48. A recent study (Assefa, 1989) dealing with a resource allocation problem of cooperative farming in the central highland regions of Ethiopia revealed that specialization in crop production does not provide the opportunity for optimal allocation and efficient utilization of the physical, human and financial resources. The study has established that an optimal mixed farming, consisting of a few major crops, dairy (20-50 lactating cows) and sheep (100300 ewes), would substantially improve the productivity of PCs. On this basis the model projected that individual members' farm income would grow by at least three-fold. This model presupposes better management and availability of adequate credit for securing an optimum mix of technology including draft oxen and tractorization. It also assumes that farmers will continue to commit freely their resources to the PCs' production needs.
49. Taking the economic benefits as the sole criteria, the optimal organization of PCs on such a scale looks very attractive. However, in the face of the problems currently facing cooperative farming systems, the question is whether this development approach would be convincing to farmers to participate voluntarily. As it has been witnessed in Arsi region and elsewhere some cooperatives have been dissolved and the land has been redistributed to the members leading to a restoration of individual smallholder farming.
50. Livestock keeping under the traditional individual smallholder management system may be supported from the social and cultural viewpoints. Where economies of scale deriving from larger sized operations are considered important in the introduction and adoption of improved livestock technology in production, processing and marketing, reverting to small individual holdings would not offer a unique and optimal solution to the development of a viable livestock production system in the peasant sector. On the other hand, as indicated earlier, farmers are unlikely to be persuaded to join groups based on collectively owned and managed resources. The following options are indicated for future consideration.
51. i. Group Farming
A group farming system based on individual ownership of the means of production (land, animals, etc.) and individual freedom in the appropriations of farm income, but cooperatively organised farm operations would facilitate the absorption of improved technology and management system with economies of scale advantages.
52. In order to avoid past problems, group farming initiatives should be guided by farmer participation being truly voluntary. Individual smallholder operations need not be disrupted until the farmers themselves fully appreciate and recognize the benefits of group undertakings. The size of the group should as well be determined by the farmers themselves with some assistance and/or advice from extension and credit officers. Some guidelines on the economic and social characteristics of farmers which form particular groups would help establish desirable homogeneity. By and large, such group farming would adopt extensive management system at least in its initial phase of development.
53. As far as livestock development (particularly dairying) is concerned, the group farming effort would start with selected local cows to be integrated with crop production. Subsequently, when this proves viable, cross dairy animals along with the associated technology would be introduced. Though the emphasis so far has been on dairying, the meat production component is equally important. Considerable effort should be made to strike a balance between the two commodities, i.e. between milk and meat. Oxen loans aimed at only increasing crop production need to be carefully re-examined in terms of incorporating a commercial beef fattening scheme.
54. To facilitate the marketing of fresh milk in particular, several small milk-collecting centers within the proximity of the producing farmers need to be established. These centers need to be integrated with the primary SCs to be established at the PA level. In turn, these primary SCs would be integrated with secondary SCs to be established at the next higher level serving, say, up to 10 PAs. From there on, there could be a chain of advanced SCs (with more facilities) at district or provincial-level depending on the proximity of the terminal markets. Under the circumstances where this marketing structure would not be effective or where transportation of liquid milk is cumbersome, small-scale processing technology should be considered as an alternative.
55. In developing group farming systems, careful study of the experience of other countries in group production, processing and marketing would be very useful. In this connection, adequate lessons from other countries and organizations should be drawn e.g. the Grameen Bank of Bangladesh, the rural banking system in Ghana, group farming in Nigeria, the group credit schemes in Malawi, the Small Farm Credit Programme in Zimbabwe, 'Operation Flood' dairy development in India and the Kenyan Cooperative Creameries (KCC). In fact, before embarking on large-scale implementation of group farming in rural Ethiopia, pilot trials will be essential to assess the proper entry points into the existing farming system with due attention to the prevailing political, social and economic environments. These pilot programs would provide basic information on such matters as an optimum economic unit, patterns of resource allocation credit and marketing systems, and effective approaches to the provision of extension and technical services.
56 ii. Individual Smallholder Production
Where the feed resources are adequate and economic infrastructure are better developed, the promotion of individual smallholder dairy enterprise systems and/or small-scale fattening schemes, appears to be feasible as another option. Intensive management in resource utilization would seem proper in the framework of this option. In the immediate future, however, as smallholder are not organized and ready to undertake either group or individual ventures, private commercial dairy farmers around major urban cities should be encouraged. In fact, their success would have an impact on the rapid progress and promotion of rural dairy farms through the supply of improved foundation stock and other dairy and livestock-related technologies.
