Milk Marketing System. A Case of Mieso Woreda, Oromia Region, Ethiopia

Research Paper (undergraduate), 2008

20 Pages, Grade: B



The study was conducted in Mieso district of Oromia region, Ethiopia. The study was undertaken with the objective to characterize milk marketing system and to forward appropriate intervention in the area. The data was collected based on group discussion with key informants and then using pre-tested questionnaire administered to randomly selecting milk producer from randomly selected rural Kebeles. Two market places were selected purposively. The result indicates that all milk animals are indigenous cattle, camel and goats. There were generally two types of milk outlets identified in the district. These are traditional milk associations or groups and individual sellers. The traditional milk producer association group is locally called Faraqa Annanni. From a total of 94 households that sold milk during the study, only 22 (23 %) households were involved in the milk seller groups. The average amount of milk contributed by an individual in group marketing was significantly (P £ 0.05) higher (3.94 ± 0.17 liters/person) than individual sales (1.64 ± 0.06 liters/person). The total amount of milk sold (liter/person/day) at the two market sites differed significantly, being higher in Mieso (3.27 ± 0.17 liters/person) than in Asebot (1.91 ± 0.06 liters/person). Variable which has a significant (P £ 0.05) impacts on the decision behavior of the household on cow milk sell is location from the market. As the model output indicates, the further household is away from the market center the less will be its participation to the cow milk sale. As the logit regression result indicates the availability of Faraqa Annanni in the area had significantly (P £ 0.1) positive relation with the participation decision of the household to sale cow milk. Availability of Faraqa Annanni in the vicinity increases the opportunity of the household for cow milk sale by 14 %. Most of the respondents indicated that milk sale was highly affected by low milk quantity (73 %) followed by distance to market, (38 %). hence, informal milk marketer groups (Faraqa Annanni) could be taken as an opportunity to established formal milk cooperative groups.

Key words: Milk, Market, Camel, Cow, Goat


Ethiopia possesses the largest livestock population in Africa. Estimates for farmer holding in rural areas indicate that the country has about 50.9 million heads of cattle, 22 million goats, 26.0 million sheep and 2.3 million camels (CSA 2010/11). Though Ethiopia has the largest inventory of livestock in Africa, its productivity and commercialization remain low. A vibrant dairy sub-sector is important for the economic development of Ethiopia. Dairy offers a pathway out of poverty for a large number of households keeping livestock.

Ethiopia has a huge potential for dairy development in Africa. The large and diverse livestock genetic resources, existence of diverse agro-ecologies suitable for dairy production, increasing domestic demand for milk and milk products, better market opportunity, and proximity to international markets indicate the potential and opportunities for dairy development in the country (Azage et al 2013). This potential take-off comes at a time when the demand for animal products is increasing due to growing population and urbanization, rising disposal incomes, and changes in demographic structure of the population (LandO’Lakes, 2010). To fill this gap, the domestic industry will need to expand, dairy cows will have to be more productive (cross-bred cows) and better managed, and producers will have to become more market-oriented and commercialized; otherwise, dairy imports will continue to increase and will drain scarce foreign exchange (Azage et al 2013). Ethiopian producers can provide milk to meet the increasing national demand. 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 (IPS, 2000). Rural milk production system is part of the subsistence farming system. According to Tsehay (2001), it is the predominant production system accounting for over 97% of national milk production. This system includes pastoralists, agro-pastoralists, and crop-livestock producers. This system includes informal (traditional) milk channel and has remained dominant in Ethiopia. Moreover this channel provides substantial amounts of milk which goes into traditional dairy processing and then traded especially traditional soured butter (Land O’lakes, 2010).

To this end, the production as well as marketing potential of the rural milk producer needs to be characterized and thereby to exploit the untapped production potential. Hence the current study were designed to identify milk marketing systems and then to identify appropriate intervention areas in the study area.


2.1. Sampling Procedures

From the Mieso district, five rural kebeles, Dire-kalu, Welda-jejeba, Hunde-misoma, Gena, and Huse-mendera were selected using purposive sampling which is based on the accessibility, and security condition of the area. Preliminary survey was conducted in the rural kebeles in order to obtain the total number of the households who have dairy animals (cattle or/and camels). For selection of sample size of the farmers or dairy farmers using updated list, farmers from each rural kebeles were selected using Proportional Probability to Size (PPS) approach for each rural kebeles, and a total of 120 farmers were selected based on the number of households. From each rural kebeles the individual households were selected using systematic random sampling methods. To capture gender effects in the overall production system the sample household on each rural kebeles was stratified in to female and male headed households, at this level which guide to determine the number, with using proportional probability to size (PPS) approach.

For market study, from the three existing market sites two were purposively selected namely, Mieso and Asebot markets due to the accessibility of the areas. Milk marketing was monitored for two seasons, in rainy and dry seasons. The study covered 28 days, one week from each market for two seasons. To assess the milk marketing data a well-developed questionnaire was used in order to collect amount of milk delivered to the market, price and number of the individuals who sale milk.

2.2. Data Collection Methods

In the PRA (Participatory Rural Appraisal) phases, group discussion was undertaken with key informants such as elders and agricultural bureau staff to investigate and have an overview about the overall milk production and marketing system. The information generated in participatory rural appraisal phases was used for the preparation and development of the questionnaire for the formal survey. Pre-testing of the questionnaire was made before the actual data were collected on sampled households in order to modify the questionnaire and to decrease error by excluding the unimportant data to be considered and revised accordingly. The enumerators were trained and they practiced by interviewing each other to ensure that they correctly understood each question. Finally the formal survey was conducted by enumerators under close supervision and participation of the researcher. In the formal survey stage of the study, all required data was collected from 120 individual pastoralists or agro-pastoralists.

