Abstract:
The Ethiopian economy greatly benefits from its abundant livestock population. This
sector has a vital role in the improvement of food security., supporting smallholder
farmers, and increasing the per capita consumption of milk and dairy products. However,
barriers are hindering the sector's progress. This study examined the key factors
influencing the supply of milk to the local market and the challenges faced by households
in the Adea Berga district. The primary data were collected through a semi-structured
questionnaire from a sample of 286 dairy producers in the district. The double hurdle
model was used to examine dairy farmers' decision making when entering the market.
Results indicate that the number of dairy cows (marginal effect: 0.031), educated
unemployment (marginal effect: 0.172), access to credit (marginal effect: 0.045), access
to market information (marginal effect: 0.029) and the presence of a married household
member (marginal effect: 0.073) have a positive and strongly significant effect on the
household's decision to participate, at the first hurdle of the model. While the customer
base (marginal effect: 2.183) and female household heads (marginal effect: 0.717) have a
positive and significant effect on the milk market level, land size has a negative effect, as
shown in the second hurdle model. Milk production and access to a collection center had
a positive and strongly significant effect on milk market participation with corresponding
marginal effects of (0.013 and 0.424) and (0.09 and 1.448), and in the first and second
hurdles, respectively, while young migration and family size had a negative and strongly
significant effect on milk market participation by corresponding marginal effects of (-
0.062 and -1.499) and (-0.021 and -0.634), respectively, in the first and second hurdle
model. Thus, interventions to improve production scale minimize youth migrants and
access to collection centers will increase farmers' participation in milk production and
marketing
