Dambali Dairy Farm

The Dambali Dairy Farm was established in 2008 by Dr. Alemtsehai Tesfa Gammada, a female dairy farmer with a PhD in Animal Science and a former lecturer at Helsinki University, Finland. The farm is located on Dr. Gammada’s 4.5 ha. family plot, officially registered on 16/10/2006 GC with the license number KIO/IO/H938/98. Dr. Gammada also holds a 50 year agreement to land usage rights with the municipality of Naqamtee under the registration certificate number 0004403041, issued 2/04/2008. The farm currently includes a 40 x 14 meter barn, constructed in July 2010, with tie-up stalls and space for 37 animals. The farm also has separate calf rearing and feed storage barns, a milk collection room, and office. The farm began to produce milk in July, 2011 and now produces up to ~250 liters per day from 17 dairy cows. The space available in the cowshed is adequate for 20 more animals.

Purpose of Grant

The expansion of Dambali Farm in East Wollega is an AGP-LMD ‘Cornerstone’ activity. Implementation of this expansion of the Dambali Farm will go well beyond the mere increase in processing capacity of a single enterprise: the establishment of this milk collection system together with its state-of-the-art processing plant in an area of high dairy potential but presently without any cooling or processing capacity, will catalyze the emergence of a formal dairy sector providing not only a safe supply of milk for thousands of local consumers, including children, but also creating offering dairy producers the opportunity to expand their production, increase their income and stimulating many new job opportunities, initially targeting the 200 milk producers in the Dambali Farm milk shed.

The purpose of this grant is to establish three milk collection centers and a dairy processing plant in East Wollega Zone which currently has no formal dairy processing capacity to serve its population of over 96,000 inhabitants. This grant will enable Dambali Dairy Farm and to process 1,500 liters of raw milk into pasteurized milk and other dairy products a day, expanding to 5000 lts/day within the next 3- 5 years. The balance of the milk initially required for processing (~225 liters) will be produced on the Dambali Dairy Farm itself. The business plan is to gradually increase the number of collection centers serving East Wolleda Zone, and to expand the Farm’s processing capacity to 10,000 lt/day. While acknowledging the risk associated with such an ambitious investment plan, they will be closely and carefully managed but the clear and obvious need to develop a formal dairy value chain in East Wollega, and the substantial development benefits of financially and technically supporting the Dambali Farm expansion are believed to justify this investment.

Notably, USAID’s AGP-LMD grant funds will be used to leverage a $367,550 loan from the Cooperative Bank of Oromia which has conditionally been approved. The loan funds will be used as partial cost share for the new processing facility, working capital, to provide embedded services (feed and veterinary inputs) to smallholder farmers, and to expand and improve the Dambali Dairy Farm facilities.