For many poor households, dairying is considered a powerful pathway out of poverty. Marketing of dairy products, however, remains a major challenge to the realization of this potential. In Ethiopia, this challenge is exacerbated by the absence of structured marketing channels and strict religious observance by Orthodox Christians who do not consume animal products during fasting days and seasons. Despite such challenges, there still exist windows of opportunities to exploit niche markets and create wealth. The ability to exploit these markets to a large extent depends on one’s stamina and innovation in establishing reliable market outlets for dairy products.
We want to demonstrate the credibility of this using evidence from a dairy farmer in Agula’a, a small town located 30km north of Mekelle in Tigray region of northern Ethiopia.
Nurhussien Aligoshu is a dairy farmer who has never had a formal education in agriculture and has had no prior exposure to modern dairy farming. His first experience in dairying was in 2006 when a local organization offered him some seed money to purchase a crossbred dairy cow. Nurhussien was able to expand his crossbred dairy herd from 1 to more than 15 cows in just 8 years. His daily milk sales fluctuate between 30 and 70 litres per day depending on demand. Over the same period, Nurhussien’s monthly income from the sale of milk grew from barely 500 Birr to 15,000 Birr.
In addition to managing his dairy cows, Nurhussien has successfully organized and led a dairy marketing cooperative named ‘Daero‘ (with 30 active members) that has been able to find niche markets for liquid milk. Daero cooperative has approved a binding by-law which stipulates that members are not allowed to sell water-adulterated and coagulated/clotted milk. A fine of up to 500 Birr and cancellation of membership rights are imposed on offending members.
The by-law also requires members to participate in various committees which are assigned with diverse tasks. The marketing committee has the sole responsibility of identifying potential milk and heifer markets. The quality control committee oversees the maintenance of herd records and collection of good-quality raw milk to be delivered to cafés, hotels, and restaurateurs through trusted milk collectors/distributors who have established an elaborated business relationship with the dairy marketing cooperative. The selling of replacement heifers, which earns up to 30,000 Birr per heifer, within and outside Tigray, is also another income source enjoyed by the members.
The successful experience of Nurhussien and his fellow cooperative members clearly demonstrates the potential of dairy in boosting income and creating wealth for people with limited options. Members of the dairy marketing cooperative are able to engage in dairying with a clear vision and have managed to create a low- risk environment for dairy farmers. Success came from their overall cooperation, realistic organizational and institutional interventions, sharing of risks, minimizing of ad hoc milk sales and establishing of reliable marketing links with milk collectors/distributors.
In view of the ever-increasing herd size and volume of milk produced by the marketing group members that necessitated other market outlets, the Livestock and Irrigation Value Chains for Ethiopian Smallholders (LIVES) project identified potential clients and facilitated market linkages with large institutional milk consumers. LIVES also collaborates with Nurhussein and other members of the dairy marketing cooperative to test improved dairy technologies such as simplified corn silage using plastic bags.
Written by Yayneshet Tesfay (PhD) with contributions from Dawit Woldemariam and Gebremedhin Woldewahid.