Structure, conduct and performance of marketing chains: The case of milk marketing among pastoralists and agro-pastoralists of Eastern Ethiopia

Abstract

Bedilu Demissie, Hussien H.Komicha and Adem Kedir

Pastoralists and agro-pastoralists in Ethiopia have untapped livestock resources. However, they have inadequate economic benefits from these resources due to lack of efficient structure, conduct and performance with which these resources have been explored. Despite large livestock resources, the communities experience high incidence of poverty. Their geographic areas are susceptible to frequent droughts. Ethiopian agricultural policies in the past had largely neglected this sector, focusing on mainly crop production and marketing. Policy attention to milk production and marketing in the pastoral and agro-pastoral areas had been negligible. In order to explore efficiency of milk marketing system in pastoral and agro-pastoral areas as well as to generate information for relevant policy formulation, this study attempts to analyze cow and camel milk marketing channels, the role and linkages of marketing agents using the commonly-used Structure–Conduct-Performance (S-C-P) framework and commodity approaches. Primary data from 140 pastoral and agro-pastoral households and several marketing agents were collected and many secondary data sources were also consulted. The study found presence of inadequate provision of public services, and predominantly traditional and fragmented marketing system. Both cow and camel milk markets exhibit strong oligopoly in the area. The study suggests that there is a need to link milk marketing agents through development of institutional arrangements such as dairy cooperatives, traders’ unions and contract marketing scheme; a need for public investment in the development of supportive infrastructure (e.g., telecommunications, roads, electricity, water); extension support to augment traditional production system, such as promotion of cross-bred cows and veterinary services; licensing and inspection of milk traders and producers to ensure achievement of minimum hygiene and quality standards; and a need for development of valueadding processing facilities to minimize waste and increase the profitability of the enterprise.