Analysis of Value Chain of Cow Milk: The Case of Itang Special Woreda, Gambella, Ethiopia

— Ethiopia has a long and rich history of dairy farming, which was mostly carried out by small and marginal farmers who raised cattle, camels, goats, and sheep, among other species, for milk. Finding the Itang Special Woreda cow milk value chain is the study's main goal. In order to gather primary data, 204 smallholder dairy farmer households were randomly selected, and the market concentration ratio was calculated using 20 traders. Descriptive statistics, econometric models, and rank analysis were used to achieve the above specified goals. Out of all the participants in the milk value chain, producers, cafés, hotels

the subsector and have contributed to its low productivity (Tafere and Worku, 2015).However, the dominance of subsistence farming, the lack of a business-oriented agricultural production system, and the restricted or nonexistent access to market facilities lead to a low level of smallholder farmers' involvement in the value chain or in adding value to their output (CSA, 2011).
Value chains can have different stages, such as input supply, production, processing, marketing, and consumption, depending on the type of dairy production system under study.In this context, the term "value chain" refers to a variety of players and activities spanning from production to consumption as well as the dynamic interactions between participants in dairy production systems (Rich et al., 2011).
According to CSA, Ethiopia has the greatest population of livestock in all of Africa.Furthermore, according to CSA, the estimated number of cattle is 52.13 million.Additionally, Ethiopia produced 3.3 billion liters of milk in 2011-2, valued at $1.2 billion, and imported dairy products for an additional $10.6 million.The country's rural sedentary areas are anticipated to produce 3.2 billion liters of milk annually, with an average daily yield of 1.37 liters per cow (CSA, 2017).However, due to Ethiopia's underdeveloped milk marketing system, the vast majority of smallholder milk producers have restricted access to the market.Dairy production is one of the most important aspects of the livestock production system in Ethiopia, where dairying has not yet been adequately promoted and exploited while being an important source of food and money from animals.Despite its vast population, Ethiopia's livestock subsector produces little overall and contributes less directly to the country's economy relative to its potential (Mebrate et al., 2019).
The challenges faced by Ethiopian smallholder dairy producers in marketing their fluid milk have been the subject of various theoretical analyses and empirical studies.Dairy cooperatives that are now in existence typically operate in regions that are easily accessible to markets and transportation.This implies that some producers continue to produce at a subsistence level and that a significant amount of milk does not reach the markets (Zelalem et al., 2011).
The Gambella region has the potential to increase dairy production despite being a low-lying territory that has a more extreme dry season than other nearby regions such as Benshangul Gumuz, Oromia, and SNNP regions.Furthermore, the agriculture sector is dominated by vast herds of cattle in particular and livestock in general because people take advantage of the opportunity to move their animals to pasture areas during the dry season when the grass wilts (Degife, et al., 2019).
Milk and its byproducts are essential commodities in the study region, where they can be traditionally processed into fermented form or drunk as fresh, fluid milk.A range of dairy products, such as fresh milk, fermented milk (Ergo), butter, and buttermilk (Arera), which were not intended for domestic use, were sold in the hamlet to generate revenue.Dairy is a vital industry in the research area for the support of the farming community and other products.Despite the potential for producing milk and milk products in the research areas, little is known about the current methods for managing, producing, and marketing milk (Hussien, 2020).
Thus, the goal of this study is to provide sufficient information on the participants in the cow milk value chain, as well as to assess the current state of the market and the opportunities and problems that producers face.

Study Area
The Gambella People's National administrative districts, which include the Anyuak, Nuer, and Mejenger zones, and three ethnic zones (Fig. 1).
According to the CSA (2013), there are 42,000 people living in the district as a whole.The study area's livestock population is estimated to be 99128 cattle, 832010 sheep, 38055 goats, 116712 poultry, and 6445 bee colony (Itang Special District Agricultural Development Office, annual crop assessment report, 2017).

III. RESEARCH DESIGN
Smallholder dairy producer households in Itang Special Woreda were the target population.In the research area, the figures correspond to 1373 smallholder dairy producer households.In a short while, the Woreda's household-level smallholder dairy producers will be the unit of study (Table 1).Diagrammatically, the process is illustrated as follows below (Fig. 2): Fig. 2: Actors' market price shares from the end user

Types, Sources and Methods of Data Collection
From primary and secondary data sources, both qualitative and quantitative data were gathered.Primary data was gathered from smallholder dairy producers who were chosen at random.To gather primary data essential to understanding the respondents' socioeconomic characteristics, a systematic questionnaire was created.The district agricultural office, the central statistical agency, earlier research, the administrative office, additional published and unpublished materials and nongovernmental groups whose written materials were made available for research and evaluations were the sources of secondary data.

