ODA BULTUM UNIVERSITY

COLLEGE OF AGRICULTURE
DEPARTMENT OF ANIMAL SCIENCE
REVIEW ON DETERMINANTS OF DAIRY PRODUCTION AND MARKETING SYSTEM
IN ETHIOPIA
A SENIOR SEMINAR SUBMITTED TO THE DEPARTMENT OF
ANIMAL SCIENCE IN PARTIAL FULFILLMENT OF THE
REQUIREMENT FOR THE COURSE OF SENIOR SEMINAR1
BY: ID
1 , BELSTI YENEW..............................0662/13
2, KEDJA YESUF................................2453/13
ADVISOR : KEYRU L (M.Sc)

Nov 2023

CHIRO , ETHIOPIA
 ACKNOWLEDGMENT

First of all, I would like to thank the Almighty God who created and helped me pass through/Passover
over ups and downs of life to date and achieve this academic level/stage . Second, I would like to extend
my deepest and heartfelt gratitude to my advisor Mr. Keyru Laillamo .who has been resourceful in
advising and giving me all the necessary direction, corrective comments throughout my work. I am also
grateful to my friends and relatives and to those who supported me both morally and financially to
complete this seminar review2.

ii
 ABSTRACT

This seminar paper referred various studies with the objective of characterizing dairy

production, processing/handling, marketing systems as well as to prioritize constraints and

opportunities for dairy development in Ethiopia. Dairy production, among the sector of livestock

production systems, is a critical issue in Ethiopia where livestock and its products are important

sources of food and income, and dairying has not been fully exploited and promoted in the country.

Based on climate, land holdings and integration with crop production as criteria, different dairy

production systems are recognized in Ethiopia; namely the rural dairy system which is part of the

subsistence farming system and includes pastoralist, agro-pastoralists, and mixedcrop –livestock

producers; the peri-urban; and urban dairy systems. Dairy processing in the country is basically limited

to smallholder level, and hygienic qualities of products are generally poor. It is generally based on

ergo (fermented milk in Ethiopia); Fresh milk is distributed through the informal and formal marketing

systems. In both rural and urban parts of the country, milk is distributed from producers through the

informal (traditional) means. This informal market involves direct delivery of fresh milk by producers

to consumers in the immediate neighborhood or to any interested individuals :nearby towns3.

iii
 TABLE OF CONTENTS

Caver Page..............................................................................................................................i

ACKNOWLEDGMENT............................................................................................................... ii

ABSTRACT ............................................................................................................................... iii

ACRONOMY AND ABBREVIATION.......................................................................................... V

1. INTRODUCTION ...................................................................................................................1

1.1. Background of the Review ............................................................................................. ..1

1.2. Objective of the Review ................................................................................................. ..4

1.2 .1. General objective ........................................................................................................ ..4

1.2.2.Specific objectives ...........................................................................................................4

2.LITERATUR REREVIEW................................................................................................................5

2.1.Dairy production systems in Ethiopia ............................................................................ 5

2.1.1 Per-urban or small scale dairy production system ..................................................... 5

2.1.2Urban or Commercial Dairy Production System .......................................................... ..6

2.1.3. Marketing System of Milk and Milk Products ............................................................. ...7

 iV

2.2.REVIEW ................................................................................................................................8

3. CONCLUSION AND RECOMMENDATION ........................................................................ ...11

3.1. Conclusion .................................................................................................................... ...11

3.2. Recommendation ......................................................................................................... ...12

4. REFERENCES .................................................................................................................. ...13

 ACRONOMY AND ABBREVIATION

AADPA ADIS ABEBA Diary Producer Association

AI Artificial Insemination

DDA Diary Development Agency

FAOSTAT Food Agricultural Organization Corporate Statically Data Base

GDP Growth Demotic Product

SNNPRS South Nation Nationality & People Regional State

UNICEF United Nation Children Fund

UNRRA United Nation Relief & Rehabilitation Administration USD

United States Dollar6

V
 1. INTRODUCTION

1.1. Background of the Review

Dairy sector is a major contributor to economic development.especially among the developing

countries. As an engine of growth, it provides increased income, employment, food and foreign

exchange earnings as well as better nutrition (BEREDAI et al., 2014). Special report OF FOOD AND

