Rural-urban linkage in market oriented dairy development in Ethiopia: lessons from the Ada'a District

Addis Ababa, with an estimated human population of over 3 million, has a high demand for cereals, pulses, fresh vegetables, fruits, milk and milk products and meat and eggs. The Ada’a Woreda is one of the important areas that supply the well known ‘maja’ teff, chickpeas, fresh vegetables, eggs and chicken, meat and milk. The Woreda capital, Debre Zeit town, is only 45 km southeast of Addis Ababa and has a very good road and railway connection. The Ada’a Dairy Cooperative was established in 1998 in Debre Zeit based on its comparative market advantage, the conducive agro-ecological conditions for dairy production and the available support services. The cooperative was established with 34 members and an initial capital of 3,400 Birr. The main objectives are to minimize transaction costs, reduce price fluctuations over seasons, increase production efficiency, improve incomes and create job opportunities. Milk collection and marketing started in January 2000, with a daily total of 308 liters. The association has made significant progress so far and currently has over 850 members (about 50% female) who individually own over 3000 dairy cows. The current capital of the association has increased to USD 138,029. The number of milk collection sites has increased to 10 and job opportunity has been created for 62 staff. Daily milk collection has increased to over 8,000 liters and is mainly sold to the Dairy Development Enterprise (DDE) in Addis Ababa. The cooperative has established a small processing unit for the production of butter, yoghurt and cottage cheese during periods of excess supply. Members use mainly crossbred animals and the management level is relatively intensive with limited land area. Most animals are stall fed. The cooperative supplies inputs such as grass hay, concentrate feeds, veterinary drugs and services, and artificial insemination service to members at reasonable prices. Rural dairy farmers are joining the cooperative, taking advantage of market access for their milk. Inputs required in dairy production include feeds and water, labour, veterinary drugs and services, artificial insemination and equipment and utensils. The largest input in terms of volume and financial requirements is feed. These involve roughages and concentrate feeds. The main rural areas that provide roughage feeds (grass hay and crop residues) include Selale, Ada’a and adjacent Woredas, and Arsi. Concentrate feeds such as bran, middlings, oil seed cakes, molasses are supplied by ago-industries around Addis Ababa, Debre Zeit and Nazareth, but the row materials come from various parts of the country. Molasses is supplied from Wonji and Shoa Sugar Estates. Another major input is water which is used for animal consumption, washing and cleaning purposes. Most dairy farmers use expensive municipal water supply. Most of the milk collected is supplied to DDE. Pasteurized and processed products are mainly sold in Addis. Some fresh milk is also sold directly to hotels and restaurants in Addis Ababa, Debre Zeit, Dukem and Nazareth towns. In addition, milk collected from Ada’a by the Sebeta agro-industry is processed and supplied to urban centres as far as Bahir Dar. Manure produced from dairy farms is also supplied to a limited extent to rural areas, particularly to horticultural crops producing farms. A strong and organized rural-urban linkage is evolving informally at the moment and this should be recognized and strengthened to benefit both rural and urban dwellers in taking advantage of the value chain. Although urban and peri-urban dairy production system plays important role in the national economy, the system has been marginalized and there is limited research and institutional support addressing this issue. This paper presents the activities and achievements of the Ada’a dairy cooperative and also highlights the rural and urban linkages through the value chain of milk production, processing and marketing