Methods of Data Analysis
The data acquired from the respondents in this study was analyzed using econometric approaches, Likert Rank Analysis, descriptive analysis, and value chain mapping in order to satisfy the study's predetermined objectives.

Demographic and Socio-Economic characteristics of sample households
A total of 204 household heads made up the sample group of respondents from households that were surveyed during the survey period.The sampled household respondents' ages ranged from 28 to 60 years old, with a mean age of 41.32 years, according to the survey results.It was discovered that the average age of milk market participants was 41.37 years.In the meantime, the non-participants' average age was 41.26 years.This indicates that because of the age and youth of the responders in each group, there is very little variation in the average age of the two groups.When these two groups were compared, it was found that the milk market participants were older on average than the non-participants; the mean age difference between them was statistically not significant (Table 2).According to the survey results, the average number of years of schooling for participants who ate dairy products and those who did not was 3.82 and 3.62 years, respectively.This difference in average is highly significant at the 1% precision level.Furthermore, in the research location, the mean average of dairy participants is higher than that of non-dairy individuals.The data suggests that a higher education level is associated with an increase in milk participation knowledge and attitude.Additionally, the development agent (extension worker) provided monthly service contact frequency of 2.58 and 2.58 for dairy and non-dairy participants, respectively, to sample households.These results are statistically significant at the 1% precision level for both groups (Table 2).
The survey's findings regarding market information reveal that, respectively, 27.94% and 37.25% of milk market participants use information, while others do not have access to it.On the other hand, a significant difference from those who do not participate in the milk market is shown, indicating that 34.31% do not have access to knowledge on the milk market, while 0.5% can access and utilize it.This could be as a result of information asymmetry brought on by the lack of a structured milk marketing system in the area (Table 2).

Milk Production Summary of sample households
A statistically significant difference was observed between the mean average number of dairy cows owned by participants in the milk market (2.42) and those owned by non-participants (0.70) (Table 3).

Access/Use to Dairy Service
In addition, household respondents were questioned about their usage of and access to various services, such as obtaining credit and market data, as shown in Table 4.As can be seen here, their primary motivation for taking the money was to buy a dairy cow and upgraded facilities.Additionally, at a significance level of less than 1%, there is a statistically significant difference in the participants' and non-participants' access to current market information.In Achua and Waar, there was no statistically significant difference in the sampled households' access to Kebeles' credit service between the two groups (participant and non-participant).

Measure of market concentration ratio
The market concentration ratio of milk dealers was calculated using the four processors/retailers (hotel and café) that handled the most milk.The four milk processors/retailers in Itang town have a market concentration ratio (C4) of 33%, indicating a weak oligopoly market type.Where *** is the market type indicator which significant at 1% level

Marketing Costs
Table 6 lists various marketing and production expenses associated with milk transactions by farmers, dairy cooperatives, and retailers (cafés and hotels) in the research area: The production cost structure shows that while the producers' labor marketing expenditures were greatest across all channels, veterinarian costs were comparatively high across all channels.Additionally, it was found that cooperatives and retailers had greater transportation marketing costs in channels (V) and (VI).Conversely, the cafe and hotel in channels III and VI had the largest sugar marketing costs.Where selling and buying price determined here in ETB and 1 USD was equivalent to 43.64 ETB in survey time

Marketing Margin
The marketing margin is a metric used to quantify the expense of providing marketing services.It is defined as a function of the price differential between the farm and retail prices of a specific farm product.Price changes for marketing inputs, farm supply, and retail demand are the main factors affecting the margin (Fig. 3).

Fig. 3: Actors' market price shares from the end user
A summary of the marketing margin between various participants in various channels is shown in Table 7.
Channel VI has the largest total gross marketing margin (TGMM), with channel III coming in second with TGMMs of 55% and 48.38% of the consumer price, respectively.On the other hand, the producers, hotels, cafés, and dairy cooperatives that deal in milk have the highest gross marketing margins, accounting for 100% of the consumer price in channels I and II, 55% in channels III, and 25.5% in channels V.  7).

