Public Disclosure Authorized

, R~R IC ED

1 .rt PA-68a

This report is for official use only by the Bank Group and specificaDyauthorized organizations
or personfLIt may not be published, quoted or cited without Bank Group authorization. The
Bank Group does not accept responsibilityfor the accuracyor completenessof the report.
Public Disclosure Authorized

INTERNATIONALBANK FOR RECONSTRUCTIONAND DEVELOPMENT

INTERNATIONALDEVELOPMENTASSOCIATION
Public Disclosure Authorized

APPRAISAL OF

ADDIS ABABA DAIRY DEVELOPMENT PROJECT

ETHIOPIA
Public Disclosure Authorized

June 15, 1971

Agriculture Projects Department

 CURRENCY
EQUIVALENTS

US$1 = Dollars (E$) 2.50

E$l = us$o.4o

WEIGHTSANDMASURES

Metric System

1 kilogram(kg) = 2.20pounds (lb)

1,000 kg (1 metric ton) = 2,200 pounds
1 kilometer(km) = 0.62 mile
1 hectare(ha) = 2.47acres
1 squarekilometer(km2) = 100 ha
= 0.39 sq ml
= 247.11acres
1 liter(1) = 0.26 gallon
1,000 millimeters(mm) = 39.37 inches

ABBREVIATIONS
iErG = ImperialEthiopianGovernment
DDA = DairyDevelopment Agency
AADI = AddisAbabaDairyIndustry
DBE = DevelopmentBank of Ethiopia
EIC = EthiopianInvestment Corporation
AIDB = Agriculturaland IndustrialDevelopment
Bank
GDP = GrossDomesticProduct
 ETHIOPIA

ADDIS ABABADAIRY DEVELOPMENTPROJECT

TABLE OF CONTENTS

Page No.

SUMMARY AND CONCLUSIONS ................... .i-ii

1. INTRODUCTION . ................ ........................ 1

II. BACKGROUND ....... * ... ,,....
, * ........
.* .......
1

A. General ............. , .,. 1

Climate ............ .......... 1......
Population and GDP ...................... ,. 2
Exports and Imports . 2
B. The Agricultural Sector . .2.........
................. 2
Contribution of Agriculture to the Economy. . 2
Land Use ........... ............. ................. 3
Crops ... , 3
Livestock . . 3
Animal Health ........... . . 4
C,. The Dairy Industry ............ 4
D. Agricultural Credit ........................ , 5

LII . THE PROJECT .................... ,,,. .

......... 6

A. General Description .. ..... .. ..... 6

Definition and Purpose .... .................. 6
Project Area .. .... ...... ................ 6
B. Detailed Features ...... ....... ....... 7
On-Farm Development ........ . .. . ..... . ... 7
Milk Collection and Processing Facilities. 8
Technical Services .............. ..... 8
C. Cost Estimates.................. .................... 10
D. Proposed Financing .................................. 11
E. Procurement ................ ..................12
F. Disbursement .. 13
G. Organization and Management .. 14
It. Lending Operations .. 16
I. Auditing .. ......... 17

This report is based on the findings of an IDA appraisal mission to Ethiopia

in April/May 1970, composed of Messrs. D. N. Sutherland and M. J. McGarry
(IDA) and Messrs. K. Cheriyan (FAO/IBRD) and H. Ochs (Consultant).
 2-

Page No.
IV. MARKETS,PRICES, PRODUCERBENEFITS ANDREVENUEGENEMTION 17

Markets . . ...............*...... 17
Prices .... 18
Producer Benefits ... . . ........ 19
RevenueGeneration .... 19

V. ECONOMIC BENEFITS AND JUSTIFICATION .................. 20

VI. RECOMMENDATIONS ...... .. ....... 20

ANNEXES

1. Dairy Cattle Husbandryand Disease Control

2. Credit Institutionsand AgricultuwalCredit

3. LivestockProcurement,Demand and Supply of Dairy Heifers

Table 1 - Project Demaon and Supply of Dairy Cattle

Figure 1 - Effect of Age and Price of Heifersen Rate of Return

4. AbermossaCross-BreedingRanch - 800 Cows

Table 1 - Herd DevelopmentPTojections

5. Private Cross-BreedingRanch Model - 200 Cows

Table 1 - Herd DevelopmentProjections

Table 2 - Investment Costs *Aa Fixn= Ig
Table 3 - Projections of laeoae aed Operating Costs
Table 4 - Financial Proj*ctions

6. Holleta Dairy Stud Farm - 100 Cows

Table 1 - Herd Development Projections

Table 2 - Investment Costs and Financing
Table 3 - Income Projections
Table 4 - OperatingCosts Projections
Table 5 - Financial Projections

7. Medium Size Farm Model - 40 Cove

Table 1 - Herd Development Projections

Table 2 - Investments Gomasand Financing
Table 3 - Projections of Inecm and Operating Costs
Table 4 - Financial Projectios
 -3-
ANNEXES (Continued)
8. Small Farm Model - 10 Cows

Table 1 - Herd DevelopmentProjections

Table 2 - InvestmentCosts and Financing
Table 3 - Projectionsof Income and Operating Costs
Table 4 - Financial Projections

9. Shola Dairy Plant - Technical Aspects

Table 1 - Financial Projections

Table 2 - Projections of Income and Operating Costs
Table 3 - InvestmentCosts and Financing

10. Phasing of the Lending Program

11. Estimated Schedule of Disbursmenentof IDA Credit

12. Dairy DevelopmentAgency

Table 1 - Technical and AdministrativeStaff Requirements

Table 2 - Costs of Technical and AdministrativeServices
Table 3 - Breakdown of Costs of Technical and Administrative
Services
Table 4 - Financial Projections

13. Dairy DevelopmentAgency Organization Chart

14. Milk Marketing and Prices in Addis Ababa

15. Financial Rates of Return

Table 1 - Privately Owned Farms

Table 2 - Holleta Dairy Stud Farm - 100 Cows

16. Economic Rate of Return

MAP

Ethiopia/Project Area
 ETHIOPIA

ADDIS ABABADAIRY DEVELOPMENT

PROJECT

ANDCONCLUSIONS
SUMMARY

i. This report appraises;a Project for development of dairy produc-

tion in the Addis Ababa area to supply milk to that city. Present daily
milk supply to Addis Ababa, a city of about 685,000 people, varies sea-
sonally between 13,000 and 25,000 liters, representinga very low per capita
consumption.

ii. About half the present milk supply has been marketed in recent years
through the Addis Ababa Dairy Industry (AADI), a section within the Ministry
of Agriculture,which operated the Shola Dairy Plant and a milk collection
scheme. AADI increased its annual milk throughput from 290,000 liters in 1961
to 3,070,000 liters in 1969.

iii. The Addis Ababa area is well suited ecologicallyto development

of a dairy industry because of its temperate climate and moderate to high
rainfall. Major constraints to such development in the past have been lack
of adequate technical knowledge and services for dairy cattle husbandry and
shortage of improved dairy cattle.

iv. The Project would provide for on-farm developmentof approximately

240 small and 110 medium size dairy farms to carry a total of about 7,000
dairy cows; for importation and breeding of dairy cattle for these farms; for
technical services to farmers; for additional facilities and organization
for collection,processing and marketing of milk; and for hiring of consultant
services to carry out feasibility studies and prepare a second livestock
developmentproject.

v. An autonomous, Government owned agency, the Dairy DevelopmentAgency

(DDA), would have the major responsibilityfor administrationof the Project.
It has taken over from the Ministry of Agriculture the assets of AADI includ-
ing Shola Dairy Plant and the milk collecting centers. Onlending to farmers
would be handled by the Agriculturaland Industrial Development Bank (AIDB),
acting as agent for the Government.

vi. Proceeds of the Credit would be passed on to DDA and AIDB by the
Government for approved Project purposes at an interest rate of 6-1/2% per
annum for a period of 20 years, including a grace period of six years. AIDB
would make sub-loans for approved Project purposes from the proceeds of the
IDA Credit at an interest rate of 9-1/2% per annum for periods not exceeding
14 years, including a grace period of five years.

vii. Because of the inadequacyof existing technical services within the

Ministry of Agriculture, the Project would provide, through DDA, for techni-
cal, veterinary and artificial inseminationservices to participatingfarmers.
 - 2-

viii. The total costs of the Project are estimated at US$6.5 million.
An IDA Credit of US$4.4 million is proposed. It would finanoe approximately
US$1.0 million of local currency expenditure as well as the foreign exchange
component of US$3.4 million, which is equivalent to 53% of total project
costs. Government and DDAwould finance about US$1.6 million equivalent and
farmers about US$0.5 million equivalent.

ix. The categories of Project cost are: US$2.8 million equivalentfor

on-farm investments, including US$1.6 million for dairy cattle prscueant;
US$0.3 million equivalent for further investments in Shla Dairy Plant and
milk collection centers; US$1.8 million equivalent for technical services
and administrative costs of DDA; US$0.5 million equivalent for iucremental
working capital for participating farmers and DDA; US$0.4 miLllion equiva-
lent for carrying out feasibility studies; and US$0.6 mil;lion jLvaleat fo-r
contingencies. In addition existing Government assets at an estJmted value
of US$0.6 million equivalent would be taken over by D=.

X. Approximately 5,500 heifers of Eurepeax dairy bxeed (principally

Friesian) would be required for Project purposes, of which sa 3,900 would
have to be imported. International comptitie bUWing, is not appropriate
for purchase of livestock, but adequate safebArda would bweeafuore to en-
sure that due regard would be given to pricea a" qu4ty conaidzations.

xi. The fiancial rates of return to participating faxasra are esti-

mated at 17% to 21%. These estimates axe baau on retail mU prices
of US$0.20 equivalent per liter in the initial years of the Project, de-
clining to US$0.16 equivalent by year 11. This latter price is na higher
than the retail milk price in most West European countries and it is con-
siderably below the price in most other African cities.

xii. On the basIs of a projected retail price of US$0.16i eWmalent per

liter for milk, rate of returu to the econmy on the Proj-eat is eatiamted at
approximately 12%. The Project woul4 hav important side bneafits,.in istro-
ducing improved dairy production methoda and., establishing a.unclwo about
7,200 dairy type cattle as a ba&Is for further expansion of- daftylag. i-s
Ethiopia.

xiii. The Project is suitable for an IDA Credit of US$44.4 milion.. The
Borrower would be the Imperial Ethiopian Government.
 ETHIOPIA

ADDIS ABABA DAIRY DEVELOPMENT

PROJECT

I. INTRODUCTION

1.01 The Imperial Ethiopian Government (IEG) has requested an IDA

Credit to assist the financingof a dairy developmentProject to increase
the supply of milk to the Addis Ababa market. This would be the third IDA
Credit for agriculturaldevelopment in Ethiopia. The two previous credits
were for the Wolamo AgriculturalDevelopment Project, 169-ET,made in Novem-
ber 1969 and the Humera AgriculturalDevelopmentProject, 188-ET,made in
May 1970.

1.02 This Project, the Addis Ababa Dairy Development Project, would
include on-farm developmentof about 350 dairy farms in the Addis Ababa
region and improvement to the system of milk collection, transport,pro-
cessing and marketing for Addis Ababa. Ancillary to these objectives, it
would provide for importationand breeding of dairy cattle and for technical
services to dairy farmers. An autonomous agency, the Dairy DevelopmentAgency
(DDA), has been established to execute parts of the Project.

1.03 The livestock and meat industry is also one of Ethiopia'sbest

prospects for development,provided a number of serious constraints can be
overcome. In April/May 1970, a Bank Group mission visited Ethiopia to study
and make recommendationson an overall strategy for livestock development,
to help identify projects and to make recommendationson project prepara-
tion. Funds would be provided within this credit to finance feasibility
studies for future livestock development projects.

1.04 This Project was prepared initially by a project preparation

committee of the IEG assisted by staff of the Permanent Mission in Eastern
Africa. This report is based on the findings of an appraisal mission, com-
posed of Messrs. D. N., Sutherland, M. J. McGarry (IDA), K. Cheriyan (FAO/
IBRD) and H. Ochs (consultant), which visited Ethiopia in April/May, 1970.

II. BACKGROUND

A. General

2
2.01 Ethiopia, with an area of about 1.18 million km , lies between
latitudes 3° and 180 N in East Africa, on an elevated plateau broken by the
Rift Valley, extending from the Red Sea southwest to Lake Rudolph.

Climate

2.02 The high altitude more than the latitude determines climate and
land use. The highlands north of the Rift Valley are about 2,000 to 3,000
m above sea level, but some mountains are higher than 4,000 m. The climate
 - 2 -

of the highlands generally is moderate, with only small variation during

the year and high rainfall, but it is hot and dry in the highlands south-
east of the Rift Valley, as well as in the lowlands. The country can be
divided into four climatic and ecological zones.

(a) the mountain zone above 3,200 mi where high rainfall

and lo temnperatures preclude cultivation;

(b) a cool zone with average temperaturesfrom 10' to

18^C, rainfall above 1,000 on and altitudes between
2,100 and 3,200 m;

(c) a temperate zone with average temperaturesbetween

16* and 20C and altitudes between 1,500 and 2,100 m;
and

(d) the hot zone below 1 500 m, which has an average

temperature above 20 C and low rainfall.

Population and GDP

2.03 The population of Ethiopia at about 25 million is increasing

at approximately2X per year. About 92% of the people ldme in mural areas
but urban population is rising rapidly. During 1961-4969, GDP grew at a
rate of about 4.5% per year. In 1969 it totalled US$1.5 billiou, nearly
60% of which came from agriculture. Per capita income at US$63 is one of
the lowest in the world.

Exports and Imports

2.04 In 1968, agriculturegenerated about 85% of totalde,ptrts,which

were valued at US$106 million. Coffee contributedabout 582 of experts.,
and oilseeds, vegetables and hides and skins shared second place, each with
about 9%. Although imports far exceed exports there has been uo serous
balance of payments problem due to capital inflow. However.,Ethiqpia,must
diversify her exports and replace imports by domestic productionln crier to
achieve a reasonable growth of the economy.

B. The A&1cul.tural Sectar

Contribution of agriculture to the Eoon.2y

2.05 The seooney of Ethiqpia is based UaWgely on subsistence;agricul-

ture. The average farm size is estimated4at3.3 ha, but about fi0 of *he
5 million UfarerS cultivate less than :.2 ha. Agriculture provides 90Z of
emiployment. The gmas value of a UinuYnural production increased over the
period 1961 to 19&9 at a rate of smgb 2X%y year,, whereas total GDP bad
a growth rate of about 4.5X per "ot the sameperiod.. The growth
Muw
in agriculturebarely kept pace with increase.
-oulation
 -3-

Land Use

2.06 Only 8% of the total land area of Ethiopia is under cultivation

while the remainder is taken up by grazing grounds (28%), open brush and
scrub (25%), open woodland (3%) and areas not suitable for plant and live-
stock production (36%).

Crops

2.07 Ihe different ecological zones allow cultivationof numerous crops.

Teff, wheat, barley, maize, sorghum, millet and pulses are grown in the cool
and temperate zones. Conditions for the cultivationof coffee, tea and
citrus are particularlyfavorable. The productionof a variety of fruits
and vegetables is important in view of their export potential. Use of
around 1 million ha of potentially irrigable land would permit increased
cultivationof industrial crops such as cotton, oilseeds, sugar cane and
sugar beet and of high yielding forage crops.

