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.