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This study was tried to answer the inquiry ‘‘What Determines Participation Decision, Degree and Deed
of Value Addition to Milk by Dairy Enterprise? by setting the foremost objective of examining the
determining factors influencing decision, degree, as well as deed of participation to VAM, so as to find
approaches necessary to promote dairy enterprises to engage in diversified VAM in the study area. By
employing Yamane formula, a sample of 219 dairy enterprises was selected from the target population in
the study area. A multi-stage sampling procedure was used to select sample dairy enterprises for data
collection. The dairy enterprises stratified as micro, small and medium enterprises and the whole 219
dairy enterprises were selected using stratified random sampling technique from the purposively selected
district; Addis Ababa, Debire Zeit, Sebeta and Sululta, and by the probability proportional to size; of
which 212(96.8%) properly responded the survey questionnaire. Semi-structured questionnaires were
used to collect data from the sampled enterprises. The descriptive statistics as well as Double-Hurdle and
Hackman two-step models were used to analyze the determining factors affecting the decision, degree and
deed of participation to VAM and the findings demonstrate that various factors affect these three outcome
variables. The results after the double-hurdle model revealed that from the variables of interest
machinery & equipment, the volume of milk in litter, access to credit services and skill training had
positive and significant influence on the decision as well as degree of participation to VAM. While
research & development and access to market information had a positive and significant influence on the
degree of participation to VAM. On the contrary to prior expectation number of dairy cattle had negative
and marginally significant influence on the decision of participation to VAM. Moreover, the results after
Heckman’s two-steps model disclosed that from the variables of interest, volume of milk in litter had
positive and significant influence on both the decision and deed of participation to VAM. Additionally,
access to machinery and equipment and incentive had positive and significant effect on deed of
participation to VAM. Therefore, this study suggests that establishing dairy training centers, increases
volume of milk, shorten way of credit services provision, encouraging innovation of micro, small and
medium scale low cost processing machinery and equipment and providing market information about
local and foreign market are required to promote the well enough and diversified milk value addition by
dairy enterprises. |
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