Under the PROSPECTS Partnership, the ILO hopes to create more and better jobs for refugees and host communities in the dairy value chain in the Somali Region of Ethiopia. With its implementing partner Vétérinaires Sans Frontière Suisse, the ILO aims to increase income and reduce food insecurity in the region. ILO’s Approach to Inclusive Market Systems (AIMS) will play a pivotal role in strengthening dairy sector governance and coordination, in improving milk quantity and quality together with improved market linkages.

Two million of the most food-insecure Ethiopians live in the Somali region, where eighty per cent of the inhabitants rely on agriculture and livestock for their livelihoods (WFP, 2021). Pastoralism is a critical economic activity in the region with women playing a significant role in the milk value chain. Milk is a valuable food source for humans in this semi-arid environment. Milk products are at the core of pastoralists’ culture, life, health and are considered as white gold of the desert.
The initiative will only be successful with the involvement of various value chain actors and support functions (as represented in the graphic below). These range from milk producers and retailers, dairy cooperative and association representatives, milk collector and trader associations, dairy enterprises, livestock keepers, dairy and fodder producers, women’s cooperatives, line ministries and pastoral and consumer communities.

Based on a recently released ILO publication and in order to better understand the market dynamics and relationships between different actors in the chain, the ILO, together with VSF-Suisse, organized a workshop with different stakeholders in the milk value chain. One of the workshop's objective was to fill key knowledge gaps and concretise areas for collaboration in the development and local economic development in the milk value chain that incorporates, among others, both refugee and host communities who are currently the main producers.

The ILO’s Approach to Inclusive Market Systems (AIMS) applies the Making Markets Work for the Poor (also known as M4P or market systems development) approach jointly developed by ILO and UNHCR. These tools were presented to participants as a holistic approach that seeks to work both on the demand and the supply sides of the labour market. Paul Mayanja, Enterprise and Market Systems Development Specialist for PROSPECTS in Africa, presented the AIMS approach and its application to value chain development in forced displacement situations. He detailed the resulting design of push-pull interventions through which this vision will take shape. On the one hand, targeted push interventions will develop the skills and capacities of the refugee and host communities to engage with the market, through technical and entrepreneurial skills development. On the other hand, with the use of pull interventions, other value chain actors are facilitated to increase demand for the products or services produced by the refugees and host communities, add value and enhance linkages to the ultimate product markets. This the approach will help develop the dairy value chains with great potential to expand in the Somali region and diversify market opportunities. Dr. Fisseha Abenet from VSF presented the dairy value chain development project that they will implement in partnership with the ILO in the Somali region using the AIMS approach.

The 18-month joint partnership between the ILO and VSF will seek to increase the production of milk in Somali region, increase producers’ access to markets, improve the productivity and competitiveness of the milk value chain and support entrepreneurship and cooperatives development for women and youth. The initiative has components related to skills development, infrastructure development, market linkages and access to finance. The initiative directly targets 850 women and youth beneficiaries within existing or new cooperatives societies, incorporating actors involved at different stages of the value chain ranging from the milking, milk collection, cooling, transportation and local marketing in Somali region. The beneficiaries will comprise mostly women-owned cooperative societies, as the sector is mainly a female-dominated activity (96%), operating from host, internally displaced persons (IDP) and refugee communities in the target areas of Somali region. Activities will include support to nine cooperatives in the production and marketing of the milk products including camel, cow and goat milk together with fodder production to feed the animals during the dry season. All cooperative members are expected to strengthen their respective skills in good animal husbandry practices, fodder production, cooperatives, entrepreneurship and financial education.

The workshop further discussed the critical constraints in the milk value chain in Somali region together with the potential opportunities to work with cooperative societies, stakeholders in the feeding, input delivery, animal health and private sector engagement to develop the value chain. The day ended with a visit to a private dairy processor in Jigjiga that is working with cooperative societies to collect milk from farmers before they process it into pasteurised milk. Owners of the company guided ILO and VSF representatives through their milk processing plant where the milk is pasteurized slowly by heating it, a process that kills potentially harmful microbes while conserving its nutritional qualities. Company owners shared their concerns regarding the limited milk supply and the ever-increasing demand in the region. They also expressed their interest to increase the shelf life of milk products, by further processing and turning it into yogurt and cheese.