Volume 10, Issue 1: 41-52; January 25, 2020  
ISSN 2228-7701  
Godadaw MISGANAW  
University of Gondar, Ethiopia  
Email: godadaw@gmail.com  
Supporting Information  
ABSTRACT: Describing the sustainability of dairy value chain and showing the clear gaps of the sector is  
important for bringing continual improvement that can support the livelihoods of dairy farmers and the  
wellbeing of environment. To facilitate a balanced practice on the three pillars of sustainability (people, planet  
and profit), a regular updating of the existing situation of dairy production is crucial. Therefore, the objective of  
this report was describing the sustainability of dairy value chain in Aksum district, and shows clearly the gaps  
of the sector that needs urgent action for continual improvement. Desk study for gathering secondary  
information was employed. Different analytical tools were used to analyze and present the result. In Aksum,  
milk is produced by mainly smallholder farmers, dairy cooperatives and few commercial medium scale farms.  
The production system is operated by gender inclusive system which is in line with sustainable dairy. The  
production potential of milking cows is very poor that is mainly due to poor genetic makeup and management  
system. The common feed is roughage that causes to the low production performance (poor economic  
viability) and high greenhouse gas emissions from enteric fermentation (risky for environment). The highest  
value addition, risks and costs are belonged to producers but the high share of margin is for processors and  
retailers. Therefore, this unfair share of profits, costs and risks is not a good sign of sustainable dairy  
development. Hence, an attempt to improve the dairy sector should consider the three pillars of sustainability.  
Keywords: Dairy value chain, gender inclusive, smallholder farmers, Sustainability  
Sustainable dairy farming refers to a system based on three pillars, which are environmentally sound, socially responsible  
and economically viable. Sustainable dairy farming requires a commitment to continuous improvement, which means  
that performance gaps are identified and addressed, and actions taken must maintain an appropriate balance among the  
three interdependent pillars of sustainability (Allan et al., 2017). General improvement of crop and livestock production  
practices can also contribute to climate adaptation due to improved resilience of animals and increased farm productivity  
and income; which means all pillars of sustainable farming would be considered (Marion et al., 2016).  
Dairy farms in Ethiopia known by low milk production on average about 1.7 liters per cow/day (Yilma et al., 2011)  
and poor reproductive performance. Therefore, improving general dairy management, such as breeding, feeding and  
animal health, will lead to increased efficiency of dairy production (economic viability) and a decrease in greenhouse gas  
(GHG) emissions to the environment (Gerber et al., 2013). In Ethiopia’s Livestock Master Plan, crossbreeding with exotic  
dairy breeds, and AI and synchronization, combined with better feed and health services is already in the development  
roadmap for dairy farming (ILRI, 2015). This is a good kickoff of sustainable dairy development in the country. Domestic  
demand of milk is projected to grow by 47% towards 2020 (GTP II, 2015). This can offer chances for the dairy farmers to  
increase their income from selling dairy products and enhance their livelihoods.  
Efficient milk production is a key to sustainable development of dairying. In Tigray regional state, there are about  
862,441milking cows. The average lactation performance of the cow was 415 and 1712 litres of milk for local and  
crossbreed cows respectively (CSA, 2016). Milk is a vital cash income sources for household consumption expenses.  
There are many opportunities for the development of sustainable milk production including the presence of suitable agro-  
ecology for the realisation of potential dairy production and the enormous market potential for dairy products  
However, information is scant on the existing situation of dairy production from the three pillars of sustainability  
point of view; which is important for researchers and policy makers to set out improvement considering people, planet  
and profit. Therefore, this study focused on reviewing and analyzing of different secondary information to describe the  
Citation: Misganaw G (2020). Assessment of dairy value chain sustainability, constraints and opportunities in Aksum, Central Tigray, Ethiopia. Online J. Anim. Feed Res.,  
10(1): 41-52. www.ojafr.ir  
magnitude of dairy production sustainability and clear gaps of the sectors in Aksum district which needs urgent action for  
continual improvement.  
Description of study area  
The study was conducted in central Zone of Tigray regional state. Aksum is the capital city of the zone and located  
in Northern Ethiopia. Aksum is situated 1024 kilometres far from Addis Ababa the capital city of the country (Figure 1).  
The altitude of the zone is mainly falls within the category of 2000 to 3000 meters above sea level. A Large part of the  
district receives mean annual rainfall ranging from 400 to 800 mm. The mean monthly maximum and minimum  
temperature of the zone are 300c and 100c, respectively. The district has the largest human population in the region.  
