system. The marketing strategies encompass supply and demand sides of inputs and

outputs, as well as domestic and foreign markets targeting market infrastructure and

information systems, regulatory frameworks, capacity building implementation, and finance.

The major strategies stipulated and more important among other include focus on:-

A more efficient exchange of agricultural inputs,

Creating efficiencies in agricultural product markets,

Quality assurance programs,

Expansion of the export of agricultural products,

Expanding and strengthening marketing infrastructure,

Development of finance/loan and insurance components,

Ensuring the prevalence of marketing rules and regulations,


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Development of an implementation capacity for agricultural marketing,

The establishment of a market information system;

18. RECENT LIVESTOCK DEVELOPMENT PROGRAMMES

Two programs are considered here. These are National Livestock Development Program and

the livestock development master plan study. Brief descriptions are as follows:

18.1. National Livestock Development Program

The National Livestock Development Program, which is the second after 1980’s Livestock Sub

sector Review, was prepared in 1997 (MoA, NLDP, 1997). This program was developed based

on the analysis of performances of past livestock development efforts and the Ruminant

Livestock Strategy prepared in 1993. The Program realizing the potential to develop a viable

livestock industry and increase domestic production indicated path ways to tackle the

development of the necessary infrastructure, improvement of production by better feeding,

breeding, health care, and the development of links between rural producer and urban

consumer by improving the collection, transport, storage and distribution network for livestock

and livestock products to bring about a significant change in the livestock sub-sector.

The basis and major areas of focus of the program premises were:

Improved breed development that are highly adapted to the diverse agro-climatic

conditions of the country, as the basis for increased supply of animal products, milk and

meat, and work input and hence possibility for improvement of the genetic potential of the

indigenous breeds and introduction of high yielding and adaptable stock,

Increased animal feed in both quantity and quality through improved resource

management and introduction of high yielding grass and legume species could alleviate

the problem. In view of the expansion of cropping and the decline of grazing lands, there

is a need of integrating feed production into the cropping system so as to sustain the

productivity of the animals and improving soil fertility in due time,

Strengthening of the veterinary service and control of the main economically important

diseases and thereby reduction of the excessive wastage due to disease, where many

endemic and epidemic diseases and varied internal and external parasites are highly

prevalent,

Need for programmes designed to improve the marketing infrastructure that could


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immensely improve the performance of the sub-sector. The programme was designed to

improve the nutrition, health, breeding, management and market situation of the livestock

with overall objectives of increasing income of the farming family, meeting the rising

demand for livestock and livestock products, and earn the foreign

The cumulative effect of the various components of the program was to bring about substantial

increment in milk, meat, eggs and other products of livestock in the country. By the end of the

fifth year of the programme the milk production of 222 kg per lactation from local breeds to be

increased to 315 kg, while the lactation length to grow from 189 to 210 days. The production

from improved breeds will grow from 1,500 kg per lactation to 2,400 kg. The per caput milk

consumption was expected to be improved from the existing 16 kg per year to 32 kg per year

(MoA, 1997). The project is its final stage of execution for completing quality control laboratory

and other activities through Government financing.

18.2. The Livestock Development Master Plan study

The livestock development master plan study was designed to develop a comprehensive set of

strategies to address the major constraints hindering the country’s ability to take advantage of

the resource and market opportunities and harness the full potential of the sub-sector. In

retrospect objectives of the study include preparation of a comprehensive livestock

development master plan on dairy, meat, hides and skins, draught power, eggs and apiculture

sub sectors for a plan horizon and investment period of twenty years.

The study involved the collection of data and information for the analysis of the technical,

biophysical, institutional, political, environmental, economic and social investigations in order to

prepare a master plan for sustainable and equitable development of the livestock and

formulate and prepare at least four priority projects for future financing.

Phase I of the study was completed to date with production of review documents on all

thematic areas underlined in the study protocol. The second phase had been initiated and on

process and currently the study was interrupted awaiting decision by the Government


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19. LEGAL FRAMEWORKS RELATED TO LIVESTOCK

19.1. International regulation on trade in livestock Fulfilling the stringent requirements on public health from a risk of importation of dangerous

human or animal pathogens under the “maximum acceptable risk”, as International regulation

applicable to agricultural (and livestock) commodities and that the “Sanitary and Phytosanitary

Agreement” (SPS Agreement) of the World Trade Organization (WTO) should be complied and

basic if we are exporting milk and dairy products. Though countries have the right to establish

the level of health protection, they deem necessary and are based on international standards

to facilitate harmonization of certification.

Many bilateral agreements were signed where almost all trade agreements are on meat and

live animal export.

19.2. Country level proclamations and Regulations on

Livestock and dairy A number of laws, regulations, and decrees related to livestock existed since the late 1940’s.

Between 1949 and 1971 there were four proclamations and amendments issued for the control

of animal diseases. Recent proclamation is the Animal Disease Prevention and Control issued in

2002 that replaced the Animal Disease Control of 1961.

Animal disease prevention and control (No 267/2002)

Refers to prevention and control of diseases; outbreak notification authority, provisions,

declarations, measures, and power, establishment of quarantine stations, entrance and exit to

ports for export of livestock and livestock products, international animal health sanitary

certification, and animal movement permit. Further more it aims at enhancing the disease

reporting, investigation and surveillance mechanisms at federal and regional levels. It also sets

modus operandi for intervention and control of disease outbreaks. The main provisions of the

proclamation related to dairying are presented in Annex 2.

Draft Regulation to control movement of animal and transportation of

animal products and byproducts

Sets mechanisms to prevent spread of infectious diseases out of the foci of occurrence and

increase confidence of recipient/importing countries.


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Draft Regulations to provide for the registration and licensing of animal

health professionals

Issue legislations on the registration of animal health professionals on delivery of services and

other provisions

Guidelines

There was no guideline developed on dairy but most are on meat inspection, hygiene and

construction of export abattoir, and Operational procedures of export abattoir.

Cooperative Societies Proclamation (No 147/1998)

The Proclamation allows establishment of cooperative societies to actively participate in the

free market economic system. The provision elaborates that cooperative societies are

voluntary, democratic, and autonomous, self-help organizations controlled by their members.

Specific provisions and guidelines having implication for livestock are:

A minimum of ten-members to form a society,

Any cooperative society is a 'limited liability' organization that can be established at

different levels up to the federal level,

Allows a society to engage in either production, service-rendering activities, or both,

Entitles members to receive dividends according to their share,

Puts restrictions on interest received from its members not to exceed the current interest

rate of the bank,

Restricts a society from extending loans to others who are not its members or a society

established under this proclamation,

Entitles cooperative societies a right to exemption from income tax,

Allows cooperative societies to acquire land and to receive other government assistances

through training and other means, not withstanding the incentives permitted by investment

codes

Public health proclamation (No 200/2000)

Public health proclamation gives Ministry of Health (MoH) the mandate to "inspect any

premises where there exists a situation endangering public health".

