Peasant Associations (PAs)
16. Peasant associations (PAs) by definition are mass rural organizations (at grassroots level) with an average 280 household members and a total landholding of about 800 hectares per PA. In peasant associations where PCs have not been formed and also where smallholders have not had any livestock credit services, the manner of grazing land allocation and utilization and the mode of production and livestock keeping in general have remained the same as in the pre-land reform period. In these circumstances, private as well as communal grazing land continue to be the main sources of feed. The traditional extensive management system still prevails. Where smallholders receive credit through SCs, AIDE obtains assurance that adequate pasture land, ranging from 1.5-2 ha. per adult animal, would be allocated for each participating farmer. It has, however, proved very difficult for the bank to verify this landholding on the spot.
17. In contrast, in PAs where PCs have been formed it is not uncommon to reserve extensive grazing land of relatively good quality for use exclusively by PCs. As a direct consequence, non-PC members' animals are restricted to grazing small and marginal private as well as communal grazing lands. In these situations severe soil erosion and land degradation resulting from overstocking constitute a major concern.
18. As will be noted in subsequent discussions, some individual smallholders who are members of PAs have been participating, in dairy, beef fattening and draft oxen loans for some time now. Generally, however, government policy has given low priority to the promotion of individual-ownership small-holder dairy enterprises in the peasant sector. It is only recently that the government started supporting such programs on an extended scale in the post-revolution period - e.g. the Government of Finland supported Selale Peasant Dairy Development Project.
Service Cooperatives (SCs)
19. Service cooperatives (SCs) representing an affiliation of 3 to 10 PAs, are established to facilitate the bulk purchase and supply of inputs and farm implements, and to provide, in the main, produce marketing, milling as well as shopping services to member PAs. Apart from providing these essential services, a large number of SCs in various regions have in the past been actively involved in dairy farming using hired management. While their direct participation in production activities had been questioned from the outset, their extremely poor standard of management has additionally precipitated the fast closure of most of the SCs' dairy farms. Service cooperatives are now in principle barred from direct participation in dairy production.
Producer Cooperatives (PCs)
20. Producer cooperatives (PCs), whose nuclei start in PAs, are institutions where the means of production are collectively owned and utilized. PCs can be formed with a minimum of 3 households and become legal entities with a membership size of at least 30 households, provided other preconditions for economic viability are fulfilled. In full-fledged PCs, where all members of the PAs have become members there can be no privately owned grazing land. This means, all privately owned animals would have to be kept on communal grazing land outside the PC holding. Some cooperatives have altogether abandoned individual ownership of animals due to the critical shortage of pasture land.
21. Invariably, PCs' oxen and improved dairy animals have priority over privately owned animals in the allocation of pasture land (0.5 ha/ox and 1-2 ha/cow and its followers, on average). Consequently, as pointed out earlier, privately owned animals are destined to poorly managed and marginal lands. This special attention given to PC-owned animals has in fact aggravated the overstocking of communal grazing land. For this reason, PC managed livestock activities are generally resented by non-PC members as well as PC members.
22. Cultivated fodder production to supplement natural pasture is not wide-spread, and even where it has been introduced the scale of operation is limited to 1-3 ha. Also concentrate feeding is not generally encouraged on grounds of its cost implications, though it is not part of government policy to discourage concentrate feed use.
23. In some PCs, inadequate pasture and shortage of water have seriously hampered livestock activities. In others, where dairying has not been started and where cooperative activity is confined to crop production, livestock development has been relegated to mere oxen keeping. In some localities where improved sheep raising has been started, a rule-of-thumb pasture land allocation of 0.2 ha/adult sheep is followed, but with increasing pressure this does not seem to be sustainable in the future.
24. PC operated farms are in general also more intensively cultivated with virtually no fallow land, and they do not follow strict crop rotation systems either. As a consequence, especially in areas where livestock density is considerably high even the dairy animals are reduced to a scavenging status along with sheep, goats and poultry. Due to the existing demarcation of landholding between PAs, the free movement of animals for grazing from one locality (PA) to another has become almost impossible.
25. All in all, PC dairy farms have not performed well even where the resource endowment is considered adequate. The productivity of cross-bred cows (F1) in PCs is limited to a maximum of about 1500 Its/lactation on average, while 2000-2500 its/per lactation is the expected yield level under reasonably good management. However, more worrisome at the moment is the sudden disruption of PC-managed dairy activities in the face of the unexpected dissolution of a large number of such cooperatives across the country.
Parastatals
26. The existing state-run dairy enterprises (15 in total) on the outskirts of Addis Ababa and other big cities, with the exception of 2 or 3, are ones which were taken over from private operators. Among the first nationalized dairy farms, some 3 were closed down, some have been consolidated and rehabilitated, and some have been restructured. Only 2 or at most 3 new state-run dairy farms have been established during the post-revolution period.
27. All the major dairy processing plants including the Shola Milk Processing Plant in Addis Ababa are state owned and operated by the Dairy Development Enterprise (DDE). In 1987 and 1988, the state farms supplied on average about 36% of the total annual fresh milk throughput of the Shola Milk Processing Plant. In the same period, the supply by smallholders (through collection centers) and private commercial dairy farmers accounted for 32% and 6% respectively. Imported milk powder (including food aid) used to reconstitute milk accounted for the remaining 26%.
Private Commercial Farms
28. Some of the privately owned small and medium size commercial dairy farms have been seriously disrupted to the point of bankruptcy, and far worse, some have been altogether abandoned. Due to the critical feed shortage, ascribed mainly to the land tenure system, and other technical and non-technical constraints, only some six private commercial dairy farms have been considered viable enough for bank financing in the post-revolution period.