Tigray region has a total of 4,791,341 cattle, and 18% are milking cows (CSA, 2016).  
Figure 1 - Map of Central Zone of Tigray (Aksum)  
Data collection  
This study was mainly done based on the secondary information from others work such as articles and institution  
papers from an internet search. Besides, personal experience and practical field visit were employed to generate the  
Data analysis  
Both qualitative and quantitative methods of data analysis were employed. For qualitative data, PESTEC (Political,  
Economical, Social, Technological, Ecological and Cultural) and SWOT (Strength, Weakness, Opportunity and Threat)  
analytical tools were used to analyze and describe the strength and weakness of dairy value chain in the area. Problem  
tree was also applied to identify the core problem, its causes and effects of milk production. Narrative description was  
used to assess the sustainability profiles of dairy production from People, Planet and profit point of view (3p profile). For  
quantitative information, different economic parameters have used to find out thedistribution of added value and share of  
margins among dairy value chain actors.An economic parameter like gross margin was used to analyse the benefit share  
and added value of dairy chain actors in the area. The gross income was estimated by subtracting the cost price of the  
product/unit from the sale price (revenue) of that product. Or in short:  
(KIT and IIRR, 2008). A gross margin (GM) shows the percentage of the actor’s revenue that is gross profit per unit of  
produce and was calculated as follows:  
Added valueis the difference between the price the actor pays for the produce, and the price she or he sells it for. It  
was calculated as follows.  
Citation: Misganaw G (2020). Assessment of dairy value chain sustainability, constraints and opportunities in Aksum, Central Tigray, Ethiopia. Online J. Anim. Feed Res.,  
10(1): 41-52. www.ojafr.ir  
Like gross margins, the size of the value share also reflects the number of costs and risks appear in the product flow  
by that actor. Value share was estimated by using the following formula:  
Description of dairy value chain actors  
In central zone of Tigray, milk production is mainly carried out by many smallholder farmers, few medium scale  
commercial farmrs and cooperatives. Dairy cooperatives in Aksum and Adwa town was composed from some smallholder  
farmers and college graduated youths (Misganaw et al., 2017). Tsehaye private dairy enterprise is one of the commercial  
dairy farm and act as producers, milk collectors from the nighboures, processors and wholesaler/retailr (Figur 2). Private  
milk and milk products shops are also play an important role in the distribution of milk to the consumers. The detailed  
description of available dairy chain actors is depicted in table 1.  
Available supports for dairy sector in Aksum  
All milk producers are fully dependent on the support of districts livestock office and some private veternary clinics.  
Besides, Dedebit Credit and Saving Institution (DCSI), Livestock and Irrigation Value Chains for Ethiopian Smallholders  
project (LIVES), Aksum University (AKU) and Aksum Research Center (ARC) are also involved the support of milk  
production in Aksum. Most of these supporters provide inputs and skills that help to realize sustainable dairy development  
in the area. The detail functions of supporters were presented in table 2.  
Table 1 - Key actors play role in milk production and marketing  
Produce and supply fresh milk to collectors,  
retailers and consumers  
Smallholder farmers  
Producing milk  
Producing, collecting and processing  
and then retailing milk products  
Produces Pasteurized milk, Yoghurt & cheese,  
and distribute it to consumers and hotels  
Dairy cooperatives  
Producing, Collecting and Processing  
Pasteurized milk, cheese, sometimes cream  
& supplied to retailers  
Tsehaye dairy enterprise  
Private milk products shops Selling milk and milk products  
Receive processed milk from processors &  
fresh from farmers, &sell it to consumers  
Cafes and Restaurants  
Selling milk and milk products  
Purchasing milk & milk products from  
different retailers  
Consuming fresh and processed milk  
Sources: (Aksum University, 2016; Misganaw et al., 2017; Yaynishet et al., 2018)  
Table 2 - Key supporters play role for sustainable dairy production  
Train and advice farmers, cooperatives and retailers.  
