Diary of a Dairy

Almost exactly 2 years ago, I (John) wrote a blog post about what I was then up to in Mekelle, working with a small, local “civil society association” dedicated to helping the mentally ill (https://ethioepic.wordpress.com/2012/10/31/diary-of-an-appendage/). Unfortunately, that venture did not end happily, for reasons too complex to explain here (let’s say that I was perhaps naive, and it turned out that the lure of ferenji money proved too powerful for one of the main players involved).
However, one good outcome was that I formed a strong relationship with four people involved in the association, and we decided to attack the problem from the other end, by setting up a business that would, once it became profitable, be able to provide funding for the treatment of mental illness, and in the meantime would create a number of what in NGO parlance are called “secure livelihoods”, both for my partners and for the employees of the business.
One day in the future, should the business prove successful and profitable, I will no doubt be found pontificating about our prescience, our business acumen, our intuitive grasp of investment opportunities… If that happens, feel free to remind me of the reality. Despite fast development and the ubiquity of things like mobile phones, Ethiopia is not yet a consumer society, except in pockets of the bigger cities. In fact, 85% of its population are still subsistence farmers, with small plots of land and a handful of livestock. Because of the size of the human population, those small plots and handfuls of animals add up to the largest cattle stock in Africa. So when you’re looking to set up a business here, there’s no point fantasising about the kind of niche consumer product that keeps the Dragons occupied in their Den. Agriculture is the way to go.
Mekelle is Ethiopia’s second-largest city, up from around 180,000 when we arrived to nearly a quarter of a million people now. It has a growing middle class, which is starting to look for products that we take for granted, like pasteurised milk, butter, cheese and yoghurt, which are currently brought from Addis Ababa 800 km away and are therefore expensive. So when my partners and I sat down under the avocado tree in our garden 26 months ago, we decided – in the course of a five-minute high-level summit meeting (you see: acumen, prescience, careful planning and all that) – that we would become dairy producers.
Our first step in this direction, in December 2012, was to buy a herd of 20 dairy cows, housed at the time in a small, cramped cowshed within the urban fabric of Mekelle. Though of mixed breed, the animals were part Friesian, with a relatively high milk yield by Ethiopian standards, though not sufficient to keep the Archers afloat. With advice from a dairy specialist, we identified local feed products that could be used to enhance milk yields. We bought a horse and cart, and delivered the raw milk to cafes and hotels around the city, where it is mostly used in macchiato coffee drunk as hot milk with sugar and a sprinkling of local spice.
Though the cowshed was small and dark, and the cows unable to go outside, the place had a certain charm. In the traditional manner, the dung was collected and spread out across the small paddock to dry and then subsequently sold as fuel for the injera ovens. Hay was brought by donkey from the feed market, where I hid in the background as my partners did the negotiation, to avoid inflated ferenji prices.

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The longer term plan was more ambitious. We set up a joint-venture PLC, quite a complex process in a country where most small companies are still sole proprietorships. In the case of PLCs with foreign involvement, a minimum investment in US dollars is required in order to obtain an investment licence.
We applied for agricultural land in Adi Gudem, a village 35 km to the south of Mekelle on the main road to Addis, where the municipal council is keen to attract investors. In September 2013, we were granted a 2.5 hectare plot, on the edge of the village, neighbouring an existing dairy operation whose owner plans to raise a hundred cows.

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We immediately began building, and by January this year (2014) things were taking shape and we were pleased with the progress.

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By April we were able to move the herd from the city into a modern cowshed in Adi Gudem, where the cows had the opportunity to move around in the open, rather than being permanently confined in semidarkness. As well as a small office block, a second large building was erected to house the milk pasteurisation and cheese processing plant which is the next phase of the operation. Since equipment of this kind is unavailable in Ethiopia, it will be imported. At present, the milking is done by hand, but we also plan to bring in mechanical milking equipment.

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In July this year, the land was ploughed in the old-fashioned way (a team of oxen, a wooden plough with a metal ploughshare), and sown with Canadian wheat, alfalfa, pigeon pea, cowpea and other kinds of cattle fodder, ready for the annual rains.

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By September, the usually brown, parched and stony land was alive with green crops and flowers.

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In October, two men with hand scythes harvested the wheat. The grain will be sold and the straw used as cattle feed.
Not everything is being done in the traditional way. Instead of being collected and dried for burning, the manure will soon be channelled through a biogas plant, which will convert it to dry fertiliser for the land, while the gas is used to generate electricity for the milking shed.

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Without going too far into the business complexities of dairy farming in Ethiopia, the big problem is the supply chain, i.e. getting raw milk to a processing plant from many scattered smallholders. We plan to work with the local milk co-operative, with our dairy farmer neighbour and also to expand our own herd to 60 animals.
It is a long way from where we started, and not what I imagined myself doing when we first came here. We will be leaving Ethiopia soon, but the farm will bring us back, and my four partners, Azmara, Gebremedhin, Girmay and Micheale, will carry on the work. If all goes well, by this time next year, AJGG Dairy Products plc will be supplying the huge demand on the Mekelle market for pasteurised milk, cheese, butter and yoghurt.

It is also a long way from the image of Ethiopia that many Westerners still carry with them, since the day almost exactly 30 years ago when the BBC broadcast the first television reports of a devastating famine in Ethiopia, prompting a huge international response, including the Live Aid concert in aid of victims, unforgettably fronted by Bob (give me your f***ing money) Geldof. One of our close friends here, Mitiku, survived the famine as a small boy and recalled his experiences on this blog in June 2013 (https://ethioepic.wordpress.com/2013/06/17/mitikus-story/).
Now, Ethiopia has systems in place to prevent the worst effects of drought through its “food security” programme. It is developing fast, for both good and ill, with the target of becoming a “middle income country” by 2025. Perhaps we may play some small part in that process. We have not lost sight of our original goal, but for the present the objective is that of any young business, to survive and grow.

Posted by ethioepic on 04/11/2014

https://ethioepic.wordpress.com/2014/11/04/diary-of-a-dairy/