Livestock

2.08 With about 26 million cattle, 12 million sheep and 11 million

goats and about 56% of the total land surface suitable for grazing, Ethiopia's
livestock represents a major national resource. This resource, however, makes
a disproportionatelysmall contributionto national income and export earn-
ings due to unsatisfactorymanagement, seasonal shortages of feed supply and
diseases.

2.09 The indigenouscattle belong to the Zebu type. Of particular im-

portance are the Borana cattle in the South, which are highly valued for
meat production. Under good management, the indigenous cattle show good
growth characteristicsbut poor milking abilities (400 to 700 liters per
lactation of 150 to 180 days).

2.10 Of the 26 million cattle, it is estimated that between 6 and 7

million are working oxen. Sample surveys indicate that, depending on the
different regions, only 27% to 35% of the cattle population are breeding
cows. A survey in Southern Ethiopia showed that two-thirdsof the calves
born survived one year and 60% two years. Thus, with an interval of ap-
proximately 18 months between calving, the number of progeny that survived
to an age of two years per 100 cows was about 40, which is considered to be
low. The informationderived from this survey is accepted in Ethiopia as
being generally applicableto the whole country.

2.11 Grazing is generally on a communal basis in the pastoral areas.

In cultivatedregions, it is mostly on an individual basis. The typical
herd in agriculturalregions has five to 10 animals. Some farmers have
no cattle and up to 80% have only a few head to provide draught power and
milk for home consumption. Herds are larger in the pastoral southern
provinces but the majority of herds there contain less than 20 animals.
 -4-

2.12 Pasture management is poor and overstocking is common. Scarce

stock watering facilitiesare often a serious limitation to efficient
exploitationof the available resources,especially in the pastoral areas.

2.13 The fodder resourcesare natural grassland supplementedby crop

residue and stubble in the cultivatedregions. Most of the r^isfalloccurs
during a period of three to four months, so that there are long periods of
malnutrition. Feeding of hay during the dry season is practiced ow.dairy
farms around the larger cities; elsewhere no hay is fed. Fodder production,
preparationof silage and rotationalgrazing are unknown.

2.14 The large seasonal variation in fodder availability results iu a

very poor growth rate of animals, Cattle are generally over five-yearsof
age before they are ready for slaughter and have a body condition satis-
factory only for the most modest standard of carcass quality.

Animal Health

2.15 The major epidemic diseases of cattle, rinderpest, foot-and-mouth

disease (types A, 0 and C) and contagious bovine pleuropneuaonias(CBPP),
occur in Ethiopia. Effective vaccines are available for controlFof these
diseases. Anthrax, blackleg and haemrrbhagc sptica4ema aleo occur spora-
dically but they also can be controlledby vaccination. The tkclhborne
diseases, heartwater,babesiosisand anaplamosis, have bme remcrded in
the Addis Ababa area, but can be controlledby regular dipping or spraying.
The most serious tick-borne disease, East Coast Fever, occurs in Ethiopia
but not in the Addis Ababa region. Internal parasites, includingliver
fluke, are a serious problem in cattle ih the highland areas. However,
they present little problem with dairy cattle that are housed. Generally,
commercialdairy farmers take adequatemeasures to control all chows
disease conditionsand tick infestation,while owners of native cattle
do very little in this regard.

C. The_Dairy ;Idusty

2.16 Althoughmilk is produced from-nativeZebu cattle ftr home

consumption throughoutEthiopia, cotmercialmilk productionhas bueneastab-
lished only in the Asmara and Addis Ababa areas. In the Asmara areaa there
are about 25 commercialherds with about 3,500 improveddairy cow. There
appears to be little if any scope for increasingproduction in this area as
the market is not expanding.

2.17 In the Addis Ababa area4 a 8sytem of milk collection, prQoessing

an,dmarketing has been operated by the Addis Ababa Dairy Industry (AADI), a
s.ction within the Ministry of Agriculture. It operated a number of mik
collection centers and the Shola Datry ftont, vhich has capacity to pasteur-
ize and bottle 30,000 liters of mi-lkper dafy on one shift. UNICEF assisted
in the establishmentof the dairy plant and the milk collectionsystem. In
connectionwith this Project, the plant and the collectionand marketing fa-
cilities have been turned over to the Dairy DevelopmentAgency (DDA). There
are approximately40 commercial farms with herds ranging from 10 to 250 im-
proved dairy cows; about 30 supply milk through DDA. Around 1,250 smaller
dairy farmers also supply milk to DDA. There are, in addition, an indeter-
minate number of individuals owning one or two cows and selling small amounts
of milk independently. Most of the commercialherds comprise cattle of
the European dairy breeds and their crosses, while the herds of small
farmers are practically all native cattle. Dairy cattle husbandry and
disease control are discussed in more detail in Annex 1.

2.18 There are no reliable figures on actual milk supply to Addis Ababa
as the amounts sold outside the DDA marketing system are not recorded.
Sales by AADI increased by approximately160% between 1965 and 1969. In
1969, AADI's daily average sales were 8,500 liters with a range from 5,900
liters in April to 11,700 liters in October. A survey in September 1969
indicated that "hawkers" were supplying about 4,000 liters per day. Sales
by the large commercial farmers are estimated to average about 4,000 liters
per day. Overall daily milk sales probably range from about 13,000 liters
during the dry season (March-April)to 25,000 liters in the flush season
(September-October).

2.19 Population of Addis Ababa is estimated at about 685,000, with an

annual growth rate of 6.2%. However, only a small proportion of this popu-
lation has sufficient income to be able to purchase milk regularly. DDA
operates a number of retailing booths through which it sells milk in 1/2-
liter bottles at a price of US$0.20 equivalentper liter (para 4.06). At
this price, demand exceeds supply. Milk sold by commercial farmers and
"hawkers" sells at prices well above the DDA price. Towards the end of
1970, DDA commencedmarketing of reconstitutedmilk, made from imported
skim milk powder, at a price of US$0.12 equivalent per liter.

D. Agricultural Credit

2.20 Non-institutionalagencies, charginghigh interest rates, consti-

tute at present the main source of agriculturalcredit in Ethiopia. The
major constraints to expansion of institutionalcredit are the predominance
of holdings operated by tenant farmers who have little or no security of
tenure and the absence of legal provisions for chattel mortgage. The Govern-
ment has recently merged the former Development Bank of Ethiopia (DBE) and
Ethiopian Investment Corporation (EIC) into one new credit institution,the
Agricultural and Industrial Development Bank (AIDB), along lines proposed by
a Financial IntermediariesReorganizationCommission, appointed by Government
to study and report on this issue. Prior to the merger, DBE advanced medium-
and long-term credit to both small and large farmers. However, it had a
poor record of recovery performance and consequentlya weak financial position.
EIC extended credit in agriculture only to relativelylarge farming enter-
prises. The CommercialBank of Ethiopia (CBE), another state-owned bank,
deals almost exclusively in short-term credit. Certain special agencies,
 - 6 -

such as the Chilalu anidWolamo AgriculturalUnits, functioningas part of

the Ministry of Agriculture,and the FAO FertilizerProgram also deal in
short-termproduction credit in specific areas but ttae total volume of credit
advanced is low. The cooperativemovement is still at a very early stage
of development and, with a few exceptions,cooperativeshave yet to emerge
as viable institutionsfor channeling credit. The banking institutionsin
Ethiopia also have very little experience in financing livestockor dairy
development. Agriculturalcredit is discussed in more detail in Annex 2.

III. THE PROJLCT

A. General Description

Definitionand Purpose

3.01 The objective of the Project is to increaseproductionof milk

for the Addis Ababa market. It would provide for on-farm developmentof
approximately240 small farms (averageof 10 milking cows each), and 110
medium size dairy farms (averageof 40 milking cows each) including impor-
tation and breeding of dairy cattle for these farms; for establishmentof
about seven ranches to breed cross-breddairy heifers, of one dairy stud farm
and one farm to be used for receptionof imported dairy cattle; for technical
services to farmers; for additionalfacilitiesand organizationfor collec-
tion, processing and marketing of milk; and for employment of consultants to
carry out feasibilitystudies and prepare future livestock developmentproj-
ects. An autonomousagency, the Dairy DevelopmentAgency (DDA),has been
created to execute all aspects of the Project except on-lending to farmers,
which will be handled by AIDB acting as agent for the Government, and the
feasibilitystudies on future livestock projects.

Project Area

3.02 Participatingdairy farms would be located in Shoa Province with-

in a radius of 120 km of Addis Ababa; ranches for breeding of dairy heifers
would be located in the highland area within a radius of 250 km of Addis
Ababa (see Map of Project Area).

3.03 The altitude of the Project area is in the range of 2,200 to

2,500 m. The climate, which is temperate,is quite suitable for cattle of
the European dairy breeds or crosses between these breeds and native cat-
tle. Average annual rainfall of the Project area is in the range of 800
to 1,200 mm. Despite the seasonal nature of rainfall,with an annual dry
season of about six months, it is adequate for growth of productivepastures
and crops. However, seasonaleffects on livestockand milk productionare
signtficant.
 -7-

B. Detailed Features

On-Farm Development

3.04 An essential feature of the farm development proposals would be

the use of improved cattle of the European dairy breeds or their crosses
to replace native cattle, which have very low capacity for milk production.
As improved type dairy cattle are in very short supply in the Project area,
provision would be made for procurement of cattle of the European dairy
breeds from the Asmara area and from overseas and for breeding of cross-bred
dairy cattle.

3.05 Dairy Cattle Importation. In its application for finance for the
Project, the IEG proposed importation of about 3,800 pregnant heifers about
two years old and 200 bulls from Kenya at an estimated laaded cost of US$400
equivalent each. However, financial projections indicate that, in the case
of the medium size farms, purchase of weaner heifers, aged 6-10 months, is
likely to give better returns than purchase of pregnant heifers (Annex 3).
This system would have the added advantage of enabling farmers to gain
experience in handling exotic cattle before they come into milk. In the case
of pregnant heifers, purchase from Kenya would be much cheaper than from
alternative more distant sources. With weaner heifers, the advantage is much
less, largely because freight is a much smaller component of total landed
cost. However, Kenya may be unable to supply sufficient numbers. Herd models
and financial projections are therefore based on purchase of weaner heifers
at US$240 equivalent, which is considered adequate to cover the price that
may have to be paid to obtain them from Western European countries. DDA
would take over from the Ministry of Agriculture the Shola Dairy Farm and
use it for holding imported dairy cattle for about one month to enable them
to become acclimatized before being transferred to individual farmers.

3.06 Dairy Cattle Breeding. To ensure a supply of cross-bred dairy

heifers, provision would be made to undertake cross-breeding between
Friesian bulls and native cows on six private ranches and one Government
ranch. For this purpose, the Abernossa ranch, owned by the Ministry of Agri-
culture, would be transferred on lease to DDA for eight years from the start
of the Project. Friesian bulls have already been introduced to the Abernossa
herd for mating with Borana cows (Annex 4). The herd and financial projec-
tions and investment schedule for a model cross-breeding ranch are given
in Annex 5. Cross-bred heifers from these sources would not be available
for sale to participating small farmers until the fourth year of the Project.
DDA would also take over from the Ministry of Agriculture its dairy stud farm
at Hlolleta and increase the production of Friesian stud bulls for sale to
dairy farners (Annex 6).

3.07 Medium Size Farms. The average farm in this category would be de-
veloped to maintain 40 milking cows of a European dairy breed. Thirty weaner
heifers would be purchased in year 1 and 20 in year 2. In the herd projec-
tions, fairly liberal estimates of wastage from mortality and culling have
been made because of the initial inexperience of farmers in handling improved
type dairy cattle. In addition, investments would be made for fencing,
 -8-

quarters for employees,dairy buildings,water facilities,dairy and other

equipment and for fodder and pasture production (Annex 7). It is expected
that sub-loans will be made to approximately10 existing and 100 new farmers
in this category.

3.08 Small Farms. For the small farms, native cows would be replaced
by cross-breddairy heifers through purchase and by mating native cows to
Friesianbulls by artificialinsemination. From either of these sour.ces,
cross-bredheifers would not come into milk productionuntil the fourth
year of the Project. Investmentson small farms would be for purchase of
heifers and for fencing, dairy buildings,water facilities,dairy and other
equipment. Herd and financialprojectionsfor a model of a small farm are
given in Annex 8. The small farms to be assisted are in existence now.

3.09 Projections for both categoriesof farms are based on a feeding

system involving heavy use of concentratesfor milk productionand for rear-
ing heifers. There is a good supply of fodders such as wheat bran and pro-
tein-rich oilseed cakes, which are used for compoundingconcentraterations
for dairy cattle. At the existingprice, equivalentto US$0.06 per kg, this
system of feeding for milk production is profitable. In the long torir,it
may be feasible to change over to a lower cost system of milk production
based largely on home-grown fodders, including improved pastures, foder
crops and grain crops. The eanvironment and soils are suitable for this
type of productionbut further field studies are needed to determine suit-
able local techniques for pasture and fodder production.

Milk Collection and Processiug Facilities

3.10 At present there are 32 centers for collection and tranp*rt of

milk to the processingplant at.Shola operatedby DDA. The Project would
provide for establishmentof 16 new milk collectioncenters and replacement
of eight temporaryones. The exiating facilitiesof the Shola Dairy Plant
were constructedwith the assistanceof and under supervisionof UNI=EF.
Proposals for purchase and installationof additionalequipment to izcreae,
milk processing capacity of the plant from 3Q,000 liters to 5O,000 liters
per day have been drawn up in consultation with the UNICI;F BegitoXul (tice
for East Africa. Finance for these additios would be included in the
Project. Details and estimated costs are given in Annex 9. inQcontracts
under this categorywould be awarded without the certification of an apropm-
riate UNICEF representativethat they are in accordance with sound engineer-
ing practices. Assurancesto this eff-ectwere obtained durtug negotiations.

Technical Services

3.11 A Production Division would be estalhishedwithin DDA, with

responsibilitiesfor providing technical services to participating farmers.
These would include farm plan preparation and supervision, advisory services
on dairy cattle husbandry, disease contrcl services and an artificial insemi-
nation (A.I.) service. Provision would alan be made for construction of
extra accommodationat the Holleta Dairy Stud Farm to enable DDA to con-
duct short trainingcourses for dairy farmers and dairy farm managers.
Assurances were obtained during negotiations that the above services
would be provided, during the life of the sub-loans to the farmers.

3.12 Because of the presence of serious infectiousdiseases and of

cattle ticks and several serious tick-borne diseases (para 2.15), a high
level of veterinary services would be provided to ensure that adequate dis-
ease control measures would be enforced. As the Veterinary Division of the
Ministry of Agriculture is inadequatelystaffed to provide the required
level of service, personnel would be employed under the Project for this
purpose. Assuranceswere obtained during negotiationsthat cattle on par-
ticipating farms would be vaccinated at agreed intervals against rinder-
pest, foot-and-mouthdisease and contagiousbovine pleuropneumoniaand that
satisfactoryprocedures for control of cattle ticks and tick-bornediseases
would be enforced, during the life of the sub-loans to the farmers.