AGRICULTURE ORGANIZATION OF THE UNITED NATION Ethiopia has the largest livestock inventory in

Africa with the estimated domestic animals population of 52.13 million, 24.2 million sheep, 22.6

million goat, 2.5 million camel, 44.89 million poultry, 1.96 million horse, 0.37 million mules and 6.4

million donkeys. Among livestock production sectorss ,dairy production is critical in Ethiopia where

livestock and its products are important sources of food and incomer;however dairying has not been

fully exploited and promoted in the country

Based on market orientation and land holding, milk production system in Ethiopia can be broadly

categorized in to three systems such as rural milk production system, peri- urban milk production

system and urban milk production system.Cattle have the largest contribution (81.2%) of total

national animal milk output followed by goat (7.9%), camel 6.3% and sheep 4.6%. out of the national
3.3 billion of milk production in Ethiopia ,32%, is allocated for calf consumption and wastage and 68%

is allocated for human consumption.

The handling and safety of milk and milk products is of great concern around the world, this is

especially true in the developing countries , where production of milk and various dairy

products takes place under unsanitary condition and poor production sale. consider the health of

consumer ( maze G, Foster HA, HOLZAPFEL WH ,2001) Filed Survey and Literature Review of

Ethiopian Traditional Fermented Milk Products. International Journal of food microbiology, Ethiopia.

er. In most part of the countries milking containers are normally made from woven grasses, calabash,

hollowed wood, skin, clay pat ,in which disinfection is difficult and rinsed with cold water, smoked by

burning chip of clean African or acacia (BUSI FAO ,2010) .Status and Prospects for Smallholder Milk

Production: A Global Perspective. HEMME T, OTTE J (Eds.), Rome, Italy.

Milk processing is usually designed to remove water from milk or reduce the moisture content of the

product.Generally, milk processing is not well developed in Ethiopia (Azage Tegegne, Tsehay Reda,

and Alemu M. Hizakias K.,2001) .Milk Recording and Herd Registration in 8Ethiopia. In: An essential step

towards genetic improvement for milk production. Pastoralism and agro-pastoralism which way

forward; proceedings of the 8th annual conference of the Ethiopian society of animal production (ESAP).

Milk production system is based on market orientation and land holding(Tsehay ,2001) reported that in

Ethiopia can be broadly categorized in to three system rather:-rural milk production system, peri
urban milk production system and urban milk production system. The main source of milk production

in Ethiopia is from the cow, but small quantities of milk obtained from goat and camel is also used in

some regions particularly in pastoralist areas .Ergo is one of the most common TRADITIONAL made

fermented milk product in Ethiopia. As indicated by DESAIEGA (2013) Anti-Microbial Activity of Lactic

acid Bacteria Isolated From “Ergo”, Ethiopian Traditional fermented Milk.

Current research in microbiology and biotechnology, 1(6): 278-284n, ARERA is local name for

DEFATTED

butter milk in Ethiopia. DEFATTED butter milk is asemi-liquid product that remains after butter

making.. It has thin consistency and basically contains the casein protein of milk.

AYIB (Ethiopian traditional cottage cheese) is made from butter milk obtained after CHURNIN of sour

whole milk. AGUAT is Amharic name for whey which remains after most of the fat and protein in the

milk are removed during cheese makingPeri-urban milk production: This system includes small holder

and commercial dairy farmers near ADDIS ABABA and other regional town Ahmed MAM, EHUI S,

YEMESRACH A (2003) Dairy Development in Ethiopia. ILRI working paper no. 58. ADDIS ABABA,

Ethiopia. s. Most of the improved dairy stock is used for this type of dairy production.

Currently small holder farmer milk marketing units, DDE (dairy development enterprise), Mama Agro

industry and private dairy farmers in and around ADDIS ABABA supplying dairy products to the city

market.Peri-urban dairy production system is mainly operational in areas where the population

density is high, agricultural land is shrinking due to expanding urbanization, and labor cost is on the

increase. Peri urban dairy system occurs around cities, where demand for milk is high. Peri urban milk
production system includes small holders and commercial dairy farmers working in 10the proximity of

the city of ADDIS ABABA and other regional towns.

