Chapter 10: PROMOTING AGRO-ENTERPRISES IN THE HIGHLANDS OF ETHIOPIA THROUGH IMPROVED INSTITUTIONAL SUPPORT SERVICES: EXPERIENCES OF MARKET-ORIENTED DAIRY AND FATTENING DEVELOPMENT

Ethiopia's agriculture-led industrial development strategy (ADLI) stipulates that smallholder-led commercial transformation of agriculture is vital for the social and economic development of the country. The improving productivity and market success (IPMS) of Ethiopian farmers project is intended to demonstrate market-oriented transformation of smallholders in Ethiopia. This five-year project, operating in 10 districts distributed in four Regional States, follows innovation systems perspective and value chains framework, and participatory commodity development approach in identifying and implementing various interventions. Action research is an integral part of the project designed to draw and synthesize lessons for scaling out and up of successful practices. This chapter presents syntheses of the results and lessons of the development of institutional support services in promoting market-oriented dairy and livestock fattening to transform smallholder farms into rural agro-enterprises. Major conclusions and implications include: (1) the traditional production and technology focused extension service approach is inadequate for market-oriented agricultural development; market-oriented extension service is required; (2) provision of market information in various forms, facilitating virtual or physical linkages of producers with buyers, and formal and informal collective action for produce marketing increase bargaining power of farmers; (3) different input supply systems including community-based, farmer-to-farmer, the private sector, cooperatives and the public sector can be appropriate and effective for different value chains; (4) creating linkages between producers, input suppliers and other value chain actors is an important part of value chain development and a task for the extension service; (5) market-oriented agricultural development is a continuous and dynamic process that requires different types of interventions at different stages of development; (6) community-based insurance for small ruminant fattening enterprises can be successfully developed, benefiting especially female-headed households; and (7) credit systems to support small-scale commercial livestock production and agribusinesses can be successfully used to boost production and the supply of inputs and services.