3.13 In the long term, the best and cheapestmethod of providing a

supply of improved dairy cattle will be by grading up native cows by mating
to bulls of European dairy breeds. To this end, an A.I. service would be
provided by the Production Division of DDA for participatingdairy farmers
at a fee. For small dairy farmers,A.I. would be much more economical than
maintaining a bull. It would also have the advantage of reducing the level
of infertility in dairy herds due to infectiousdiseases. Semen for use in
the A.I. service could be imported at low cost (about US$0.40 per dose) and
local technicianscould be trained as inseminators.

3.14 The AgriculturalResearch Institute, financed by a UNDP/SF Project,

has done some research work on production of improved pastures and fodders
for cattle at its field station at Holleta. An amount of US$100,000would
be provided under the Project to carry out field studies and establish
demonstrationplots of improved pastures and legumes within the Project
area. It is proposed that a program of work in this field be organized by
Government in consultationwith DDA and the AgriculturalResearch Institute.
Assurances were obtained during negotiations that approval would be obtained
from IDA before funds allocated for this purpose were committed. An amount
of US$30,000 equivalentwould be included, as part of the technical services
costs, for employmentof consultants to advise DDA on milk processing and
marketing.

3.15 The Bank Group livestock review and identificationmission (paragraph

1.03) identifiedsix potentially bankable sub-projects,which could possibly
be incorporatedinto one or more comprehensivelivestock development proj-
ects. Based on its recommendations,an amount of US$350,000equivalent
would be included in this Credit to finance feasibilitystudies and prepara-
tion of future projects. Assuranceswere obtained during negotiations that
the Governmentwould obtain IDA approval on the consultantfirms and the
individual consultants to be engaged for these studies and on the terms and
conditions of their engagement.
 - 10 -

C. Cost Estimates

3.16 Total Project cost is estimated at approximately US$6.5 million

equivalent. This includes incremental working capital requirements during
the disbursement phase, but excludes the value of existing assets to be taken
over from the government by DDA. The estimates are based on prevailing
prices in Ethiopia. A contingency allowance has been included in each
category. In the case of imported livestock this is based solely on.an
allowance for possible price increase. For a8l other catego-ries, contin-
gency allowance is based on possible increases in both price and physical
inputs. In view of the relative price stability in Ethiopia in recent
years there appears to be no reason to allow for higher price contingency
on locally procured goods than on imported goods. The foreign exchange
component is approximately US$3.4 million equivalent, or 53% of total
Project cost (Annex 10).

3.17 Technical services and administrative costs at US$1.8.million

represent nearly one-third of total Project cost. Because of the pioneer-
ing nature of this Project, a high level of technical.,veterinary and A.I.
services would be required. These serviceswould be applicablein the
future to a much larger development of dairylng in the Project area and in
other parts of Ethiopia. In addition, the establishment of, DDA a.a8 new
entity to execute the Project necessitates meeting,fairly heavy costs for
administration. The major categories of Project cost are shown below:
 - 11 -

Total Project Cost

E$ 1000 US$ '000 Equivalent z /I 12

CategOrc LOCal Foreign Total Local Foreiln TOtal TPC FEC

On-Farm Investment
Livestock 1,535 2,395 3,930 614 958 1,572 25 61
Other 1 715 1 475 3 190 686 590 1,276 20 45
Sub-total T3Y 37 7 1,300 1,548 2,848 ZE 5 4

New Investment in
Shola D5airy Plant
Buildings & Equipment 254 337 590 101 135 236 4 56
Vehicles 47 111 158 19 44 63 1 70
Sub-total 48T
40748 179 299 5 59
Technical Services &
Administrative Costs 2,020 2,595 4,615 808 1,038 1,846 29 56

Feasibility Studies 250 875 1,125 100 350 450 5 85

Total Investment Cost 5,821 7,788 13,609 2,328 3,115 5,443 83 57

Incremental Working
CaPita1 1,191 - 1,191 477 - 477 8
Contingencies
Price 397 502 899 159 201 360 5 56
Physical 243 263 503 97 104 201 4 52

Sub-total 640 765 1,402 256 305 561 9 54

Total Project Cost 7,652 8,553 16,205 3,061 3,420 6,481 100 53

Existing Assets Taken Over

Shola Dairy Farm 95 - 95 42 - 42 - -
Shola Dairy Plant 919 - 919 368 - 368 - -
Holleta Dairy Stud
Farm 350 - 350 140 - 140 - -

Sub-total 1,364 - 1,364 550 - 550 - -

/1 Total Project Cost.

7E Foreign Exchange Component.

D. Proposed Financing

3.18 The estimated Project cost would be financed as follows:

 - 12 -

(US$ '000 Equivalent)

Farmers DDA AIDB Government IDA Total
Category Amount Amount Amount Amount Amount % Amount

On-Farm Investment
Private Farms 400 - - 44 2,333 84 2,777
DDA Farms - 12 - - 59 83 71
Sub-total __9
400 - -- a 2,392 83 2,848

Shola Dalry Plant - 59 - - 240 80 299

Technical Services &

Administrative Costs - 808 - - 1,038 56 1,846

Feasibility Studies - - - 100 350 77 450

IncrementalWorking
Capital 38 - 439 - - - 477

Contingencies 48 89 44 380 561

Total Project Cost 490 968 527 144 4,400 68 6,481
% of Total Project Cost 8 15 7 2 68 100

Existing Assets
Taken Over - - - 550 - - 550

3.19 The proposed IDA Credit of US$4.4 million equivalentwould finance

68% of total Project cost. US$3.4 million, or 77% of the Credit, would
finance foreign exchange costs while US$1.0 million or 23% would finance
local currency expenditure. Assuranceswere obtained during negotiations
that funds would be provided to DDA either through the banking system or
from the Government'sown budget to enable it to meet its own working capi-
tal requirements. The IDA Credit would meet the estimated foreign exchange
compontantof the cost of the consultantservices to carry out the feasibility
studies in relation to proposed future livestock developmentprojects.

E. Procurement

3.20 All purchases of dairy cattle to be financed by the Credit would be

subject to the approval of the ProductionManager of DDA. Purchases of dairy
cattle from outside Ethiopia for Project purposes would be organized and ef-
fected by DDA to fulfill firm orders by farmers taking into account price
quotations from potential suppliers in at least three different countries as
well as production standardsand suitabilityfor Ethiopian conditions. All
importationswould be subject to veterinary requirementslaid down by the
Director of the VeterinaryServices of the IEG. In particular,all cattle
would be certified free from East Coast Fever and vaccinatedagainst foot-and-
mouth disease (Types A, 0 and C), rinderpest and contagious bovine pleuro-
pneumoniawithin the three months preceding arrival in Ethiopia. Assurances
 - 13 -

were obtained during negotiationsthat procurement and importationof cattle

would be carried out in accordancewith the above conditions.

3.21 Any contract estimated to cost over US$20,000 equivalentfor pur-

chase and installationof equipment for Shola Dairy Plant and for purchase
of vehicles by DDA would be subject to internationalcompetitivebidding.
Goods and services required for on-farm developmentwould be obtainedby
farmers through existing commercialchannels, where they are readily avail-
able and where there is adequate competition. Other expendituresby DDA,
except for reimbursementsof staff, would be made in accordancewith pro-
cedures to ensure a satisfactorydegree of local competition. Assurances
were obtained during negotiationsthat procurement of goods and services
would be carried out in accordancewith these conditions.

F. Disbursement

3.22 The Credit would be used to finance:

(a) 100% of long-term sub-loans to farmers for approved Proj-

ect purposes in cases where such sub-loans do not exceed
90% of the total costs of the correspondingon-farm in-
vestments;

(b) 90% of long-term sub-loans to farmers for approved Project

purposes in cases where such sub-loans exceed 90% of the
total cost of the correspondingon-farm investment;

(c) foreign exchange component of cost of technical and admin-

istrative services of DDA and cif costs of vehicles and
other equipment imported specificallyfor the Project;

(d) 80% of cost of constructionof milk collectioncenters and

milk retailing centers and other constructionfor Shola
Dairy Plant for approved Project purposes, and 70% of the
cost of equipment procured locally for the Project;

(e) 80% of expenditure for approved Project purposes on farms

operated by DDA; and

(f) foreign exchange expenditure for feasibilitystudies for

the proposed livestock development projects, and 70% (the
estimated foreign exchange component)of expenditurefor
exploratorydrilling for water for purpose of these feasi-
bility studies.

3.23 Disbursementof the Credit would be extended over six years as

shown in the following schedule:
 _ 14 -

Project Year
Category 1 2 3 4 5 6 Total
---------------- US 000 -------------------

On-Farm Development 480 618 458 376 280 180 2,392

Shola Dairy Plant 82 34 34 57 16 17 240
Technical Services &
AdministrativeCosts 223 250 218 141 109 97 1,038
Feasibility Studies 125 125 100 - - - 350
Contingencies 80 93 74 60 43 30 380

Total 990 1,120 884 634 448 324 4,400

For medium size farms, commitments would be made during the first four years
of the Project and each subloan would normally be disbursed over three years.
For small farms commitmentwould be made during the first three years of
the Project and disbursementof individualsubloans over four years. Plan-
ning of total Project expenditure and of disbursementof the Credit by
quarters are shown in Annexes 11 and 12.

G. Organization and Mknagement

3.24 As the Project would involve fairly large-scale commercialopera-

tions, it would be appropriate for it to be administered by an autonomous
authority operating on a comercial basis. DDA has been set up for this pur-
pose. The objectivesof DDA are to develop milk production and milk market-
ing in Ethiopia. It would be authorized to engage in purchase, collection,
transport,processing and marketing of milk; to operate farms producing milk
or breeding dairy cattle; and to provide technical,disease control and A.I.
services to dairy farmers.

3.25 DDA has taken over the assets of the Addis Ababa Dairy I*dustry,
namely the Shola Dairy Plant, the milk collection centers serving that plant
and the equipment used in collecting, transporting, processit&g And marketing
of milk. It has also taken over from the Ministry of Agricultutethe
Holleta Dairy Stud Farm and the Shola Dairy Farm (para 3.06).

3.26 The Board of Directors of DDA consists of the Minister for Agri-
culture or his delegate as Chairman; one representativefrom each of the
Ministriesof Finance, Commerce, Industry and Tourism, National Community
Development and Social Affairs; one representativeeach from the Municipal-
ity of Addis Ababa and the Agriculturaland Industrial DevelopmentBmnk; and
one representativefrom the milk producers. During negotiations,it was
agreed that any changes in the charter of DDA, made without prior agreement
of IDA, which would materially and adversely affect DDA's ability to execute
ttte1'roject,could be considered a default under the Credit Agreement.

3.27 The above organizational arrangements differ from those embodied

ill the Plan of Operations between the UNICEF and the Governmentunder which
 - 15 -

UNICEF financed the establishmentof the dairy plant and the milk collec-
tion system. However, UNICEF has agreed that the new arrangementsare ap-
propriate for DDA's enlarged responsibilitiesand UNICEF and the Government
have agreed that they will make appropriate amendments to their plan of
operations. These amendmentswould be a condition of effectivenessof this
credit.

3.28 The chief executive of DDA would be the General Manager. There
would be a Production Division, under the direction of a Production Manager,
responsible for provision of on-farm technical services, farmer training,
veterinary services and an A.I. service; it would also be responsible for
drawing up development plans for individualfarms, which would form the basis
for applicationsfor subloans under the Project. The Processing and Market-
ing Division, under the direction of the Processing and Marketing Manager,
would be responsiblefor operation of the Shola Dairy Plant and for collec-
tion, transport,processing and marketing of milk. A Financial Manager would
be responsible for financial management of all aspects of DDA's operations.

3.29 The staffing requirementand organizationchart proposed for DDA

is presented in Annex 13. A qualified and experienced ProductionManager,
acceptable to IDA, would be recruited on terms and conditions acceptable to
IDA. IDA would also be consulted and given time to comment on the persons
to be appoinitedand the terms and conditionsof appointment for the posi-
tions of General Hanager, Financial Manager, Processing and Marketing Man-
ager, Chief VeterinaryOfficer, Artificial InseminationSpecialistand
Chief Dairy Development Officer. It would be a condition of effectiveness
that appointmentshad been made to all of the above positions, except the
positions of Artificial InseminationSpecialist and Chief Dairy Develop-
ment Officer. In its application,the Government-statedthat a number of
these positions would have to be filled by non-Ethiopians. The question of
recruitment of non-Ethiopianswas discussed with the Governmentduring ap-
praisal and again during negotiations. It is not expected that there will
be any difficulty in this regard. It is likely that some could be supplied
through bilateral aid agencies. Ethiopian counterpartswould be appointed
and trained to assume the duties of positions to which non-Ethiopiansare
appointed. Assurances on the above points were obtained during negotiations.

3.30 Assurances were obtained during negotiations that, in those cases

where non-Ethiopian& are appointed to any of the positions mentioned in para-
graph 3.29, DDA would be required to meet only the local costs of their em-
ployment. These are approximatelyequivalent to those which would be in-
curred if Ethiopians were employed in the same positions. The remaining
costs would be met by the Government as a grant to DDA from the proceeds of
the credit as a development cost. In order to avoid delay in meeting the
conditions of effectiveness(para 3.29), it was agreed during negotiations
that we would propose that retroactive financing be provided to enable DDA
to proceed with recruitment of the Production Manager and possibly some other
non-Ethiopianpersonnel. During negotiations it was also agreed that retro-
active financinig should be proposed to enable the Government to proceed with
feasibtlity studies for a second livestock development project (para 3.15)
without delay. A total amount of US$100,000 equivalent is proposed as retro-
active financing from January 1, 1971.
 - 16 -

H. Lending Operations

3.31 Assuranceswere obtained during negotiations that procedures ac-

ceptable to IDA would be established for on-lending of funds from the IDA
Credit to DDA for approved Project purposes, at an interest rate of 6-1/2%
per annum repayable over 20 years, including a grace period of six years,
except for that portion of the costs of employmentof non-Ethiopianstaff,
which would be provided as a grant (para 3.30). The arrangementswould be
ratified in a Project Financing Agreement between the Governmentand DDA
before Credit effectiveness. Assuranceswere obtained during negotiations
that the Governmentwould provide an advance of not less than US$100,000
equivalent as initial working capital for DDA, before Credit effectiveness.

3.32 Due to the recent establishmentof AIDB and the fact that it is
still in the process of evaluationof the loans acquired from its predecessor
agencies, it was decided that, at least initially,AIDB would act as an agent
of the Government in making loans to participatingfarmers and that project
funds would thereby be kept separate from AIDB's own accounts. the Govern-
ment would open a Project Account in the National Bank of Ethiopia into which
it would deposit quarterly in advance such amounts as are estimated to be re-
quired to enable AIDB to make disbursementson sub-loans for the quarter im-
mediately following. AIDB would deposit repaymentsof principal plus interest
at 6-1/2% into the Project Account. These arrangementscould be modified with
the Association'sapproval following a satisfactoryappraisal of AIDB's finan-
cial prospects, in connectionwith a proposed Bank Group financing of AIDB,

3.33 Applicationsby farmers for subloans would be received initiallyby

the Production Division of DDA. Techniciansof this Division would visit the
farm, assess the technical feasibility of the farmer's proposal and draw up
with the farmer a farm development plan and financial projection for the per-
iod of the proposed subloan. Subloans would be made only on the recommenda-
tion of the Production Manager on the basis of a farm development plan ap-
proved by him and following a positive recommendationon creditworthinessby
a senior officer of AIDB satisfactoryto IDA. AIDB would not modify the terms
and conditions of the loan proposed under the farm development plan without
the prior approval of the ProductionManager. DDA would assiat AIDB in
verifying that disbursementsunder dairy loans are in accordancewith approved
farm development plans, in providing technicaland veterinary services to
participatingfarmers, and in collectingrepaymentsof principal and interest
from the proceeds of milk sales.