Transfer information and technology,  
ProvidingAI and health service through experts  
They offer credit for  
Aksum Livestock  
Providing extension  
Dedebit credit and  
saving institute  
Providing financial  
farmers to purchase breeds, drugs,  
Cooperatives and retailers as initial capital  
Organizing farmers in a cooperative, providing technical  
skills and some processing equipment’s as starting point  
Support producers and processors through research  
findings on constraints, quality assessment, breed  
improvement strategy  
Providing training and  
some inputs  
Aksum Research  
Disseminating research  
findings to stakeholders  
Support dairy farmers in providing practical based  
Monitor and give professional feedbacks to processors  
and retailers  
Providing training,  
involved in research and  
community service.  
Aksum University  
Adwa Feed Processing Supplying formulated  
Formulate feeds for different class of dairy and distribute  
it to the dairy farmers  
It’s local NGO that control all foreign aid of the region and  
influences value chain through infrastructure development  
Relief Society of  
Tigray (REST)  
Aksum governmental  
Policy, rules and  
Try’s to control everything and influence the milk value chain  
Sources: (Aksum University, 2016; Misganaw et al., 2017; Yaynishet et al., 2018)  
Citation: Misganaw G (2020). Assessment of dairy value chain sustainability, constraints and opportunities in Aksum, Central Tigray, Ethiopia. Online J. Anim. Feed Res.,  
10(1): 41-52. www.ojafr.ir  
Figure 2 - Dairy value Chain map in Aksum  
Sustainability profile (3P)  
Sustainability measure is an essential and newly adapted parameter for successful and continual operation of a  
business. Any business will be sustainable if it is environmentally sound (Planet), socially responsible (People) and  
economically viable (Profit). Hence, sustainability of milk production in Aksum is examined according to people, planet  
and profit profiles, and discussed as follows.  
Socially responsible (People) dairy production  
The social responsibility component of sustainability in dairy production includes elements such as: improving and  
maintaining the societies and communities where dairy food products are produced; good working and social conditions  
are valid regardless of gender, age, personal preferences, or conviction; guaranteeing food safety and public health, and  
improving and safeguarding animal health and welfare (Allan et al., 2017). Besides, farmers’ cooperation to improve their  
bargaining power and existence of long-term relations among chain actors are important indicators for sustainability.  
These elements were used as a reference to evaluate and assess the sustainability of milk production in Aksum districts  
from the perspective of people profile (Table 3).  
A) Gender involvement: Dairy cooperatives in Aksum and Adwa are principally established from many jobless youth  
females, and few college graduated males (Misganaw et al., 2017). The role of women was high in the collection of milk,  
processing and retailing functions in their cooperative. Similarly, the ten private milk products shops in Aksum and Adwa  
towns owned by eight women and only two men (LIVES, 2015). But, in the case of smallholders, the contribution of  
women is limited to activities performed around the home. Therefore, activities like cleaning dairy shade, caring dairy cow  
and calves, milking, milk container cleaning and milk quality control, milk processing, butter selling were mainly  
performed by females while selling milk, buying and selling dairy cows and feed collection and animal breeding were also  
given principally for males (Zemeda, 2015). Similarly, (Gebrekidan et al., 2012) reported that in central zone of Tigray the  
highest participation of adult female family members was observed in milking, making and selling dairy products and calf  
caring in the urban areas. Besides, (Haregewoyni, 2015) also indicated that, men and women are moderately involved in  
feed collecting, feeding, health follow up, cleaning and herding. Therefore, this active involvement of gender in dairy  
production and marketing has a positive contribution for improvement and sustainability of dairy sector in the area.  
Citation: Misganaw G (2020). Assessment of dairy value chain sustainability, constraints and opportunities in Aksum, Central Tigray, Ethiopia. Online J. Anim. Feed Res.,  
10(1): 41-52. www.ojafr.ir  
B) Chilled labor: Family children boys were mainly involved in herding, watering and barn cleaning in both urban and  
peri-urban areas of Aksum district. Family children girls had less involvement in the farms and none of the hired children  
girls were involved in any dairy activities (Gebrekidan et al., 2012). In contrary, (Haregeweyni, 2015) reported that in  
Central zone of Tigray, women and female child are highly involved in milking (72.5%), processing (75%) and selling of  
dairy products (54%).Therefore, child labor is common in both urban and peri urban dairy production and marketing  
system in the study area. However, sustainable dairy operation should be free from child labor.  
