Analysis of the dairy value chain: Challenges and opportunities for dairy development in Dire Dawa, Eastern Ethiopia

*Corresponding Author: Email: [email protected] Tel: +267-3650100; Fax: +267-3928753 The study was conducted to characterize the dairy value chain and to identify challenges and opportunities for development of the dairy industry in Dire Dawa, Eastern Ethiopia. A total of nineteen key informants were interviewed using a structured questionnaire. Moreover, secondary data were used to augment the information obtained through survey. The dairy value chain is not well organized in Dire Dawa. The roles and functions of all the actors in the value chain are not clear and there is a weak link between milk producers, traders and other stakeholders. Shortage and high cost of feed, lack of institution that provides dairy related information, difficulty to get land, disease prevalence, lack of technical support, and lack of dairy related technologies are the major constraints related to milk production whereas problems related to milk marketing include lack of quality control of milk, lack of cooling and storage facilities at milk vending sites, poor quality of milk supplied from rural areas, sale of raw milk, inappropriate milk handling and storage vessels, and spoilage of milk due to lack of preservation and processing facilities. The major opportunities for the development of the dairy sector in Dire Dawa include high demand for milk, presence of enabling policy that encourages investment in the dairy sector, absence of competitors, and easy access to transportation systems. Thus, in order to develop the Dire Dawa dairy industry, all the challenges identified in this study need to be carefully considered and addressed. Moreover, coordination and intervention strategies should be designed and applied across the entire value chain in order to develop the dairy sector.