Proclamation to establish Quality and Standard Authority of Ethiopia

(102/1998)

Objectives of Quality and Standard Authority of Ethiopia include the following:


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To promote and assist establishment of appropriate quality management practices as

integral and yet distinct management functions in the social and economic sectors,

To promote and co-ordinate standardization at all levels in the country,

To assist improvement of quality of products and processes through promotion and

application of Ethiopian standards;

The powers and duties to achieve these sets of objectives include:

To formulate, approve, declare, and issue Ethiopian standards for general and specific

applications as may be necessary,

To specify quality marks and certification of conformity,

To popularize quality and standards amongst users and public,

To establish a documentation and information center for the provision of quality and

standards related information;

Investment proclamation (280/2002):

As a result of the New Economic Policy and the series of reforms since 1992/93 an enabling

environment was created for both domestic and foreign private investment. In realizing the

role of private activity in generating growth and supporting poverty reduction the National

Poverty Reduction Strategy had dwelt and emphasized participation of the private sector as

part of driving forces of change in achieving food security.

Opportunities in the private sector are based on factors that created favorable climate. These

investment climates as presented by (MoARD, 2008) are peace and stability, macroeconomic

stability, access to land and taxation.

The investment code is one of the most flexible and has undergone several amendments in a

view to progressively improve the investment climate in Ethiopia.

The most recent (amendment) proclamation (373/2003) allows the Ethiopian Investment

Commission to complete the following tasks:

Issue investment permit on behalf of the Ministry of Trade and Industry (MTI),

Authorize memorandum of understanding and article of association,

Commercial registrations,

Issue work permits and business licenses;


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Investment regulation (84/2003)

Stipulates the following incentives that are relevant to livestock production, processing and

marketing:

Exempts from income tax for five-years, those manufacturing, agro-processing or

agricultural production enterprises that export 50% of their products, or supply at least

75% of their products to an exporter as a production input. Depending on circumstances,

the exemption will be extended to seven years and above,

Provides two-year exemptions from income tax against export of less than 50% or supply

of products only to domestic market - the latter being subject to the decision of the Board,

Where the investment takes place within the emerging regions of the country, an additional

one-year tax exemption is allowed,

Two-year income tax exemption for expansion or upgrading of existing enterprises that will

export 50% of the product and increase in value of the production by 25%,

In case of incurring losses by the enterprise, the regulation allows the carrying forward of

the payment of the income tax by half the pre-stated exemption period after expiry date,

To assist improvement of quality of products and processes through promotion and

application of Ethiopian standards;

19.3. National development policies and programs and

their implications in dairy development An appropriate and effective policy by definition should be clear, detailed, and coherent, with

clearly defined instruments and linked to other relevant national policies. Incomplete policy and

that do not have compatible and inter related policies could not lead to the attainment of its

own objectives.

Policies on dairy, specifically and livestock in general, could not be studied in isolation as they

are strongly influenced by other policies related to livestock, and agriculture respectively. In

addition the environment and natural resources management, land tenure, marketing and

trade, transport, human development and institutional capacity building, public health and food

processing and regional and international cooperation are also important considerations.

Effectiveness of policy is measured by its impact on the development of the sector or sub-

sector in question. It is therefore essential to review of all existing dairy, dairy related,


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agricultural related and rural development policies to indentify limitations, challenges and

successes within the policies and of their respective implementation.

19.4. Adequacy and Relevance National and sectoral policy objectives

Development policy objectives of the Government are focused on achieving economic efficiency

where it is concerned with increasing the level of real national income to be achieved

concurrently with sustainable conservation of the natural resource base in the interests of long-

term economic efficiency and sustainability. Maintaining the stability of the envisaged growth

and equity is a pro-poor objective that focuses on making fair distribution of income and wealth

from the growth realized as most farming is based on smallholder basis.

In context of the above statement the development policy objectives of the country are

relevant and sufficient to guide livestock development in general and dairy development in

particular (MoARD, 2008; Demise et al, 2009). This is reflected on the dairy development policy

objectives in the draft Agricultural development Policy and livestock (draft) policy objectives to

include the following:

Self-sufficiency in livestock production through improved nutrition and management

Export promotion (increasing raw material supply and export earning)

Income generation and employment creation.

Strategic Orientations

The strategies of sectoral policies recognize livestock as a potential area for poverty reduction

and economic growth and to have leading role. Furthermore transformation of the smallholder

subsistence agriculture into a productive and market-driven and the advancement of this on

agro-ecological criteria to a more geographical differentiation of the country into different

growth opportunity zones is an important strategy to the marginalized livestock sub-sector and

dairy.

Policy Instruments

Key policy instruments common for the agriculture sector are applicable to livestock. These

include rights and access to the land, credit, research (technology), extension, input supply,

market information and knowledge and skills. Specific measures to livestock include access to


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land tenure and land security; rights and access to improved breeds, veterinary services,

pastureland and water and quality control services.

The land policy dictates the use of land for its best. However, as indicated in several reports

there remains impediment to use land as an important input to enhance investment, such as

high land lease rates, bureaucratic hurdles to secure land, and absence of infrastructure

services.

Access to land use is one of the major issues of agricultural development (New coalition,

2003). The essential elements of the land policy among others relevant to dairy production

should be free and non-time bounded access to farmers/pastoralists, leasing to other

participants, restriction of land redistribution without the will and consent of the farmers at

large, leasing of peasant holdings to other farmers or investors, presenting land use certificate

as collateral by investors.

Access to market and market information

Informal dairy market dominating the system, the poorly organized and functioning market is

unable to stimulate modern dairying and supply of adequate milk and dairy products to local

and national markets. The articulated reasons are dominance of subsistence production

combined with under developed rural infrastructure, limited involvement of private investors in

the marketing system, weak financing systems, scarce market information and weak rural-

urban linkages. In response to the constraints on livestock marketing MoARD had adopted,

though major emphasis being on export marketing, an agricultural marketing strategy in 2005.

Hence accepting policy and institutional constraints are largely contributing to market

inefficiencies, realization of adequate policy and implementation of the policy with applicable

instruments and efficient institution is essential

Access to livestock extension services

Existing extension approach is menu-based integrated packages with the household as focal

point for intervention. While the technological interventions are commodity based

encompassing breeding, feeding and health, extension services related to delivery of animal

health and artificial insemination services are seen and run as separate functions. This needs

strong functional linkages where inefficiency in only could affect the adoption of the

technology.


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The agricultural extension system did not target the larger commercial their influence on

smallholder farmers to adopt technology could offer as drivers of change in technology

transformation, input and service providers and market Therefore there is limitations in scope

and coverage in livestock and dairy extension.

Access to Technology

Focus on livestock research in the past was marginal being to identify, test, and adapt existing

technologies while strengthening research on areas of strategic or national importance do not

exist. Long term research on thematic areas and focus on dry land and pastoral agro-ecologies,

on improving forage varieties, generating better information of husbandry, health care, and

breed improvement would be strategic areas.

