Posts Tagged: Dairy

Building “Win-Win” Relationships Between Smallholder Producers and Dairy Processors in Ethiopia | Agrilinks

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Ethiopia’s dairy sector has the potential to not only significantly increase the availability of nutritious milk and dairy products for consumers, but to also enable its smallholder livestock farms to be nationally and internationally competitive.

Ethiopia has 52 million head of cattle—the highest population in Africa—including 10.5 million dairy cattle. In 2011, the country produced 3.3 billion liters of milk—an extremely disappointing 1.5 liters per cow per day! Less than 5 percent of Ethiopia’s milk flows through “formal channels” to dairy processors who sell pasteurized milk and dairy products. These channels suffer from low dairy cow productivity due to a lack of knowledge among smallholders about dairy cow feeding management, poor access to genetically selected bulls for breeding, and inadequate handling of milk that results in post-milking losses of up to 35 percent. As a result of these shortfalls, cooperatively owned milk collection centers struggle to collect enough milk to fill their cooling tanks, which drives up raw milk procurement costs for their client milk processors.But despite these challenges, the Feed the Future-financed USAID\Ethiopia Agricultural Growth Program-Livestock Market Development (AGP-LMD) Project, implemented by CNFA, sees the dairy sector as an opportunity to stimulate economic growth in rural Ethiopia and create a vibrant and competitive livestock industry driven by and built on both public and private investment.

The AGP-LMD Project intends to increase production by 200,000 liters per day through additional milk collection, processing and marketing, which in turn is expected to result in 10,000 off-farm jobs. One of the keys to the success of the Project’s dairy sector goals is the improvement of the business capacity of milk-processing entrepreneurs who are willing to engage with smallholder producers. Hiruth Yohannes, a Project client, is a dairy processor who has been able to improve the quantity and quality of her firm’s milk products while serving as the principal buyer of raw milk from approximately 2,000 smallholder dairy producers.

The AGP-LMD Project supports processors like Hiruth with grants to purchase equipment in order to increase daily processing capacity followed by the development of business-to-business (B2B) relationships that enable win-win opportunities for producers, processors and consumers. The approach builds on existing smallholder production systems, developing market-driven business relationships for these smallholder farmers, which provides further incentive to increase productivity and reduce spoilage, putting more quality raw milk into the cooling tanks of cooperatives and reducing procurement costs for processors. Hiruth established her business relationships with the smallholder farmers by supplying them with high quality animal feed on the basis of credit that is paid back through milk sales. As a result, producers now get two to three liters of additional milk per cow per day which results in an additional $4.00 per day in milk sales and netting $2.00 per day in additional household income.
The formalization of the milk value chain and the establishment of processing plants like Hiruth’s provide smallholder producers with a reliable, supply-based relationship, with processors providing them with opportunities to invest in their own productivity. Additionally, processors like Hiruth reduce the business risk of smallholder producers by consistently purchasing milk 365 days per year.

The case of Hiruth and the 2,000 smallholder producers from whom she buys is just one example among many that demonstrates the benefits of AGP-LMD’s unique dairy value chain development approach in Ethiopia. When smallholder producers are certain their milk will be purchased, they are subsequently more willing to increase investments in better feeds and in better cows, which raises the productivity of herds that supply Ethiopia’s dairy processors, and generates increased incomes for the smallholder families that supply them.

In summary, the AGP-LMD Project’s investments in formal dairy processing create win-win business relationships that benefit processors as well as smallholder farmers!

It won’t happen overnight, but we have already seen how our program has positively impacted Ethiopia’s dairy sector, thus strengthening the country’s dairy industry and helping it meet its full potential. Working at both ends of the dairy value chain in Ethiopia is creating “win-wins” for everyone!

For further information contact Marc Steen, USAID AGP-LMD Project chief-of-party at msteen@cnfaethiopia.org.

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See How Ethiopia’s Livestock Market Development Celebrated World Milk Day

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On June 1, people around the world celebrated World Milk Day, which originally kicked off in 2001 to focus attention on the importance of milk and the milk industry. The USAID – US Agency for International Development-supported Agricultural Growth Program-Livestock Market Development (AGP-LMD) project worked with Ethiopia’s Ministries of Agriculture and Health to increase awareness of the nutritional benefits of drinking milk and consuming dairy products.

AGP-LMD sponsored a “Question and Answer Quiz Show” featured on Saturday, June 7 on Ethiopian TV (ETV) where participants were asked questions related to milk and world milk day. More than 400 men, women and children watched the filming of the show.

AGP-LMD is part of the U.S. Government’s Feed the Future initiative to improve smallholder incomes and nutritional status in Ethiopia through investments in the meat/live animals and dairy value chains.

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USAID’s Livestock Market Development Project Kicks Off School Milk Day Events

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The United States Agency for International Development (USAID), today kicked off the first of 14 events known as “School Milk Days” at the Wushawushign Primary School in the Amhara Region.  The purpose of these events is to increase the awareness and knowledge of school age children, parents, and teachers about milk.

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Learn How USAID is Partnering with Project Mercy in Ethiopia

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This short video provides an overview of two agreements that USAID signed with Project Mercy, a not-for-profit development and relief agency, based in Ethiopia.  USAID’s Livestock Market Development project, implemented by CNFA, is supporting Project Mercy’s dairy farm in Chacha, Ethiopia.

 

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