C) Farmers’ cooperative: Dairy Cooperatives play a significant role in ensuring sustainable supply of raw milk to the  
dairy industry by coordinating the flow of milk from their members and assisting them by providing the required dairy  
farm inputs (FAO, 2011). Farmers’ cooperation is the main tool of empowering the bargaining power of dairy farmers in  
Aksum and there are two female-dominated milk cooperatives in the town (Misganaw et al., 2017) which has its own  
positive contribution for sustainable dairy production. Some of these contributions are creating fair value share through  
improving their bargaining power, maintaining products quality, reducing market barriers and spoilage, improving  
D) Job creation for local community: Dairy production is therefore an important source of self-employment,  
especially for rural households. A significant proportion of dairy operators also hire long-term or casual labour, which  
creates employment among some of the poorest segments of society, including landless households in rural areas (Staal  
et al., 2008).In central zone of Tigray, income and employment opportunity are common under market-oriented dairy  
production system. The type of labour that employed in dairy producer around Aksum district is herder, milkier, cleaner  
and processer. The availability of employment creation for herding of local and cross breed cow owners was 5% and 11%,  
respectively. The average amount of salary payment for one hired labor in Aksum was 3906 Ethiopian Birr (ETB) per year  
(Haregeweyni, 2015). Therefore, the dairy sector in Aksum is giving only a limited number of employment opportunities  
for local communities with very low salary rate. Thus, this practice contributes negatively for the sustainability of dairy  
production in the area. Because the communities in general and youths in particular are not well benefited from the dairy  
sector through obtaining decent job and income; sense of ownership and support will be reduced and they try to devastate  
or rob the resource.  
E) Guaranteeing food safety and public health: In central zone of Tigray, milk production and prestige value were  
the main purpose of keeping dairy cattle both in urban and peri-urban areas (Gebrekidan et al., 2012). Dairy products are  
an essential component of the diet in the area. Fresh milk, yoghurt, butter, buttermilk, cheese and whey are among the  
common milk products produced and consumed by the local communities. About 51% of the communities prefer to  
consume milk either after boiling or souring, but, the rest proportion consumed raw milk which is not safe for health and  
consumption. The major proportion (75%) of produced butter is sold and the remaining proportion is used for various  
purposes like cooking and cosmetic. The income generated from the sale of milk products is used to purchase farm  
inputs, food item, education materials for their children and health services for the household (Haregeweyni, 2015).  
Table 3 - Summary of milk production sustainability performance from people profile  
Sustainability indicators of  
People profile  
Current situation in dairy  
Remarks for sustainable development  
Better gender  
It should be kept the contribution of gender for sustainable  
Gender involvement  
Chilled labor  
High chilled labor  
Using chilled labor must be stopped in dairy sector  
Even if their power and capacity is weak, a good start is  
observed (gender inclusive jobless youths are emerging to dairy  
sector in the form cooperatives)  
Farmers’ Cooperative  
Positive contribution  
Job creation for local  
Guaranteeing food safety and  
public health  
Minimal and  
The dairy sector can generate more jobs for the local community  
and has to be pay a fair wage in order to be sustained  
Especially in peri-urban areas, half of the community consumes  
milk in a raw state. Therefore, strict quality measurement and  
awareness should be made  
Has potential risks  
There are no any legally registered standard quality measures for milk and milk products in Aksum. Traditionally, the  
communities have a mechanism to check the quality of milk products. This measurement is dependent on sensory  
reflections. Color (pure white), Smell (not offensive or attractive odour), and taste are the major intrinsic fresh milk quality  
attributes. The textureis also considered as intrinsic quality for yoghurt and cheese along with the others. Shelf life for  
milk by-products released from processing units is even considered as intrinsic quality attributes in the area. Packing  
materials for yoghurt, pasteurized milk and cheese is the extrinsic quality attributes used to check the safety of dairy  
products in Aksum. Even for milk and milk products, there are no international quality management systems in the  
country. But, the Ethiopian Food, Medicines and Healthcare Administration and Control Authority (EFMHACA) is the  
National Regulatory Body of Ethiopia which is under the Ministry of Health. The Authority is responsiblefor ensuring the  
quality, safety and efficacy of medicines and foods. This authority takes a sample of milk and milk products randomly at  
producers, processors and retailers, and then checks it in a laboratory. Later, the feedback and corrective measures are  
addressed through extension officers.  
