Abstract:
The study was undertaken with the objective of assessing Factors affecting distribution channels
of dairy product in Jimma town, Ethiopia. The specific objectives were: To describe dairy
producers participating in Formal and Informal milk marketing channels, To Identify factors
affecting dairy producers‟ choice of milk marketing channel and To Identify the constraints
Dairy farmers‟ face when supplying milk to formal marketing channels. Cross-sectional data
was collected from 62 dairy producers, 24 cafeterias randomly selected urban and peri urban
households of four sub city of Jimma town. Both descriptive and quantities techniques
(correlation and Multinomial Logistic Regression) were used in data analysis. From the results
Out of the total dairy producers 34.4%, 31.1, 21.3% and 13.1% were consumers, cooperative,
cafeterias/hotels and wholesalers /retailers market channels/outlets, respectively and they are
55.7% and 44.3% dairy producers used Formal market system and informal marketing system
were milk dairy market distribution channels respectively. Regression result shows that access to
credit, institutional support and member to dairy cooperative association and Payment model
dairy market use has positive and significant effect on the preference of formal milk markets and
Ages of household head, Experience dairy producer head and average milk sold per day has
negative and significant effect on formal milk markets. Based on the main findings the study
recommend sex, to aware milk producers to choose good market outlets such as cooperatives for
efficient and profitable marketing of dairy and suggests the government to increase the access of
cooperatives and the improvement of the infrastructure to enhance milk marketing. As a result,
access to milk market outlets of households can be segmented by socioeconomic and
demographic characteristics, physical capital, market access, institutional support services and
attributes of alternative milk market outlet The findings are quite consistent with the expected
behavior of Ethiopia dairy farmers and provide a clear picture of the milk marketing behavior .
In view of research findings, several policy proposals are suggested. These include offering
reasonable prices price per litre of milk, propelling collective actions, provision of non-price
incentives, re-structuring existing dairy institutional arrangements, establishing milk collection
centers, encouraging value addition (adoption of best upgrading practices) and investment in
dairy processing (empowering SMEs).
