Ethiopia, renowned for its vast agricultural landscape, is swiftly emerging as a pivotal player in the dairy industry within the African continent. With a staggering 66.26 million cattle, it stands as Africa's largest cattle-keeping nation, with local breeds constituting nearly 97% of the total population. This livestock sector contributes 25.3%, to the nation's GDP. Recognizing the potential, the Ethiopian Ministry of Agriculture is open to hosting a future AfDA conference and exhibition. This platform would bring together regional and global dairy industry stakeholders in Ethiopia to explore of investment prospects, networking opportunities, and the promotion of regional dairy products.
Being home to a total of about 66.26 million heads of cattle, Ethiopia stands on top of the African countries list in terms of livestock population. There are about 30 distinct local cattle breeds that account for slightly under 97% of the total cattle population in the country. The difference constitutes mainly Holstein-Friesian and to a lesser extent Jersey dairy cattle breeds (pure and crossbred with local cattle breeds). These improved breeds are mainly concentrated in dairy potential urban and peri-urban areas reared by commercial farmers. They are also kept by market-oriented smallholder farmers in the crop/livestock mixed dairy production system. Livestock contributes to 17% of Ethiopia’s gross domestic product (GDP) and 39% of its agricultural GDP. However, if processed livestock products, livestock organic fertilizer and traction are considered then the contribution of livestock to Ethiopia’s GDP rises to 25.3%. Milk accounts for 34% of the livestock contribution to the country’s GDP.
Fuelled by a growing population, urbanization, and economic growth, the demand for milk is expected to increase in Ethiopia. Though much of the milk supply comes from domestic production, the foreign currency, the country spends to import dairy products mainly concentrated (powder) milk is increasing year after year and will reach $25 million in 2021. By the year 2028, an estimated daily deficit of about 3,185 million litres (29% deficit) of milk is expected. Filling the supply-demand gap for milk will therefore require a sizable investment in the Ethiopian dairy industry and based on the results of the livestock sector analysis, if the proposed investment interventions are successfully implemented by the year 2028, Ethiopia expects an annual 20% surplus milk production estimated at 2 billion litres. Improvement interventions focus on investments in better dairy genetics, feed, and animal health services for both traditional dairy farms and commercial-scale specialized dairy production units. In addition to the need to keep the momentum, it is important to equally invest in post-harvest technologies. In achieving its targets, the government of Ethiopia expects contributions from its strategic development partners including national and international research institutions, non-governmental development organizations, as well as domestic and multinational private companies.
Ethiopia’s dairy industry has already taken off, which can be exemplified by the reported over three-fold increase in the proportion of improved cattle (including the female cattle population) over the last five years. In 2021/22, the population of improved (pure exotic and crossbred) cattle accounted for 3.07% from less than 1% five years earlier. Related to the increasing number of active dairy cooperatives, and private milk aggregators, the volume of milk collected, industrially processed, and marketed via the formal market channel has increased from less than 50,000 litres in 2000 to about 150,000 litres in 2011 to 300,000 litres/day in 2021
10 years dairy development plan:
Several agricultural growth programs have been initiated and implemented with the objective of realizing the national vision of becoming a low-middle-income country and the country’s renascence through sustaining the rapid, broad-based and inclusive economic growth with dairy contributing its part.
The 10-year (2020-2030) dairy development strategic plan targets to increase national-level milk production from cattle, camels, and goats from about 4.3 billion litres in 2020 to about 11.6 billion litres in 2030. Key interventions include breed improvement through adopting AI technology using proven conventional/unsexed and female sexed semen, and improved husbandry practices for local and improved cows as well as camels and goats. The major implementation strategies include the expansion of family dairy, improving the productivity of local cows through selection and better management from about 1.45 to 2.02 litres of milk/day, reducing milk cows’ population from 11.5 to 9 million, raising the proportion of improved dairy cattle breeds from 2.7 to 17% and increasing the milk yield of crossbred cows from 6 to 10.7 litters and exotic breeds from 13 to 17 litters/day, and increasing the number and productivity of medium- and large-scale dairy farms. Other key strategies include improving the daily milk yield per camel from 2.9 to 3.4 litres through better management, increasing the contribution of goat milk to the national milk production through increasing the number of dairy goats and daily milk yield per does from 0.4 to 0.5 litres, reducing milk post-harvest loss from 2.6 to 1.3%, and increasing the proportion of marketable milk from 46 to 67% from the total milk production.
"The Ministry of Agriculture, Ethiopia, is open to hosting a future AfDA conference and exhibition. This platform would bring together regional and global dairy industry stakeholders in Ethiopia to explore of investment prospects, networking opportunities, and the promotion of regional dairy products." H.E. Dr. Fikru Regassa, Ministry of Agriculture, State Minister, Livestock and Fishery Resources Development, Ethiopia
Given the high required budget ($274.2 million) to be committed for the mid-term (2023-25) and long-term (2026-30) dairy development plan and assuming all relevant development partners will concert their efforts in a well-coordinated manner, the country’s already taken off the dairy industry will get the opportunity to develop and contribute its part to the food and nutrition security as well as economy and vision of the country.
