The Milk and Milk Products Value Chain in Ethiopia

This report investigates the dynamics of a multi-stakeholder platform (named: Coordination Group, or CG) for stakeholders of the milk and milk products value chains in Ethiopia. The CG was initiated by the Dutch development organisation SNV in 2005 as part of a broader programme to improve market access for farmers and small- and medium-sized dairy companies. To examine the MSP, both its internal, organisational dynamics and its external dynamics, i.e. the changes brought about in key areas of the institutional business environment, were analysed. A mixedmethod design was used for the data collection and -analysis, including in-depth interviews with 18 key representative dairy stakeholders participating in the CG meetings, document analysis, and a social network analysis. Growing domestic market for high-quality dairy products in a country whose economy largely depends on agriculture should be met by a national dairy sector rather than by imports. The dairy CG was therefore a timely and relevant response. But the dominant impression is that the dairy CG had only limited effect in addressing some of the major constraints in the Ethiopian dairy sector. The Ethiopian dairy market is dominated by two private processing firms. The CG tried to enhance competition through its indirect support - funds provided in the dairy CG- for emerging private processors and the establishment of the EMPPA, the dairy producers and processor association. Nevertheless, low confidence and distrust between dairy producers and processors has persisted, also in the EMPPA. Neither did the CG manage to get the Ethiopian government proactively involved in raising the competitiveness of the dairy sector. The establishment of an Ethiopian Dairy Board, initiated by SNV BOAM, which is envisaged to have a more significant contribution from processors and the government, may improve the situation. A neglected sector requires time and investments to ensure genuine improvement. Opportunities created in the dairy CG, how small they might appear, can function as a catalyst for further development of the dairy sector.