3.34 It is expected that the operators in all of the medium size farms
and of most of the small farms would be landowners. Mortgage would be taken
on land and inmovable property as security for subloans to landowners.
Provision woultd be iaadefor subloans to tenant farmers only on c*ndition that
(a) thsol,otitaii turctios from one or more guarantors providing adequate
security for the subloans; and (b) they enter into a written long-term lease
agreement with the landowner,satisfactoryto DDA.
 - 17 -

3.35 Long-term subloanswould be made to farmers to cover purchase of

dairy cattle; fencing;water facilities;dairy buildings; accommodationon
the farm; equipment and tools, includingmilking and veterinary equipment;
and fodder purchase. These subloanswould be at an interest rate of 9-1/2%
per annum for a period not exceeding 14 years, including a grace period of
five years. Of each 9-1/2% interestpayment received,DDA would receive 2%
as a service charge, AIDB would retain 1% and 6-1/2% would be paid to the
Government. In cases of default on sub-loans,DDA and AIDB would share equal-
ly the loss of principal and the payment of interest due to the Government.
The approval of IDA would be needed in cases where an individualsubloan or
the aggregate of subloans to an individualfarmer exceeds US$50,000 equiva-
lent. Assuranceswere obtained during negotiations that long-term subloans
would be made by DDA in accordancewith these conditionsand those listed in
paragraphs 3.32 and 3.33.

3.36 In some cases, participatingfarmers would need short-termloans

during the first five years of their developmentprogram to cover incremental
working capital requirements,as determinedby the farm developmentplan,
arising from increasedoperating costs, reduced net income and interest
payments on long-term subloans. AIDB would provide short-termloans for this
purpose on a year-to-yearbasis. The interestrate charged to farmers would
be not more than 10-1/2% per annum.

I. Auditing

3.37 Assuranceswere obtained during negotiationsthat DDA and AIDB would

maintain separate accounts in respect of the Project, that these accounts
would be audited annually by auditors acceptable to IDA and that the audited
accounts would be submitted to IDA within four months of the close of the fi-
nancial year.

IV. MARKETS,PRICES, PRODUCERBENEFITS ANDREVENUEGENERATION

Markets

4.01 There is fairly strong evidence that the Addis Ababa market is
under-supplied with milk and that demand is growing rapidly. Output of
milk by AADI increased from 288,000 liters in 1961 to 3,070,000 liters in
1969 and it has been marketed without difficulty. In fact, AADI had to main-
tain a system of rationing of sales through its 41 retail centers, which sell
milk only from 6 a.m. to 9 a.m. daily (Annex 14).

4.02 Daily milk sales of the order of 13,000 to 25,000 liters, represent
a very low per capita intake for a population of approximately 685,000 in the
city. However, the percentage of the population with sufficient income to
purchase whole milk is very small. The foreign populationof 45,000 accounts
for a very large proportion of sales. Average per capita consumptionin Addis
 - 18 -

Ababa is only about 10% of the consumption level of Nairobi and about 20%
of the level of Asmara.

4.03 A feature of the present milk supply situation is the marked

seasonal fluctuation in production. During the uionthspreceding the wet
season -- February to May -- intake at the sShola Dairy Plant is about 25% be-
low average while it is about 25% above average during the flush mqpths of
September to December. If productioln were maintained throughoutth, year at
the level of the flush months, overall consumption could be incre^a,dby about
35%. One of the objectivesof technical services to farmers would be to im-
prove feeding and management standards and thus reduce seasonal fluctuations.

4.04 A study by the University of Addis Ababa indicated an iiCQgo elas-

ticity of demand of at least 1.0 for milk in the city. With population
growth of 6.2% per year and growth of per capita income at loeat at the
national level of 2%, demand for milk can be expected to grow by at le4st
6.i% annually. Taking a conservativeestimate of demand at 25,OOQ liters
per day, an amount marketed without difficulty in the flusb #S#Q; qf 1969,
demand by 1980 would exceed 59,000 liters daily. Thus, the eptiiated in-
creased supply of 31,000 liters as a result of Project investmentswould not
exceed the increase in demand due solely to population and income growth.

4.05 In 1967, imports of milk powdgr into Ethiopia were 2,000 tons,
equivalent to an average supply of 55,000 liters per day of reconstituted
milk. At existing retail prices in Addis Ababa, its price is equivalent
to US$0.22 to US$0.48 per liter. A large proportion of this milk powder
is purchased by the higher income residents of Addis Ababa bec4use they
are unable to obtain a regular supply of good quality pasteurizedmilk.

Prices

4.06 Until late in 1970, AADI paid E$ 0.25 (US$0.10 equivalent) per liter
to small farmers deliveringmilk to collecting centers and E$ 0.28 or E$ 0.30
(US$0.11or US$0.12 equivalenit) per liter to large farmers, depending q4 their
distance from Shola. It sold milk through its retail centers at 9$ 0.40
(US$0.16equivalent) per liter. Of the total milk sales by DDA, proq1ly a
third or more is purchased by retailers or owners of bars whq resell it at
considerablyhigher prices. As DDA gives first priority to qg4lig tbro-gh
its own retail centers, it is not able to supply regularly tp superrkets,
other large retailers,hotels and hpspitals,which therefore qhtain their sup-
plies direct from large cowmercialfarmers at a price of E$ 0.45 (US$0.18
equivalent) per liter.

4.07 In the last quarter of 1970, AADI raised its retail selling pric,e
to E$0.50 (US$0.20equivalent)per liter. This has enabled it to Qffer ac
average price of about E$U.33 (US$0.13equivalent) per liter to suppliers.
Thuh slhould attract more of the commercial producers to supply milk to the
Slio4a Dalry Plant. With increasing supplies, DDAwould be able to supply
ow milk regularly to lhigher priced m.kts such as supermarkets and hotels.
It would also be able to offer a premiu price for quality milk suitable
for thlese higher priced markets. Assuragces were obtained during negotia-
 - 19 -

tions that DDA would adopt pricing policies that would enable it to operate
profitably and also offer satisfactoryprices to farmers.

4.08 Financialprojectionsfor farmers, Shola Dairy Plant and DDA have

been based on retail prices equivalentto US$0.20 per liter from years 1 to
6, US$0.18 per liter from years 7 to 10 and US$0.16 per liter thereafter.

Producer Benefits

4.09 Farmers participatingin the Project would derive substantial

increases in income as shown below:

Before DevelopmentYear
Development 6 13
Medium Size Dairy Farm
No. Milking Cows: Native 17 - -
Improved - 39 39
Production of milk, Liters 8,100 88,400 103,400
Cash Balance after Debt Service, US$ 432 3,054 5,844

Small Dairy Farm

No. Milking Cows: Native 4 - -
Improved - 7 10
Productionof Milk, Liters 1,900 8,500 17,800
Cash Balance after Debt Service, US$ 156 396 883

Cross-BreedingRanch
Herd Size (AnimalUnits) 231 554 558
Cross-BredHeifers Sold - 54 54
Cash Balance after Debt Service,US$ 932 1,274 9,065

4.10 Financial rates of return are estimated at about 20% for the model
of the medium size dairy farm, about 21% for the small dairy farm and about 17%
for the cross-breedingranch at retail milk prices as stated in paragraph
4.08 (Annex 15). If a retail milk price of E$0.40 per liter is assumed
throughout,financialrates of return are reduced to about 15% for the large
dairy farm and about 19% for the small dairy farm.

Revenue Generation

4.11 Farmers would pay interest and repay their subloansout of revenue
over a period of 14 years. The incrementalcash balance after debt service
would be positive for the medium size farm and the cross-breedingranch from
year 5 and for the small farm from year 4. By year 14, the aggregate
incrementalcash balance after debt service of farmers would be approximately
US$0.5 million equivalent, rising to over US$0.8 million by year 17. At
existing rates, income tax on small farmers would be negligibleand the
highest rate paid by other farmers on their projected income would be 15%.
Thus, most of the extra income would be retained by farmers. It is expected
that there would be considerablescope for further developmentof dairy
production to supply the growing demand of the Addis Ababa market and it is
 - 20 -

likely that farmers would reinvestmost of the extra income generatedby the
Project to further increase their production.

4.12 DDA would have a positive cash balance after debt service. The
cumulativecash balance to year 10 is estimated at US$3.2 million equivalent
and from year 15 onwards the annual cash balance would be US$0.4 million
equivalent. DDA would thus be establishedas a viable corporationthat could
contribute to financing of future investmentsin infrastructurefor further
developmentof the dairy industry.

V. ECONOMIC BENEFITSAND JUSTIFICATION

5.01 On-farm developmentunder the Project is expected to increase

average daily milk supply through Shola Dairy Plant by approximately19,000
liters by year 5 and 31,000 liters by year 10. In addition, it is expected
that improvementto Shola Dairy Plant and the organizationof milk collec-
tion and marketing by DDA would stimulatefurther increasedsupplies to
the Plant. Although milk price would rise over the next six years -- as it
would do in any case without the Project -- developmentof productionunder
the Project would lead to reductionof retail price to the equivalentof
US$0.16 per liter, which is slightly lower than the retail price in most
West European countries and in Nairobi and considerablylower than the re-
tail price in other African cities.

5.02 The Project would establish,in the Addis Ababa area, a population
of about 7,000 cows and heifers of improveddairy breeds. This would ?ro-
vide a supply of dairy type heifers for further expansionof dairy production
around Addis Ababa and in other parts of Ethiopia. It would eliminate the
need for any further importationsof dairy cattle on a large scale.

5.03 The rate of return to the economy of the Project is estimatedat

approximately12%, at a retail milk price of E$0.40 (US$0.16)per liter.
At a retail milk price of US$0.18 per liter, economic rate of return would be
approximately16%. These rates of return are based on a price of US$240 for
weaner heifers, which is the estimated price at which they could be procured
from Europe. If obtained from Kenya, they could almost certainly be delivered
at lower cost, with consequentincrease in the economic rate of return.

VI. RECOMMENDATIONS

6.01 During negotiations,assuranceswere obtained that the Government

would:

(a) ensure that funds would be provided to DDA, either through

the banking system or through the Government'sown budget,
 - 21 -

to enable DDA to meet its own working capital requirements

(para 3.19);

(b) establishsatisfactoryproceduresfor makiag nvailable funds

from the Credit to DDA and AIDB for approvedProject purposes
on terms and conditionsacceptableto IDA (paras 3.31 and
3.32); and

(c) employ consultantsacceptableto IDA, on terms and condi-

tions acceptable to IDA, to carry out feasibilitystudies
in relationto preparationof a future comprehensivelive-
stock developmentproject (para 3.15).

6.02 During negotiationsassuranceswere obtained from the Government

that DDA would:

(a) prior to award of contracts for purchase and installationof

equipment for Shola Dairy Plant, obtain the certification
of an appropriaterepresentativeof UNICEF that such con-
tracts were in accordancewith sound engineeringpractices
(para 3.10);

(b) provide technical,veterinaryand artificialinsemination

servicesof a satisfactorystandard to participatingfarmers
during the life of sub-loans to farmers (para 3.11);

(c) ensure that all cattle on participatingfarms are

vaccinatedagainst rinderpest,foot-and-mouthdisease
and contagiousbovine pleuropneumoniaat intervals de-
terminedby the Chief VeterinaryOfficer of DDA and
that procedureslaid down by the Chief VeterinaryOfficer
are enforced for control of cattle ticks and tick-borne
diseases on participatingfarms during the life of sub-
loans to farmers (para 3.12);

(d) obtain IDA approval before commitmentof any funds from

the Credit for carryingout field studies or establishing
demonstrationplots (para 3.14);

(e) undertakeprocurementand/or importationof cattle and

procurement of goods and services for Project purposes
on terms and conditionsacceptable to IDA (paras 3.20
and 3.21);

(f) recruit a qualifiedand experiencedProductionManager,

acceptable to IDA, on terms and conditionsacceptableto
IDA; and consult IDA and give IDA time to comment on
the persons to be appointedand terms and conditionsof
appointmentsfor the positions of General Manager, Fi-
nancial Manager, Processingand Marketing Manager, Chief
 - 22 -

Veterinary Officer, Artificial InseminationSpecialist

and Chief Dairy DevelopmentOfficer (para 3.29);

(g) in cases where non-Ethiopiansare appointed to any of the

positionsmentioned in paragraph 3.29, appoint suitably
qualifiedEthiopians as counterpartsto be trained to
assume the duties of the relevant positions (para 3.30); and

(h) adopt pricing policies for the purchase and sale of milk
and related productswhich provide adequate incentivesfor
milk production and which allow DDA to operate profitably
(para 4.07).

6.03 During negotiationsassuranceswere obtained from the Government

that AIDB would:

(a) make long-term loans to farmers for on-farm developmenton

terms and conditionssatisfactoryto IDA (paras 3.32 and
3.34);

(b) make short-termloans to participatingfarmers to cover

reasonablerequirementsof incrementalworking capital as
determined by the farm developmentplan, on terms and con-
ditions satisfactory to IDA (para 3.35); and

(c) employ a senior officer to supervise its lending operations

under the Project whose qualificationsand experiencewere
satisfactoryto the Association (para 3.33).

6.04 The following would be conditionsof effectivenessof the Credit

in addition to the customary conditions:

(a) the General Manager, ProductionManager, FinancialManager,

Processing and Marketing Manager and Chief Veterinary Officer
had been appointed on terms and conditions acceptable to IDA
(para 3.29);

(b) the Government had provided DDAwith initial working capital

in an amount of not less than US$100,000 equivaleat on terms
and conditions satisfactory to IDA (para 3.31);

(c) The Government and UNICEF had amended their Plan of Opera-
tions so as to be consistent with the Project (para 3.27);
and

(d) the senior officer of AIDB for supervision of lending opera-

tlons under the Project had been appointed.

6.05 The Project is considered suitable for an IDA Credit of US$4.4 mil-
lion. The Imperial Ethiopian Government would be the borrower and would
carry the foreign exchange risk.
May 28, 1971
 ANNEX 1
Page 1

ETHIOPIA

ADDIS ABABA DAIRY DEVELOPMENTPROJECT

Dairy Cattle Husbandry and Disease Control

1. Of Ethiopia'scattle populationof about 26 million, less than

10,000 are European-typedairy cattle, mostly Friesian. While native cattle
are widely used for milk productionfor home consumption,Asmara and Addis
Ababa are the only areas in which there are commercialdairy farms on a signi-
ficant scale.

The Dairy Herd

2. There are about 25 herds, with about 3,500 upgraded dairy cows in
the relativelydry Asmara area. All these herds are housed and stall-fed.
Operating costs are high and farmers are paid E$0.37 (US$0.15)per liter c.f
milk. All milk is consumed in Asmara with the exception of the output of one
dairy farm with 850 cows, which sells sterilizedmilk to other cities. An
artificialinseminationscheme commenced in the area in October 1969 and
Asmara representsa potential source of dairy heifers for the Project (Annex 3).

