The Livestock and Irrigation Value Chains for Ethiopian smallholders (LIVES) project has published its third working paper on the sources of technical inefficiency of smallholder dairy farmers in the highlands of Ethiopia.
The dairy sector plays an important role as a source of livelihood in the form of consumption, income and employment for most of Ethiopia’s rural population. According to a survey published by the Central Statistical Agency (CSA) in 2014, the amount of milk produced in the country in 2012-13 was estimated to be 2.8 billion litres. But the annual growth of milk production in the dairy sector has been moderately slow through the years and according to some researchers, is a result of an increase in the number of cows rather than increased productivity.
Increasing production efficiency is key to increasing productivity. This working paper identifies factors associated with the inefficiency in Ethiopia’s dairy production from data collected from more than 1,000 rural farm households in Amhara, Oromia, SNNP and Tigray showing where there is a high level of technical inefficiency in milk production and, consequently, significant room to increase milk production at household level by improving technical efficiency.
The paper calls for the education system to respond to the education needs of farmers whose literacy can be improved through formal and informal methods and use of targeted training and other capacity development activities to counter the negative effects of low literacy. It also calls for policy attention to improve infrastructure to enable milk producers gain more access to major markets and institutions.