Determinants of Profitability in Dairy and Poultry Enterprises: Evidence from Bonga, Mizan Aman, and Tepi Towns, Southwest Ethiopia Region
Based on a cross-sectional study of 120 enterprises in Southwest Ethiopia, this paper concludes that dairy and poultry farming are profitable, with productivity significantly driven by education, herd size, veterinary services, and production systems, prompting recommendations to strengthen extension services and infrastructure to further enhance these sectors.
Original paper licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). This is an AI-generated explanation of the paper below. It is not written or endorsed by the authors. For technical accuracy, refer to the original paper. Read full disclaimer
In the highlands of Southwest Ethiopia, the rhythm of daily life is often set by the movement of livestock. For millions of people, keeping animals is not merely a hobby or a side activity; it is the foundation of their food security and their financial survival. Cows provide milk, a staple that feeds families and can be sold for cash, while chickens offer a steady stream of eggs and meat. Yet, owning animals is only the first step. The true challenge lies in turning a herd or a flock into a thriving business. This requires navigating a complex web of factors: how much feed is available, whether the animals are healthy, if the farmer has access to clean water, and whether they possess the knowledge to manage the operation efficiently. When these elements align, a small farm can become a powerful engine for economic growth. When they do not, the same animals can become a source of debt and disappointment. Understanding exactly what makes these enterprises succeed or struggle is vital for anyone looking to improve the lives of rural and urban communities in this region.
A recent study set out to uncover these secrets in three specific towns: Bonga, Mizan Aman, and Tepi. Researchers traveled to these communities between October and December 2025 to speak directly with 120 farm owners. They did not just ask general questions; they looked closely at the numbers behind the operations, examining 63 dairy farms and 57 poultry farms. The goal was to move beyond simple observation and identify the specific ingredients that lead to profit. The team gathered data on everything from the age and education of the farm managers to the size of the land they owned and the frequency of their visits to veterinary clinics. By comparing the costs of running these farms against the money they brought in, the researchers could see clearly which practices were working and which were holding farmers back.
The results revealed a landscape of opportunity, though the path to success looked different for dairy farmers than for poultry keepers. Both types of farming were found to be profitable, meaning the money earned from selling milk and eggs exceeded the costs of feeding and caring for the animals. However, the dairy sector showed a stronger financial return. For every unit of currency invested in dairy production, the farmers received a return of 1.71 units. In contrast, poultry farmers saw a return of 1.29 units for every unit invested. While both are viable businesses, the data suggests that dairy operations in these towns are currently generating a higher margin of profit.
Who is running these successful farms, and what are they doing differently? The study painted a clear picture of the people behind the enterprises. Dairy farms tended to be managed by older individuals, with an average age of about 42 years, who often had less formal education but more years of hands-on experience. These farms required more land, with an average grazing area of 1.2 hectares per farm. On the other hand, poultry farms were often run by younger managers, averaging 37 years old, who had completed more years of schooling. Poultry farming proved to be much less demanding on land, with most farms operating on a tiny fraction of a hectare, making it an accessible option for those with limited space.
The research identified several key drivers that directly influenced how much milk and eggs these farms produced. For poultry, the gender of the manager played a significant role. Male-managed farms produced significantly more eggs than those run by women, a gap the researchers attributed not to a lack of skill among women, but to differences in access to resources, training, and credit. Age also mattered; older poultry managers produced more, likely due to their accumulated experience. Education was another powerful factor, as more schooling helped farmers adopt better techniques. Crucially, the type of housing and the production system used were decisive. Farms that moved away from letting chickens roam freely and instead used semi-intensive or intensive systems, where birds are kept in sheds with controlled feeding, saw much higher egg production. Access to veterinary care and the quality of the poultry shed itself were also major contributors to success.
For dairy farmers, the story shared some similarities but had its own unique requirements. Again, male managers produced more milk than female managers, likely due to similar constraints on resources and time. However, unlike poultry, older dairy managers produced slightly less milk, suggesting that in this sector, newer, more modern practices might be favored by younger or more adaptable farmers. Education was a strong positive factor; better-educated managers produced more milk, likely because they could better understand and implement improved feeding and care strategies. The size of the herd mattered, as expected, but so did the basics of animal care. Access to veterinary services, a reliable supply of water, and regular contact with agricultural extension workers—officials who teach farmers new methods—were all linked to higher milk yields. The study found that farms with these supports were significantly more productive.
Despite the overall profitability, the farms faced real and persistent challenges. A major weakness identified was the shortage of capital; very few farmers had access to loans to buy better feed or expand their operations. For poultry, the supply of day-old chicks was often late or inconsistent, and disease outbreaks remained a constant threat. Dairy farmers struggled with the high cost of feed and the scarcity of water during dry seasons. The study also highlighted a gap in record-keeping; many farmers did not track their profits and losses, making it difficult for them to know exactly how well they were doing or where they could cut costs.
The researchers concluded that while these livestock enterprises have strong potential, their growth is being held back by specific, fixable barriers. The path forward involves strengthening the support systems that farmers rely on. This means expanding access to veterinary clinics to keep animals healthy, improving the supply chains for feed and chicks, and ensuring that water is available even in the dry months. It also calls for more training and education, particularly for women and younger farmers, to help them adopt the intensive and semi-intensive systems that the data shows are so effective. By addressing these constraints, the dairy and poultry sectors in Bonga, Mizan Aman, and Tepi could transform from subsistence activities into robust engines of economic development, providing a more secure and prosperous future for the communities that depend on them.
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