One of those staples found in the majority of households, milk is of the utmost importance—culinary, nutritional, and economic—to vast swathes of Ethiopians. Of course, the nation is blessed with abundant cattle, toping African nations in its numbers. Not the case with productivity and marketing depth, however, as Ethiopia lags behind in both metrics. Milk of the cow and its many derivative products have not garnered enough attention from authorities, both past and present. Perhaps the upcoming proclamation on the matter will change how milk is produced, processed, and availed to markets. Key here is the issue of feed for the cattle that produce the white gold. With fodder prices escalating, productivity is declining—offering a window to adulterers. EBR’s Bamlak Fekadu takes a look at the sector that upholds the livelihoods of so many rural and semi-urban Ethiopians while providing nourishment to millions more.
Always in demand, milk is one of those stationary basic goods demanded by wide swathes of the Ethiopian population. Periods that follow major fasting seasons, however, exhibit an extended need for the staple as people reward themselves with extra amounts of milk and its derivatives. This is coupled, of course, with other animal by-products like meat and egg. Traditional and modern kitchens are thus filled with milk, yoghurt, butter, and the like. So goes the same with food establishments throughout the nation. These days, whether at a small yoghurt joint at the street corner or on the family breakfast table, dairy products are becoming hard to come by.
Although supply has never met demand, current milk shortages are frustrating consumers and producers alike. Abay Gezahegn, 43, was jogging down Jomo Kenyatta Street on a sunny and humid day, rushing to buy milk and other dairy products from a branch of Fresh Corner, a subsidiary of Luna PLC. She was shocked, however, during checkout to see the price of a half-liter package of locally-produced milk.
“How can a half-liter of milk be sold for ETB54? That is more than ETB100 for a liter,” laments Abay.
Recently, a drastic price spike on milk products was observed. Though the product at the supermarket which Abay visited was out of the ordinary, during early June, most half-liter packages of locally produced pasteurized milk went for around ETB27 to 30.
What makes her even sadder is that the quality of milk has been deteriorating over time, and is no longer the same as it was years ago. She claims it has become much thinner as of recent times.
“Milk is not milky anymore, but watery,” she told EBR.
Addis Ababa, the biggest dairy market in the country consuming 65.5 million liters of milk annually, has recently been hit hard by a critical shortage of milk and an ensuing spike in prices. As per the industry’s development institute, the monthly consumption of liquid milk in the capital stands at 8.5 liters per adult, while the national average is even lower.
Further, annual per capita consumption of milk in Ethiopia ranges from 19 to 24 liters, while it is 120 and 180 in the case of Kenya and Sudan, respectively. Still, supply is much less than demand with current shortages frustrating consumers and producers alike, especially in times of high demand, i.e., post-fasting seasons.
The International Livestock Research Institute (ILRI) estimated that in 2019 close to 6.7 million dairy cows produced an estimated 3.6 billion liters of milk throughout Ethiopia. Other studies show that the farm-level value of milk is an estimated ETB16 billion while calf consumption and wastage of milk is 32Pct of the total produced.
The traditional smallholder milk production system—either in rural or semi-urban areas—is dominated by indigenous breeds and accounts for about 98Pct of the total annual milk production in the country. Over 85Pct of the milk produced in the countryside is consumed within the producer households with only less than 7Pct being marketed, as per the Ethiopian Meat and Dairy Industry Development Institute (EMDIDI).
Milk is sold directly to consumers, processors, or to cooperatives. While some milk marketing cooperatives exist, the activity is predominantly performed through informal and unorganized channels where raw milk is sold on a contractual monthly subscription basis. The unavailability of support services including cooling and logistics facilities pushes the marketing system towards more informal paths where milk is marketed to neighbors and nearby locales. Otherwise, it is processed into butter and cheese locally.
With few connections to enabling inputs, like feed suppliers, processors, and transportation companies, milk-producing farmers are often unable to sell their produce. This reduced supply increases milk prices and decreases consumption.
As such, achieving the daily needs of consumers, especially in the cities, has never been easy for both producers and suppliers. It is turning out to be more challenging with the growing size of the middle-income earning population group.
According to ILRI, the low genetic potential of indigenous breeds, limited availability of feed, high disease prevalence and poor animal health services, low level of husbandry, and limited extension and research contribute to inadequate milk production. These production side problems are combined with weak market linkages that have long troubled the dairy industry. Therefore, despite the richness of Ethiopia’s livestock industry—with the largest cattle population in all of Africa—dairy production remains extremely underdeveloped and the country’s supply of milk is far from satisfying demand.
