Global Journal of Management and Business Research: B

Economics and Commerce

Volume 18 Issue 5 Version 1.0 Year 2018
Type: Double Blind Peer Reviewed International Research Journal
Publisher: Global Journals
Online ISSN: 2249-4588 & Print ISSN: 0975-5853

Camel Milk Marketing Channel Choices for Enhancing

Competitiveness in Eastern Ethiopia: Multinomial Logit Approach
By Bedilu Demissie, Hussien H. Komicha, Adem Kedir & Sisay Asefa
University of Winnipeg
Abstract- Literature on camel milk market channel choices has been thin, especially in pro-poor
pastoral/agro-pastoral area of sub-Saharan Africa, as a result its prudent to note that none of past studies
identified factors affecting camel milk market channel choices in Eastern Ethiopia even though camel milk
market access is pivotal to transform livelihood of people who live in arid and semi-arid areas of Ethiopia.
Therefore, the study seeks to determine factors influencing camel milk marketing channel choice in
Gursume and Babile districts of Eastern Ethiopia, with the aim of enhancing camel milk competitiveness.
Data were collected from 92 camel milk producers’ pastoral/agro-pastoralist by using two-stage stratified
sampling. Multinomial Logit model was employed for analyzing data. Multinomial Logit model result
indicated that, compared to assembler market channel outlet (base channel), the likelihood of accessing
consumer market outlet was higher among pastoral/agro-pastoral who have higher educational level,
better livestock extension services, better milk market information and higher income from none dairy
source. The likelihood of accessing commission man milk marketing channel choice was higher for
households who wanted better milk price offered by commission agent as compared to the base channel.
Compared to accessing assembler market outlet, the likelihood of accessing retailer milk market outlet
was higher for those who have better dairy extension services and for those who were far away from
milk market.
Keywords: camel milk, marketing channels, multinomial logit, pastoralist.
GJMBR-B Classification: JEL Code: M29

CamelMilkMarketingChannelChoicesforEnhancingCompetitivenessinEasternEthiopiaMultinomialLogitApproach
Strictly as per the compliance and regulations of:

© 2018. Bedilu Demissie, Hussien H. Komicha, Adem Kedir & Sisay Asefa. This is a research/review paper, distributed under the
terms of the Creative Commons Attribution-Noncommercial 3.0 Unported License http://creativecommons.org/licenses/
by-nc/3.0/), permitting all non-commercial use, distribution, and reproduction in any medium, provided the original work is
properly cited.
 Camel Milk Marketing Channel Choices for
Enhancing Competitiveness in Eastern Ethiopia:
Multinomial Logit Approach
Bedilu Demissie α, Hussien H. Komicha σ, Adem Kedir ρ & Sisay Asefa Ѡ

Abstract- Literature on camel milk market channel choices has livelihood for 60 to 70% of the population (NBE, 2005/ 06),
been thin, especially in pro-poor pastoral/agro-pastoral area of and accounts for about 12 to 15% of national export

2018
sub-Saharan Africa, as a result its prudent to note that none of earnings (EEA, 2005). However, CPALD (2013) revealed
past studies identified factors affecting camel milk market

Year
that agricultural GDP calculations in Ethiopia
channel choices in Eastern Ethiopia even though camel milk
underestimated the contribution of livestock to the
market access is pivotal to transform livelihood of people who
live in arid and semi-arid areas of Ethiopia. Therefore, the Economy because the value of economic benefits that 31
study seeks to determine factors influencing camel milk are derived from livestock power for farming and

