By Dr. Solomon Mengestu Addisu Abera Solomon Abeyi Fantahun Dereje May, 2012 EIARBy Dr. Solomon Mengestu Addisu Abera Solomon Abeyi Fantahun Dereje May,

ByByDr. Solomon MengestuDr. Solomon MengestuAddisu AberaAddisu AberaSolomon AbeyiSolomon AbeyiFantahun DerejeFantahun Dereje

May, 2012May, 2012EIAREIAR

ByByDr. Solomon MengestuDr. Solomon MengestuAddisu AberaAddisu AberaSolomon AbeyiSolomon AbeyiFantahun DerejeFantahun Dereje

May, 2012May, 2012EIAREIAR

BEEF AND FEED VALUE CHAIN STUDY IN ADAMA AREAS BEEF AND FEED VALUE CHAIN STUDY IN ADAMA AREAS BEEF AND FEED VALUE CHAIN STUDY IN ADAMA AREAS BEEF AND FEED VALUE CHAIN STUDY IN ADAMA AREAS

IntroductionAdama Area:

One of the major beef animal source for the domestic markets of Adama-Addis Ababa areas

Its proximity to the large consumer base in Addis Ababa, Farmers of the area have got Long tradition in Fattening cattle It is an important means of livelihood for the farmers, In the study villages, cattle are the dominant livestock species

having multiple functions i.e. traction, income source Feed scarcity is a major problem that limits animal

productivity, Improvement in livestock productivity can be achieved by

alleviating feed constraints,

Scope & Objectives

The scope of the study is limited to small scale beef producers.

The major objective of this study is to select the best bet Feed technologies

1.Describe and map the core functions and major actors involved and their market channels in each value chain,

2.Identifying major constraints and opportunities in each value chain,

3.Testing and further refining of the VCA tool for wider scale use in the future,

MethodologySampling procedures:

Adama was selected

•Two kebeles based on their proximity to input & output market were purposively selected with wereda staff thus,

•The two villages were kechema & Kuriftu wenji

•A total of 40 producers participated

Source of data•Secondary data and review of relevant literatures were undertaken,

•PRA was conducted with producers for production and marketing issues,

•A focused group discussions using a checklist prepared for this purpose.

•Key informant interview conducted with, Input suppliers, traders, processors, retailers and consumers,

•Data analysis was conducted using simple descriptive statistics,

METHODOLOGY

Adama District Kechema Wonji KuriftuAnd Targeted value chain

actors as well

Methodology

Kuriftu Kechema

15 M 5F 11M 9F

Selection Criteria:

One near market (input & Outputs source) the other Relatively far from market (input & Outputs source)

6

Village Sites

Districts

• Group discussion with farmers:• Kechema 20 (15 men and 5 women)• kuriftu 20 (11 men and 9 women)

PRA Exercise

PRA Exercise

• Questioner survey on key value chain Actors

• Quantitative information

Individual actor

interview

Individual actor

interview

Data gathered synthesized in to report

7

Methodology of The VCA Tool

Data Analysis & Reporting

Data Analysis & Reporting

Review of Available

Information

Review of Available

Information

• Research results,• Previous studies• Secondary Data

8

Results and discussion

ProductionProcessingMarketing Consumption

Input supply

•Lean cattle

•Veterinary services

•Feed & Water

•Extension services

•Feeding & management of the animal

•Buying

•Transporting

•Distribution to consumers

•Slaughtering

•Chilling

•Packing

•Domestic consumption and Beyond

Core function in Beef Value ChainCore function in Beef Value Chain

10

Input suppliers: Feeds, Vet. services

Domestic abattoir

Hotels

Small holder farmer

Traders

Consumers

Export abattoir

Butcheries SupermarketConsumption

Associations

Machinery & farm equipments

and suppliers

EIAR

Agents and Brokers

NGO

Marketing

Input supply

Production

Function

Financial service

Investment Agencies

MOTI

MoARD

Service Provide

rs

BOARD

Processing

Institutions

Mapping The Actors, Function & Service ProvidersMapping The Actors, Function & Service Providers in Beef Value Chainin Beef Value Chain

Major Beef marketing channels identified #3

1.Channel one- Beef cattle purchased by Hotels and individual consumers in the Adama areas,

2. Channel two- Beef cattle transported from Adama to Mojo, Zeway, Bishoftu, Dukem and Addis Ababa consumer markets,

3. Channel three- Beef cattle purchased for fattening purpose by farmers of the Adama areas,

Core functions of the feed value chain

Input Supply Production Processing Marketing

• Seed supply

• Supply of fertilizers

• Supply of Industrial by-products

•Tillage

•planting

•weeding

•harvesting

• Baling

•Stacking

•Grinding/crushing

•Mixing

• Baling

•Stacking

•Grinding/crushing

•Mixing

• Feed Formulation

• Treatment

• Supplementation

• Feeding

Consumption

• Transportation

• Retailing

• Whole selling

Feed VC Actors, functions & Support services

ConsumptionConsumption

Enabling Environment

ProductionProductionSmallholder farmersSmallholder farmers

Agro-processing industriesAgro-processing industries

TradersTraders Unions/coopsUnions/coops

Small holder Cattle fattenersSmall holder Cattle fatteners

Institution/colleges, research centers etcInstitution/colleges, research centers etc

