Impacts of Dairy Cooperatives on the Livelihoods and Quality of Milk from Smallholders in Selected Areas of Central Ethiopia

Abstract

The purpose of this study was to evaluate how dairy cooperatives affect smallholder farmer livelihoods and raw milk quality in selected districts of Ethiopia’s central highlands. Utilizing data from 205 farm households (156 members and 49 nonmembers),
the research employed descriptive statistics and propensity score matching to examine key parameters such as milk production, selling price, household income, consumption, and labor demand. In parallel, 45 milk samples (30 from cooperative members and 15 from non-members) were laboratory-tested using t-tests to compare physicochemical and microbiological characteristics. The analysis revealed that cooperative membership significantly elevates milk output and total household earnings, largely because members benefit from improved access to crossbred cows, veterinary care, production inputs, and market intelligence. Although
non-member producers obtained marginally higher prices by selling directly to consumers, cooperative members achieved greater overall economic returns through steady market access, price protection, and annual dividends. Furthermore, increased
herd sizes among members stimulated farm employment. While informal markets, fluctuating demand, and quality control remain prominent obstacles, expanding urban centers, demographic shifts, government policies, and proximity to commercial dairy processors provide substantial growth prospects. Crucially, laboratory results demonstrated significant quality variations between groups, as milk from nonmembers displayed lower specific gravity values (1.023 to 1.024) than member milk (1.027 to 1.028), with member samples also recording significantly higher average total solids and fat content (P < 0.01). Consequently, the study highlights the value of cooperative networks and recommends refined milk handling practices to safeguard product quality.