Global Journal of Management and Business Research ( B ) Volume XVIII Issue V Version I
marketing channel choice in Gursume and Babile districts of transport are not routinely included.
Eastern Ethiopia, with the aim of enhancing camel milk In arid and semi-arid parts of sub-Saharan
competitiveness. Data were collected from 92 camel milk Africa, pastoralism is a well-suited way of life. In Ethiopia
producers’ pastoral/agro-pastoralist by using two-stage pastoral area cover more than 62% of the national land
stratified sampling. Multinomial Logit model was employed for
area (EARO, 2003), which support about 9.8 million
analyzing data. Multinomial Logit model result indicated that,
compared to assembler market channel outlet (base channel),
people of which 56% are pastoral, 32% are agro-
the likelihood of accessing consumer market outlet was higher pastoral and remaining 22% are urban dwellers
among pastoral/agro-pastoral who have higher educational (EEA, 2005). It contribute about 30% of the GDP and
level, better livestock extension services, better milk market 90% of the hard currency from live animal export and
information and higher income from none dairy source. The employs about 27% of the national population (Amaha,
likelihood of accessing commission man milk marketing 2003). However, this communities are marginalized and
channel choice was higher for households who wanted better generally not given due consideration in wider socio-
milk price offered by commission agent as compared to the political analysis (Simenew et al., 2013) of the country
base channel. Compared to accessing assembler market
relative to Highland area.
outlet, the likelihood of accessing retailer milk market outlet
was higher for those who have better dairy extension services Camels live in the vast pastoral areas in Africa
and for those who were far away from milk market. The study and Asia, Ethiopia stands third in camel population in
reveals to exploit the indigenous social capital of pastoral/ Africa by possesses over 2.4 million dromedary camels
agro-pastoral to enhance milk marketing supply chain, (FAO, 2010), which is all owned by pastoral. In this
in addition to strengthening the formal institution harsh area, camels produce milk even during the dry
(such as education, livestock extension and develop milk season when milk from cattle is scarce (Bekeleet al.,
collecting cooperatives) to increase the competitiveness of 2002), because of this outstanding performance
camel milk market in semi-arid areas of Ethiopia and sub- pastoralists of eastern Ethiopia mainly rely on camels for
Saharan Africa in general.
their livelihood, without camel their life can be
Keywords: camel milk, marketing channels, multinomial
jeopardized. However, despite its significant contribution
logit, pastoralist.
camel is one of the neglected domestic livestock by the
I. Introduction scientific community in Ethiopia (Yesihak and Bekele,

E
2003), until recently. Even regarding camel milk, very
thiopia is one of the richest countries in livestock
little is known and understood about its marketing,
inventory both regarding number and diversity.
despite its critical and increasingly relevant role for the
However, the benefit obtained from it is low as
pastoral/agro-pastoral food security (Nori, 2010).
compared to other African countries. The livestock
Ethiopia produces about 75,000 tons of camel
subsector comprised 24% of agricultural GDP between
milk (Felleke, 2003). However, pastoralists have not
the year 1995/96 and 2005/06, and is a source of
economically benefitted to the extent they ought to from
Author α ρ: Department of Agricultural Economics, College of the milk produced (Bedilu et al., 2015) because their
Agriculture and Environmental Science, Arsi University. participation in market-led dairy development has
e-mails: bediluzeleke@yahoo.com, billybedilu@gmail.com not been widespread. Hence, increasing pastoral
Author σ: Department of Economics, University of Winnipeg, Winnipeg,
Canada.
market participation as well as developing chain
Author Ѡ: Department of Economics, College of Arts and Sciences, competitiveness and efficiency are valuable strategies
Western Michigan University (WMU). for poverty alleviation and food security in arid and semi-
© 2018 Global Journals
 Camel Milk Marketing Channel Choices for Enhancing Competitiveness in Easter Ethiopia: Multinomial
Logit Approach

arid part of Ethiopia. According to CSA (2015), for the to 2000 m above sea level, respectively. The area has a
year 2014, out of the total milk production only 6% was good potential for camel and camel milk production,
sold. This low volume of sale is attributed to market- which is mainly commenced by pastoral and agro-
related issues such as, low collaboration among dairy pastoralists households of both Oromia and Ethio-
value chain actors, bargaining on price setting, weak Somali tribe. The districts livestock population
market integration, forging forward and backward comprises of 125, 996 cattle, 23160 sheep and 10936
linkages, lack of relevant market information, lack of camel (East Hararghe profile, 2009).
meeting the market quality and safety requirement
b) Source of data and sampling techniques
(Andualem, 2015; Ketema et al., 2016), and lack of
The field was conducted during 2012/13 year.
market-oriented production.
Data collection focused on household heads, key
One of the necessary condition for producers to
informants, rapid market appraisal and focus group
reap economic benefits is the provision of assured milk
discussions. In addition to the primary data, different
market outlets (Bardhan et al., 2012). However, scant
2018

sources were used to collect secondary data. The

attention has been given on analyzing the factors that
selected districts and Peasant Associations (PAs) were
Year