Urban & peri-urban farmersUrban & peri-urban farmers

Input Supply Extension services

Provision of Planting materials & fertilizer

Credit services

Technology

Land availability

Laws Drought

ProcessingProcessing

Major Feed marketing channels identified #5

1.Channel 1- Supply of teff straw from Debrezeit areas to Adama beef fatteners,

2. Channel 2- Supply of grass hay from Sululta and Sendafa areas to Adama area beef fatteners,

3. Channel 3-Supply of Molasses from wonji and Metahara sugar factories to Adama areas beef fatteners,

4. Channel 4- Supply of oil cake and flour mill by products to Adama areas beef fatteners,

5. Channel 5- Supply of crop residues (teff straw, wheat straw and maize Stover for fattening purpose by farmers of Adama areas,

 Cost description*Export Abattoirs Butchers-IIV Super mart. Hotels Butchers-III Butchers-II Butchers-I

Producers selling price (Birr/head) to d/t actors 6000 6000 8000 8000 8000 10000 13000

Selling price (Birr/head) 9000 8500 12000 12000 11000 14000 18000

Marketing cost (Birr/head) 500 450 900 800 600 800 1000

Marketing margin (Birr/head) 1750 1250 2850 2850 1850 1950 2950

Net margin (Birr/head) 1250 800 1950 2050 1250 1150 1950

Producer's share of final price (%) 80 85 66.7 66.7 72.7 71.4 72.2

Costs and margins of actors involved in the Beef marketing channel and the Share of producers from final price

*Export Abattoirs , in this case they are producing for domestic consumption , i.e . For supermarkets, hotels, Universities & institutions.

Costs and margins of actors involved in a market channel selling crop residue (Teff straw) and concentrate to users

Price per One donkey cart (10 Baler) Producers Small trader/userSelling price (Birr/10baller) 120 200Marketing cost 30Marketing margin   80Net margin   50Producer's share of final price (%)   60

Price per One quintal of (concentrate) straw Producers Small trader/userSelling price (Birr/10baller) 240 310Marketing cost 30Marketing margin   70Net margin   40Producer's share of final price (%)   77.41

Crop residue (Teff straw)

Concentrate

I. Constraints along the Beef value chain

Input Supply•Shortage of feed supply (quantity & Quality)•Lack of awareness about feed formulation•Inefficient vet services & supply of vet drug•Insufficient provision of credit and problematic collateral arrangementsProduction•High feed cost & low conversion ratio of older animals•Lack of skill and knowledge with regard to profitable beef productionProcessing•Low level technology take up,•Poor sanitary practices•Low level of technical skill & knowledge of the staff

Marketing

•High cost of sell and unfair distribution of the food item

•High cost of marketing margin to end actors in the chain

•Lack of chilling facilities (most of the traders) commodities

• Few types of salable commodities at retail shelf

• Fraudulent brokerage in the market places

Consumption

•Presence of fraudulent slaughter and weak regulatory services (Road side slaughter, back yard slaughter

•Long fasting days of the Orthodox Christian followers

•Lack of consumers’ knowledge on eating preference (as raw meat)

II. Constraints in feed value chainInput Supply

•Land shortage•Shortage of seed and other planting materials•Lack of training on forage production and pasture management•Shortage of raw materials for agro-industries and feed processing plantsProduction

•Low productivity of pasture; Lack of forage production skill•In-effcient feed preservation practicesProcessing

•Few processing plants that are congested around Addis•Most of them operate under their installed capacity•No quality control on feed

Cont’dMarketing

•Seasonality in availability and price of feed

•High transportation costs

•Absence of feed quality control in the market

•Few actors monopolizing the concentrate feed market

Consumption

•High feed price & Shortage of supply

•Lack of awareness on improved feeding

•High adulteration

•High transportation cost

•Low level of understanding of feed quality by consumers

Opportunities identified

• High number of cattle population

• An increasingly high demand for beef meat and animal feed in local markets

• High population growth with better income and demand for better quality food

• Expanding livestock industry with high demand for better quality feed resources

Lessons learned

Beef and feed production constraints in the study area are identified.

Production intervention should focus to solve constraints indicated in

the areas of the 5 core functions (input supply, production,

processing, marketing and Consumption)

Major beef and feed market channels identified by this study.