Determinates Of Milk Supply To The Local Market: The Case Of Adea Berga District West Shoa Zone, Oromia National Regional State, Ethiopia

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