Abstract:
Ethiopia is believed to have the largest livestock population in Africa. However, dairy farming,
has not been extensively developed and promoted in the country (CSA, 2020). To determine the
variables influencing dairy production and the value chains, a cross-sectional and retrospective
study was conducted in the districts of Ambo and Holeta, Ethiopia. Using a random sampling
method, 200 smallholder milk producers and milk traders along the marketing chains were used
as a sample. The required data were collected from both secondary and primary sources.
Primary data was collected from producers and traders using a semi-structured questionnaire.
Secondary data was collected from the district Agricultural office, the Internet, and other
stakeholders. The data were analyzed using descriptive and econometric methods. The model
result showed that dairy production was strongly and significantly affected by the use of
improved feed, demand for milk, number of cross-breed milking cows, frequency of getting
training, access to credit, and education of the household heads. The seasonality of production,
spoilage (lack of milk at collecting facilities), poor animal health and management, inadequate
supply of quality feed, low productivity and genetics, milk quality problem, long and weak supply
chains, absence of processing plants, shortage of water, lack of access to land, and
ineffectiveness and inadequate infrastructural and institutional set-ups, were among the
significant problems identified that are affecting the dairy production and value chain
development in the study area. On the other hand, the study found a high demand for dairy
products in both areas. Therefore, dairy value chain development endeavors such as dairy
processing facilities establishment, support for dairy producers and cooperatives, and improving
access to services should receive due attention from policymakers.