Citation: Misganaw G (2020). Assessment of dairy value chain sustainability, constraints and opportunities in Aksum, Central Tigray, Ethiopia. Online J. Anim. Feed Res.,  
10(1): 41-52. www.ojafr.ir  
Environmentally sound (planet) dairy production  
An environmentally sound dairy production system is characterized by the adoption of practices and technology for  
more efficient use of natural resources per unit of animal food produced. Increasing production and improve  
environmental impacts through reducing emission intensity of greenhouse gas and decrease air, water, and soil pollution  
(ammonia, nitrate, phosphorus)are the basic elements of environmentally sound dairy production. Implementing practices  
to improve air quality; manage manure in ways that ensure recycling of nutrients and energy, and minimize release of  
gases with high global warming potential, and applying efficient grazing systems are also considered as environmentally  
With regard to the environmental aspect, the analysis demonstrates that the most serious impact in terms of CO2  
equivalent per unit of product is due to the emissions of methane in the enteric fermentation of animals; these emissions  
are directly connected to the type of diet fed to cattle. Besides, the production of feed and fodder, either self-produced by  
the companies themselves or purchased from external suppliers have also contribution for the rise of emissions (Lucio et  
al., 2016). In order to improve these aspects in terms of sustainability, among others, two key factors have to be  
considered in conventional livestock breeding such as management of feeding practices and annual milk production per  
hectare and per cow which means efficiency of production (Dillon et al., 2010 and O Brein et al., 2015).  
A) Efficient use of resources and milk production: In Central zone of Tigray, the average milk yield potential of local  
and cross breed cows was reported approximately 2 and 7 liters/day per cow respectively. The overall average lactation  
length of local and crossbred cows was 193 and 233 days, respectively (Haregeweyni, 2015). Both the milk yield and  
lactation length are under the standard performance of dairy cows. However, the cows will consume feed throughout the  
year and contribute greenhouse gas emissions. According to Mulugeta (2015), the daily feed intake of local cows was  
ranged from 7.8 to 9.4 kg in dry matter (5.28 to 7.07 roughage and 2.68 to 2.74 concentrate feed). Hence, we can  
conclude that dairy animals in Central zone of Tigray are not as such efficient producers and there is a probability of high  
greenhouse gas emission per unit of products. About 99% of dairy farmers have access to get Artificial insemination  
service and the average conception efficiency was 85.5% (Haregeweyni, 2015). Possible reasons for these low  
performances of dairy animals in central zone of Tigray are poor production genetic potentials of the animals and weak  
management system such as feeding, health follow-up, housing and the like factors.  
B) Efficient grazing system: Grazing was practiced by small farmers and mostly for local animals in peri-urban  
areas, though there was a practice to some extent in urban areas. Majority of the urban dairy producers rely on zero  
grazing but smaller proportions were used roadsides, hillsides and vacant plots for grazing to their dairy cattle  
(Gebrekidan et al., 2012). Tigray region is a model for the country in the conservation practices and wise use of natural  
resources; and Aksum is the one that found at the center of the region and known by conservation of natural resources  
that mainly practicing intensive or semi-intensive dairy farming in urban and peri-urban area. This practice supports the  
sustainability of dairy farming since damage of natural vegetation and soil compaction minimized. So that, lands that are  
not suitable for crop production are used for animal grazing and the possible competition of land between dairy and crop  
production will be reduced.  
Tigray were hay, crop residues, grazing, crop after math and non-conventional feedstuffs (like: ‘Atela’, kitchen waste and  
weeds). Concentrate feeds were rarely supplied to dairy producers by the private feed traders in Aksum and Adwa.  
Therefore, dairy cows in Aksum is mainly dependent on roughage feed stuffs that are not easily digested and converted to  
animal products. The less digestibility of the feed would increase the time of enteric fermentation and methane gas  
production and emission. The production efficiency of the animals will be reduced and their contribution for global  
warming raised; these features negatively treat the sustainability of dairy production in the area.  
D) Waste management: In central zone of Tigray, wastes from dairy farm such as manure, urine, wastewater, and  
feed leftover were removed either manually as was the case in small and medium farms or through concrete drainages in  
the case of large farms. Urban farmers were obliged to pile the cow dung outside of the farm which caused a nuisance to  
the area, including the risk of local pollution due to nutrient leaching. But in the peri-urban areas, due to alternative uses  
of manure as organic fertilizer, waste disposal was not well thought-out as a serious problem (Gebrekidan, 2014).  
