Value Chain Analysis of Dairy Products in Esssera District Dawro Zone, Southern Ethiopia

Abstract

Dairy sector has significant contribution in supporting household income and used as source of food in Essera District of Dawro Zone in Southern Ethiopia. Producers, traders and supportive service providers play great role along dairy value chain in study area. But actors along the dairy value chain and their functions, the role of gender at producer level, benefit distribution along the dairy value chain and determinants of farmers participation decision and level of participation decision on milk value addition were not identified and analyzed to  take intervention area to improve the dairy sector. This study  aimed at assessing value chain of dairy products in Essera District with specific objectives of identifying actors and their roles, estimating benefit distribution along dairy products value chain, identifying the role of gender particularly women at farm level. The primary data for this study were collected from 133 producers, 24 traders and 12 consumers and analyzed using application of appropriate statistical tools. The result indicated that input suppliers, producers, local collectors, wholesalers and retailers are direct actors along dairy value chain in Essera District. Accordingly, producing and processing, collecting, packaging, storing and marketing dairy products are the major activities which were performed by the actors. Respondents’ survey result asserts traders in study area faced with lack of training, lack of capital, lack of access to market and stiff competition of unlicensed traders respectively. The reason could be limited supply of credit and institutional weakness like license providing sectors. Average shares of profit margin of local collectors, wholesalers and retailers were 17.6%, 21.9% and 7.2%, respectively, from the sales of one kilogram butter. This asserts that wholesalers benefit more than other actors. Therefore, policy aiming at improving producers’ and traders’ access to improved inputs such as improved breed of dairy cows, credit, extension service and empower women to enhance dairy value chain in study area is crucial. In addition, value addition through both innovation and coordination should be done.

Keywords: Value addition, Essera, value chain analysis, margin, gender