Developing the Butter Value Chain In

Ethiopia
Berhanu Gebremedhin*, Azage Tegegne, Dirk Hoekstra, Samson Jemaneh, Kaleb Shiferaw, Aklilu Bogale and Yasin Getahun

The butter value chain system

Ethiopia has large potential for dairy production. However, it lags behind relative to many other African countries in dairy production. The low
consumption of milk and milk products coupled with the huge potential for dairy development indicates that there is ample opportunity to
improve the sector. This is even more appealing given the considerable potential of dairy production in creating income-generation opportunities
and its further contribution in improving human nutrition, particularly for women and children. Within dairy, the butter value chain receives
little attention in both research and development. This study analzes the Ethiopian butter value chain and is based on two sets of data: the
Improving Productivity and Market Success of Ethiopian Farmers (IPMS) project’s rapid butter market appraisal and the Livestock and Irrigation
Value Chains for Ethiopian Smallholders (LIVES) project’s baseline data.

Traditional versus modern butter making Butter Market channels

Fresh Milk

Aging/
Rural
Separation
Fermentation Consumers

Sour Milk/ Cream Skim Milk Butter

Butter Assembler/
Yogurt/Ergo Shops/
Producers Collector
Churning Heating Retailers
Churning

Butter Milk Lactic Fresh/Sweet Cream Urban

Local Whey
Butter Butter
cheese/Ayib
Consumers

Heating Heating
Market Channel I Market Channel III)
Market Channel II Minor market channels
Butter Oil
Local Whey
Spices
cheese/Ayib
Ghee

Results of LIVES and IPMS studies
• Traditional (lactic) butter production and marketing is highly
commercialized in that 84 % of the farm households who produce
butter sell it and 75 % of the butter produced is sold
• Distance/travel time to fluid milk markets is a key consideration in
targeting butter production
• Unlike the sale of fluid milk, which mainly takes place in and near
urban centers, butter is produced and sold also in rural areas
• Butter churning takes place at household level mainly by females,
both in male and female-headed households
• Production of milk/butter is hampered by availability of feed/fodder
and longer calving intervals
• The relative price of butter to fluid milk appreciated by 73% between
2005 and 2012
Approaches towards improved butter value chain
• Use of GIS technologies with varying coefficients to simulate different
potential butter production areas in a dynamic context
• Bulking and processing of the milk produced by individual households
and use of modern churners by such groups for improved efficiency of
labour and fat extraction
• Aggregation/bulking of butter to increase producers bargaining
position may be obtained by forming larger scale butter processing
and selling cooperatives in the rural areas
• Production of milk or butter can be increased by
• introducing mass insemination with the help of hormones and
mobile teams to improve breeds for butter production
• Provision of extension services on fertility management combined
with feeding/fodder development

On-going activities by LIVES

• Improving oestrus synchronization and mass insemination services
• Testing of churning technologies and business models
• Establishing butter processing and marketing groups in rural areas
• Introducing improved fodder technologies
• Implementing grazing land improvement and management
interventions

Research outputs and documentation

• Berhanu Gebremedhin, et al. 2009. Sustainable land management
through market oriented commodity development: case studies
from Ethiopia
• Blog stories on LIVES website

Berhanu Gebremedhin
b.gebremedhin@cgiar.org ● P.O. Box 5689 Addis Ababa, Ethiopia ● Tel +251 116 172405 ● www.ilri.org

Funding: Canada’s Department of Foreign Affairs Trade and Development (DFATD)

This document is licensed for use under a Creative Commons Attribution –Non commercial-Share Alike 3.0 Unported Licence October 2014