determine dairy producers’ channel choice (Berhanu et

selected as they were considered the milk-shade due to
al., 2013), especially there have been relatively few
their potential for camel milk production and
32 studies to quantitatively asses milk market outlet issue
commercialization. Two-stage stratified sampling was
(Falkowski et al., 2008), even though market access is
employed to select the sample households (HHs). The
Global Journal of Management and Business Research ( B ) Volume XVIII Issue V Version I

one of the major limitations in harnessing opportunities

base for stratification of sample household was milk
in camel milk production, as camels live most of the
production types as only camel, and both camel and
time in remote area their milk accessibility could be
cow milk producers as pastoralists and agro pastorals
difficult. The major camel milk marketing channels 1
own only camel or else both camel and cow as their
through which pastoral and agro-pastoral of eastern
livestock herd. Based on the stratification, 53 and 40
Ethiopia can deliver their camel milk are consumer
households were selected from only camel, and camel
channel, assembler channel, retailer channel and
and cow milk producers, respectively. Then using
commission agent channel.
probability to proportional sample size sampling
To maximize the benefits that pastoral and
technique making the sample HH level 93 households.
agro-pastoral earn, they have to make an appropriate
decision as to where and to whom they should sell their c) Theoretical Framework
camel milk produce. Identifying these factors is very The study is based on the theory of rational
important regarding determining areas of interventions choice, which is used in modeling economic behavior.
for effective policy formulations and to integrate pastoral The theory assumes that pastoralists and agro-
and agro-pastoral into the modern marketing channels. pastoralists are rational, means they will rank alternative
Consequently, the research is aimed at providing an marketing channel outlets in order of utility subject
empirical basis for identifying camel milk market channel to pastoralists socio-economic, demographic and
choices of pastoral/agro-pastoral. In doing so, the study institutional factors influencing the choice entrenched in
attempts to contribute to filling the knowledge gap by each outlet. Hence, pastoralists’/agro-pastoralists’ milk
assessing factors affecting camel milk market outlet marketing channel outlets choice was conceptualized
choices in eastern Ethiopia. using the random utility model.
The pastoral and agro-pastoral of eastern
II. Material and Methods
Ethiopia were mapped into four marketing channel
a) Topography and climate of the study region outlets: direct consumers, assembler, retailer and
The study was conducted in the arid and semi- commission agents. The camel milk producer pastoral/
arid area extending from Gursum to Babile districts of agro-pastoral i was able to choose from a set of
Hararghe zone, Oromia Regional State of Ethiopia, alternative channels (j=1,2,3,4) (which provided a
along the main road to Jijjiga having an area of 967.3 certain utility level 𝑈𝑈𝑖𝑖𝑖𝑖 from each alternative, by
km2 and 3022.2 km2, respectively. The camel milk-shade comparison on marginal benefit and costs based on the
extends from Dire Dawa to Harar to Jijjiga milk-shade, it utility that will be gained by selling to particular camel
is not only limited to Gursum and Babile districts. milk marketing channel.
Gursume and Babile districts are characterized However, according to Green (2002), it is not
by warm lowlands between 1200 m to 2950 m and 950 possible to directly observe the utilities, but the choice
made by pastoral/agro-pastoral revealed which
1
Camel milk marketing channel is a sequence of milk marketing marketing outlet provides the great utility. Hence, the
institutions from milk producers to final consumers, including
pastoral/agro-pastoral milk producers, milk traders (such as
utility was decomposed into deterministic 𝑉𝑉𝑖𝑖𝑖𝑖 and
assemblers, retailers, wholesalers etc.), brokers, commission agents random ℇ𝑖𝑖𝑖𝑖 part:
and the final users of camel milk, who exist for their joint opportunity in
the camel milk market. 𝑈𝑈𝑖𝑖𝑖𝑖 = 𝑉𝑉𝑖𝑖𝑖𝑖 + ℇ𝑖𝑖𝑖𝑖 (1)

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 Camel Milk Marketing Channel Choices for Enhancing Competitiveness in Easter Ethiopia: Multinomial
Logit Approach

Since it was not possible to observe the random indicates that there are J-1 for sets of β estimates. In
(ℇ𝑖𝑖𝑖𝑖 ) and predict exactly the choice of camel milk other words, the total number of parameter estimates is
marketing channel, the probability of any particular (J-1)k. This implies that the sample size should be larger
channel choice was used in which a pastoral/agro- than (J-1)k.
pastoral selected a marketing outlet j=1 if: To test the potential multicollinearity problem
(2) among discrete and continuous variable (Green (2002),
U ij > U ij ∀i ≠ k
variance inflation factor (VIF) and contingency coefficient
Where 𝑈𝑈𝑖𝑖𝑖𝑖 represents a random utility (CC) among explanatory variables were tested,
associated with the market channel outlet j=k, 𝑉𝑉𝑖𝑖𝑖𝑖 respectively. And it was found not to have any potential
represents an index function denoted the decision influence on estimates from the model. The econometric
maker’s average utility associated with this alternative software STATA 13 is used to estimate the parameter
and ℇ𝑖𝑖𝑖𝑖 represents the random error. coefficient and predicted marginal value.