Manure from the urban areas is also supplied to a limited extent to the peri-urban areas, particularly to crop  
producing farms. Hence, urban to peri-urban linkage is evolved informally and this should be recognized and strengthened  
to promote nutrient recycling and benefit both urban and peri-urban producers (Gebrekidan, 2014). On the other hand,  
waste disposal and its valorization thorough renewable energy production technologies (in particular the anaerobic  
digestion of sewage) allow for not inconsiderable reductions in the Carbon Footprint of milk production. Otherwise, pilling  
of manure hips outside of the dairy farm is also responsible for phenomena such as the eutrophication and acidification  
of waters along with GHG emissions (Lucio et al., 2016).  
Citation: Misganaw G (2020). Assessment of dairy value chain sustainability, constraints and opportunities in Aksum, Central Tigray, Ethiopia. Online J. Anim. Feed Res.,  
10(1): 41-52. www.ojafr.ir  
Table 4 - Summary of dairy production sustainability from planet profile  
Sustainability indicators of  
Current situation in dairy sector  
Remarks for sustainable development  
Planet profile  
Efficient use of resources and  
milk production  
Very poor production and  
reproduction performance  
Upgrading the genetic makeup of the milking cows could  
help to them utilize resources efficiently  
Little dependency on grazing,  
urban producers uses zero  
grazing system  
Efficiently utilizing road and hill side grazing good  
practice and must be maintained  
Efficient grazing system  
Instead of fully depending on less digestible feeds that  
increase emission and reduces production, using  
concentrate feeds has double advantage  
Roughage feeds are common  
Feed types  
Cultivating forages through intercropping system has  
paramount important for sustainable dairy production  
Cultivation of forage  
Negligible due to land shortage  
Poor manure handling system in  
urban but used it as organic  
fertilizer in peri-urban  
A promising start was observed between dairy producers  
and crop cultivars. Scaling up of this practices and  
linkage must be considered for sustainable development  
Waste management and  
nutrient recycling  
Economically viable (profit) dairy production  
Food production must be economically viable: the producers and other food chain stakeholders must be able to  
prosper and sustain investment, while consumers need access to quality food in affordable prices. From an economic  
standpoint, sustainable dairy farming systems are therefore characterized by elements such as: enabling economically  
viable food production along the food chain, while accomplishing social and ecological goals; ensuring that farm  
operations obtain a fair share of the profits achieved in the food chain; supporting the ability of dairy producers to invest in  
sustainability improvements; adopting innovation and approaches that help farmers deal with market volatility and hence  
the prices of products and inputs (Allan et al., 2017). Economic viability was assessed by determining fixed and variable,  
direct and indirect costs, with regard to all factors involved in the milk production process (Lucio et al., 2016). However,  
due to information limitation; fixed cost is not accounted in the economic analysis of present study.  
A) Revenue and variable cost of milk production  
The average cost of production per liter of milk in Aksum was reported to be  
6.5 Ethiopian Birr (ETB). As indicated from Figure 3, the revenue generated by milk  
producers from a litre of milk was 12.5 ETB. Estimation of the average variable cost  
includes cost of milk production, cost of transportation, labour, electricity, water,  
a gross income of 3.8 ETB from a liter of milk.  
B) Cost and selling prices of milk and milk products  
C) For the producers, cost price includes the costs of feed, hired labor, transport Figure 3 - Average revenue and  
gross income of milk producers in  
and opportunity cost. For the processors and retailers, the cost of milk purchased,  
labor and transport costs were included. On top of these, processors have an  
additional expenserelated to processing and packing. Producers sell a litre of milk in 12.5 ETB to processors and retailers.  
Then the processor processed it into at least three by-products (fluid milk, cheese and yoghurt/curd) and sells it by (18.85,  
68.3 and 20.5 ETB/unit respectively) on to retailers (Table 5). Retailers purchase fresh milk directly from producers and  
the processed products from processors. Finally, the retailer sells these dairy products to consumers.  