Access to Inputs

Improved breeds, fodder crop varieties, and veterinary services are vital inputs to raise

productivity. However, supplies availed are limited and service provided are ineffective and

inefficient, unable to satisfy the rapidly growing demand for improved technology. Policy guides

and support for development and utilization of forage plants, crop residues, and industrial by-

products and breeding are also lacking

Dairy development in particular and livestock development in general is highly constrained by

inadequate access to productivity enhancing technologies and inputs. Supplies are limited and

are hardly affordable by farmers.

Private sector development

Introduction of Investment Code designed to encourage larger scale private investment has

favored growth in certain agricultural sub sectors. In response to the investment climate, new

investment in livestock has been emerging. However, these are mostly on import, wholesaling,

and retailing of veterinary drugs which are fully run by the private sector.

19.5. Compliance of the policies in light of dairy sector Inventory of the existing policies and strategies at sectoral level and programs developed

thereof in Ethiopia had indicated that the overall objective of the policies and strategies are

more or less comprehensive in addressing basic principles of development. Intuitional capacity,


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ownership, follow-up, coordination and continuity are among the main challenges which deter

the effectiveness of these policies.

However, the dairy sector development is impaired in most cases not by the lack of general (or

national) policies and strategies but limitations and constraints of their implementation and lack

of focus. Implementation requires appropriate institutions with the required capacity and public

sector participation. In the case of Ethiopia dairy development involves many stakeholders from

production of raw milk to collection, processing, marketing of the product, input and service

delivery and regulatory functions as well as the consumer. All stakeholders should be involved

in promoting efficient production, clean, safe and standardized milk and regulating the market

which include public and the private sector as well as NGOs, CSOs, CBOs and donors. Efficient

and effective implementation of existing policies and strategies are thus essential.

In addition, livestock in general and dairy in particular are not policy deficient nor are the

existing policies are hindrance to its development. But inexplicitness of the issues in existing

official documents (RDPS, PASDEP, etc.). Livestock sub-sector has lack of focus in specific

policy regimes in an integrated and comprehensive setting (MoARD, 2008; Demise et al 2009).

To address the issue of inexplicitness and avoid lack of focus, there is need for national dairy

policy to guide the development nationally. Accordingly there is requirement for specific policies

like the draft breeding policy which include on dairy feed and feeding, dairy health, etc.

19.6. Effectiveness of strategies on the dairy sector Most of the strategies advocate for integrated development approach. However coordination

and integration of managing the different development tasks under the development programs

and different projects were not practical in most instances where problems are emerging on

slow and inadequate performance by not invoking and using this integrated development

approach.

The draft Livestock Breeding Strategy should be reviewed to include issues of timely breeding

such as synchronized breeding for the purpose of fixed time breeding through efficient mating

and insemination system to achieve compact calving, thus align breeding programme with feed

availability and marketing.


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Review the existing animal feed strategy should be examined. The strategies developed for

improved forage production and use of other feed resources had little if not any impact on feed

availability as indicated in their perspective plans.

Smooth linkages among stakeholders and systematically linked and institutionalized activities

could have played significant role for the implementation of development interventions.

Coordination and alignment of duties and responsibilities is thus are of attention where diverse

institutions are involved where there magnitude and involvement differ between regions

Inadequate technology generation and transfer and weak research extension farmers’ linkage

are challenges contributing to the lack of effectiveness in the Research, Extension and

Development chain.

Linkage and proper enactment of legislation on quarantine, standard and quality control among

and by institutes mandated to enforce the law and standards should be considered issue of

national concern. MoARD’s Animal and Plant Health Regulatory Directorate, and Ethiopian

Quality and Standards Authority should come in a formal linked for institutional arrangement in

order to address national issues of agricultural inputs and outputs quarantine, standard and

quality.

19.7. Need for an institution There is no single organization responsible for the development of dairy at national level in the

country. This has created a rift between the producers and consumers and all those actors in

the value chain to involve in the development process coherently. This could have assisted in

the development of the dairy sector and improve the food security in terms of making sufficient

clean and standardized milk and dairy products available and improve the stability of supply

resulting in the poor facilitation of production and marketing of the products in the country.

If dairying in Ethiopia is expected to develop at a pace to guarantee food self-sufficiency in

milk and dairy products and promote import substitution and export earnings institutionalizing

is essential. An organization or institution responsible for the overall dairy development; co-

ordination in development, marketing, and quality control and pricing, for the coordination of the

dairy development, marketing and control of quality and hygiene is vital for smooth and

efficient development of the dairy sub sector.


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19.8. Challenges on the enforcement of the existing policies

Achievements of the dairy sector due to the implementation of existing policies, strategies and

programs on milk production and consumption could not indicated its effectiveness but futile

exercise where data is scarce and magnitude are diverse. It would be worthwhile if not directly

related to dairy to refer on trends of agricultural development in the past decade.

Recent study (Demise et al, 2009) on impact of policy on agricultural development due to the

implementation of existing policies, strategies and program indicated share of agriculture GDP

has declined from 57% to 46% in ten years time between 1996 and 2007. And within

agriculture it is the crop sub sector which is leading in terms of contribution to GDP. As of

2006/07 crop agriculture share from GDP is 30% while its share from AGDP is 65%. For the

same period the share of the livestock, is 12.3% from GDP and 26.5% from AGDP, and the

budget allocated for agriculture both at the Federal and Regional State Governments level is

about 15%. In terms of milk production, although the average daily milk yield of cow and

camel is showing a slight positive increase, the change is still small per capita consumption of

milk of Ethiopia is the lowest in Africa which is about 23Kg per annum.

In general, the livestock sub-sector is not policy deficient nor is the existing policies are

hindrance to its development. The reflection of these policies on dairy development can be

considered the same. The problem in achieving the expected goal of efficiency lies on lack of

focus, institutionalization (ownership) and reinforcement. As emphasis of interventions in

agriculture are bound to differ with in the sectors and commodities depending on potential

resources, incompatibility to address more critical issues in the development phase could

hamper achievement of the overall expected goals.

As the number of stake holders involved in the milk value chain is immense and need for

concerted effort on dialogue and involvement in the development process is vital. A platform is

required to address the issue of productivity and production, efficient marketing and supply of

clean and standard milk and dairy products for the use of the public, which necessities the

importance the dairy board like many countries on the globe.

The need to develop dairy development policy is imperative to deal with issues of focus.

Further in line with the recently formulated Livestock Breeding Policy and Strategy (MoARD,

AFRD, 2008; Demise et al, 2009) and submitted to the Council of Ministers there is need for


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detailed separate policies on animal health and animal feed. Where milk involves production

and health safety in the production and consumption chain interventions for increased

production, regulating the market and guarantee quality milk supply.