; 3

Most of the improved dairy stock in Ethiopia is used for this type of production.

Urban milk production: In most towns of Ethiopia, the urban dairy cattle production systems are

practiced with little or no land resources for the production and sale of milk. It is the most

market oriented dairy cattle production system compared to other production systems

(BEKELE et al., 2015). Urban areas producers use crossbred, as well as high grade, dairy animals.

However, only 1% of the dairy cattle from the total population of dairy cattle of the country are kept

under urban dairy cattle production system (Gezu and Zellalem, 2018). Cattle are housed in improved

shelters made of locally available materials. Concentrates, roughages and non-conventional feeds are

the main feed resources which are used in urban dairy cattle production system. Moreover, road side

grazing, fruits of plants and wastes also used in urban dairy cattle production system

(Gurmessa,2020).

et al., 2015).

1.2. Objective of the Review

1.2 .1. General objective

- To review determinants of dairy production process and marketing system in Ethiopia
1.2.2. Specific objectives

- To review factors affecting of dairy production process and marketing system in Eth

- To review determinants of dairy production systems problem,challenges and opportunities of milk

production in Ethiopia-

To review determinants dairy marketing systems identify constraint and opportunities for diary

marketing in Ethiopia11 4

2. LITERATURE REVIEW

2.1. Dairy production systems in Ethiopia

In Ethiopia, dairy production is one of the sub sectors of livestock production that contributes to the

live of the owners through important sources of food and income; even though dairying has not been

fully exploited and promoted in the country (Beyene et al., 2015). Like most dairy production systems

found in the tropics, the Ethiopia dairy production system includes large number from small to large

sized and subsistence to market oriented farms (Bereda et al., 2014). Though different classifications

have been used to characterize the dairy production system in the country; based on their locations,

AHUNED et al. (2003) classified into three broad categories, namely, urban, peri-urban and rural dairy

production

2.1.1 Per-urban or small scale dairy production system

The peri-urban dairy cattle production systems are mainly located at the edge of the town areas which

have comparatively better access to urban centers in which dairy cattle product are extremely wanted

(Tegegne et al.,2013). This production system is as semi-intensive crop-livestock farming system.

Because of steadily increasing demand in milk consumption, periurban dairy farms are growing

around cities and towns(GALMESSA et al.,2013).

Most of the dairy cattle producers depend on hybrid cows and they practiced supplementary

concentrate feeding (GEBRESELLASIE, 2019). It possesses animal types ranging from 50% crosses to

high grade FRIESIAN in small to large sized farms, and contributed only 2% of the total milk production

of iThis sector owns most of the country‘s improved dairy stock (Gobena, 2016). As related to the

rural dairy cattle production system, peri-urban dairy cattle production systems is typically located

along roads within reasonable distance to urban centers and keepers are involved in fluid milk market

(Nigatu et al., 2012). 5

2.1.2Urban or Commercial Dairy Production System

In most towns of Ethiopia, the urban dairy cattle production systems are practiced with little or no

land resources for the production and sale of milk. It is the most market oriented dairy cattle

production system compared to their production systems (BEKELE et al., 2015). Urban areas producers

use crossbred, as well as high grade, dairy animals. However, only 1% of the dairy cattle from the total

population of dairy cattle of the country are kept under urban dairy cattle production system (GEZU

and ZELALEM, 2018). Cattle are housed in improved shelters made of 12locally available materials.

Concentrates, roughages and non-conventional feeds are the main feed resources which are used in

urban dairy cattle production system. Moreover, road side grazing, fruits of plants and wastes also

used in urban dairy cattle production system (GURMESSA et al., 2015). Under the use of intensive

management system urban dairy cattle production systems has better access to inputs and services

providing by the public and private sectors as compared to other dairy cattle production systems
(GEBRESELLASIE, 2019, GOBENA,2016). They have also access to animal health services, use more

intensive systems.