Determinants of Milk Market Participation Decision
Table 8 presents a summary of the binary Probit (participation) equation results.Households make the decision to sell or not in the first step.The Probit Maximum Likelihood technique was used to estimate the decision to engage in the binary market.
In order to examine the sample of smallholder dairy producer households, it was found that 65.2% of them participated in the milk market, while 34.8% did not.
Six (6) variables were identified from a set of thirteen explanatory variables to be used in the Probit/participation equation to calculate the probability of cow milk market participation.The following factors are included in the Table 8: the number of children under five (NUNDF5), the number of owned milking cows (TTLMLKCOW), the income from non-dairy sources (INCNONDS), the frequency of interaction with extension services (EXTSSFREQ), the volume of milk yield per day (MLKTLD), and the milk market information (MKTINFO).

Determinants of milk market supply
Seven (7) explanatory variables-including inverse Mill's ratio (LMBDA)-out of the thirteen hypothesized explanatory variables in the selection equation of the model were found to be significant determinants of the level of cow milk volume marketed surplus.These explanatory variables affected milk market supply in Heckman's two-stage model's second stage.They included the number of children under five (NUNDF5), the education level of the household head (EDUCLVL), the number of milking cows owned (TTLMLKCOW), the frequency of extension services contact frequency (EXTSSFREQ), the volume of milk yield per day (MLKTLD), and Inverse Mill Ratio (/Mill Ratio) (Table 9).Where, ***, ** and * indicated that statistically significant level at 1%, 5% and 10% respectively.

Dairy Production and Marketing Constraints
In the discussion section, a number of obstacles that prevent the cow milk value chain from thriving and hinder dairy productivity are discussed.Table 10 provides a brief overview of the main obstacles.The current limitations were recognized and articulated at the Woreda and Kebeles levels that were chosen, and the Likert rating result showed that the importance of the issues (constraints) varied throughout Kebeles.As a result, although one constraint can cause issues for one Kebeles, another might not necessarily do so for the other.The respondents ranked various obstacles and chokepoints in the dairy production and marketing system, ranging from the first (ranked first) to the eleventh (ranked eleventh).
Nonetheless, the top five obstacles noted by stallholders are prevalent issues in the chosen Kebeles and pose serious challenges to dairy production.According to the Likert rank analysis, the top five restrictions were diseases, market issues, predators, a lack of veterinary care, and issues with thieves.This is consistent with the findings of Sharo (2015) and Nardos (2010), they reported that seasonality in milk demand, a lack of formal marketing systems, land constraints for sustainable dairy development, high costs and shortages of animal drugs, a lack of knowledge regarding improved dairying, and difficulty obtaining credit for business expansion all contribute to lower productivity levels for dairy cow milk (Tsegay andGebreegziabher, 2015, Tegegne, 2017).

Dairy Cattle Health
The majority of responders from the chosen Kebeles reported having udder infections in their dairy herds, with Achua, Pulkod, and Waar having the highest rates.While all the farmers in the Woreda region utilized traditional treatments to treat their sick animals, only a small percentage of the sampled HHs used veterinary drugs.A small yield rate was the productivity that the remaining responders were pushing, with over half discarding the milk produced from sick udders.While half of the household heads in Pulkod and Waar reported both lumpy skin disease (LSD) and foot and mouth disease (FMD), mastitis was the other most common dairy cattle condition.
Previous research conducted in several regions of Ethiopia revealed that the most common health issues affecting dairy cattle were FMD, mastitis, anthrax, pasteurollosis, blackleg, and LSD, according to (Andualem, 2015).This suggests that one of the main illnesses that result in significant financial loss is mastitis.Thus, for dairy production to be viable over the long term, farm earnings are greatly impacted by the health of the cows (Asrat, et al. 2016).

Market Challenges:
According to this research, the main issue dairy farmers and other market participants (hotels, cafés, dairy cooperatives, and consumers) in Itang Woreda were facing was a lack of a milk market.The low milk productivity, seasonality of the product, the society's religion, the lack of information about the milk market, the lack of transportation, the long travel distance to the woreda market, and the perishable nature of the fluid milk are the reasons why it is difficult to access the market for an extended period of time.