20. CROSS-CUTTING ISSUES Cross cutting issues like environment, gender and youth in the dairy sector are not reviewed in

depth. In the course of this study certain issues identified as challenges are incorporated in this

report.

20.1. Environment

Though poorly managed dairy farm is posing environmental and health threat, many urban

small holder dairy farmers are forced to close their farms because of health and environmental

issues. No significant effort is made to enable these small holder dairy farmers to be safe and

clean environmentally before being pushed to quit their business. Packaging used for

pasteurized milk, are not biologically degradable and some of the packaging materials used are

not safe for in keeping the quality of milk before usage.

Challenges, constraints and recommendations are summarized as follows:

Challenges

Chasing of urban dairy farmers from town, mainly from Addis Ababa,

Non environmental friendly packaging,

Weak waste disposal system;

Constraints

The unjustified and misperception of some governmental and municipal authorities on the

dairy farming of urban and peri-urban dairy system,

Lack of knowledge and skill on potential usage of farm manure for energy and fertilizer,

High cost of packing materials and unavailability of environmental friendly packing in the

market;


Introducing cost effective waste management system to the urban dairy farmers,

Introduction of environmentally friendly packaging materials;


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20.2. Gender

Based on the rapid assessment on few cooperatives on dairy, the composition of women as a

member is too low, which is below 20%. It is evident that women are bearing the majority of

burden in the dairy farming, whereas their role in influencing the business out of dairy

transaction looks slim. Training opportunities organized through farmer organizations are

attended by men members where as women who are involved in the operation are missing

such opportunities as they are not often member of such cooperatives. Challenges, constraints

and recommendations are summarized as follows:

Challenges

Low participation of women and youth in cooperative and union organizations despite the

fact that they are playing significant role in dairy.

Constraints

Cultural misperception on women participation in farmers organization


Encouraging women’s participation on dairy cooperatives,

Privilege of farm level and cooperative level trainings to women,

Encouraging of membership of wife and husband at a time;

21. BENCHMARKS

The Ethiopian Dairy policy gaps can be analyzed based on the data gathered from documents

available, which are relevant to dairy sector and reviewing on the policy gaps and challenges

from the various dairy sector actors. And the other important reference on the dairy polices are

also be compared from best experiences of countries that are selected based on some

similarities of the dairy with Ethiopia like Kenya, Swaziland, India, and Pakistan. The dairy

policies of Kenya, India, and Pakistan are narrated for these study are mainly from the Steven

J. Staal, Alejandro Nin Pratt, and Mohammad Jabbar,2006 :A Comparison of Dairy Policies and

Development in South Asia and East Africa Part 2:Country Case Studies from South Asia and

East Africa – Kenya, Ethiopia, Pakistan and India.

21.1. Kenya Dairy Policy

The Kenya Dairy Industry Policy covers key issues relating to quality control and standards,

consumer safety, consumption, promotion of local dairy products and exports.


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To promote dairy production and marketing the government of Kenya (with the support of its

development partners and the private sector) has been implemented variety of policy

instruments and strategies. These include:

Regulatory framework,

Feed prices and quality,

Breeding and artificial insemination services,

Tick control,

Veterinary clinical services,

Investment in research,

Extension services,

Pricing and taxation policies,

Market and trade policy, and promotion of marketing services such as through

cooperatives,

Expansion of rural infrastructure (e.g., roads, electrification, water, etc);

Main Lessons from Kenya’s Dairy Policy

Legal and Statutory Framework

A conducive legal regulatory framework is important in facilitating growth and development in

the dairy industry and the economy. The regulatory framework for the dairy industry of Kenya

consists of various laws enacted in a number of legal documents. These acts include the Dairy

Industry Act (CAP 336, Laws of Kenya) which was first enacted in 1958 and established the

Kenya Dairy Board (KDB) to regulate the dairy industry. The Act has been revised in the past

(1962, 1972 and 1984) with the aim of improving sectoral performance in the dairy industry.

The main functions of the KDB include (i) licensing of retailers, (ii) controlling of milk

movement and quality, and (iii) appointment of dairy inspectors.

Another important regulation is the Co-operative Development Act (Cap 390, Laws of Kenya),

which governs all dairy marketing co-operatives. Despite good performance in many cases,

most dairy co-operatives have not allowed sufficient farmer participation in their management.

The Act was revised in 1997 to ensure greater farmer control, and less government

intervention.


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The Companies Act (Cap 486, Laws of Kenya) is another important legal and policy framework

that provides for registration of companies engaged in various business transactions in the milk

supply chain. These include (i) registration and licensing of milk processors, (ii) licensing of

retailers, (iii) regulations of milk transportation, and (iv) inspectors’ regulations (by KDB).

Violation of these regulations is liable to prosecution.

Another statutory body, the Kenya Bureau of Standards (KEBS) promotes adherence to

standards in industry and commerce, and to undertake educational work in connection with the

standards. The KEBS is established under the Standards Act (CAP 496, Laws of Kenya). These

standards are intended to safeguard both consumers and producers for product quality and for

fair commercial dealings. KEBS has specified the methods of analysis to be followed for various

products (including dairy products) and has powers to enforce these standards even by

prosecution, if necessary.

Feed Prices

To reduce the cost of animal feeds, the government waived duty on imported feed ingredients

and there are no additional taxes on manufactured feeds.

There is generally greater feed availability and usage in most parts of the country, although its

quality is sometimes suspect.

Animal Breeding Programs

The Kenya Stud Book was established to keep animal breeding records in the early 1920s.

Since then, major cattle breeding-related activities have been introduced. These include

Livestock Recording Centre (LRC) to keep all livestock statistics and performance, Dairy

Recording Services of Kenya (DRSK) - formerly Kenya Milk Records (KMR) – to keep all milk

performance data; Central Artificial Insemination Station (CAIS) to produce semen and the

Kenya National Artificial Insemination service (KNAIS) to distribute semen (Connelly, 1998). To

assist further the adoption of the higher yielding inputs and enhance dairy productivity, duties

were waived on imported semen and embryos.

Milk Marketing

The informal milk marketing has enormous potential for off-farm employment generation.

However, the efficient operation of, and potential evolution towards higher standards with the

raw milk market has been impeded by the non-recognition of raw milk traders due to public


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health concerns. The mobile traders have often operated without trade licenses and actively

sought innovative ways and means to circumvent such official impediments to business

operations. Research has shown that the quality of milk sold by the mobile milk traders is not

significantly different from those with fixed premises (Omore et al, 2005).In 2004 and 2005,

the Kenyan Government has taken steps to “formalize” and legalize raw milk marketing,

through training and certification of small scale traders. Where appropriate, institutions should

explore alternative systems, such as self-regulation and partnership with the private sector.

The required legislation to safeguard these policy changes is currently making its way through

the legislative channels to be enacted.

Similar changes have occurred or are occurring in other countries in East Africa, particularly

Tanzania and Uganda. Thus even as income and urbanization trends move towards a larger

share of the formal market, this type of policy shift can mainstream the informal sector, and

raise the quality of milk it handles, bridging the informal-formal gap as the industry develops.

