Promoting Agricultural Value Chains:
In the OIC Member Countries
78
Finally, poor road infrastructure and high transport costs have been identified as impediments
to domestic milk and dairy consumption as well as export promotion (Markt & Produkt, 2010).
5.2.4 Governance and value chain actors
Milk production is very fragmented and three main categories of farmers can be identified
(Oxford Business Group, 2012b) (se .
Figure 5-6 Milk value chain in Egypt
Source: Authors’ elaboration
Firstly, small family farms with 1-8 cattle constitute the majority of dairy farmers and are the
major source of raw milk. Sources indicate that these farmers are responsible for about 80
percent of the milk produced (Al-Amaiem, 2014). Most smallholders follow an integrated
production system where fodder crops are grown as feed for animals and animal manure is
used to enhance soil fertility (El-Nahrawy, 2011). Milk is produced mainly as a subsistence
activity and surpluses are sold to family members or within the local community (Markt &
Produkt, 2010). Some of the farmers are organised in the Egyptian Milk Producers Association,
but most of them are unorganised and are considered to be the weakest link in the value chain
(El-Nahrawy, 2011). The absence of producer organisations for milk collection, cooling and
transport facilities has been recognised as one of the main challenges for ensuring quality
along the chain (Tibbo, 2013). Secondly, there are about 80-100 of medium sized farms, which
have automatic milking machines and cooling facilities but are often characterised by
inefficient operations (Oxford Business Group, 2012b). Finally, there a small number of large-
sized farms which are frequently owned by big processing and manufacturing companies in a
system of vertical integration.
The majority of milk produced (about 85 percent) is marketed as raw milk, e.g. sold loosely on
the street or through vendors that go from door to door, or processed into home-made butter