3. In the Addis Ababa area, dairy farming has developed rapidly

during the last decade following the installationof milk collecting
centers and Shola Dairy Plant. At present about 40 commercialdairy farms,
with 10 to 250 cows each, have a total of about 2,000 dairy-typecows, mainly
upgradedFriesians. Holleta and Shola dairy farms are owned by the Govern-
ment and have herds of 60 to 70 Friesian cows, respectively,originating
from Kenya. Cows are usually housed and investmentsin cow sheds and accommo-
dation are necessarilyhigh. Labor requirementsare estimatedat one worker
for five cows. Feeding consists of low quality hay and a fairly high ration
of concentratefeed, mainly wheat bran. Green-fodderfeeding is practically
unknown and grazing is, as yet, of limited importance. However, excellent
conditionsexist for cultivationof fodder crops and for establishmentof
high yielding grassland.

4. Data collected from 12 commercialdairy farms indicate that in

herds comprisingmainly F and F Friesian x Zebu cattle, milk production
is in the range of 1,400 to 1,808 liters per lactation,while it is in the
2 ,500--to
3,000-literrange in two larger commercialdairy herds and in
the two Government farms, which have virtually pure Friesian cattle. The
calving rate at 60% to 70% is low.

5. About 1,250 small farms supply milk from native cows to the milk
collectingcenters. Nutrition of these cows depends exclusivelyon pas-
tures, which is reflectedin a sharp drop in milk productionin the dry
 ANNEX 1
Page 2

season. During the night, cattle are kept in corrals beside the farmers'
huts, and milk sold per cow per year is estimated at 100 to 500 liters.

The Environment

6, Farmers in the Project area are good herdsmen but they appear to
have little knowledge of dairy farming.

7. The Project area is at an elevation of 2,200 to 2,500 m above

sea level. Climate is temperate, frost is an exception and European-type
dairy cattle do well under these conditions. Average rainfall at Addis
Ababa is 1,070 mm per year, with a six-month dry season from October to
March and, in most years, a short dry season in May to early June. Topo-
graphy is undulatingwith numerous small water courses and mostly heavy
grey black soils in valleys and red loams on hills.

8. Existing unimproved pastures provide on average about 2 tows per

year of mediocre quality hay, with 6% to 8% crude protein content and 2 to
3 tons of green fodder for grazing. Very little experimentalwork has been
done on pasture improvement. However, preliminary trials carried out at
Holleta under the UNDP/SF AgriculturalResearch project indicate that pro-
ductive rye grass-whiteclover pastures can be established. Crops such
as oats, vetches, oats and vetches, oats and broad beans, cow pe8as, rape,
fodder sorghum, green maize, berseem and Persian clover can also be grown
successfully. Under irrigation,highly productive stands of alfalfa could
supply green fodder during the whole year. Trials carried out in the
Chilalu AgriculturalDevelopmentUnit (CADU) Project indicate that a wide
range of improved grasses and legumes from both tropical and temperate
environmentscan be grown in the area of that project,where the environ-
ment is similar to that of the region around Addis Ababa.

Some Technical Aspects for Dairy Farm Development

9. Fodder Production and Feeding. While there are excellent pros-

pects for dairying based on grass and forage, feeding for the immediate
future would have to rely heavily on concentrate feed. There is at present
a plentiful supply of cheap oilseed cake (principallynug cake) and milling
by-products such as wheat bran. CADU produces a concentratemixtureof
equal parts of aug cake and wheat bran plus bone meal and salt at E$7
(US$2.8 equivalent) per 100 kg. Project farmers would be able to buy a
more balanced concentrate at a price of E$15 per 100 kg from a feed mixing
plant being established by the Livestock and Meat Authority. At a milk
price to the farmer of E$0.33 (US$0.13 equivalent) per liter, delivered
to the collection center, the milk-to-feed-price ratio is very favorable
for milk production.

10. For the future, greater emphasis should be given to the develop-
ment and utilization of grasslands for dairying as this will undoubtedly
lead to lower cost milk production. As a first step, fencing of Project
farms to protect them from grazing by stray cattle and other livestock
 ANNEX 1
Page 3

will increaseavailable pasture for the farmer'sown cattle. Field trials

and demonstrationsproposed under the Project would have the objective of
determiningsuitablemixtures and methods of pasture and fodder crop pro-
duction as well as methods for their management and utilization,e.g.,
stockingrates, fertilizerapplication,and hay and silage making. For
the immediate future, it is anticipated that most large farmers will estab-
lish small areas (about 1 ha) of alfalfa under irrigation for hay and green
fodder as well as grow more fodder crops without irrigation.

11. Calf Rearing. In the initial years it is expected that most far-
mers will rear calves by suckling, but as they attain more skills in dairy hus-
bandry they could change over to bucket rearing. Friesian-typedairy
heifers would require about 400 liters of whole milk and 1,400 kg of con-
centrates from birth to calving at about 28 to 30 months of age. Require-
ments for cross-bredheifers would only be about two-thirdsof this amount.

12. Housing. Housing provided on most commercialdairy farms in the

Addis Ababa and Asmara areas now is more elaborate than is needed, compris-
ing completelyenclosed barns with individualstalls in which all cattle are
tethered and fed. Under the Project, a cheaper system of housing would be
used, involvingbarns with loose box stalls and an attached open area
where cattle would be fed and watered. Farmers would be encouraged to
graze their herds, at least during the day. Allowance in the Project is
made for one man to handle 10 cows.

13, Training. Short trainingcourses would be provided for future

dairy farmers at Holleta Training Center. These courses would include
practical training in milking and hygenic milk production,management of
dairy cattle and pastures, productionof alfalfa and other fodder crops
and fodder conservation.

Cattle Diseases

14. Although a number of the major infectionsand tick-bornediseases

occur in Ethiopia, they can be controlledby vaccinationor other means.
The followingis a brief summary of the positionwith regard to the major
diseases of cattle:

Rinderpest- This disease is endemic throughoutEthiopia but

it can be controlledby vaccination. Tissue culture vaccine
confers a solid immunitythat lasts for a number of years.

Foot-and-MouthDisease - Types A, 0 and C occur in Ethiopia,

and vaccination twice yearly with a tri-valentvaccine is
needed for control.
 ANNEX 1
Page 4

Contagious Bovine Pleuopneuumonia(CBPP) - This disease is

endemic tihrouglhout Africa. It is not as infectiousas the
above two diseases. Losses caused by epidemicsof CBPP are
much lower than in those caused by rinderpest. In Ethiopia,
KH3J vaccine i8 used against this disease because it pOtduces
only a mild reactionin vaccinatedanimals. As it cornfers an
immunitythat lasts omly for six months, vaccinationmust be
carried out twice a year.

haemmorhagic Septicaemia, Anthrax and Blackleg- These diseusta

occur sporadicallybut they can be controlledby vaccination.

Tick-Borne Diseases - The most serious of the tick-bofne

diseases,East Coast Fever, does not occur in the Addis
Ababa area even though Rhipicephalusappendiculatus,the
tick which transmitsit, is present. Any cattle to be
introducedto the region,either from Kenya or other parts
of Ethiopia,should be certified as being free froxi expo-
sure to this disease for a period of at least two years.
Iieartwater, a bacterial disease transmittedby the tick,
Anbylomma hebraeum, occurs in the Project area. It can be
controlled in cattle at pasture by spraying or dipping
once weekly to control ticks. Where cattle are housed
permanently,control of tick infestationpresentsvery
little problem. The common tick fevers, babesiosisand
anaplasmosis, also occur. Control of babesiosispresents
very little problem. Although there is no effectivepro-
phylaxis or treatmentfor anaplasmosis,it is unlikely to
cause serious losses.

InternalParasites - Liver fluke, Fasciolahepatica, is a

serious problem in grazed cattle in some parts of the
district. It can be controlledby drainingor treating
swampy areas that harbor the intermediatehost, which is
a snail. Worm parasitesare also a problem in grazed
cattle. They can be controlledby a program of anthelmin-
thic treatmentand rotationalgrazing. In cattle that atr
housed and hand-fed, internal parasites will not prebeht
a problem.

Infertility - The three major infectious diseasesassociated

with infertility, brucellosis, vibriosis and trichoftibabiS,
are almost certainlypresent in the Project area. Bruieellosis
can be controlledby vaccinationof all heifer calves. The
effects of the other two diseases can be reduced to negligible
proportionsif an efficientartifiCialinseminationservice is
available to dairy farmers.
 ANNEX 1
Page 5

Mastitis - While sporadic cases of mastitis will almost

certainly occur, its effects will probablybe less serious
than in more highly developed dairy industriesfor two
reasons: first, cows would not be fed or managed to attain
extremelyhigh levels of production,which predisposecows
to mastitis; second, cows would be milked by hand rather
than by machines,with each milker handling only eight or
ten cows.

15. The effective control of all of these disease conditionswill be

essential to the success of the Project. As far ag the individual farmer
is concerned, failure to control diseaseswould lead to almost certain
financial failure. Measures to control all these diseases are known but
it is essential that the Project make provision for its own veterninary
service to the farmers. The existing veterinary service of the Ministry
of Agriculturewould be inadequate for the increased needs of the Project.
One veterinarianshould be employedwithin DDA to concentratesolely on
disease control. He would have under his supervision about 12 veterinary
assistants. Because of shortage of Ethiopian veterinaries,it would be
necessary to engage an expatriateveterinarianat least for the first two
years. He should have had veterinary experiencein East Africa.

ArtificialInsemination (A.I.)

16. Developmentof an efficient artificialinseminationservice is

important to the success of the Project for a number of reasons. For the
small farmers, it would be completelyuneconomic to purchase and maintain
a bull of a breed such as Friesian. A system of joint ownership of a bull
by a number of small farmers would certainly lead to spread of disease,
such as vibrisosis or trichomoniasis,with consequent infertility. Simi-
larly in large herds, the use of A.I. is more or less essential to the con-
trol of these disease conditions. Provision of an A.I. service would give
farmers access to service from proven bulls, which would be of much higher
genetic standard than the bulls they could afford to purchase.

17. It is proposed that a veterinarianspecializingin A.I. be em-

ployed within DDA for the first two years of the Project. He would have
to undertake the training of inseminatersand the organizationand estab-
lishment of the A.I. service in the Project area. During this two-year
period, he would be expected to train an Ethiopian counterpart to take
over responsibilityof the A.I. service.
 ANNEX 2
Page 1

ETHIOPIA

ADDIS ABABADAIRYDEVELOPMENT
PROJECT

Credit Institutionsand AgriculturalCredit

1. The State Bank of Ethiopia, created by Imperial Charter in 1942

soon after the cessationof militaryoperationsin the country, carried out
the dual functionsof central and commercialbanking till the end of 1963.
At that time, by ProclamationNo. 206 for regulatingthe banking and monetary
system in Ethiopia, it was wound up and replacedby two new institutions,
namely, the National Bank of Ethiopia,which would functionas the central
bank of the country,and the CommercialBank of Ethiopia,which would take
over all banking businesswith the public previouslycarried out by the
State Bank of Ethiopia except credit mortgage activities. These were
transferredto the Mortgage Company of Ethiopia, a fully owned subsidiary
of the CommercialBank of Ethiopia. The NationalBank of Ethi.opiaexercises
powers for licensingand inspectionof commercialbanks. It imposes the
requirementsfor maintenanceof reserve balancesand liquidity ratios and
a ceiling on interestrates on deposits acceptedby the banks. It also
offers rediscountfacilitiesto banks for eligible paper coveringexport of
goods at 5% per annum and all other eligible paper at 5-1/2% per annum. No
banking institutionin Ethiopiahas so far availed itself of the facilities
for rediscountingagriculturalpaper.

Banking Institutionsin Ethiopia

2. The CommercialBank of Ethiopia (CBE). Incorporatedas a fully

Government-owned share company under the Commercial Code, the Commercial
Bank of Ethiopia has a paid-up share capital of E$30 million and reserves
amounting to E$11 million. Its deposits amount to nearly E$300 million and
it has a loan portfolioof E$228 million. Of the total loans, E$90 million
is for financingexports and imports;E$48 million for financingdomestic
trade, includingmovement of agriculturalproduce; E$43.8 million for financ-
ing industrialactivities;E$22.4 million for financingagriculturalproduc-
tion; and E$22.8 million for financingbuilding constructionand other miscel-
laneous activities. The Bank's advances for agriculturalproductionare
mainly to large firms undertaking sugar cane and cotton farming.

3. The net profits of the Bank for 1968 amounted to E$6.17 million
and it has maintainedfor some years now a dividendof 7% on its share
capital. The bank had 70 branch offices at the end of 1969 and a total staff
of 1,292, 66 of which belonged to the managerialand senior supervisory
category. The bank organizes advancedmanagementservices and training
programs for its staff at all levels. Supervisorystaff are periodically
sent abroad for specializedtraining in banking and management. The bank
proposes to set up an AgriculturalCredit Division very shortly.
 ANNEX 2
Page 2

4. Loans are sanctionedafter obtaining full financialdetails of the

borrower and an appraisal of the project. Loan committees have been set up
at branch offices and at the head office to sanctionloans. Small loans up
to E$20,000 could be sanctionedby a Loan Committeeheaded by the Credit
Manager and loans above this amount by a Loan Committeeheaded by the General
Manager;loans exceedingE$1 million need to be referred to the Board of the
Bank. The bank ordinarilyrestrictsloans to 50% of the value of the security
but this could be relaxed when guarantees are provided. The interest rates
vary from 7-1/2% to 9-1/2%, dependingon the type of loan or advance. The
bank does not generally advance medium- or long-term loans but could do so
if reimbursementfacilitieswere provided.

5. The Agriculturaland IndustrialDevelopmentBank (AIDB). AIDB was

establishedin November 1970 as a state-owned share company, with a nominal
equity of E$50,000 and taking over most of the assets and liabilitiesof the
..vw-Jefunct Dcvelopment Bank of Ethiopia (DBE) and Ethiopian InvestmentCor-
poration (EIC). Recent operationsof these predecessor institutionsare
described further below because, with the formation of AIDB so recent, it is
not yet possibleto review AIDB's own lending program. Neither of these
institutionswas in a strong financial position prior to its dissolution.
Arrangements have been made for the InternationalExecutive Service Corporation,
New York, to provide AIDB with a senior adviser for a period of three months
to make an assessmentof certain assets and liabilitiestaken over from DBE;
to assess and advise on financingand managementproblems facing some of the
companies in which AIDB has now assumed an interest (mainly from EIC) and
to advise on proper managementarrangementsfor AIDB itself.

6. Apart from its normal operating income, arrangementshave been

made for AIDB to receive, for the next five years, half of the profits of
the National Bank of Ethiopia,which would otherwisehave gone to the Minis-
try of Finance. Hlowever,AIDB's present financialsituation and prospects
are unclear and it is too early to completea meaningfulappraisal. No
balance sheet is available.