Milk is sold to consumer and processing plants through informal market. But milk supply is low due

small number of dairy cattle population kept under this system (GURMESSA et al.,

2.1.3. Marketing System of Milk and Milk Products

Like other African countries (Kenya and Uganda), dairy products in Ethiopia are channeled both formal

and informal dairy marketing systems Mohamed A, Simon E, YEMSRACH A (2004) Milk Development

in Ethiopia. 6

EPTDD discussion paper number 123. Washington DC, USA. . According to Van der VALK and TESSEMA

report, 98% of milk produced in rural area was sold through informal chain whereas only 2% of the

milk produced is reached the final consumers through formal chain in Ethiopia. Similarly, MURIUKI

and Thorpe showed that the share of milk sold in the formal market is insignificant in Ethiopia, which

is less than 2% as compared to 15% share in Kenya and 5% in Uganda.

2.2. EMPIRICAL REVIEW

According to Mebrate (2020) The milk processing: Status, challenges and opportunities in

Ethiopia,The performance of livestock product marketing was poor in the last decade, despite some

improvement in recent years, especially in terms of aggressive policy and strategy on export of livestock

and livestock products, indicating that the sector is still underexploited. There is need to promote the

market-oriented production of milk export. Knowing the common challenges and opportunities are very

much important in designing smart livestock and livestock product marketing systems in the country.

The common milk processing products market constraints in Ethiopia include lack of clear milk
marketing system, factors of culture and religion, inaccessibility of market and lack of transport,

seasonal based demand, lack of effective extension service to use newer technologies and practices, lack

of market information, lack of holistic intervention and localized markets. 14According to Hialemikael

(2019) Review on Traditional Handling, Processing and Marketing of Milk and its Derivative in Ethiopia,

The handling and safety of milk and milk products is of great concern around the world, this is specially

true in the developing country where production of milk and various diary products takes place under

unsanitary condition and poor production sale must consider the health of consumer. Milk processing is

usually designed to remove water from milk or reduce the moisture content of the product.

Small holder milk processing is generally based on sour .

Each household in the country accumulates milk either from a single milk animal or large number of

animals and it is processed in to different products such as butter, cheese, whey Dairy cattle products in

Ethiopia are channeled both in formal and informal marketing systems, the constraints of handling and

processing of milk and milk products includes un improved of milk and milk processing utensils, lack of

access and high price of cooling facilities, low milk production process(ADULTERATION or milk quality

problem), Adultration is a problem of processing and marketing dairy products. According to Melikasa G

and Tamru a (2021) Dairy Production System, Constraints and Opportunities in Ethiopia .

The main constraints that affect milk production capacity of dairy cattle in Ethiopia includes feed

shortage in terms of quality and quantity, land shortage for farming of improved forage, insufficient

veterinary services, diseases, absence of improved breed, poor artificial insemination service, poor

management of animals and lack of marketoriented production. So , it is very important to introduce

improved forage, increase AI utilization efficiency, and improve management practices and veterinary
services. providers such as veterinary health and artificial insemination centers, development of

infrastructural sector like road access, water supply.

According to Birhanu et al (2014) assessing factors affecting milk market participation and volume of

supply in Wolaita zone, Ethiopia. Out of the total 32,972 households, 398 households were selected

using simple random sampling methods. Data were collected using discussions, rapid appraisal,

observation and formal survey. The data generated were analyzed using both 15 descriptive and Heck

man two-stage selection econometric models. The results revealed that out of an average 8 L of milk

3. CONCLUSION AND RECOMMENDATION

3.1. Conclusion

A compressive literature review was made with the objectives of reviewing dairy production

and marketing systems in the Ethiopia and its major constraints. The dairy production system in
Ethiopia is categorized into three broad categories based on their locations, as urban, peri-urban and
rural dairy production. From the current literature review, feed shortage in terms of quality and

quantity, land shortage and space limitation, inadequate extension and veterinary services,

diseases, poor market data (internal and external), absence of better-quality breed, insufficient

infrastructure and inadequate artificial insemination (AI) services, poor management of animals, lack of
market-oriented production were the primary as constraints of dairy production. Age of a household
positively and significantly affected the probability of milk market participation.