2018
d) Methods of data analysis e) Variable Hypothesis
Both descriptive and econometric tools were i. Dependent Variable

Year
used to analyze the collected data. Descriptive statistical Camel milk market channels or outlets are those
tools were used to explain the socio-economic, pathways where camel milk produce passes through to
demographic and institutional characteristics of camel 33
reach the final consumer. According to the consumer
milk market participants. While Multinomial Logistic theory, camel milk producers are expected to choose

Global Journal of Management and Business Research ( B ) Volume XVIII Issue V Version I
Model (MNL) was used to identify the determinants of the best channel through which they sell their camel milk
camel milk market channel choice decisions (Berhanu et depending up on various criteria. The prevailing
al., 2013; Xaba and Masuku, 2013; Mukiama et al., alternative camel milk marketing channels for the
2014; Bezabih et al., 2015; Riziki et al., 2015) of the sampled households include Direct to Consumer,
sampled pastoralists and agro-pastoralists, because it Assembler, Retailer and Commission agent. Of which
is the standard method for estimating unordered, multi- the base category is Assembler Channels only because
category dependent variables. It also assumes this channel was chosen by most of the pastoral/agro-
independence across the channel choices, that is, it pastoral households to trade their camel milk.
does not allow correlation between alternatives Consequently, the dependent variable for the
(Wooldridge, 2006). model is discrete variable taking a value of 1, 2, 3, and 4
The result revealed that households accessed representing the channel choices, where 1 represents
milk market channel outlets such as individual selling camel milk through consumer channel; 2
consumers, assembler, retailer, commission agents and represents selling camel milk through assembler
the combination of thereof. However, due to mutually channel; 3 representing selling camel milk though
inclusiveness of choices, fewer representation and retailer channel; and 4 represents selling camel milk
similar collection and operation practices, only through commission agent channel.
household who had access to individual consumer,
ii. Independent Variables
assembler, retailer and commission agents camel milk
Based on earlier works (Alemu et al., 2012;
market channels were considered in multinomial logit
Berhanu et al., 2013;Xaba and Masuku, 2013 ; Mukiama
regression. Out of these channel choices, selling camel
et al., 2014; Bezabih et al., 2015; Geoffrey et al., 2015;
milk to assembler was taken as a base category against
Moturi et al.,2015; Mutura et al., 2015; Riziki et al., 2015;
which other milk market channels are going to be
Frank et al., 2017) and observations during field survey
compared. Following Green (2003), the Multinomial
in arid and semi-arid area of eastern Ethiopia, the
Logit model for multiple choice problems takes the form:
pastoral/agro-pastoral households’ decision to choose
β j xi
 a particular camel milk market channel depends on
Pr( y = j ) = β j xi β j xi
or socio-economic, institutional and demography variables.
 βo xi +  + ... +  The expected effects of each of these variables
k are summarized as follows in Table 1. The following
∑ β jk xk variables were used as an independent variable: Age of
 k =1 the household head (AG_HH), Educational level of
Pr ob( y = j ) = k (3)
J −1 ∑ β jk xk household head (EDL_HH), Household members under
1 + ∑  k =1 5 years (HH_MM5_YR), Experience in livestock
j =1 Production (EXP_LIV_PRO), Livestock extension service
(LV_ESV), Distance to near dairy milk market
Given Prob (y =1), where j =1,2,3, J -1.
(DS_MLK_MRK), Number of milk camel own
The parameter β has two subscripts in the (N_MIK_CAM), Milk market information (MRK_IFF),
model, k for distinguishing x variables, and j for Quantity of milk sold (Q_MIK_SOLD), Income from non-
distinguishing response categories. The subscript j dairy source (IN_NOND) and Family size (FS_HH).
© 2018 Global Journals
 Camel Milk Marketing Channel Choices for Enhancing Competitiveness in Easter Ethiopia: Multinomial
Logit Approach

