Dairy Value Chain Analysis in Southern Ethiopia

Shashamane-Hawassa-Dilla milk shed is one of the main dairy development corridor found in Southern Ethiopia and this study was conducted to analyse dairy value chain in the milk shed. For this study six towns (3 urban and 3 peri-urban) were purposively selected based on their potential for dairy production and marketing. A multi-stage stratified sampling technique was used to identify and sample milk producer households (n=358 dairy farms) and other value chain actors. A structured questionnaire was used to collect data from farm households while open ended checklists were used to collect data from other value chain actors. A value chain map was developed following the formal and informal surveys. A cost benefit analysis was conducted to determine the profit margins fetched by value chain actors. A Heckman’s two-stage selectivity model was employed to determine factors that determine value addition practices in the study area; this model also determined determinant factors that contribute to the volume of milk being value added.