Dairy Business Environment

To address limitations in the dairy business, the Kenyan government will work closely with

stakeholders in the industry to address problems pertaining to dairy business environment.

Areas of priority will include: - guide the industry towards self-regulation path; development of

contractual norms and corresponding legal mechanisms, low cost dispute resolution

mechanisms, and industry codes of practice; facilitate the formation of a stakeholder driven

ethical committee to handle arbitration issues in the industry; facilitation of the organization of

interest groups along the value chain to improve performance in the sector; and support the

setting up of an industry umbrella association within the sector where stakeholders can

dialogue and lobby. A tribunal to handle livestock disputes will be established to arbitrate

issues on dairy industry, among others.

Renewed public investment in livestock services

It’s apparent that the withdrawal of government support to livestock services in the 1990s was

not matched with increased provision of private services. Smallholders in particular, have lost

access to some of these services. In order to support continued opportunities for resource poor

farmers to increase productivity and opportunities in dairy, it’s likely that renewed public

investment in services will be required until viable, appropriate private services are widely

available.


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21.2. Pakistan Dairy Policy

In Pakistan two broad sets of policy measures influenced the dairy sector growth directly

and/or indirectly:

Policies, institutions and programs for improving dairy production and marketing;

Public investment in livestock extension and services,

Promotion of dairy cooperatives,

Targeted dairy development projects,

Public sector investment in milk processing and marketing,

Facilitating private sector investment in dairy processing,

Import tariff on milk powder and income tax exemption to dairy farmers;

Other policies that indirectly impacted the dairy sector;

Promotion of green revolution technologies,

Exchange rate policies,

Tax policy for processed milk products and agricultural inputs,

Regulations banning animals in metropolitan city areas,

Regulation to control milk quality;

Main Lessons from Pakistan’s Dairy Policy

Several policy, institution and program areas stand out as major contributors to dairy

development through improvement in production and marketing.

First, increased public investment in extension, research and other support services, especially

investment in artificial insemination and other breeding services and veterinary services,

contributed significantly to yield and output growth by improving the genetic, health and

overall quality of dairy animals.

Second, targeted dairy development projects in specific parts of the country for promotion of

improved feed, management and genetics as well as dairy cooperatives to improve market

access for inputs, services and products contributed to dairy growth.

Promotion of green revolution technologies

Among the policies that indirectly impacted on the dairy sector, the promotion of green

revolution technologies stand out clearly as it contributed to dairy growth from both supply and

demand sides.


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On the demand side, higher cereal productivity and rural income enhanced demand for

livestock products in the rural areas, and higher cereal productivity reduced real prices of

cereals for urban consumers, so enhanced their ability to increase consumption of dairy

products. Thus green revolution induced demand growth acted as a pull factor for dairy

development. On the supply side, three interrelated factors emerged that contributed to

enhance dairy growth.

First, mechanization of various farm operations at mature stages of green revolution

released draft animals thereby created room for increased number of dairy cows to be raised

with available feed. Cattle were more used for draft purposes, so mechanization allowed an

increase in the buffalo population, and a higher milk yielding animal. Higher cereal productivity

also released some land to increase production of green fodder for dairy animals. These factors

together resulted in higher yield per animal and in higher output.

Second, overvalued exchange rate policies pursued in the 1960s protected the domestic

market but stifled growth by giving a reasonable income from low productivity and providing

disincentive to invest in productivity improving technologies. Combined with this, the policy on

high import duty on imported dairy products, mainly powdered milk, and also soft growth as it

discouraged domestic producers to be competitive.

21.3. Indian Dairy Policy

Main Lessons from Indian Dairy Policy

Having achieved the status of the largest milk producing nation in the world, India clearly

offers a number of important lessons for dairy development, and the policies associated with it.

Regulatory Environment in the Dairy Sector

The Indian dairy industry has grown and diversified enormously in the last few decades. To

ensure the proper development and growth of this sector, the government has formed various

laws and regulations. The regulations are briefly discussed below.

Food quality and safety

Food quality and safety issues were regulated by a number of acts and agencies. The Ministry

of Food and Consumer Affairs is the main agency dealing with issues of food safety. There are

other ministries/departments, which are involved in food regulations.


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The Prevention of Food Adulteration Act is the main food safety act enforced by the Ministry of

Health and Family Welfare, Government of India. It focuses on the establishment of regulatory

standards for food safety and applies equally to domestic and imported foods including

livestock products. It covers various aspects of processing and distribution such as colour,

preservatives, and pesticide residues, packaging, labeling and sales regulations.

The Bureau of Indian Standards creates standards for food products. The Standards of Weights

and Measures Act establishes fair trade practices with respect to packaged commodities, and

makes it essential for the manufacturers to display information about the nature of the

commodity, date of manufacture and retail price on the label.

Besides these, there are a number of commodity specific quality control orders issued under

the Essential Commodities Act. Milk and Milk Products Order (MMPO) has promulgated for dairy

products. This is applicable to both the domestic and imported products. The MMPO regulates

the production, distribution and supply of milk products. It establishes sanitary requirements

for dairy products, machinery, premises, and establishes quality standards for milk and milk

products.

Agricultural Products (Grading and Marketing) Act, 1937, commonly known as AGMARK is

enforced by Directorate of Marketing and Inspection under the ministry of rural development.

Under this Act, Grade Standards are prescribed for agricultural and allied commodities. Grading

under the provisions of this Act is voluntary. Manufacturers who comply with standard laid

down by DMI are allowed to use "Agmark" labels on their products.

The fact that food safety regulations are enforced by these multiple agencies and Acts is

considered to be restrictive to the growth of food processing industry. Recognizing the growth

potential of food processing and to create an enabling environment for value addition to

agricultural products the Government of India has taken an initiative to create a Unified Food

Law by merging/amending all the existing food laws taking into consideration the global food

quality standards. The Unified Food Law, known as the Food safety and Standards Bill, was

introduced in the legislature in August 2005 and after approval from the parliament all the prior

acts/regulations related to food would be repealed. The proposed act would be implemented

and coordinated by a single agency.


100

Multiplier effects of the Green Revolution - In general, development of the crop sector

and the infrastructure related with this development during the period of the Green Revolution

have played a key role in dairy development. The role of irrigation and fertilizer through

increasing year around availability of fodder, and through broader innovation processes of

farmer technology uptake, have been some of the main driving forces to dairy development in

India.

Improved dairy animals – Improved (through selection) and cross-bred cattle, as well as

dairy buffaloes, have played a key role in India’s dairy development. The success of cattle

crossed with exotic dairy genes offers important lessons for similar approaches in tropical

settings.