Table 1: Description of the independent variables used in the logistic regression model
Independent Variable Type Value Hypothesis
AG_HH Continuous Number of years +
EDL_HH Continuous Years of schooling +
EXP_LIV_PRO Continuous Years +
HH_MM5_YR Continuous Number -
LV_ESV Dummy 1=Yes, 0=No +
DS_MLK_MRK Continuous Kilometer -
MRK_IFF Dummy 1=Yes, 0=No +
N_MIK_CAM Continuous Number +
Q_MIK_SOLD Continuous Liter +
IN_NOND Continuous Birr +
FS_HH Continuous Adult Equivalent -
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III. Results and Discussion condition for the study area. The study spotlighted
Year

that, the total camel milk produced per day in the

Camel milk is the vital part of a diet for study area was estimated to be 1720.25 liters or
34 pastoralist of eastern Ethiopia, especially during the 12041.75 liters of milk per month, and the average
drought period when pasture is scant, and it produces milk yield per lactation per head was found to be
Global Journal of Management and Business Research ( B ) Volume XVIII Issue V Version I

milk when milk from cattle is scarce (Bekele et al., 2002). 1391.23 liters. The study reveals that all of the camel
In the study area camel milk is consumed mostly as a dairy owned by sampled respondents were found to be
raw state, milk tea, and in the form of fermented milk local breeds, which are low in milk productivity as
without adding any value to the camel milk, because of compared to Israel’s’ dairy camels which yield 20 liters a
the limited ability of camel milk to be coagulated by day or more (Yagil et al., 1994).
enzymes, due to the composition of the casein micelles Out of the total sampled household, 98.9% of
(Zubeir and Jabreel, 2008). However, a small amount of sampled camel milk producers were found to participate
milk produced in the study area is subject to butter and in milk marketing. The share of camel milk sold by
cheese processing by mixing it with goat and cow milk sample producer was 77.76%, and the mean milk
based on their endogenous knowledge, the result is in production per day per dairy household during
agreement with the finding of Yagil (1982). Nevertheless, the survey period was found to be 18.48 liter, by
it is possible to processes camel milk into cheese using revealing that the study area has high potential of
Camifloc and calcium chloride (Khan et al., 2004; Zubeir commercialization if due attention is given regarding
and Jabreel, 2008) to preserve camel milk and create market-oriented milk production and liking farmers with
potential trade to camel keepers in semi-arid and arid modern market which is based on consumer needs to
areas of Eastern Ethiopia, as it can help to improve increase the competitiveness of camel milk in the study
pastoral/agro-pastoral economic condition by finding a area specifically and in sub-Saharan African generally.
proper market for camel milk cheese, especially by
exporting to Europe (Saima et al., 2003). c) Market characteristics in relation to market outlets
The study reveals that most of the sampled
a) Composition and physical characteristics of camel milk households (35.87%) sell camel milk though the
Dromedary camel milk composition is excellent assembler channel outlet. Next, to the assembler,
in from nutritional view point (Sisay and Awoke, 2015) 29.35% of the sampled households sell their camel
as it has valuable nutritional properties as it contains a milk produce through direct consumer channel. The
high nutritional value, with vitamin C, which is three remaining pastoralists and agro-pastoralists sell their
times greater than the cow’s milk, iron content ten camel milk though retailer (18.49%) and commission
times and B vitamins present in reasonable amount agent (16.3%) marketing channel. In Easter Ethiopia,
(Arrowal et al.,2005). In addition to that, cow milk tends camel milk producers supply milk as a household
to make people fat, causing obesity but camel milk and by forming informal groups of women locally
gives strength, endurance, and stamina, and attribute called ‘affosha 2’ and the other social institution in the
that pastoralists need in order to pursue a nomadic life camel milk marketing is personalized method
style (Sisay et al., 2015). However, the camel milk has of economic exchange called ‘maamilla’ which is based
not been given as much attentions in research on a supplier and buyer trust-based relationship that
and development as the cow milk, especially in
Eastern Africa. 2
‘Affosha’ is informal group of women who group themselves up to ten
b) Camel milk market participation by sample persons together to market camel milk by round up to same amount
as they were agreed, especially pastoral/agro-pastoral who produce
pastoralist and agro-pastoralists
small amount of came milk use such informal grouping mechanism to
The average milk yield per day per camel reduce the transaction cost associated with selling small amount of
was estimated to be 4.8 liters under the desert milk at distance milk market.