Farming experiences of a household negatively and significantly affected milk market

participation and volume of supply. The number of milking cows owned by a household

positively and significantly affected probability of milk market participation.

. Generally, with the existing problems there are many opportunities for dairy development in

Ethiopia. Therefore, coordinated efforts are necessary to address the identified constraint across the

different dairy production systems.16

3.2. Recommendation
This review dairy products are marketed informally via different channels and mainly hampered by many

constraints. Low amount of milk produced, distance to the market and high cost of transport was the

major among the constraints. As market is the driving force to the development of this sector and

provision of improved and sustainable milk marketing arrangements in smallholder villages is

indispensable for advancement of the national dairy industry, responsible stakeholders should not only

work towards dairy production and productivity of cattle but also towards dairy marketing options.

• Feed availability is low both in quality and quantity, hence strong extension service on use of

concentrate feed, grazing land management system, and development and utilization of improved

forage is very important.

 • Diseases are among the major constraints; therefore, dairy owners should be trained with good

management practices and the government should expand enough veterinary services and better health

care.

• It is important to use AI service to increase milk production by improving genetic potential of local dairy

cattle.

• It is important to use modern production system with improved technology in urban area and in rural

areas.Better to replace the phrase “it is important “ in the last list with another phrase avoid

monotony or redundancy . 10

4. REFERENCES

Ahmed MAM, EHUI S and YEMESRACH ASSEFA (2003). Dairy development in Ethiopia Paper presented

at the ‘Successes in African agriculture’ conference In: WENT, IFPRI, NEPAD,

Ahmed, M. M., EHUI, S. and ASSEFA, Y. (2003). Dairy development in Ethiopia. ILRI, International Live

stock Research Institute. Socio-economics and policy Research Working Paper, 58.ALMAZE G, Foster

HA, HOLZAPFEL WH (2001) Filed Survey and Literature Review of Ethiopian Traditional Fermented

Milk Products. International Journal of food microbiology, Ethiopia AZAGE TEGENA, TSEHAY REDA,

ALEMU M HIZAKIAS K (2001) Milk Recording and Herd Registration in Ethiopia. In: An essential step

towards genetic improvement for milk production. Pastoralism and agro-pastoralism which way

forward; proceedings of the 8th annual conference of the Ethiopian society of animal production

(ESAP).24-26 . ADDIS ABABA, Ethiopia, pp. 90-104.

BIRHANU et al(2014) assessing factors affecting milk market participation and volume of supply in

WOLAITA zone, Ethiopia.

BEREDA, A., YILMA, and NUREFETA, A. (2014). Dairy Production System and Constraints in EZHA

Districts of the GURAGE Zone, Southern Ethiopia. Global Veterinarian, 12 (2), 181-186, 2014. DOI:

10.5829/idosi.gv.2014.12.02.81199conference paper no. 6. 1 –3 December 2003,

Pretoria,South Africa.BEYENE, B., HUNDIE D. and GOBENA, G. (2016). Assessment on Dairy

Production System and Constraints in HOROGUDURU WOLLEGA Zone, Western Ethiopia. Sci.

Technology. Arts Res. J., 11

BEYENE, B., HUNDIE, D. and , G. (2016). Assessment on Dairy Production System and its

Constraints in HOROGUDURU WOLLEGA Zone, Western Ethiopia. Sci. Technology. Arts Res.

J., 4(2): 215 - 221.

CSA (Central Statistical Authority) (2012) Agricultural Sample Survey on Livestock and Livestock

Production (Private Peasant Holding). Statistical bulletin No.532. ADDIS ABEBA, Ethiopia, DEREJE

TADESSE WORKNEH AYALEW and HEGDE BP. (2005). Survey of traditional cattle production systems

and preferred cattle functions in North and south WOLLO zones, Ethiopia. Ethiopia Veterinary Journal

9(1):91–108
DESAIEG A (2013) Anti-Microbial Activity of Lactic acid Bacteria isolated From “Ergo ”, Ethiopian

Traditional fermented Milk. Current research in microbiology and biotechnology, 1(6): 278-284 FAO

(2010) Status and Prospects for Smallholder Milk Production: A Global Perspective. T, Ot te J (Eds.),

Rome, Italy.