Meeting traditional demand – Related to the growth in demand, was a shift by formal

market processors to traditional Indian products such as paneer, chhena, khoa, gulab jamun,

products formerly supplied almost entirely by the informal market. This created new market

opportunities, and allowed the formal market to build on traditional demand patterns, rather

than try to create demand for Western style products. Some of the latter, however, such as

sweetened yoghurt and ice cream, also helped create new markets.

Raw milk and traditional markets - These markets continue to dominate the dairy industry

in terms of market share. By virtue of their huge scale, they have clearly played a role in being

the primary mechanism for linking growing demand among consumers with increased

production coming from producers. A key policy ingredient in this role was the approach by

regulators and policymakers generally towards small scale informal market activity. That policy

stance, although not stated but nevertheless implemented and observed, has allowed the

relatively efficient operation, organized and mostly competitive milk and dairy product chain.

Cooperative development:-Although the Operation Flood and the role of dairy cooperatives

is always mentioned as a key factor in the growth of the dairy sector in India, the empirical

evidence suggests that the role of cooperatives in growth was not as direct as generally stated.

Cooperatives still account for a small proportion of dairy market share, and there is little

evidence to show that development of milk markets through cooperatives has driven growth in

dairy. However, the evidence does suggest that dairy cooperatives have had impact on the

supply side, in fostering the introduction of new technology, particularly improved dairy cattle.


101

The role of cooperatives may thus have been more in terms of supporting technology

development and uptake.

Market linkages Several factors have worked to ensure that smallholder dairy producers can

retain participation in gradually changing market. Key among these has been dairy

cooperatives in a number of States, to which tens of millions of smallholder rural milk

producers belong and rely on to sell their milk. Another increasingly important avenue for

reliable market linkages that provide scope for increased productivity and scale are contract

farming arrangements with private dairy processors, such as those with Nestle in Punjab.

Support continued animal breed improvement. India also provides a strong case for

continued investment in improved breeds of cattle and buffalo. With the proportion of cross-

bred dairy cattle in the population at over 70% in some States (including crosses between

indigenous breeds), it is clear that exotic dairy genes can play an important role in even semi-

arid, high temperature settings. The regional analysis shows that improved animals have been

critical to dairy productivity and development. Further public support to this process, as well as

through cooperatives, is central to the continued progress of the dairy industry.

21.4. Swaziland

Important policy issues and relevant strategies followed by the Kingdom of Swaziland which

are more applicable to Ethiopian dairy industry are briefly summarized as follows:

The Livestock marketing policy

The strategy to be followed is the improvement of the distribution of better and tested bull

from breeding stations and the training of farmers to keep breeding records for improved herd

quality and performance.

The Processing industries policy

Promote primary processing industries and participate where and when necessary through

minimum shares to ensure their maturation and the eventual participation of producer groups

through the purchase of the Government shares.

The strategy to be followed in the Swazi case as their primary objective was on beef market

the strategy was on beef fattening and sale. Where as in our case the policy indicated could be


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used in dairy processing and market as the sector need high financial injunction to invest in

milk collection, transportation and processing.

The Cost recovery and commercialization of livestock development Policy

Commercialization of livestock development through the introduction of a cost recovery policy

and the rational use of Government revenue in all matters of animal health and production

The strategy to be followed are 1) privatization of the veterinary clinical services in such a way

as to save Government revenue and improve the delivery of veterinary services to the farmer

and 2) creation and management of livestock development funds and revolving funds where

levies and or contributions for the specified commodity could be deposited for the development

of that particular industry

The Promotion of Livestock enterprises and entrepreneurship policy

Promote small holder livestock enterprises and a spirit of entrepreneurship among farmers

The strategy to be followed are 1) introduction of appropriate credit schemes and packages

and the training of farmers on the use of such schemes within the cost recovery framework,

and 2) facilitating access to all available lines of credit by qualifying producers and

entrepreneurs and the use of livestock funds and revolving funds on a cost recovery basis

The maintenance of good range and pasture management practices Policy

Develop and maintain a high level of range and pasture management in the country with soil

and water conservation practices

The strategy to be followed among others pertinent to Ethiopia are 1) establishment of farmers

groups in communal grazing areas on pasture management, 2) introduction of grazing area

fencing schemes and 3) establish stocking rates for the different stratified grazing areas and to

enforce through the livestock grazing group

The National herd improvement Policy

Improve the national herd and ensure the maintenance of internationally accepted standards of

livestock production and breeding


103

The strategy to be followed among others pertinent to Ethiopia are 1) establish clear breeding

objectives and programs, 2) registration of breeders and breeders associations and monitoring

of livestock breeding activities in the country

The Livestock nutrition Policy

Develop and use internationally acceptable standards of livestock nutrition and feeds quality

and to protect the consumer from sub-standards feeds and their dumping

The strategy to be followed among others pertinent to Ethiopia are 1) establishment of a

national animal feed standards to be met by feed manufacturers and importers and to protect

animal feeds consumers from the use of costly but very low quality feeds in the market, 2)

Provision of a feeds quality assurance service to farmers, feed manufacturers and distributors.

The Legislation Policy

Enforce compliance and ensure administrative efficiency and harmonization of established

policies, regulations on animal health, production, processing and trade

The strategy to be followed among others pertinent to Ethiopia is the enforcement of

legislations that will support and enforce compliance with established policies, and regulations

for the development of a sustainable livestock industry and the protection of the consumers.

Details of policies on Swaziland agriculture and dairy can be refer on: Livestock Development

Policy, Ministry of Agriculture and Cooperatives, Swaziland Government, Mbabane, 1995)

21.5. Botswana Botswana’s National Master Plan for Arable Agriculture and Dairy Development and the policy

thereof indicates the country to follow intensive development in both sectors as in irrigated

agriculture and dairy development. As the country is classified as an upper middle income

country and due to its agro climatic factors, it is more inclined to intensive agricultural

development. This is well demonstrated by the well developed beef industry. Hence the policy

on dairying in the same token and the strategies envisaged in the document follow the same

pattern of high capital seeking large scale dairy farming. Thus the policy indicated will not be

compatible to our needs of dairy development.


104

In the case of Botswana expansion of milk production was envisaged with the use and

importation of dairy breeds of cattle and the Government will have high investment and

collaborate and encourages investors to promote dairy in the country. The dairy farmers will be

advised to maintain a minimum herd size of 50 milking cows. Hence there is no lesson to be

learnt from Botswana’s dairy development policies and strategy. (Reference: National Master

Plan for Arable Agriculture and Dairy Development (Government White Paper No. 1 of 2002),

Republic of Botswana).


105

Annexes


106


107

Annex 1: Animal Disease Prevention and Control

Animal Disease Prevention and Control

The Animal Disease Prevention and Control Proclamation (267/2002) is the most recent and

relevant legal provision to regulate livestock, livestock products and by-products.