2.3. Analytical Techniques

Most of the data were analyzed with SPPS version 12.1 software. Simple descriptive statistics such as mean, range and percentile for crop and grazing land holding, livestock holding, amount of milk produced, consumed and marketed. ANOVA (Analysis of variance): was used to test the variability of different variables among rural kebeles and household heads such as crop and pasture land holdings, livestock holdings, age at first calving, calving interval, amount of cow and camel milk produced and marketed. Chi-square test was used to examine difference between levels of significant of different variables among rural kebeles or between household heads for parameters such as type of income and expenditure, importance of dairy animals, constraints in dairy production, feed and water shortage. Simple and multiple correlation was used to estimate degree of relationship among the parameters such as crop and grazing land holding, number of animal holding,. GLM (General Linear Model ) with T-test and Duncan multiple range tests was used to test age at first calving, calving interval at different rural kebeles, variability of price for cows and camel milk at different season, amount of milk disposed to the market in wet and dry season.

The market participation of dairy farmers was analyzed using logit model by using Stata version 8 software program. This model consider different variables that affects participation of households to cow milk sell, such as dairy production, education of the household head, age and sex of the household head, distance from market, extension support, and availability of Faraqa Annenni (milk seller group). The application of linear regression model when the dependent variable is binary has some fundamental problem. Thus a qualitative choice model was used to determine the probability that an individual with a given set of attributes will make one choice rather than the alternative. Binary choice models assume that an individual faced with a choice between two alternatives and that has choice depends on their characteristics (Pindyck and Rubinfeld, 1991). It was assumed that cattle herder who produce milk for various reason may or may not be participate in marketing, may sell or otherwise. This dependent variable is descript consists of two outcomes, yes or no, therefore, logit model is appropriate for dichotomous dependent variables.

The impact of cow milk sale on market orientation was analyzed in the logit model. The dependent variable in the model was the logarithm of the odds that a given household is market oriented that is

Abbildung in dieser Leseprobe nicht enthalten

This question can be written as:

Abbildung in dieser Leseprobe nicht enthalten

Where: II (X) is the probability of participating in the market for the ith dairy producers and ranges from 0-1

1- II (X) = 1/1 + e-zi is the probability non participation in the market

Then, the odds ratio in favor in market participation is given by

II (X)/ (1- II (X)) (3)

By taking the natural log of equation (1) we get the following

Li = In [II (X)/ 1- II (X)] = Zi ..(4)

With the error term incorporated, the logit model will have the following form

Abbildung in dieser Leseprobe nicht enthalten

Where, X2, X3….Xn are the explanatory variable of the model,

D1 = 1 if the household sale cow milk and 0 otherwise.

β0 is the intercept

β1, β2, β3… βn are the coefficient to be estimated in the model and Ui is the error term.

Definition of explanatory variables for market participation decision on cow milk sale

Dairy production: different types of milk and product are expected to have a positive contribution in market participation of milk producers. Production of cow and camel milk or an increase in production has significant effect in motivating market participation for cow milk sale. More milk production from camels and goats is expected to have direct contribution on cow milk sale. Production of cow milk beyond consumption may be processed or consumed at household level. The processed product may be consumed or marketed. Amount of milk available in the household depends on the number of lactating animals.

Distance from market: closeness to market would reduce trekking time; reduce loss due to spoilage, better access to information and facilities. This improves returns to labour and increase farm gate price, in turn it encourages market participation.

Education of the household head: intellectual capital or education is assumed to have positive effect on market participation and sale decision, depending on cultural barriers.

Age of household heads: this variable is measured in terms of age of household head. Aged household are believed to be wise in resource allocation and use, and it is expected to have a positive effect on decision to participate on sale.

Sex of the household head: most of the time milk sale is the major task of women especially married women. However, lack of capital and access to institutional support may affect women participation and efficiency in ruminant livestock production.

Extension support: the availability of extension support in advice and input support on milk production have effect on decision on dairy animal production and efficiency. Support encourages and derives them to market participation.

Availability of Faraqa Annenni (milk seller group): this type of milk seller group save time and money. Therefore, availability of this group is expected to have direct influence on market participation.


3.1 Milk Marketing System

The primary objective of keeping cows, camels and goats in the study area was for milk production. Fresh milk, fermented milk, whey, and butter were among the common milk products produced and consumed in the study area. This finding is similar to the report of Fikirneh et al (2012) who indicated that cow and goat are source of milk for the household. In addition, camel milk is as a source of milk in limited level in Mettema district, Ethiopia. Similarly, as indicated by Kedija et al (2009) Camel milk supply to the household and the market becomes very important for agro-pastoral areas during the dry season when feed shortage becomes critical and milk production from cows is reduced. However, in the current report cheese was not produced among the surveyed households. In contrary to this Sintayehu et al (2008) indicates that cow milk is the only source of milk and from which butter fermented milk (Ergo) and cottage cheese is produced and marketed. However, in the current study culturally fermented milk is not sold; rather cows’ fresh whole milk, butter, camel milk and rarely goat milk are sold in the market.


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Milk Marketing System. A Case of Mieso Woreda, Oromia Region, Ethiopia
Haramaya University  (college of Agriculture)
thesis part
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ISBN (eBook)
ISBN (Book)
Milk, Market, Camel, Cow, Goat
Quote paper
Kedija Hussen (Author)Mohammed Yousuf (Author)Azage Tegegne (Author)Berhanu Medhin (Author), 2008, Milk Marketing System. A Case of Mieso Woreda, Oromia Region, Ethiopia, Munich, GRIN Verlag,


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