Predator Challenges
Predation is a totally natural process in which the primary means of obtaining food is through the killing and consumption of other animals.However, it can become problematic when the predator becomes overly abundant or when it is seen inappropriate for humans to share individuals of a specific type of prey.It is likely that predation has been an issue since domestication and that it still is, necessitating current solutions.In contrast to previous research, the peculiarities discovered in this report were limited to the lowland regions and were not seen in many other parts of the nation (Hansson & Tranvik, 1996).
Ultimately, the biggest loss resulting from predation was that many dairy farmers chose not to raise a herd of cattle because they thought the losses from predation might not be profitable.This leads to the loss of rangeland improvement that can come from mixed-species grazing, as well as the loss of potential revenue for the producer and the community to which they contribute.As a result, instead of being dairy producers, the producers decided to focus under the age of five, the education level of the household head, the number of milking cows they own, the frequency of their interactions with extension services, and the volume of milk yield they produce each day."According to the aforementioned, the top five obstacles were, in that order, veterinarian extension services, predators, thieves, lack of market, and dairy health issues.Consequently, as a result of such factors, smallholders' milk yield has declined, which also causes producers to stop taking part in milk marketing.
The findings indicated above lead to the following recommendations: • The market is the main issue in dairy production, and it makes it more difficult for small-scale dairy farmers to make a profit.The simplest way to address this issue and prevent producers from losing milk due to a lack of market is to establish processors close to collectors and producers.This will also make it easier for producers to obtain information about the milk market.
• The dairy cooperative should function as a formal marketing structure to change the mindset of farmers who wish to sell their fluid milk directly to consumers if it is renovated to a very active level.Other interested parties can accomplish this by setting up milk processors, but Gambella Agricultural Marketing and Promotion Agency (GAMPA) should operate here as the primary actor in obtaining information on the milk market.
• The absence of veterinary services was the other production issue.The majority of the families included in the sample required veterinary care to address widespread health issues with their dairy cattle; nevertheless, these households found it difficult to communicate with farmers, and the cost of medications was prohibitive for small-scale dairy farmers.A variety of stakeholders, including NGOs, traders, input suppliers, veterinarian service providers, researchers, and other interested parties, are needed to address these issues.
• The research area also has the issue of being hard to control when it comes to predators and thieves.Enough police should be deployed as part of the Woreda administration's security performance to prevent the former.To combat the latter, well-built barriers should be used to keep lions and hyenas from getting into the herd den.A variety of players, including dairy guarding farmers, material suppliers, traders, financial institutions, nongovernmental organizations, the government, and other interested parties, are needed to address this issue.
• Finally, it was noted that the majority of Woreda's smallholder dairy farmers use traditional dairy production methods, which have a negative impact on milk output.One strategy to help dairy producers increase their revenue by operating their dairy farm expertly and fetching a good price in the market is to raise knowledge of the importance of quality milk production and to enhance their ability for it.NGOs and local extension agents are important collaborators in raising awareness of the significance of productivity and production.

Table 1 :
Proportion of farmer households in each Kebele that produce milk

Table 3 :
Additionally, a highly significant difference was seen between the average amount of milk produced daily by participants (4.68) and non-participants (0.85).It is clear that, at less than 1% significance level, the milk volume produced by those participants and not by participants in liters indicates a highly significant difference.This could be because non-participant households have less access to information about the milk market, own fewer milking cows, and have more children under the age of five, who may consume a significant portion of the produced food even though the model indicates it is statistically insignificant.Milk Production Summary of sampled household Int. J. Forest Animal Fish.Res.www.aipublications.com/ijfafPage | 23

Table 4 :
Use/Access to dairy service

Table 5 from
Kohls and Uhl  (1985)supports this conclusion.This suggests that the town of Itang has a large number of dairy farmers.

Table 6 :
Market cost of dairy production and milk marketing

Table 7 :
Summary of marketing margins for milk traders in different marketing channels Where FCP is final consumer price stated in ETB and 1 dollar was equivalent to 43.64 in survey time Int.J. Forest Animal Fish.Res.

Table 8 :
First-stage probit estimation results of probability of milk market participation decision Int. J. Forest Animal Fish.Res.www.aipublications.com/ijfafPage | 29

Table 9 :
Estimation result of Cow milk supply equation model