The main provisions of the proclamation related to dairying are:

Controlling the movement of animals, animal products and by products within, into,

and out of the country,

Authorize the appropriate government authority (MoARD) to declare areas infected with or

free from 'noticeable' animal diseases and take measures for the prevention and control of

animal disease into and from the country,

Establish an emergency preparedness and epidemic surveillance system to contain the

spread of animal diseases and avoid the introduction of exotic diseases into the country,

Set priorities of animal diseases based on their socio-economic and public health impact

and implement control programs,

Requires the competent authority to work in close collaboration with the Ministry of Health

to control zoonotic diseases,

Authorize animal health officers to inspect and limit or prohibit movement of animals if

required before, during, and after transport; enter and inspect any premises or area where

animals, animal products, and by-products, or animal feeds are kept,

Carry out appropriate inspection at entry and exit points,

Demands the Ministry to establish the national animal health information system, and each

regional government shall exchange necessary information with neighboring regional

governments and the Ministry,

Requires the need to issue international animal health and sanitary certificates for export

and import of any products and biological materials of animal origin,

Permits registration of animal health professionals to deliver services or practice veterinary

profession, and demands establishing veterinary council for the registration and

professional licensing of animal health professionals,

Requires the competent authority to promulgate directives on conditions of performing

animal health interventions by unregistered animal health professionals and other non-

professional users,


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Liberalized the animal health services by allowing any person to establish animal health

station, centre or institution upon the fulfillment of the necessary requirements, which

include holding a certificate of competence from the Ministry or concerned regions, and

business license from the Ministry of Trade and Industry or the regional competent

authority,

Requires the Ministry to create favorable conditions for the promotion of private animal

health service delivery, and define the roles and responsibilities of the public and private

sector in the delivery of animal health services

Introduction of cost/recovery-based animal health services;


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Annex 2: Suggested Role of Dairy Board Suggested Role of Dairy Board

Institutional gaps related to linkages and synergy including issues of information exchange;

linkages among quarantine, standard and quality control; irrigation construction and use; are

gaps identified that limit progress in the dairy development. It will then be appropriate to have

public with private operated institutional arrangement such as dairy board to address

coordination and coherence of services required for the development. In addition, it need to

focus on issues related to animal feeds, trans-boundary livestock diseases, pre and post-

harvest losses, and existing land administration and use policy of the federal and land

administration and use proclamation of the regions which did not address the problems related

with grazing land and natural resources are constraints to focus on.

The board to be established has objectives of the optimal utilization of the financial, human

and other resources in the most efficient possible way and has the responsibility to plan,

coordinate, monitor and evaluate all activities related to the dairy industry in the country.


110

Annex 3: Milk Value Chain Map (Variant 1)

D.MKTPasturized Milk V.C

InputRaw Milk production Collection Transportation

Processing & Packing Distribution

Point of SaleConsumption

Specific faction FEED Medcine Traning

Equipments A.I Husbandry QT., Test & Safe Storage

Milk CanntrasportBy Truck

Pastrurizing & Packing

Whole Selling Transport Storand Promotion

Retailine Consumption

Mic

role

vel

Feed Processors Suppliers

Small Holderas Dairy Cooperatives Traders Supermarkets House holds & Individulas

VET Drugs & Vacction AI Suppliers Commercial Dairy

Farmers Milk Processors Milk Processors Milk Processors Retail Shops Institutional

Consumers

Training Provider MOARD, NGO,

Consultant, EQPT Supplires

Dairy Cooperatives Individual Traders Café & Hotels

Mes

so

Mic

role

vel

MOADR/EIAR

NGO, ASSO

MFIs

QSAE

Financial Institutions

NGO

Moard/Eiar

Mac

ro M

icro

leve

l

MOTI

Financial Institutions

QSAE

NGOs

Moard/EiraFederal Regional

Governments MOADR/EIAR, QSAE

International Organigions FAO, WFP,

etc


111

Annex 4: Milk Value chain – Variant 2

Source: UNIDO


112

Annex 5: SUMMARY OF CHALLENGES, CONSTRAINTS AND

RECOMMENDATIONS

Policy issues Challenges Constraints Policy Recommendation

1 Cattle feeding in reference to milk production

Feed, usually based on fodder and grass, are either not available in sufficient quantities, or if available the feed are nutritional poor quality,

Inefficient utilization of Agricultural by products,

Low and uneven supply of industrial by-products,

Scarce grazing land,

Inferior quality of processed feed supplies,

High cost of processed feed

Feed sources are from overgrazed common grazing and fallow lands,

Practice of overstocking beyond the carrying capacity of the land,

Existing land use policy do not consider grazing use right. Rather land tenure and access to land are based on cropping area,

Absence of enforcement of quality standards on processed feed supply,

Low dissemination and adoption of improved feed technology and inputs,

Uneven distribution of feed processing plants in the country,

Low support to commercial feed processors

Deliberate production of feed for dairy cattle,

Promotion of production on cultivated forages through the different forage development strategies employed which fit into the farming system (technology transfer and input supply),

Improve pasture use through appropriate grazing land management system,

More research and development activities and dissemination of improve feed value of locally available feed resources,

Use of alternative sources of feed from silage making and conserved residue,

Follow breeding strategy to align with seasonal feed availability,

Research on adaptive and high yielding grass legume in scope and application,

Revising of the land policy to incorporate the forage production and grazing areas and to consider livestock development on the land use plan,

Research and extension services to develop and strengthen improved feed conservation strategy to ensure year round feed availability,

Encourage and assist establishment of feed


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processing plants,

Develop feed quality control system,

Encourage self regulation of quality standards on processed feed supply through the Association,

Impose livestock tax and assign quota (stock control) for controlling overstocking based on stratification of livestock production system,

Encourage forage bank establishment in feed deficit prone areas,

Promote forest utilization as animal feed resource in expansion of agro forestry,

Develop and enact Animal Feed Resource Strategy,

Implement integrated water and pasture resources development strategy,

Encourage and provide incentive for feed processers in the livestock development potential areas.

2 Breed improvement and increased use of dairy stock

Low milk yield from local breeds

Short supply of improved dairy breed

Slow progress on genetic progress

Inefficient Artificial Insemination service

Uncontrolled breeding practice,

Low capacity for genetic improvement of indigenous animals,

Animal breeding and development research not adequate



Establishment of a local market structure for improved stock

Promotion of enabling farmers to buy and sell cows directly from each other through short term credit facility that would be available at low collateral,

Farmer based crossbreeding program using group breeding scheme and bull station,

Expansion of the Artificial Insemination Service not only on crossbred and grade cattle but also for crossbreeding the local animals to produce


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Limited number of modern dairy farms which could serve as alternative source for improved stock

Low supply of artificial insemination inputs

Low level of staffing and career development scheme for Artificial Insemination Technicians in the organization structure,

Uncoordinated artificial insemination services at all level of the system,

Low semen quality

Uncontrolled breeding bull selection

the required number of dairy animals,

Promote communal groups/private involvement on bull breeding schemes, AI services and bull rearing centers,

Establishment of public bull rearing and bull service stations

Develop and enact breeding strategy on and controlled breeding,

Encourage private artificial insemination service provision;

3 Disease prevalence and control

Widespread prevalence and spread of livestock diseases and parasites in the country

Lack of inspection and quality control services to safeguard the public from zoonotic diseases,

Lack of proper livestock movement control, quarantine and surveillance systems

Insufficient staffs and high turnover of man power of the respective bodies (federal and regional)

Increased problem on external parasites and internal parasites,

High cost of veterinary drugs,

Poor reproductive performance of the animals due to diseases,

Weak national animal health information system,

Lack of record keeping on livestock ill/health (vaccination, treatment) and other related activities,

Need for integrated public and private to undertake adequate disease prevention and control through essential veterinary infrastructures and man power development;

Design and implement appropriate control and prevention strategies for all public and economic important milk born diseases such as TB and mastitis.