Table 5 - Cost and sale prices of milk and milk products  
Items (measured ETH Birr/liter)  
Total Cost price/unit  
Fresh milk  
Pasteurized milk  
Cheese/kg (4-liter milk = 1kg cheese)  
Sale Price/unit  
Fresh milk  
Pasteurized milk  
Sources: Haregeweyni (2015); Yaynishet et al. (2016) and Misganaw et al. (2017)  
Citation: Misganaw G (2020). Assessment of dairy value chain sustainability, constraints and opportunities in Aksum, Central Tigray, Ethiopia. Online J. Anim. Feed Res.,  
10(1): 41-52. www.ojafr.ir  
D) Gross margins and value share  
Based on the above data (Table 6), gross margin and value share were calculated and presented as follows. Gross  
margins show the percentage of the actor’s revenue that is profit. It’s calculated as the gross income divided by the  
revenue and multiplied by 100 (KIT and IIRR, 2008). We can see that producer have a gross margin of 30.4% from  
pasteurized milk sales, while the retailers have highest gross margin 51.5 % from this product (Table 6).  
milk, producers earn 48.5% of the final retail price, while the processors receive 24.3% and the retailers gain 27.2%. The  
value share of producers is high (69.1%) in cheese product, but it is low for final retailers (5.6 %). In yoghurt, the trend is  
the same ascheese; producers have a high-value share.  
Like gross margins, the size of the value share also reflects the number of costs and risks appearred in the chain by  
that actor.Also, the distribution of value share tells us something about the type of product. When the consumer buys a  
product as it produced, such as fresh milk, then there has been little value added (only transport). So that, it expected that  
producers have the highest value share (74.4 %) than retailers (25.6 %) (Table 6). Therefore, processors and retailers are  
taking the profit/advantage on the expense of producers. This type of unfair share of values is not a good sign of  
sustainability. Because, the major value is added by producers and the highest costs and risks of milk production are laid  
on producers.  
Table 6 - Gross margins and value share per dairy products among actors.  
Sale price  
% Gross  
Cost price  
Gross income  
% Value share  
Fresh Milk  
Constraints for sustainable dairy production  
In the vicinity of cities or large towns of Ethiopia, milk producers have a ready market for their liquid milk. However,  
in rural areas outlets for liquid milk are limited due to lack of accessible infrastructure that links producers with traders  
and consumers. For example, a study in Tigray by the Regional Bureau of Agriculture (2006) has shown that about 45,000  
litres of fresh milk/per-day is remained to be wastage due to lack of access to the market. Hence, the government should  
take the lead in building infrastructure and providing technical service to the dairy sector (Tsegaye, 2010).  
The significant constraints of dairyproduction in the Central zone one Tigray (Aksum) are high cost of inputs, low  
volume of milk, lack of training access and low household income/low purchasing power. Unavailability of cooling  
facilities for milk storing, long distance and rugged topography to reach the market, fluctuation of supply and demand,  
low breed performance and limited transport access were also reported by (Haregeweyni, 2015) as the major hindering  
factors for sustainable dairy production in Aksum district.Also, the high barging power of milk traders, weak relationship  
of the dairy cooperative with its members, extended fasting period of Ethiopia Orthodox Church are also identified as the  
significant factors affecting sustainable dairy production.  
Moreover, the lack of milk processing facilities and skills, insufficient production area, poor sanitation, unpredictable  
marketing system, shortage of water are treating sustainability of the dairy sector negatively (Misganaw et al., 2017).  
There is also a problem of linkages among dairy value chain actors, and inadequate information on how to improve  
animal breeding, marketing, and processing aspects that critically affect dairy production in the area. To analyze these  
factors, Problem tree was used to identify the main problem, its causes and possible effects on milk production in Aksum  
district (Figure 4).  
Opportunities for sustainable dairy production  
Dairy production in Ethiopia is expected to increase rapidly in response to the fast-growing demand for milk and milk  
products resulting from growing human population and rising consumer income. Provided that, appropriate interventions  
are made along the dairy value chain and given the considerable potential for smallholder income and employment  
generation from high-value dairy products (Tegegne et al., 2013). Other opportunities for the development of sustainable  
dairy production in Aksum are the presence of suitable agro-ecology for undertaking of potential breeds, growing of  
different crops and forages. Presences of supporting institutions responsible for technology adoption of artificial  
Citation: Misganaw G (2020). Assessment of dairy value chain sustainability, constraints and opportunities in Aksum, Central Tigray, Ethiopia. Online J. Anim. Feed Res.,  
10(1): 41-52. www.ojafr.ir  
insemination, estrus synchronization and health services; the huge market potential of dairy products is also considered  
as an opportunity (Gebremedhin and Dawit, 2013). As Aksum is the center of tourists, the hotels and restaurants require  
a massive amount of fluid milk and processed dairy products to satisfy tourists demand (Getachew et al., 2016). As a  
also favoured for sustainable milk production. To analysis and summarize the different constraints and opportunities of  
milk production in the area, PESTEC and SWOT analysis is integrated and presented (Table 7).  