© 2018
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 Camel Milk Marketing Channel Choices for Enhancing Competitiveness in Easter Ethiopia: Multinomial
Logit Approach

is developed from a regular exchange of camel milk of children below five years old reduce the time allotted
with each other. to market milk at distance urban markets would be
Nearly all of the camel milk trader’s (especially, better off. The mean dairy farming experience was
rural assembler and retailer) in the study area were highest for pastoralist and agro-pastoralist who had
females, this result is consistence to Nori (2012) who access to assembler, retailer and commission agent
revealed that camel milk is predominantly marketed by milk market channel outlet, with 43 years, 46 years and
women in Puntland, Somali, implying that increasing the 46 years, respectively. The main reason for this is that,
competitiveness of the camel milk though value addition most of the experienced camel milk producers had
in Eastern Africa would have high importance at informal business tie with the milk purchaser locally
enhancing female milk traders empowerment, food called ‘maamilla’ which mean customer. Most of the
security and poverty alleviation in arid and semi-arid time experienced dairy producers do not sell camel
parts of sub-Saharan Africa. milk unless the buyer is their customer, as this
The mean household characteristics by camel experienced dairy producers also market their camel

2018
milk market outlets are provided in Table 2. The mean milk in return to sugar and salt with their ‘maamilla’, and

Year
age of market participant pastoralist and agro- even at credit base.
pastoralist who used the consumer, assembler, The average distance traveled to the nearest
commission agent and retailer market as marketing urban milk market was lowest to households who had 35
outlet had 41 years, 43 years, 46 years and 46 years, access to direct consumer channel outlet (13 km),

Global Journal of Management and Business Research ( B ) Volume XVIII Issue V Version I
respectively. This implied that those respondents who compared to pastorals/agro-pastorals supplying to
sold their camel milk to the consumer were slightly retailers outlet (20 km) and commission agent outlet
younger than those who sold at the other channels. This (26 km). This reveals that most of the time commission
reveal that younger people tend to market their produce agent collect camel milk from pastorals and agro-
at distance urban markets to reap the full benefit of price pastoralist who residence is far from town as
margin which goes to milk marketing middleman, even wholesalers own track to collect and transport the camel
by taking the risk and transaction cost associated with milk to Somali land. Moreover, the research pinpointed
trading milk in the urban market as selling camel milk via that, the average price offered by commission agent
profitable channels can lead to investment in productive market outlet was 5.59 Ethiopia Birr per liter, which is
assets and new agricultural technology (Jensen, 2010). higher than the price offered by other market outlets as
Households with few numbers of children below commission agent purchase camel milk in large
five years old marketed their camel milk though quantity and good quality, which would be exported to
consumer milk marketing outlet, other than assembler, Somali land.
commission agent and retailer because as the number
Table 2: Mean household characteristics by camel milk market outlets
Consumer Assembler Commission Agent Retailer
Variables
Mean Mean Mean Mean
Age 41(9.7) 43 (11) 46 (13.7) 46 (16.6)
Children’s (<5 years) 1(1.2) 2 (1.8) 2 (1.3) 2 (1)
Experience 18(13.4) 21 (15) 24 (15) 25 (17)
Distance 13(6.8) 13 (11) 26 (18) 20 (10)
Number of milk camel 6 (1.14) 15 (2.4) 13 (2.7) 8 (1.8)
Quantity of milk sold 10(9.6) 21 (15) 24 (21) 12 (12.7)
Income from non-dairy 6038(6369.3) 6494 (12057) 1384 (2448.8) 2822 (3380)
Family size 7(3.3) 8 (5) 8 (4.5) 7 (3)
Selling price/liter 5.38 (0.15) 4.88 (0.15) 5.59(0.19) 4.93(0.2)
Source: Field data analysis, 2012/2013
The mean dairy camel ownership of households supplied to wholesalers who export camel milk to
who had access to consumer, assembler, commission Somali land. The same holds for the quantity of camel
agent and retailer milk market outlets was 6, 15, 13 and milk sold, as we can observe that the largest amount of
8 numbers, respectively. This reveals that households camel milk quantity was sold at commission agent milk
that owned a large number of dairy camels accessed market and assembler milk market channel with the
assembler and commission agent milk market outlet mean value of 24 liters and 21 liters, respectively.
because of the two-channel purchases a large amount The lowest quantity of camel milk was supplied to
of camel milk, especially the commission one because consumer milk market channel outlet with the mean
the camel milk purchased by commission agent is value of 6 liters.
© 2018 Global Journals
 Camel Milk Marketing Channel Choices for Enhancing Competitiveness in Easter Ethiopia: Multinomial
Logit Approach

