Smallholder Dairy Production: Analysis of Development Constraints in the Dairy Value Chain of Southern Ethiopia

This study analyses development constraints of smallholder dairy production system in the Dale and Shebedino districts of Southern Ethiopia. Data were collected from 120 dairy producers, six focus group discussions and six key informant interviews. Two major dairy production systems were identified based on major agricultural activities: the coffee-based dairy production system and the enset-coffee-based dairy production system. Coffee-based dairy producers owned less local breed dairy cows and earned higher income as compared to farmers in enset-coffee-based dairy production systems, which generated relatively more income from off-farm activities. Access to farm resources, inputs and services were the major dairy development constraints in the two districts. Farmers in the districts had limited access to credit, veterinary services, artificial insemination (AI), and markets in the dairy value chain. Rapid urbanization, rising income, and population growth were creating market opportunities for dairy products in the area. Market was found to be the driving force of dairy development. In response to increasing demand for dairy products, most of the dairy producers were willing to expand their dairy farming. Sustainable dairy development can be achieved through improving access to key resources, inputs and services in the dairy production value chain and markets