FAO (2012) Crop and Food Security Assessment Mission to Ethiopia. Special report of food and

agriculture organization of the united nation Rome, Italy.

FAOSTAT (Food and Agricultural Organization of the United Nations Statistics). (2007). Online

database on food and agricultural products and producers. Accessed online at:

http://wwwfaostat.fao.org/. FAO, Rome, Italy

GALMESSA, U., DESSALGN, J., TOLA, A., Shiv, P. and KEBEDE, L. M. (2013). Dairy Production

Potential and Challenges in Western OROMIA Milk Value Chain, OROMIA, Ethiopia. Journal

12

of Agriculture and Sustainability, 2 (2013), 1, 1-21.

GEBRE Wold A, ALEMAYEHW M, DEMEKE S, BEDIYE S and TADESSE A. (2000). Status of dairy

development. Smallholder Dairy Development Project (SDDP) dairy research in Ethiopia.

GEBRESELLASIE, L. (2019). Review on Dairy Production System, Constraints and Opportunities in

Ethiopia. Journal of Scientific and Innovative Research, 8(4), 108-111

GETABALEW M, ALMENEH T, ZEWIE D (2020) the milk processing: Status, challenges and opportunities

in Ethiopia. Int J Vet Sci Res 6(1): 052-057. DOI: http://dx.doi.org/10.17352/IJIVSR . 000054
GEZU, T. and ZELALEM, Y. (2018). Dairy Trade in Ethiopia: Current Scenario and Way Forward-Review.

Dairy and Vet Sci J., 8(1), 555728. DOI: 10.19080/JDVS.2018.08.555728Gezu, T. and GOBENA, M. M.

(2016). Household Dairy Production System, Marketing and Constraints in Ethiopia. Journal of

Marketing and Consumer Research, 29, 2016.

GUDUR districts of OROMIA Regional State, Western Ethiopia. (2014) Science, Technology and Arts

Research Journal, 4(3), 111-116Gurage Zone, Southern Ethiopia. Global Veterinarian,

12 GURMESSA, K., TOLEMARIAM, T., TOLERA, A., BEYENE, F. and DEMEKE, S. (2015). Feed Resources

and Livestock Production Situation in the Highland and Mid Altitude Areas of HORRO and GURMESSA,

K., TOLEMARIAM, T., TOLERA, A., BEYENE, F. and DEMEKE, S. (2015). Feed Resources and Livestock

Production Situation in the Highland and Mid Altitude Areas of

HORRO and GUDURU districts of OROMIA Regional State, Western Ethiopia. Science, Technology

13

and Arts Research Journal, 4(3), 111-116 NIGATU, A., Dirk, H. and TEGEGNE, A. (2012). Smallholder

dairy value chain development: The case of Ada’a WOREDA OROMIA Region, December 2012, pp-7.

This sector owns most of the country‘s improved dairy stock (Gobena, 2011).

According to Hialemikael (2019) Review on Traditional Handling, Processing and Marketing of the

Milk and its Derivative in Ethiopia,

Foster HA, HOLZAPFEL WH ,2001) Filed Survey and Literature Review of Ethiopian Traditional

Fermented Milk Products. International Journal of food microbiology, Ethiopia. er.

As related to the rural dairy cattle production system, peri-urban dairy cattle production systems is

typically located along roads within reasonable distance to urban centers and keepers are involved in

fluid milk market (Nigatu et al., 2012).

NIGUSSI, GEBRESELLASIE. (2006). Characterization and evaluation of urban dairy production system in

MEKELLE city, TIGRUAY region, Ethiopia. MSC thesis, wassa University, wassa, Ethiopia. 21

ZELALEM, Y. (2018). Dairy Trade in Ethiopia: Current Scenario and Way Forward-Review. Dairy and Vet

Sci J., 8(1), 555728. DOI: 10.19080/JDVS.2018.08.555728.

14