Strengthening the institutional capacity of the pubic to implement what has been given by proclamation.

Encouraging the private veterinary drug manufacturers to invest on the sector

Encourage promotion of veterinary drug dispensing


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4 Standards and quality control

Safety and standard milk and dairy products supply to the consumer not guaranteed

High post harvest losses occurring at the different channels of milk production

High zoonotic disease prevalence

Lack of effective quality control at different stages of milk production and transaction,

Lack of efficient liquid milk collection, cooling facility and transportation to processing sites,

Poor infrastructure, road access etc

Under developed milk processing and marketing system,

Lack of enforcement of quality control regulations and standards

Quality control

Effective health service for regular vaccination and health check of animals against diseases

Well equipped collection centers be set in strategic areas and coverage

Organize producers (both smallholders and the private) to form milk collection, processing and marketing for ease of quality controls

Provide extension and education on importance of clean milk production and animal health care

Create awareness among the public on clean milk utilization

Empower women to be involved in milk production, processing and marketing

Inspection

Establishment of standard quality control laboratory

Mandatory certification and inspection service

Implementation of standards and legislations on milk quality and assurance

5 Dairy Research

Limited and biased research output on different profiles of dairy production and utilization

Limited scope of research strategy,

Low emphasis on need assessment and basis on problem solving

Focus limited on productivity enhancement on applied research on nutrition

Piece meal approach of research on dairy production,

Encourage embarking on comprehensive dairy research

Strengthen research- extension –farmer linkage

Encourage research on development of appropriate milk processing technology

Promote applied research on preservation of dairy products and render extension services


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Impact of long generation interval of cattle on research output,

Absence of high technology use to enhance research out put

Develop and promote technology of efficiency of traditional butter churning techniques,

Promote use of high technology, (embryo transfer and genetic manipulation etc) to improve impact on generation interval and accelerate research output;

6 Extension services

Inefficient and absence of extension services on dairy development for rural and urban and large scale farms respectively

It is largely biased to food and cash crops, leaving livestock extension as "filler" of the system;

N service provided for large scale and urban dairy harmers

Accompanied by no or low supply of improved technological input

Solely public service and frequent restructuring and policy signals in terms of focus and priority,

Lack of coordination and harmony of extension services rendered by multi-actors

Technical applications are more on enhancing productivity, ignoring marketing, agribusiness,

Low knowledge of dairy producers on important dairy inputs (animal feed, vet medicines)

Establish strong research, farmer and extension linkages

Formation of specialized dairy extension service

Adequate supply of improved inputs

Develop extension and advisory service for private dairy farms as well

Encourage private extension service and advisory service

7 Financial Services – Loan

Poor loan access mainly by small holders, cooperatives and unions.

Lengthy process in getting investment loan approval

Complicated procedures & formalities

High value collateral demand

Absence of system which guaranty financiers to consider livestock as a

Government needs to ensure that state owned banks have both the institutional capacity in administering Dairy related loans.

Considering a system to use livestock as collateral in such a way that risks of the


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from Development Bank of Ethiopia for loan requests by commercial Dairy farms and processors.

collateral for securing loan

Limited individual borrowing limit of MFI

High interest rate of MFIs

Absence of qualified dairy expert in commercial bank to assess proposals,

Low emphasis given by commercial banks on dairy

financiers will be properly mitigated.

Increasing the single borrowing limits of MFIs

8 Financial Services – Insurance

No suitable policy for livestock insurance to cover potential risks to the dairy farms & to use these assets as collateral for bank financing

Companies have not suitable livestock insurance for different types of livestock holdings.

Encouraging insurance companies to have customized and suitable insurance policies for dairy farms, which are also, are a basis for using the livestock as collateral.

9 Demand seasonality

Seasonality of demand for dairy products

Low level of demand during Ethiopian Orthodox fasting seasons

Promoting extended shelf live dairy products

Promoting consumption of children,

10 Cooperative/Union Organization

Limited capacity on management & marketing of respective cooperative

Limited capital

Governance system is not enabling for continuity of leadership and management

Review of the governance part of the cooperative law

Continues trainings on marketing and cooperative management

11 Consumption

Low per capita consumption of milk

Weak habit and poor understanding on the importance of milk

Promoting milk consumption and nutritional value

Promotion of school milk feeding programme

Aggressive involvement by Government on the dairy industry


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12 Dairy information

Unavailability of dairy information of production, marketing and consumption

No organized body in charge of collecting, summarizing, archiving, analyzing and disseminating

Organizing or establishing an institution for dairy information system.

13 Packaging

Uneven supply and high cost of packing materials

Use of substandard packaging materials

Few suppliers in the market and low level of capacity of the individual industries

High cost of packing materials, aggravated by the devaluation of Ethiopian Birr and foreign currency rationing

Facilitation by government in forming clustering to producing and printing of low cost but with a minimum standard of quality

14 Milk Processing

Operating under capacity

Low level and uneven supply of liquid milk with the required quantity and quality

Promoting demand

Facilitation of collection, chilling and transportation facilities

15 Informal Milk marketing

Inferior quality and health hazard

Poor collection, handling and transportation

Lack of sufficient knowledge on milk quality and risk on zoonotic disease

Presence of unregulated and uncontrolled milk supply to the society

2. Registration and special licensing of milk traders

3. Provide basic knowledge on milk quality and safety

4. Provisions of standard milk collection, handling and transportation equipment

5. Transformation and promotion of raw milk trade to small scale milk preservation and processing technology

16 Cross-cutting Issues

Chasing of urban dairy farmers

Non environmental friendly packaging

Weak waste disposal

The unjustified and misperception of some governmental authorities on urban and peri-urban dairy system

Lack of knowledge and skill on potential usage of farm manure for

Introducing cost effective waste management system

Introduction of environmentally friendly packaging materials


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system

energy and fertilize

High cost of packing materials and unavailability of environmental friendly packing in the market

17 Gender and Youth

Low participation of women and youth in cooperative and union organizations despite playing significant role in dairy

Cultural misperception on women participation in farmers organization

Encouraging women’s and youth participation on dairy development


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