Melkam Endale Dairy Farm and Milk produces raw milk from its dairy farm in the heart of Ethiopia's Oromia region. The company also sources raw milk from smallholder farmers and processes it into affordable and nutritious dairy products such as pasteurized milk and yogurt. These products are sold in Addis Ababa and nearby cities. By collecting milk from smallholder farmers, Melkam provides them with market stability and a way to increase their milk productivity, which can help them move away from subsistence farming and support their households more effectively. However, the COVID-19 pandemic impacted Melkam's ability to serve its community and empower smallholder farmers.
Melkam received a grant of US$50K from USADF in 2020. This grant was instrumental in helping them recover from the adverse effects of COVID-19. The company used the grant funding to procure additional raw milk, cover expenses related to staff upkeep, and acquire personal protection equipment (PPE) materials. They also used the grant funding to provide salary support to employees amidst declining revenue. Additionally, Melkam could help their smallholder farmer suppliers by leveraging their business relations to purchase concentrated feed in bulk at a fair price, thus benefiting struggling farmers.
Melkam's raw milk processing and sales showed significant growth, from over 1.4 million liters to 1.8 million liters by the end of the 2021 project. They also purchased more milk from smallholder farmers, going from 1.07 million liters to nearly 1.9 million liters. These developments increased gross revenue from US$667K to US$1.14M, indicating substantial business growth. In addition, despite the pandemic, Melkam maintained the health and safety of their 91 employees while diversifying their product range with a new low-cost, nutritious beverage called "Whey-Juice," made from cheese-making by-products, which also helped reduce production waste.
Melkam's impact on smallholder farmers is evident in the success of Germame farmers, located 10 kilometers from the MEDFMP facility. Previously, these farmers sold their raw milk to traders who offered low prices, particularly during fasting seasons when demand decreased. However, since Melkam began purchasing their raw milk, the farmers have received better prices throughout the year, even during fasting periods. Melkam also provided technical advisory services on dairy cow management, which helped to increase the farmers' milk production, quality, and prices from US$0.37 to US$0.54 per liter. Since the completion of the project, the number of farmers who supply milk to MEDFMP has increased from 87 in August 2021 to 150 in August 2022. Additionally, the daily collection of raw milk has increased from 870 liters to 2,000 liters during the same period.
With dedication and innovation, Melkam has established a thriving dairy business, created sustainable market access, improved livelihoods, and overcome numerous challenges. Their story is a testament to the potential of local entrepreneurship and collaborative partnerships in fostering economic growth, improving livelihoods, and creating healthy communities.