Making Milk Markets Work

A partnership with two private firms – dairy processor Family Milk (which buys raw milk from farmers) and feed manufacturer AKF – is helping to gradually expand production and sales of milk and yogurt in Ethiopia. The approach is to help small-scale dairy farmers secure a guaranteed market, thus encouraging them to invest in expanding production. Interventions target each step in the production-market chain: dairy feed, credit, extension support and market linkages.

AKF supplies feed concentrate, which Family Milk distributes to farmers on credit, recovered through deductions from payments for milk supplied. AKF and Family Milk jointly provide training and demonstrations on animal health and nutrition. In addition, Family Milk helps farmers obtain credit by guaranteeing loans taken by farmers who use feed concentrate and other recommended husbandry practices.

To date, nearly 180 tons of high quality feed have been purchased by 861 farmers. Milk yield has improved from 3 liters to 7 liters per cow per day, with variations depending on the breed and the quality of management. Over 1,400 farmers have a guaranteed market for raw milk. In October, Family Milk installed a 5,000-liter milk cooling tank at its collection center in Gindesheno. Three extension guides have been developed. More than 200 demonstrations on forage production have been set up, promoting a range of fodder crops for different production environments, from large fields to home gardens. A new training program was launched in November, designed for women farmers seeking to grow forage crops.

The program aims to expand from two dairy clusters and 1,400 farmers currently, to five clusters and 2,000 farmers in the coming months. The next steps (being designed, rollout in 2017) are to offer veterinary services through Family Milk’s extension system, and to expand the market by developing new dairy products for low-income families.

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