Households with high income tend to sell their education level, the result indicates that out of the
camel milk to assembler and the consumer channel educated respondents the market participants who
outlet, with the mean value of 6494 and 6038 Ethiopia used the consumer, assembler, commission agent and
Birr, respectively. Households with lower income from retailer channel outlet were 51.85%, 22.22%, 7.41% and
nondairy source choice to sell their milk at the 18.52%, respectively. It is evident that camel milk
commission agent and retailer marketing channel outlet participants who sold their milk at consumer outlet had a
with the mean value of 1384 and 2822 Ethiopian Birr, higher percentage than others channel outlet, this was
respectively. The mean family size by camel milk market because of the fact that education enhanced milk
outlets was 7, 8, 8, and 7 with individual consumer, market participant ability to perceive the high level of
assembler, commission agent and retailer, respectively. returns from urban milk market. Hence, there is a need
The mean household size for households who accessed to improve the dairy farming pastoralists educational
consumer and retailer milk market outlet was higher level to enable them to make an informed decision on
than the mean household size reported by Berhabu et camel milk marketing channel outlet they choice.
2018

al., (2013) for Woliata zone cow milk-shed.

Year

The proportion of household characteristics by

camel milk market outlets is given in Table 3. In term of
36 Table 3: The proportion of household characteristics by camel milk market outlet
Global Journal of Management and Business Research ( B ) Volume XVIII Issue V Version I

Consumer Assembler Commission Agent Retailer

Variables
Percentage Percentage Percentage Percentage
Uneducated 20 41.54 20 18.46
Education status of HH
Educated 51.85 22.22 7.41 18.52
Yes 37.5 21.88 9.38 31.25
Access to livestock Extension
No 25 43.33 20 11.67
Yes 36.62 30.99 15.49 16.9
Access to milk market information
No 4.76 52.38 19.05 23.81
Source: Field data analysis, 2012/2013
Out of the households who had access to of Mamo and Degnet (2012), who revealed that
livestock service 37.5%, 21.88%, 9.38% and 31.25% of educated farmers preferred selling to an actor that
households had accessed individual consumer, offered better prices.
assembler, commission agent and retailer camel milk Having access to livestock extension services is
market outlets, respectively. In terms of milk market significantly associated with high probability of selling
information, the result reveals that out of the sampled camel milk to the retailer channel as opposed to
respondents who have milk market information 36.62%, assembler channel. The possible explanation could be
30.99%, 15.49% and 16.9% sold their milk at consumer, retailer supply camel milk to hotels, restaurants, and
assembler, commission agent and retailer market outlet, urban consumers with good quality. Only pastoralist and
while out of sampled respondents who had no market agro-pastoralist who had training on camel milk
information only 4.76% sold their milk at consumer handling through extension services were able to sell
channel outlet. This reveals that the majority of market their camel milk through retail channel over assembler
participants who sold at urban market directly to channel. The marginal effect shows that the likelihood of
consumers had access to price information. accessing retailer milk market outlet increases by 35.5%
as compared with assembler milk market outlet for one
d) Determinants of Camel milk market channel choice
more member access to livestock extension services.
Out of eleven variables hypothesized to
influence camel milk market channel choice, six
variables were found to be significant. Table 4 presents
the Multinomial logit estimates for the hypothesized
variables.
Education status of the household head was
positively related to a household choice of consumer
channel outlet over assembler dairy marketing channel,
at 5% significance level. This reveals that education
increased the household likelihood of selling its camel
milk through the consumer outlet over the assembler by
29.5 percent. This result is in agreement with the finding

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 Camel Milk Marketing Channel Choices for Enhancing Competitiveness in Easter Ethiopia: Multinomial
Logit Approach