To make matters worse, adulteration has become an all-too-common act of traders and consolidators in recent times in Ethiopia. Milk, as well as several other food items including spices like pepper, food oil, and imported rice have fallen to ill-practices of debasing to the point of ruination of edible products.
Alemu Assefa, former General Manager of Elemtu Integrated Milk Industry SC, producer of Harme milk, had conducted a study on the matter. “In our assessment undertaken on dairy farmers supplying to collection centers in Sululta, we discovered that the fat content of the milk was 1.2Pct. Normal levels are double that amount.”
Matty Gelana is a milk Producer and Processor around Lege Tafo town. “We are sandwiched between challenges. Nowadays we are operating at less than half of our production capacity.” On his modest ranch erected on 500 square meters just outside the capital, he owns 35 foreign breeds. He started his ranch a decade ago with just three Borena and two foreign breeds.
In his early days of small-scale milk production, Matty used to obtain an average of 22 liters a day, which he sold for ETB8 to 10. “Now, our ranch produces around 280 liters a day. However, demand surpasses our capacity by three-fold,” he said. For the last four years, Matty has been collecting milk from Debre Berhan and nearby towns to meet his customers’ demand in the capital—primarily milk and dairy bars inside condominium compounds.
He’s frustrated that he’s unable to meet demand and faces ever growing struggles to supply even his current amounts to markets in the capital. Price spikes as well as access to fodder and veterinary medications are putting his business in a dire situation. Also, the work of some traders and producers of adulterating milk is a further problem.
“About a year ago, a liter of milk was sold for ETB 22. Now, it is around ETB 50,” he told EBR.
According to an operations manager of a milk processing company who demanded anonymity, industry players are not sufficiently benefiting despite ever-growing demand for milk and its derivatives. The major and most critical challenge is the shortage of milk supply from farmers, pastoralists, and ranches. The deficiency in this regard is mostly due to manmade influences. “We’re not even getting half of the milk supply we need,” the manager said.
“Our plant has the capacity to produce 64,000 liters a day,” he said adding that “with the amount of milk we are receiving now, it’s possible that we could cease operations at any time. For instance, we previously closed our plant for almost a year owing to a similar reason.”
The exasperating factor for players in the industry—from ranches to factories—has been the rising price of feed. The lack of animal fodder, combined with less-productive local Ethiopian cow breeds has led to a deep decline in milk production.
The major ingredients used to formulate compound feed include by-products from the processing of maize, sorghum, grain, and edible oil. Molasses and other ingredients added in tiny quantities like vitamins, minerals, and amino acids also make up feed for dairy cows.
During the last fiscal year, the highest quantities required by feed industries includes wheat at 115,100 tons, followed by maize at 141,973 and soyabean 74,480 tons.
According to EMDIDI, feed ingredient prices have shown continuous increments over the past five years from 2016/17 to 2020/21. Supply has also consistently remained deficient. During the previous fiscal year, demand was 574,734 tons while supply was less than 300,000 tons. Average prices of feed ingredients have jumped from less than ETB1,000 six years ago to as high as ETB3,000 currently.
Lack of feed results in lack of milk. Among industry players hit by drastic shortages of milk supply is 7D Food Factory, established in 2006 and known for its flavored yoghurt, cheese, and butter. According to Nahusenay Mamo, General Manager, fodder shortages coupled with price spikes has led them to produce much below capacity. “Currently, our plant is producing 50Pct below its installed capacity of 12,000 liters a day,” he told EBR.
Competing with informal players is another obstacle for 7D as well as other dairy companies. Yoghurt—the company’s main product—requires high quality and dense milk. Even though the plant was planning to export its products, “impurity-causing adulteration in the value chain has blocked us from proceeding.”
Another issue faced by the industry is lack of cooling and transportation infrastructure. “The collection process is against hygiene protocols and despite the perishability of milk, some cooperatives collect milk up to 500 kms away and transport it without cooling capabilities,” said Nahusenay.
Due to logistics issues as well as adulteration, milk straight from the cow’s udders is gaining in popularity. Though this was the norm in previous decades for milk consumers, the advent of convenient pasteurized and packaged milk led consumers away from raw cow’s milk. However, as some experience deteriorating packaged milk quality, they have begun to return to raw milk which is collected from their environs.
Commonly called rental milk, the practice has been common in Addis Ababa with consumers paying in advance for milk which they collect daily. A liter of such milk is now regularly sold for ETB60 per liter, a 50Pct increase from the recent ETB40.