There are several ongoing dairy development initiatives. Instances worth mentioning here include ‘Yelemat Tirufar’, Livestock and Fisheries Sector Development Project (LFSDP), Building Rural Income through Inclusive Dairy Business Growth in Ethiopia (BRIDGE) project, and African Dairy Genetic Gains (ADGG).
‘Yelemat Tirufat’ is a four-year development program that aims to boost productivity and production of dairy, eggs, chicken meat, honey and related hive products. Its main developmental objectives are to achieve food self-sufficiency, ensure nutritional opulence at the family and national levels, create job opportunities, increase exports, and hasten import substitution. Within the ‘Yelemat Tirufat’ initiative, the GoE planned to produce 2 million semen straws from improved bulls in the first year of the implementation and with a gradual increase to produce a total of 14 million straws in the four years. Administering these straws, about 5.75 cows and heifers are expected to conceive, which in turn increases the supply of improved heifers. Using female-sexed semen, 35,000 improved heifers are also expected to contribute to the planned milk production increase.
Building Rural Income through Inclusive Dairy Business Growth in Ethiopia (BRIDGE) project is jointly implemented by SNV Ethiopia and Wageningen University & Research (WUR). The project’s main objective is to contribute to an improved performance of the Ethiopian dairy sector and improved well-being of more than 92,000 dairy farmers. The project helped 49 ago-input dealers to enter or expand their dairy farm input and service delivery to the surrounding farmers, a total of about 126,000 farmers to cultivate improved forage crops, over 14,000 farmers to adopt silage-making and feeding, and over 34,000 farmers to increase milk production. Started working with 63 cooperatives in 2020 with an initial milk collection capacity of 31,000 lt/day, by the end of 2022, BRIDGE expanded its support to 131 cooperatives with an average milk collection capacity reaching 145,000 lt/day. The BRIDGE project also started a school milk program in 2021 reaching out to 6,500 students in 13 pre-primary and primary schools, which expanded to 151 (56 private and 95 public) kindergartens and primary schools in Addis Ababa, Amhara, Oromia, Sidama, SNNPR and Tigray. Depending on age, size and capacity, the school children consumed 150 to 250 ml of probiotic yoghurt or freshly boiled milk at a time 2 to 3 times a week. By the end of June 2023, a total of 80,197 early school-age children have been consuming probiotic yoghurt and fresh boiled milk. School milk program is therefore emerging as a new local market opportunity for dairy farmers and processors. In partnership with humanitarian organizations, the BRIDGE project has also reached out to 3,040 internally displaced students. Moreover, through deploying 24 Dairy Farm Advisors, the project has supported a total of 135 commercial farms by providing advisory services to improve overall farm performance, and international experience-sharing visits. BRIDGE has also supported legal enforcement of the Oromia milk quality & marketing regulation in six pilot Woredas, one town administration of the Selale area and is expanding these activities to other woredas in Oromia, Amhara, and other project implementation target regions.
Livestock and Fisheries Sector Development Project (LFSDP): With a budget of USD 170 million obtained from the World bank as a loan for the period 2018 – 2024, LFSDP works to increase the productivity and commercialization of producers and processors in selected value chains and strengthen the service delivery systems. Among others, LFSDP supports improved forage production and cooperatives in milk collection and marketing.
African Dairy Genetic Gains (ADGG): Funded by the Bill and Melinda Gates Foundation and implemented by ILRI since 2016, ADGG is supporting the development and upscaling of digital information and communication technology (ICT) platforms through a farmer-focused public-private partnership for on-farm data recording and timely, actionable cow and herd management feedback to farmers initially in Eastern Africa, with options for expansion to other regions of the continent. Currently, the project is in its second phase, which is integrated in the Sustainable Animal Productivity for Livelihoods, Nutrition and Gender Inclusion (SAPLING) CGIAR research initiative. This second phase has expanded its activities across African and south Asia to include Uganda, Kenya, Rwanda, Nepal, Nigeria, and Zambia.
There are several investment opportunities in the Ethiopian dairy industry. Investment in quality fodder production targeting medium- and large-scale dairy farms should be a feasible opportunity. As there are limitations in the number and capacity of actors engaged in genetic improvement service delivery, testing and supply of improved genotypes, supply of liquid nitrogen, AI Technicians training and certification, and private AI service delivery systems are all obvious investment opportunities. In Ethiopia, there is only one known accredited private laboratory for milk and milk product quality testing. There is also no well-established and functional quality-based payment system. Provision of a bundle of services that include dairy farm inputs, advisory and training services could also be a workable approach for a substantial number of small-scale farmers.
The growing demand for milk and milk products in the country related to the growing population, urbanization, and expanding economy as well as increasing consumer demand for quality products and emerging industry technologies are all drivers of investment opportunities in the sector. Industry development constraints such as low milk production and low per capita consumption also represent development opportunities in the sector.
It is therefore high time that Ethiopia hosts the upcoming AfDA conference and exhibition so that key regional and global dairy industry players get the opportunity to better understand the country’s dairy sector potential, explore investment opportunities, network with major local industry actors, and promote their products.
Strategic Deputy Project Manager, SNV Ethiopia BRIDGE Project
Communication officer NEADAP