Figure 4 - Problem tree of dairy production in Aksum  
Citation: Misganaw G (2020). Assessment of dairy value chain sustainability, constraints and opportunities in Aksum, Central Tigray, Ethiopia. Online J. Anim. Feed Res.,  
10(1): 41-52. www.ojafr.ir  
Table 7 - Analysis milk production and marketing constraints and opportunities in Aksum  
- Insufficient production  
- Lack of infrastructure  
- Inadequate data and flow  
of information  
- Considerable  
-Policy decision based  
on scant information  
-Transporting cheese  
from Addis Ababa  
- Presence of supporting  
- Fast-growing demand  
for dairy products  
- Contribution to poverty  
- Rising consumers  
- High tourist flow to  
the area  
- High cost of inputs  
- Low household income  
- Low volume of milk  
- High inflation rate  
- Cash income sources  
- Weak coordination of  
dairy cooperative  
High barging power  
- Contribution to  
nutrition and health  
- Rapid increasing of  
human population  
- the problem of linkages  
among chain actors  
-lack of training access  
- Unavailability of cooling  
- Provision of AI and  
Health services  
- Availability of  
- lack of processing  
Presence of suitable  
agro-ecology to bring  
potential breeds  
- Suitable agroecology  
for forage development  
- Rugged and rocky  
- Poor sanitation  
- Use of child labour  
- Religion prevents  
consumption of Animal  
products during fasting time  
- Celebration of holidays  
by consuming dairy  
- Existence of many  
religion holidays  
Long fasting period  
Milk production in Aksum is operated by a different segment of smallholder farmers, dairy cooperatives and few  
commercial private enterprises. The services and inputs provided by dairy sector supporters are overlapping one over the  
other. Involvement of chilled labor, principally utilizing of roughage feeds and unfair share of margins along the chain  
actors are main indicators against sustainable dairy production system. Many constraints that hinder the sustainability of  
milk dairy production in Aksum are identified, and organized with the opportunities and strengths in PESTEC-SWOT  
integrated matrix. As indicated from problem tree, the main problem for sustainable dairy production is low volume of  
milk due to poor breeds’ performance and wastage of milk due to the lack of market outlets to the consumers and less  
government emphasis for smallholder dairy farmers. The owner of this problem is the government office that involved in  
breed improvement and infrastructure development. The effect of the problem is shortage of produces in the market,  
unpredictable marketing system and results to low incomes of farmers which enforces them to live in a low living  
Depending on the analysis of the report, the following recommendations are suggested for the leading supporters of  
dairy sector  
For livestock office  
The local and central livestock office should present most productive breeds that could be easily adapted and  
effective to the area. This could help to minimize carbon footprint of milk, increase income of producers and improves  
efficient utilization of resources.  
Facilitate the possible ways realization of infrastructure development to link the rural producers with urban  
consumers through extending necessary infrastructure like accessible road.  
Advising producers not to use child labor and children should be sent to school instead of giving task and duties in  
dairy farming that impedes their mental development.  
Facilitate dissemination of market information to producers and providing trainings to improve their bargaining  
power and the share of margins.  
For Aksum research center  
Bringing and testing efficiency of modern breeding technologies (like, estrus synchronization, sex determination,  
multiple ovulation and embryo transfer) that speed up the improvement of genetic potentials of dairy farmers, and  
possible ways to change dairy wastes to worth should be considered  
For Aksum university  
Providing training on proper husbandry practices, production of quality milk, feeding and health aspects of dairy  
Create awareness how to contribute and lead sustainable dairy production farming from the three pillars perspective  
Citation: Misganaw G (2020). Assessment of dairy value chain sustainability, constraints and opportunities in Aksum, Central Tigray, Ethiopia. Online J. Anim. Feed Res.,  
10(1): 41-52. www.ojafr.ir  
Corresponding author  
Godadaw Misganaw; E-mail: godadaw@gmail.com  
The author would wish to acknowledge Mr. Biruh Tesfahun, Mr. Demeke Haile and Mr. Girma Gezimu for their  
incredible support in the development of this manuscript  
Author’s contribution  
Biruh T. and Demeke H. participated in the design of study and Girma G. critically revised the manuscript for  
important intellectual contents  
Competing interests  
The author declares that they have no competing interests.  
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