7. The DevelopmentBank of Ethiopia (DBE). The Developmentbank

of Ethiopia was establishedin May 151 by a Charter. It was a state-owned
institution with a paid-up share capital of E$11 million and a reserve for
bad and doubtfuldebts of E$3.28 million. Apart from this, the resources
of DBE consisted of loans received from USAID, IBRD and the West German
Kreditanstaltfur Wiederaufbau;the amount outstandingon December31, 1969
was E$6.476 million. The bank also received funds from the Ministry of
Finance,the amount outstandingon December 31, 1969 being E$1.541 million.
The bank did not offer deposit facilities.

8. From its inception,42% of the loans advancedwere for agricul-

ture and 52% for industry. Of the agriculturalloans, 68% was for periods
of one to five years, 30% for periods exceeding five years, and 2% for
periods of less than a year. No short-termagriculturalloans were granted
in recent years.
 AiINEX 2
Page 3

9. The total loans outstanding at the end of 1969 amounted to E$17.7

million (principal),of which E$8.588 million was for financing agricultural
productionand processing coffee. Interest outstandingon loans at the end
of 1969 amounted to E$2.524 million. At the end of 1968, E$9.254 million on
account of principal and interestwere overdue;of this, E$3.402 million was
overdue for more than two years and E$4.653 million was overdue from three
firms, which have since gone into liquidation. The bank's auditors (Price,
Waterhouse,Peat & Co.) have commented on the inadequacyof reserves to cover
bad and doubtful debts.

10. About 50% of the agriculturalloans was overdue. The bank's method
of appraisal of loan applications was faulty and it did not take prompt action
to proceed against defaultingborrowers in several cases, mainly due to poli-
tical interference. Accounts of the bank were not maintained up-to-dateand
the auditors observed that delays of over a month occurred in writing up the
accounts.

11. The bank charged interest at 8% on short-term agriculturalloans

and 7-1/2% on medium- and long-term agriculturalloans. On industrialloans,
the correspondingrates were 8% and 8-1/2%, respectively. Loans were sanc-
tioned on the basis of satisfactoryfinancial status of the borrower and the
loan officer's recommendations. A loan committee in the bank made recom-
mendations on the applications,and loans up to E$200,000 were sanctioned
by the Managing Director; loans for higher amounts were referred to the
Board.

12. The bank had a total staff of 130, many of whom had not received
any training in banking. At the higher and middle management levels, the
bank's staff did not appear to possess the necessary competenceand expertise
to deal with agriculturalcredit.

13. The Ethiopian InvestmentCorporation (EIC). Established as a fully

Government-ownedshare company in August 1963, the EIC had a paid-up share
capital of E$29.292 million and reserves of E$0.182 million. Apart from
capital funds, the EIC's main source of funds is a credit of E$20 million,
sanctionedby USAID in August 1967; a total amount of E$8.856 million had
since been drawn from this credit. The EIC investedE$24.370 million in
equity.capitalof various Ethiopian companies and advancedE$12.894 million
as loans. The auditors (Mann, Judd & Co., London) have drawn attention to
the inadequacyof free reserves.

14. The Corporationhad a total staff of 30 and hardly any fixed assets
(less than E$100,000). The major part of its capital funds was invested in
49 different companies. Dividends received during the year amounted to only
E$282,013,which representsa return of about 1.2% on the investment.

15. The net profit of EIC for the year ended July 1969 (EC 1961)
amounted to E$354,651. The EIC was prohibited from paying dividends on its
share capital under the loan agreementwith USAID for a period of 10 years
following the date of the first disbursement.
 ANNEX 2
Page 4

16. About 55% of the loans advancedby EIC were for agriculture,of
which about 60% were to large plantations. Loans to agriculturewere ad-
vanced at 8-1/2%. Following an earlier Governmentdecision to restrictLIC
financing to industryand DBE financingto agriculture,the EIC restricted
its business in agriculture in 1968/69 to the continuationof service to
existing borrowers and to agriculturalenterprises closely associatedwith
industrialoperations.

17. The Addis Ababa Bank. Establishedin 1964 as a share company,

Addis Ababa bank has a paid-up share capital of E$5 million, of which 40%
is held by the National and Grindleys Bank Ltd. and the rest by individuals.
The reserves amount to E$1.6 million, deposits to E$37.2 million and loans
and other advances to E$26.2 million. At the end of December 1969, the bank
had 16 branch offices and a total staff of 267.

18. Of the total loans and advances, 9% was for agriculture, 41% for
foreign trade, 16% for industry, 24% for local trade and the rest for build-
ing constructionand other miscellaneousactivities. The managementof the
bank is handled by a Board of eight Directors,of whom two are representa-
tives of the National and GrindleysBank.

19. The net earnings after tax in 1968 amounted to E$685,982. The
operating expenses formed 2.5% of total assets. The bank has been declaring
a dividend of 5% since 1967.

20. The Banco di Roma. Establishedin 1967 as an Ethiopian share company,

this bank is the successor to the branch office of the Banco di Roma (Italy),
which had been operating in Asmara since before World War II. The bank has
a paid-up share capital of E$4 million. The head office is in Asmara and
branch offices exist in Addis Ababa, Aseb and Mitsiwa. The bank's main
sources of funds are its share capital deposits. It advances short-term
credits in the form of overdraftsor loans against goods to be exported.
The bank does not extend credit to finance agriculturalproductionor market-
ing.,

21. The Banco di Napoli. This bank, which commenced operationsin

Asmara as a branch office of the Banco di Napoli (Italy),has very recently
been incorporatedas an Ethiopian share company. Its lending activities
consist of extending short- and medium-term commercialcredit, mainly for
export and import promotion. No advances are granted for agriculturaldeve-
lopment.

22. The Mortgage Company of Ethiopia. Establishedin 1965 as a fully-

owned subsidiaryof the CommercialBank of Ethiopia, the Mortgage Company of
Etthiopiahad, as of D)ecember31, 1968, a paid-up share capital of E$3 million,
reservesof E$0.62 million and long-term deposits of E$3.675 million. The
Company'smain resources are borrowings from CBE, which amountedto E$24.5
million at the end of 1968; its loans and advances amounted to E$30.73 million,
mainly for financing industrialand domesticbuilding constructionas well as
purchaseof property and durable consumer goods. Its net profits in 1968 after
provision for taxes amounted to E$482,413 and it has been declaringa dividend
 ANNEX 2
Page 5

of 7% on its share capitalsince 1967. The loans advancedare for a maximum

period of five years and carry interestat 8-1/2%. The companyalso grants
three-yearspecial mortgageloans at 9%. The managementof the companyvests
in a Board of five members,composedof the GeneralManager of CBE as Chairman,
two other representatives of CBE, one representativeof the NationalBank of
Ethiopiaand the General Manager of the MortgageCompany.

AgriculturalCredit in Ethiopia

23. Althoughconsiderablepotentialexists in Ethiopiafor an

expandedprogramof agriculturalcredit and investmentthrougha more
intensivecultivationof the highlandareas and higher land utilization
by means of settlementschemes in the lowlands,expeditious.governmental
action is requiredto remove certain major constraintsin land development.

24. Of the total land area of 122 millionha, about 54% is pasture
land, 11% cultivatedagriculturalland and the rest swamps, forests,barren
land, and the like. Of an estimatedpopulationof 23.7 million (1968),about
92.3% live in rural areas, and farmingpopulationaccounts for 93% of the
total. Less than 1% of the rural populationseeks a living as agricultural
laborers.

25. A sample survey by Governmentin 14 provincesin recent years shows

that about 60% of the holdingsare of less than 2 ha, which is considered
to be thieminimum economicallyviable size for a farm. There is also consi-
derable fragmentation of holdings;nearly two-thirdsof the holdings in 11
provinceswere found to be in more than one parcel. In Shoa Province,to
which the present Project relates,only about a third of the holdingsare
owner-cultivated and the rest are either entirelyleased or partly owned
and partly leased. The conditionsof tenancy take various forms and, in
the majorityof cases, there is no written lease agreement. Tenant culti-
vators have very little securityof tenure; they present a poor credit
risk for institutionalfinancing,both on account of the absenceof any
securitythat they could offer in the form of propertymortgageand on
accountof uncertainlandlord-tenantrelationships. Non-institutional
agenciesformed the major source of agriculturalcredit for tenant farmers
in Ethiopiaand extremelyhigh interestrates have been reported.

26. A number of differentsystemsof land tenure exist in Ethiopia.

Ownershiprights are derived by purchase,grant or inheritanceof lands
leased out on long-termor permanentbasis by Governmentor the Church.
On the basis of A survey carried out in Shoa Province, it is estimated
that about 10% to 20% of the landholdersmay not have mortgageablerights
on land. Title deeds of land in rural areas do not exist and ownership
rights are establishedon the basis of tax receipts. No cadastralsurvey
of land has as yet been carriedout and recordingof ownershiprights is
unknown. Presentation of tax receipts for a number of years is the only
method of establishing ownership rights and prior encumbrance to property
has to be investigated by a reference to registration of earlier mortgage
deeds.
 AiNNEX2
Page 6

27. The absence of any law relating to chattel mortgage makes it

difficult for banks to advance short-term loans for agricultural produc-
tion and marketing onithe security of standing or halrvested crops.

28. The Government lhas submitted a land reform bill to Parliament

which would confer greater security of tenure cultivators and regulate the
division of the produce of the land between landlord and tenant. Additional
legislation is under preparation concerning cadastral survey and taxatlion
of unutilizedt land.

29. Tie total credit for agricultural purposes provided

by the CBE,
DBE1,EIC and the Addis Ababa bank, as of the end of 1969, to about
amounted
E$39.5 imiillioni, of whiclh onily about E$8 million, provided by the DBE, was
medium or long term; the rest, mainly to large firms or the larger culti-
vators, was short term. The short-term credit requirements of small
farmers are thus not met by institutional agencies and very few of them
have perhaps availed of finance for capital investment needs in agriculture.

30. The important pre-conditions to any expansion in the provision of

agricultural credit by banking institutions in Ethiopia are a cadastral
survey of land holdings and provision for the recording of ownership rights,
security of tenure for the tenant cultivators and legal provision for
chattel mortgage.

Special Arrangementsf_or Agricultural Credit

31. The Chilalo Agricultural Development Unit (CADU). The project

administered by the Ministry of Agriculture, with technical and financial
assistance from thie Swedish International Development Agency (SIDA), aims
at the economnic development of Chilalo Awraja (sub-province), Arusi Province,
by creating conditions favorable for intensive farming. Started in Septem-
ber 1967, CADUsupplies fertilizers, improved seeds, concentrates for cattle,
half-breed hleifers, fencing material, and such to farmers in the area on
the basis of farm plans. Tenant farmers cultivating more than 40 ha and
owner-cultivators farming more than 25 ha do not get credit facilities. All
other farmers are required to make a down payment of 50% of the cost of
seed and payments, ranging from 25% to 75% of the cost of fertilizers,
depending on the size of farm; the balance is provided as short-term loans.

32. Mledium-term credit is advanced when lheifers and fencing material

are supplied. The security for the credit would be from three sources:
(1) two guarantors acceptable to CADU, (2) an agreement by the borrower
to market hiis produce through CADUor an agent appointed by CADU, and
(3) the deposit of tax receipts by landowning farmers. The loan documents
are registered in the District Office. In the case of tenant cultivators,
a written lease agreement has to be entered into with the landlord under
whliclhprovision is made inter alia for fixation of rent and for non-termi-
tit.ilon of lease, except in cases of rent default.
 ANNEX2
Page 7

33. CADU provided credit to farmers in 1969/70 under reimbursement

facilities from the DBE; the DBE sanctioned E$400,000 during 1969/70 for
this purpose. Short-term credit is advanced by DBE at 8% and CADU extends
credit to farmers at 12% per annum. There are 13 Extension Agents of two
types. Grade A Extension Agents are high school graduates in agriculture
who have undergone training in the Agricultural Research Institute; Grade B
Extension Agents are those who have not graduated and who are given a seven-
month training course by CADIJ.

34. In 1969, 800 families borrowed from CADU, and, so far in 1970,
4,000 applications have been received. The project would cover about
22,000 families in the Chilalo Awraja within a six-year period. Apart
from credit, other services offered by CADU are creation and improvement
of marketing facilities; development of model farms; training of farmers;
and conducting studies on infrastructure, health and small industrial
ventures in the area.

35. The Wolamo Sodo Project. This Project provides for an integrated
attack on the problems of 6,000 subsistence farm families in the highlands,
through the provision of improved roads, markets, water supplies, agricul-
tural credit and extension services, as well as for the resettlement of
1,050 farm families in two new settlement areas in the neighboring lowlands.
The Project would supply credit to farmers in kind, as is done in the CADU
Project, but credit in cash would also be provided to farmers in the lowland
areas for payment of wages to labor.

36. FAO - Freedom from hunger Campaign (FFHC). The FFHC makes funds
available to the Ministry of Agriculture for supplying fertilizers on credit
to selected farmers. The program commenced in 1967 with 450 farmers owning
20 ha or more who had agreed to use 1/5 ha for raising wheat, barley or teff,
using fertilizers. In 1968, US$4,500 was provided by FAO under this project.
The rate of interest charged to the farmer was 7%. The funds are channeled
through AIDB on agency basis. The responsibility for recovery of loan rests
with the Ministry of Agriculture.
 ANNEX 3

ETIIOPIA

ADDIS ABABA DAIRY DEVELOPMENTPROJECT

Livestock Procurement,Demand and Supply of Dairy Heifers

1. The estimated demand and supply of both Friesian-typeand Friesian-

Zebu cross-bred dairy cattle is given in Table 1. As practicallyall dairy-
type heifers bred on dairy farms in the Project area are retained by their
owners for herd build-up, provision is made in the Project to procure all
heifer requirementsfor the Project by importation,by purchase from Asmara
or by breeding on Project-assistedcross-breedingranches.

2. Requirementsof cross-bredheifers for small farmerswould be

met by purchase from the five private cross-breedingranches and Abernossa
and by breeding on participatingfarms through mating to Friesianbulls
by A.l. The number of heifers available through these sources would limit
the number of small farmers to be included in the Project to 240.

3. The Imperial Ethiopian Government (IEG) proposed in its applica-

tion that Friesian--typein-calf heifers should be imported from Kenya,
this being the cheapest potential source of supply. Estimated landed cost
of in-calf heifers from Kenya is about US$400 equivalent, compared to at
least US$720 equivalent from Israel, Europe or Australasia. Kenya would
also be the cheapest source of supply of weaner heifers, with an estimated
landed cost of US$180 equivalent,compared to about US$240 equivalent from
l.urope.The accompanyingchart indicates the effect of price of either
in-calf heifers or weaner heifers on the financial rate of return to large
dairy farms.

4. Despite the fact that most dairy farmers indicate a preference

for purchase of in-calf heifers, there are a number of technical reasons
favoring purchase of weaner heifers 8 to 10 months old, in the case of
imports. There would be less risk of losses due to physiological stress
during transport in the case of weaner heifers and they would have greater
opportunity to hecome adapted to the environment and acquire resistance to
various diseasesbefore being subjected to the stresses of calving and
lactation. Ilis procedurewould also give farmers greater opportunity to
gain experience in handling Friesian-typedairy cattle before they com-
mence milk production.

J. Analysis of the data on which the charts shown in Figure 1 are

based indicates that Importation of weaner heifers is also likely to give
better financial rates of return than importation of In-calf heifers. For
example, in the case of purchase from Kenya, in-calf heifers at US$400
 ANNEX 3
Page 2

give a return just below 20%1.,

whereas weaner heifers at US$180 would give
a return of 23%. In the case of purchase from other sources, in-calf
heifers at US$720 give a rate of return below 13% while weaner heifers at
US$240 give a rate of return just over 20%.