According to EMDIDI, in 2017, there were 32 milk processing factories in Ethiopia. A 2019 study published in the European Journal of Biological Sciences (EJBS) shows that the mean average capacity of these plants was more than 30,000 liters per day. The largest processes 120,000 liters while the smallest comes in at 4,000 liters of milk per day. These factories produce up to 24 types of dairy products including pasteurized milk, skimmed milk, yoghurt, fermented milk, table and cooking butter, cheese, cream and ice cream. Pasteurized milk takes the lion’s share of 83.4Pct of production with yoghurt coming second covering 12.7Pct.
Whether industrialized or localized, Ethiopia is far behind in terms of milk production despite boasting the largest cattle population in Africa. According to a study conducted by the Central Statistical Service (CSS) on 57,040 agricultural households in 2020, milk yield from a single cow is less than 1.4 liters a day, while it is as high as nine liters in Kenya and more than 20 liters in South Africa. Local breeds, though hardy and disease resistant, are much less productive than the bred-by-design cows.
Looking to reverse this, a project office under the Ministry of Agriculture (MoA) has orchestrated an artificial insemination project aimed at boosting milk production. Beginning in 2019 and with USD176 million from the World Bank, the office has imported bovine semen worth ETB10 million from the United Kingdom. The project has bought 200 Borena breed cattle to boost yields to as high as 18 liters a day.
Other moves by MoA to help the ailing sector involves the removal of taxes and duties imposed on feeds. Towards this, the ministry has been drafting a document for the Ministry of Finance as it is one of the driving factors for the price hike in the livestock market.
Further, Tariku Teka, Deputy Director of EMDIDI states that efforts are underway to regulate the macro market with the State of Oromia’s government gearing up to commence overlooking and inspection work in July.
Regarding feed and fodder, the Deputy Director sees the drought in south and southeastern Ethiopia as playing a major role. He also has a view on debasement that is pressuring quality of milk. “Adulteration has reached a crucial stage. Due to the lack of infrastructure in remote rural areas where it takes several hours for farmers to deliver their milk to collection centers, elements like antibiotics and others are added to keep the milk fresh. This is endangering communities’ health and life.”
Dawit Abate (PhD), Professor of Microbiology, says that “some suppliers and farmers add formalin to preserve the milk until it reaches processors.” This might help them gain more profit, but it has undesired consequences,” Formalin is extremely poisonous and can cause gastrointestinal hemorrhage, cardiovascular collapse and damage the central nervous system, liver, and kidney among other things.
The dairy sector carries wide-reaching benefits from health to economy. Some studies indicate that dairy-related activities at farm level are estimated to generate 77 direct full-time jobs per 1,000 liters of milk produced. Thus, a vibrant dairy value chain must be led by enabling policy and infrastructural environments by the government. Key here is an increase in productivity through various scientific methods as well as the availing of low-cost technologies and access to credit and fodder crops.
On top of better productivity, the administration and its organs must aid the transformation of smallholder subsistence dairying into market-oriented commercial dairy production. Most small-scale dairy farmers have limited access to knowledge and technologies including cold storage and transportation, higher-performing crossbreed cattle, veterinary services, and regular supplies of quality animal feed. Such aspects of the sector must involve direct government intervention.
Private-sector actors must also invest in commercial dairy farms, milk processing plants, feed processing, and in the marketing supply of dairy inputs and services. Further, cooperatives should play their irreplaceable role in milk aggregation, processing, and input supply to members.
Alemu believes that the private sector should lead the push and advises dairy producers to erect modern ranches coupled with sufficient investments in veterinary practices.
However, the place of cooperatives seems to get the lion’s share of attention from Industry insiders. They call for the government’s support to expand infrastructure so that these collectives better utilize current production and expand their collection centers to rural areas where larger volumes of milk can be collected and transported to efficient processing plants.
Secondly, industry insiders recommend the development of the feedlot sector. Catalyzing greater feed productivity can convert weaker animals’ output into better quantity and quality products.
Livestock plays a crucial role in the national development in Ethiopia, accounting for 40Pct of agricultural gross domestic product. Also, rapidly rising incomes have increased demand for dairy products faster than supply, pushing up prices and increasing the importation of both pasteurized and powdered milk. Improvements upon milk yields and the market chain of dairy products holds an immense potential for rural populations whose livelihoods largely depend on livestock farming. It will also result in a reduction of forex outlays and a nutritive diet for Ethiopians. EBR
10th Year •June 2022 • No. 108