Determinants of Raw Milk Supply and Value Addition Participation in Mecha Woreda, Amhara National Regional State, Western Ethiopia

Abstract

Dairy sector has important role in supporting the national economy and livelihood of milk producers. Milk producers are one of key actors that play great role along the dairy value chain in the study area. Milk producers' participation in milk and milk products marketing played roles in improving household welfare, and also means improved food security and reduced poverty. Though there are studies conducted on milk production, processing and utilization, there is insufficient information on determinants of milk producers'milk supply and milk value addition participation in Mecha woreda. Thus, this study was conducted in Mecha woreda with objectives of analyzing determinants of smallholder milk producers' participation decisions and intensity in cow milk supply and value addition. Formal survey techniques were employed to collect data. The data were collected from 200 milk producers using systematic random sampling techniques. Bivariate probit model was employed for participation decisions while recursive bivariate tobit model was used to analyze determinants of participation intensities. The econometric model result revealed that age of household head, number of local cows owned, distance of dairy products market, household milk consumption, family size, dairy farm experience, milk yield size per day, and membership in dairy cooperatives were influential variables that affected milk supply participation decision significantly. The household land size, milk consumption, distance of dairy market, milk yield per day, cooperative membership and milk market experience affected milk supply participation intensity significantly. Value addition participation decision was influenced by land size, distance of market and value addition experience positively and significantly. Distance of dairy product market, dairy farm experience, and membership in dairy cooperatives influenced value addition participation intensity significantly. In this study, improving market access by increasing number of dairy cooperatives, road and infrastructures, upgrading traditional milk products, introducing labor saving technologies, and empowering cooperatives and producers are recommended to increase smallholders' participation in dairy products marketing.