6. Thus, on the basis of both technical and economic reasons, it

would be preferable that weaner heifers should be imported rather than in-calf
heifers.
 ANNEX3
Table 1

ETHIOPIA

PROJECT
ADIS ABAA DnRY IEVELOPMENT

Project Demand and Supply of Dairy Cattle

--
- - - -- -- Tear---------------------
ITEM UNIT 1 2 3 4 5 6

Demand for Breeding Friesian BDuls

Holleta Dairy Stud Farm No. - - ,2

Abernossa Cross-Breeding Ranch No. 46 10 10 10
Private Cross-Breeding Ranches Nc. 33 25 8 10 10 13
Medium aise Dairy Farm NcI. -- - 40 27 20

Total No. 79 35 20 60 37 33

Supply of Breeding Friesian Bulls

Holleta Dairy Stud Farm No. 11 16 40 68 67 68

Foreign Countries No. 68 19 - - -

Total No. 79 35 40 68 67 68

Breeding Bulls Available for Non-Project Use No. - - 20 8 30 35

Demand for Friesian Weaner Heifers

Medium Size Dairy Farms No. 1,200 1,610 1,140 1,090 460

Total No. 1,200 1,610 1,140 1,090 460

Supply of Friesian Weaner Heifers

Asmara Region in North Ethiopia No. 300 410 380 370 140
Foreign Countries No. 900 1,200 760 720 320

Total No. 1,200 1,610 1,140 1,090 460

Demand for Friesian X Zebu In-Calf Heifers

Small Dairy Farms No. - - - 90 588- 762

Total No. - 90
go 586 762

Supply of Friesian X Zebu In-Calt Heifers

Abernosaa Cross-Breeding Ranch No. _ - 60 240 240

Private Cross-Breading Ranches No. _ - _ - 153 2614
Small Dairy Farms No. - - - 30 196 252

Total No. - - - 90 589 756

NOvember 12, 1970

 ANNE-X 3
ETHIO PI A FIGURE 1
ADDIS ABABA DAIRY DEVELOPMENT PROJECT
EFFECT OF AGEAND PRICEOFHEIFERSONRATEOF RETURN

28%

27%

26%

25%

24%

FINANCIAL 23%
RATEOF
RETURN
22%

21%

20%

19%

18%.___ _ _-

17%
300 400 500 600 700 800
PRICEOF FRIESIANWEANER HEIFERSIN ETHIOPIAN DOLLARS

21%

20%

19%/

18%

FINANCIAL 17%
RATE OF
RETURN 16%

15% _ _ _ _ _

14% _ _ _ _ _ _ _ _

13%

12%
1000 1250 1500 1750 2000
PRICEOF FRIESIAN IN-CALF HEIFERSIN ETHIOPIAN DOLLARS

IBRD-5042(R)
 ADIB A8A8A DAr EIVICIFIT P3J?CT

a~~~~~~~~~~~~~~~~~~~~~~~~~ DOsIiin fre j r

CATEOOH7 UNIT Blefog De elon2) 1 2 3 4 5 6 7 a

QLT-IRI B.eOE,
H-r , E_w1 B r B 3 B B B B6 .B B FxB B 8 NB B PuB

BHD OCMPOSITION

Breedng Co No 656 - 656 - 656 - 656 - 656 - 656 - 656 - 656 - 656 _ 656
Mated Beifws No: 14 - 144 - 144 - lb4 70 lbb 282 114 282 144 282 14b 282 144 - l14
Calves Wened No. 600 - 450 150 - 600 _ 600 - 600 - 600 600 - 600 - 600 - 600
8eifws 9-21 4Months No. 291 - 21 - 218 72 291 - 291 - 291 - 291 291 - 291 - 291
Steers 9-24 Koths go. 291 - 291 - 218 73 - 291 - 291 - 291 - 291 291 - 291 - 291
Steers 24-36 Montb No. 282 - 282 - 282 - 211 71 - 82 - 82 - 82 - 82 282 - 282
Frieian Bulle No. - 12 - 48 - b8 - 48 448 - 15 15 - 15 -
BorsiaBoll No. 36 - _ - - - - - - - 22 - 27 - 27 - 38 _ 38

Total Niber No. 2,300 12 2,114 198 1,518 793 1,011 1,371 800 1,59b 822 1,561 1,427 961 2.009 379 2.302 - 2.302

Total Animal Units go. 1,712 ,12 1,71 1,782 1,794 1,783 1,788 1,788 1,702 1,702

PUEHSES

In-C&U Heifers - B3ar No. _ _ _ _ _ _ _ l144 - 144 - 144 - 144 -

Broeding Baul -riesian No. - 15 446 - 10 _ 10 - 10 - - - 3 - 3 -
Brhdm Balls -NBorm No. _- - _- - 27 - 9 - 5 - 18 7

Total umbers No. 15 46 _ 10 _ 10 l14 10 171 - 153 3 149 3 18 - 7

MORTALITT

Breadin Cg e No. 24 - 24 - 24 - 24 - 2b - 24 _ 24 - 24 - 24 - 24
Mated Heifes No. 9 - 9 - 9 - 7 2 - 9 - 9 - 9 - 9 9 - 9
Heifr m 9-24 M8ts No. 9 - 9 - 7 3 - 9 9 9 - 9 9 9 - 9 -
Steers 9-24 Months No. 9 - 9 - 7 2 - 9 - 9 - 9 - 9 9 - 9 - 9
steer 24-36 Mnths No. 9 - 9 - 9 - 7 2 - 9 - 9 - 9 - 9 9 - 9
Buls No. 2 1 - 2 - 2 - 2 _ 2 1 1 1 1 1 1 1 - 1

Total Nueber. No. 63 1 60 2 56 7 38 24 21. 38 25 37 25 37 43 19 61 - 61

SALES

Coll Cows No. 120 - 120 - 120 - 120 _ 120 - 120 - 120 - 120 - 120 - 120
In-Calf Cross-red Heifers No. _- - - - - - 60 - 240 - 210 210 - 240 -
ated Borna Heifs No. 138 - 138 - 138 _ 67 _ _ _ _ _ 138 - 138
BTon Hia No. _ _ - _N - - - 10 - 42 12
4 _ 42 - 42 -
Stesrs 24-36 Uo.
gnths 282 - 282 - 282 - 282 _ 211 21 - 288 _ 282 - 282 - 82 282
Can Bulls No. 6 2 18 8 - 8 - 8 - 8 4 8 3 2 4 2 6 2 6
Breeding Blls No. - - 18 - _- -_ _ _ _ 24 - - - 13 -

Total Nmbere No. 546 2 576 8 540 8 469 8 331 349 121 596 123 566 124 566 264 379 546

PFHOWCTIONDILTA

Effective Calving Bate,

a.Hmd Cows d Heifers S 75 - 75 - 75 - 75 _ 75 - 75 - 75 - 75 - 75 - 75

b.Purshaed Cov and Heifwe S - - - - - - - 75 - 75 - 75 - 75 - 75

Conoeptlm Rate of Cross-breds S _- - -_ _ 85 - 85 - 85 - 85 - 85 - 85

COv Culing Rate S 15 15- 15 15 15 - 15 - 15 - 15 - 15 - 15
Bu2l C ingRate
1u S 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 -15
Adult Mortalit S 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 - 15

B - Bormia cattle

P - hiensi-Borona cross-bred cattle

 AMIS AMU DM31 MKWOT MJICT

Pri"" wm 2m 1 - 2 o

- - - - - - - - - - - - - _, - - - - - - - - - - - - - -_ - - - - - - lbd at 7rW - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
1 2 3 4 5 6 7 8 9 10
BMaTe Df l1
cgr goy mtr z r z z z zz Fz z * z vZ z z
Z Z Fla z lxZ z - z z vz

HZR ODMSITICE
6
l Oding Cow No. 85 - 172 - 2 - 164 - 164 - 164 _ 164 - 164 - 164 - 1 4a - I&
Mated H.±fws o 2 28 - 28 - 36 - 36 60 36 64 36 60 36 64 36 64 36 60 36 6
CalvH Womed lo: 628 113 3 130 1_0 l4 140 15 1140 12 I6 12 14 12 140 12 14 12 6a
difws 9-24Hontehl go. 29 - 30 - 54 - 2 62 - 67 7 67 7 67 6 67 6 67 6 67 6 67
St 9-24Nmtho go. 29 _ 31 - 54 - 1 63 - 67 6 67 7 67 6 67 6 67 6 67 6 67
Ste.ru 24-36 Mctbo No. 28 _ 28 - 30 - 52 - 1 60 64 6 64 7 64 6 64 6 64 6 64
8t.rs 36-48Msnths No. 28 - 27 - 27 - 29 - 50 - 1 58 - 61 6 61 7 61 6 61 6 61
Frieasn Hulls No. - _ - 10 - 10 - 10 - - - n1 11
2 - 11 _1-
Zebu 1M^U No. 5 - - - - - - _ _ _ _- - -

Total DbOrJ go. 297 _ 429 10 368 lhO 284 275 265 405 229 471 232 474 237 474 237 4714 236 1174 236 474

Total haMnlUnits go. 231 326 375 419 516 545 554 559 559 558 so

Breg mal , - Z.ba No. - - 100 - 8 - 35 - 37 - 30 - 30 - 31 - 31 - 31 -

BroodingMBalls - Frieian No. - _ _ n - 1 _ 2 - 2 - 2 - 3 - 2 - 2 - 3 - 2

Total mbus llo. _ _ 100 U 8 1 - 2 35 2 37 2 30 3 30 2 31 2 31 3 31 2

MOBOLUT
Brmding Con No. 5 - 11 - 6 _ 6 - 7 - 7 - 7 - 7 - 7 - 7 - 7 -
Mated Rhdtre go. 1 1 2 2 - _ 2 - 3 - 3 _ -3 3 - 3 3
eifers 9-24 Mnths No. 2 _ 2 - 3 - - 3 - 3 - 3 1 3 - 3 - 3 - 3 - 3
Stews 9-24 Hmths No. 2 _ 2 - 2 2 - 3 1 3 - 3 3 3 3 - 3
Stears 24-36 Nthe No. 1 1 - 1 2 - _ 3 - 3 _ 3 3 3 - 3 - 3
Sters 36-48 Months I. 1 _ 1 _ 1 1 - 2 _ - 2 - 3 - 3 _ 3 - 3 - 3
Balls No. _ _ _ 1 _ _ _ 1 - _ _ _ _ 1 _ _ _ _ _ 1 _ _

Total Nulbw Mo. 12 - 18 1 15 - 11 6 9 1 a 345 e 16 7 15 7 15 7 16 7 1S

SUM
can1lCos No. 10 _ 30 - 30 _ 30 _ 30 _ 30 - 30 - 30 - 30 - 30 - 30 -
r-ClCrwn-Brad Heifses Mo. - _ _ _ _ _ -_ 1 - - 54 - 54- - 54
MatedZedn H1w. go. _ _ 16 - - - - - - - - - - - -
Barr uiMf s No. - _ _ 9 _ 1o _ 10 _ 10 - 10 '. 10
Stews 36-48 Joths Mo. 27 - 27 - 27 - 27 29 _50 - 1 8 - 61 6 61 7 61 6 61
CU Blh 110. 1 - 5 - 1 - 1 - 1 2 - 2 - 2 - 2 - 2 - 2

Total Nubes So. 38 - 62 - 57 1 73 1 59 1 80 62 31 124 30 127 36 127 37 127 36 127

PM3WCTtM DATA

*.flmebComm, oad8.fwe o 65 - 65 _ 6 70 - 70 70 - 70 - 70 - 70 - 70 - 70 -
b. 1bed 0
a" mdmefws % 140 - 40 40 - -4 40 40 - - 40 - 1_0
4_0 - 140 - -

Olho__m t
Iste ef Grs-br dst S - - - - - 5 - 85
8- - 85 - -_5 8 85 85
Co Cuhllin Rats % 15 - 15 - 15 _ 15 _ 15 - 15 - 15 - 1s - 15 - 15 - 15 -
Frikeim PAU1 0.U4gRate % - 15 - 15 - 15 -- t-- 15 - 15 S ~ - 1
is - 35
Adlt ta1ty . 5 5 - _ 1S 5 5 14 1S 14 4 14 4S4 4 1S4 -1 _ 1S 1 14

Y Z zeb
.al
1 niz qpal, Ceim-Za Oroeg-bid.
 AIIk4t5
Table 2

ITHIOPIk
ADDISAD MMI VLOMT PROJECT

Private Cross-BreeinE Rnob lodel - 200 Cous

Investment Coots and Financinst

I t a a Units Unit Coat Totdl Coat

On-Farm Investment
Fencing 9J000 Dl 0.80 7,200
Water Piping 3,000 x 2.25 6,750
Water Tank (25,0001) 1 2,000 2s000
Water Pump 1 270 270
Water Trough 2 400 800
Spray Race 1 3,000 3,000
Crush and Working Paddock 1 2,000 2,000
Small Equipmzent and Tools 500
Friesian-Breeding Bulls 11 1,000 11,000
Zebu-Breeding Females 100 80 80oo0
Contingencies (approx. 10%) 4a.h80
Total Investment 46.ooo

Financinm
DI)A Loan-'/ 36,800
Famer's Contribution 9200

Total Financing

1/ The Dairy Development Agency (DDA) loan is equivalent

to 80% of the total investment cost.

i/ The farmer's contribution is equivalent to 20% of t;he total invantmnt

cost.