Table 4: Multinomial logit estimates and marginal effects for factors influencing the choice of marketing channels
Direct to Consumer Commission Agent Retailer
Explanatory Variable
Coef. dy/dx Coef. dy/dx Coef. dy/dx
AG_HH 0.015 0.002 0.022 .0009 0.038 0.005
EDL_HH 1.774** 0.295** 0.014 -0.053 0.575 -0.002
HH_MM5_YR -0.542 -0.072 -0.117 0.006 -0.248 -0.017
EXP_LIV_PRO -0.009 -0.0005 0.011 -0.0006 0.014 -0.002
LV_ESV 1.893** 0.138 0.523 -0.057 2.562*** 0.355***
DS_MLK_MRK 0.006 -0.005 0.096*** 0.007* 0.1** 0.015**
N_MLK_CAM -0.138* -0.015 -0.975 -0.004 -0.105 -0.01
MRK_IFF 3.092*** 0.296*** 0.413 -0.006 0.244 -0.049
Q_MIK_SOLD -0.028 -0.004 0.049 0.006 0.024 -0.004
N_NOND 0.0013* 0.00003*** -0.003* 0.00003*** -0.0005 -7.74e-06

2018
FS_HH -0.708 -0.016 0.12 0.012 0.06 0.104

Year
_cons -2.343 -3.463 -3.305
Number of obs.=92
LR chi2(33)=81.80
37
Prob> chi2=0.0000
Pseudo R2=0.333

Global Journal of Management and Business Research ( B ) Volume XVIII Issue V Version I
Log likelihood= -81.945
Source: field data analysis, 2012/13
Contrary to the expectation, distance to market the study result the following policy implications were
positively influenced the likelihood that sampled pastoral forwarded for future intervention to improve the camel
and agro-pastoral will choose commission agent and milk market in Eastern Ethiopia.
retailer over the base channel outlet (assembler) at 0.7% In the study area camel milk marketing lack
and 1.5%, respectively. A plausible explanation for this is inadequate horizontal and vertical integration among
that household who were far from market places pastoralists and agro-pastoralists milk producers, milk
preferred to sell their camel milk to commission agents assemblers, retailers, and commission agent. Sampled
because commission agents collect milk from distance pastoral and agro-pastoral households supplied their
place. The results are consistent with findings by Moturi milk through traditional marketing channels such as
et al., (2015). assembler channel (35.87%), direct consumer channel
There was a positive relationship between (29.35%), retailer channel (18.49%) and commission
choice of direct consumer market channel and access agent channel (16.3%), even though pastoral and agro-
to market information. The result of the study reveals pastoral have social capital which is based on informal
that access to market information increased the collective action institutions. However, though exploiting
household likelihood of selling its camel milk through the the indigenous knowledge of eastern Ethiopia
direct consumer outlet over assembler by 29.6 percent, pastoralists and agro-pastoralists such as “affosha”,
it is significance at p-value of 1 percent. The finding is in (informal types of group which supply camel milk to one
line with that of Geoffrey (2015), who revealed that another by grouping themselves up to 10 persons) and
increase in price information had a positive influence on “maamilla” (customer based camel milk selling) it
the choice of selling pineapple the local market channel. would be easy to cording and form horizontal
Income from nondairy source is significantly and vertical integration among the pastoralists to
associated with a high probability of choosing direct enhance institutional arrangement which is based
consumer and commission agent market as compared on endogenous knowledge of the pastoralist society.
to selling to assembler channel. The probability of As organizing such informal institution into formal
choosing direct consumer and commission agent milk one such as cooperative and modern marketing channel
market channel as opposed to selling to assembler have a great advantage to attaining competitive edge
channel increases for every unit increase in the by forming a strategic alliance in the camel milk
household nondairy income by 0.003% for both marketing channel.
consumer and commission agent channel over the As most of the milk trader who operates in all
assembler channel outlet, it was highly significant at 1% milk market outlets are females, improving milk trading
level for both channels. practice through vertical and horizontal linkage based
on endogenous knowledge would empower the female
IV. Policy Implication milk trader and enhance their capacity, especially the
Using household data from Ethiopia, we have value addition one. Therefore there is a need to develop
examined pastoral and agro-pastoral milk market gender smart intervention approach to consider gender
channel choice to sell their camel milk, and based on as a core process in the camel milk value chain, as such
© 2018 Global Journals
 Camel Milk Marketing Channel Choices for Enhancing Competitiveness in Easter Ethiopia: Multinomial
Logit Approach

intervention brigs gender gap in the arid and semi-arid 2. Amaha, K., 2003. Pastoralism and the need for
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market channel outlet was higher for households who (No. 2), pp. 243-254.
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