November 12, 1970

 EITIOPIA

ADDIS ARBRADAIE! DhVILPIQT PROJECT

Private Cross-Breeding anch Model- 200 Cows

ProjeCtions of Income and Operating Costs

g Before -- - - - - - - - - - - - - - - - - - - - - Years - - - - - - - - - - - - - - - - - - - - _
Developmnt 1 2 3 4 5 6 7 8 9 10-12
|ITEMS * UNIT

SALESI
CATTLLE
E$ 1,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000
o Cull Cows 16,900 18,900 18,900
E$ - - 17,850 18,900 18,900
In-Calf Cross-Bred Heifws - - -
Ea - - - 1,280 - - - -
Mated Zebu Heifers
ES - - - - - 540 600 600 600 600 600
Barren Heifers 14,195 14,375 14,195
E$ 4,860 4,860 4,860 4,860 5,220 9,000 12,650 13,115
Steers 36-48 Months 500 500 500
ES 150 750 250 250 250 500 500 500
Cull Blls
E$ 6,010 8,610 8.uo 9,390 8,470 30,890 35,650 36.115 37.195 37,375 37,195
T?t,.L Cattle Sales

OPERATINGIOSTS
1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800
Salary for Mansger 2 E$
1,080 1,620 1,620 1,620 1,620 2,160 2,160 2,160 2,160 2,160 2,160
Salaries for Labor3/ ES
ES - 700 700 700 700 700 700 700 700 700 700
Salary for Night WAtohman 825 825
ES - 750 750 750 825 825 825 825 825
Feed CostW
Veterinary Serflcea, Dipe
ES 200 1,630 1,875 2,095 2,580 2,725 2,770 2,795 2,795 2,790 2,790
and Mineral&1a
BrsedirAg Stodck-R eepacetst 2,170 2,170 2,170
Zebu Fml a E$ _ 560 - 2,450 2,590 2,100 2,100
- _ 1,000 1,400 1,400 1,400 2,100 1,400 1,40o 2,100 1,400
Friesian Balslt/ ES
Water Equiement ruelmdLsg 837 837
ES - 489 563 629 774 818 831 839 839
Repairs Y 750 750
2
ES - - 750 750 750 750 750 750 750
Fencing aBuilding Mainteamce e 600 600 600
ES 600 600 600 600 600 600 600 600
Lend Tax ±f 500
ES - 200 200 200 200 500 500 500 500 500
Miscellaneous

ES 3,680 7,789 10,41P 10,544 13,699 1I4 , 661 15,136 14,269 14,539 15,232 111,532
Total Operating Costs

in E9: cull cow 100; in-calf cross-bred heifer 350; mated Zebu- heifer 80; barren heifer 60; fat steer- Zebu 180; fat steer- Friesian x Zebu 215;
Price Assinptions
cull bull- Zebu 150; end cull bull- Fresien 250.
2/ Part-time manager.
4E540 per annum per worker.
500 kg per Friesian
At ES 5 per A.U.per
A
breeding bull per annum at E$ 15 per 100 kg.
annum.
A/t E|$ 70 per Zebu female.
I
/ At 2$ 1,000 per Friesian bull in year 2 and at ES 700 per Friesian bull in the following years.
At ES 1.50 per A.U. per annum.
2/ At 5% of investment costs.
At E$ 1 per ha.
 ETHOPIA
ADDIS ABABADAIRY DEYLOPHET PROJECT

Private Cross-Breeding Ranch Model - 200 Cows

Financisli -rgactloms
(E$)

o2 ------ - -------------------- - ---- - ~~~~~~Years

------------ -_-__
d Before 1 2 3 4 5 6 7 8 9 10 U 12-15
ITEM Developent

H Cash Inflow

H Sale of Cattle 6,010 8,610 8,060 9,390 8,470 30,890 30,650 36,115 37,195 37,375 37,195 37,195 37,195
4 Short-Term Loan _- - 8,357 - - - - - - - -
o Long-Term Loan - 36,800 - - - - - - - - - - -

Total 6,010 45,410 8,060 9,390 16,827 30,890 30,650 36,115 37,195 37,375 37,195 37,195 37,195
CashOutflow
Investments: (a) Farmer's Contribution - 9,200 - - - - - - - - - - -
(b) Long-Term Loan - 36,800 - - - - - - - - - - -
Operating Cost 3J680 7,789 10.418 10.544 13.699 14.868 15,136 314,469 14.539 15,232 14.532 14,532 14,532

Total 3,680 53,789 10,418 10,544 13,699 l4,868 15,136 14,J469 14,539 15,232 14,532 14,532 14,532

Annual Cash Balance Before Debt Servics 2,330 (8,379) (2,358) (1,154) 3,128 16,022 15,514 21,646 22,656 22,143 22,663 22,663 22,663

Debt Service
ntereat on Short-Term Loan , _ _ - _ _ 794 - _ _ _ _ _ _
Aaortisation of Short-Term Loan - - - 8,357 - _ _ _ _ _ _
Interest on Long-Term Loan Y - 3,128 3,128 3,128 3,128 3,128 2,346 1,564 782 -
Amortization of Long-Term Loan - - - - - - 9,200 9.200 9,200 9,200 - - -

Total - - 3,128 3,128 3,128 12,279 12,328 11,546 10,764 9,982 - - -

Annual Cash Balance After Debt Service 2,330 (8,379) (5,486) (4,282) - 3,743 3,186 10,100 11,892 12,161 22,663 22,663 22,663

AnnualIncre.ntalCashBalance - (10,709) (7,816) (6,612) (2,330) 1,413 856 7,770 9,562 9,831 20,333 20,333 20,333

Incremental
Cumulative CashBlnce - (10,709) (18,525) (25,137) (27,467) (26,054) (25,198) (17,428) (7,866) 1,965 22,298 42,631 123,963 k
AnmualIncrementalHerd Value _ 17,600 6,6o0 10,280 27,950 6,285 1,090 - - - - -

!/ 9.5%p.a.
2/ 8.5% p.a. on the outstanding balance.
i Total term of 10 years, including 4 years of grace.
Cwmlative incremental cash balance for year 15.
 Da nZ1W - 100c

or. - -d-- of her

- - - -------- - - - - - - - -_ - - - - - - - -
OLTEOT WinT D-om- 1 _ - 2 - - 5 6 7 B.1S
NU mNPOBITIC
Cow No. 62 61 60 59 77 77 77 77 77
In-Calf NHifers No. 17 17 16 hi 23 23 23 23 23
Heifer Calv,. No. 20 25 33 33 43 43 43 43 43
BulU Cal. io 21 25 33 32 43 43 43 43 43
Puoh" d BulCalves No - 27 6k 54 45 45 45 h5 45
N fars 9-24 Nonthu No. 20 19 24 - - -
Bulls 9-24 mnths No. 14 20 24 32 31 41 41 41 41
Purohased Bans. 9-24 Nothe go. - - 26 52 52 43 43 43. 43
Bulls Iin Suee No. 6 1 1 2 2 2 2 2_ 2

Total Numbers No. 160 195 271 305 316 317 317 317 317

Total Aniaml Unit No. 117 118 151 186 185 186 186 186 186

BIRTNS

Heifer Calves No. 24 29 39 38 S0 S0 50 So S0

Bunal."a No. 24 29 39 38 S0 S0 S0 S0 50

Total Nbwe -o. 48 58 78 76 100 100 1oD 100 100

PaRcRASMS
In-Colf Heifers No.
Bull Calves No. - 30 60 60 So So So So So
Total Nubers No. - 30 60 60 S0 S0 S0 S _ 50
MrTAlarT

cow No 2 2 2 2 3 3 3 3 3
In-CaLf NHifw No. 1 1 1 2 1 2 2 2 2
N.ifr Calves No. 4 4 6 5 7 7 7 7 7
Bull Ceas No. 3 4 6 6 7 7 7 7 7
Purchasd BnB Calves No. - 3 6 6 5 6 5 5 S
Heifers 9-24 Months No. 1 1 1 - - - - - -
Buls 9-24 Hmth No. 1 1 1 1 2 2 2 2
Pwrehaaed Balles9-24 KntM b No. - 1 2 2 2 2 2 2

Total Numbers No. 11 16 24 24 26 28 28 28 28

sAl

'1all Cows No. 10 16 16 15 20 20 20 20 20

In-Calf Heifers No. - - - 8 6 14 14 14 14
Barren Heifers No. 2 2 2 6 3 4 4 4 4
Bulls for Breading (Own) No. 12 11 16 19 26 25 33 33 33
Bulls for Breedirs (Pordcased) No. - - - 19 42 42 36 33.1 35
Rejeoted BaU No. 2 3 10 16 16 16 16
OuV1Bollo No. - 5 - 1 - _ -

Total Nubers No, 26 37 38 78 113 121 122 122 122

MIUCTIDNBDTA

COnoeptien Bate Cows 66 87 87 87 87 87 87 87 87

Conoeption Rate NHeif' % 90 90 90 90 90 90 90 90 90
Horta1iit

Adult %3 3 3 3 3 3 3 3 3
Heifer CalvesI' 16 16 16 16 15 1S 16 15 15
Bull Ce1e& Ns 1S 16 16 16
11 15 16 16 16
Purehaed Bull Calve N - 10 10 10 10 10 10 10 10

Cmv Culling Rate 14 20 20 20 20 20 20 20 20

Rejected Boll ate S 16 20 20 20 20 20 20 20 20
Caloing Interval Muoth. 16 14 14 14 14 14 14 14 14
Age at irt Cal"ng Months 24-36 24-36 24-36 24-36 24-30 24-30 24-30 24-30 24-30

/ This culling of bulls In Bervice will be repeated In ear 11.

g/ lnoludSng stlil-births.

No,ssber 12, 1970

 ANNEX6

ETOPIA

ADDISABABA
DAIRYDEVELOPMENT
PRSJECT
Holleta DairyStud Farm - 100 Cows
Investment Gosteandnanns

Year
ITEK --------------
1…-
1 ------------------
Units Unit Cost Total Cost

On-Farm Investment

Fencing 3,000 m 0.80 2,400

Manager's Howue 1 9,600 9,600
Water Piping 1,500' a.25 3,375
WaterTank (40,0001) 1 2,500 2,500
PumpingUnit 1 3,200 3,200
Water Troughs 14 400 1,600
Labor Cost for Water
Installation 2,300
Large Dairy Cooler 1 900 900
Spray Race 1 3,000 3,000
Crushand Working
Paddock 1 1,500 1,500
SmallEquipmentand Tools 3,000
Contingencies (approx.10%) 3,625
Total Investment 37,000

Financing

DDA Loan 37-000

Total Financing 37,°000

v1Since HoUrta Dairy Stud Farm is part of the DairyDevelo1mnent

Agency
(DDA),thi:s is an in-ternalloan.

November12, 1970
 E T H I O PI A
ADDIS ABABA DTRY VSLOPMENTPRCJECr

Holleta Dairy Stud Farm - 100 Cows

kAeOMiPrg.jent4nIS

Before ---------------------------------------------------------------------- Years --------------------------------------- -------------------------------------

rmr UNIT Development 1 2 3 4 5 6 7 8 9 10 11 12-15

lMIL SALFBL"

Cows ir Milk NO. 38 40 59 58 58 75 75 75 75 75 75 75 75

Heifers in Milk " 8 16 17 i6 40 22 22 22 22 22 22 22 22
Milk Yield per COw l/sar 2,800 2,900 3,000 3,000 3,100 3,100 3,200 3,200 3,200 3,200 3,200 1,200 3,200
MilkYield per Heifer l/ear 2,100 2,200 2,300 2,300 2,400 2,400 2,500 2,500 2,500 2,500 2,500 2,500 2,500
Total Milk "reduction - Cows 'OO1 1,064 1,160 1,770 1,740 1,798 2,325 2,400 2,400 2,400 2,400 2,bOO 2,400 2,400
Total Milk Production - Heifers 'OO 1 168 352 391 368 960 528 550 550 550 550 550 550 55D
Total Milk Prod'tiOn 'OO
1 1,232 1,512 2,161 2,108 2,758 2,853 2,950 2,950 2,950 2,950 2,950 2,950 2,950
612
Milk Fed Calve'0- OO1 185 360 567 562 612 612 612 612 612 612 612 612
Milkfor Sale 'OO1 1,047 1,152 1,594. 1,546 2,146 2,241 2,338 2,338 2,338 2,338 2,330 2,338 2,338
Milk Price ES/i 0.28 0.33 0.33 0.33 0.33 0.33 0.33 0.30 0.30 0.30 0.30 0.25 0.25

Total MilkSales EB 29,316 38,016 52,602 51,018 70,818 73,953 77,154 70,140 70,140 70,140 70,140 58,450 58,450

:ATTLE sBII

Cuf Come 3S 1,500 2,400 2,400 2,250 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000
In-calf Heifers SS - - - 6,C00 4,800 11,200 11,200 11,200 11,200 131,200 1,200 11,200 11,200
Barren Heifers E$ 240 240 240 720 360 180 480 480 480 480 480 480 Lao
BEllsfor Breeding 3$ 8,400 7,700 11,200 26,600 h7,600 46,900 47,600 46,200 47,600 47,600 47,600 47,600 47,600
Rejected Bulls ES 240 360 480 1,200 1,920 1,920 1,920 1,920 1,920 1,920 1,920 1,920 1,920
CullBulls ES - i,5oo - 300 - - - 600 - - - 600 -

Total Cattle Sales S$ 10,380 12,200 14,320 37,470 q7,680 63,500 64,200 63,400 64,200 64,200 64,200 64,800 64,200

Total Incme E$ 39,696 50,216 6',922 88,488 128,498 137,453 141,354 133,540 134,340 134,340 134,340 123,250 122,650

L/ All cattle on Bolleta Muiry Stud Farm are Friesians.

1 400 1 per heifer calf and 500 1 per bull calf.
Price assumptions in ES, cull cow 150; in-calf heifer 800; barren heifer 120; bull for breeding 700; reJected bull 120; and cull bUll 30O.
 3T H I O P I A

LDOS ARE&B MMs 01LO0MM FRJUCT

Holleta 1airy Stud arm - 100 Cows

,A)erraw LAfojora0D

Before
UNIT Deelpment 1 2 3 4 5 6 7 8 9 10 11 12-15
1034

OmATIO COSTS

Salaries and Wages

9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,60o 9,600
Manager U 9,600
720 720 720 720 720 720 720 720 720 720 720 720
Clerk 720
T3
1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800
oriver/Mechanic 3$ 1,800
1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200
Tractor Driver 3$ 1,200 1,200
540 540 540 540 540 540 540 540 540 540 540 540 540
pump operator 3$
720 720 720 720 720 720 720 720 720 720 720 720
Cattl Headan -Cows 3$ 720
720 720 720 720 720 720 720 720 720 720 720 720
Cattle Headnan - Young Stock B$ -
1 6,480 6,480 6,480 6. MO 6,480
ilgkers, E$ 5,400 5,400 5,400 5,400 6,480 6,480 6,480 6,480
1,620 1,620 1,620 1,620 1,620 1,620 1,620 1,620 1,620 1,620 1,620 1,620
Other LaborV 3B 1,080
1,080 1,080 1,080 1,080 1,080 1,080 1,080 1,080 1,060 1,080 1,080 1,080
Night Watchmanl 3$ 1,080

23,400 23,400 21,480 24,180 24,180 24,480 24,480 24,480 24,480 24,480 24,180 24,480
Sub-Total E$ 22,140

Other Coate

12,420 15,405 26,085 29,070 33,420 34,440 35,085 32,175 32,175 32,175 32,175 32,175 32,175
Feed CostaY 3B
Veterinary Spc,viceV/ ES - 2,925 4,065 4,575 4,740 4,755 1,799 1,755 1,799 1,799 4,755 4,755 4,755
_ 770 760 740 goo 970 970 970 970 970 970 970 970
A.I. ServicesW ,,
900 1,800 1,80 1,500 1,900 1,900 1,500 1,500 1,900 1,500 1,90 O 1,500
Purchase of Friesian Boll Co .vesd. 3$ -
15 4,000 1,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 14000 4,000 4,000
Vehicle hning and ReplirsY-.
7,500 7,500 7,500 7,590 7,500 7,500 7,500 7,950 7,900 7,500 7,500 7,900 7,900
Tractor Running an4 Repairs?! Eg
Water and Repsirs~Y 3* 919 519 664 818 814 818 818 818 818 818 818 818 818
10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000
Replacement of Machinery and Bquiwnt?/ Es 10,000
intaene g U 3,000 3,000 3,700 3,700 3,700 3,700 3,700 3,700 3,700 3,700 3,700 3,700 3,700
Fencing and hilding
Imad Tarx 3$ 220 220 220 220 220 220 220 220 220 220 220 220 220
1,000 1,200 1,200 1,900 1,500 1,500 2,000 2,000 2,0O0 2,000 2,0O0 2,000
Forap Productionl2/ !$ 900

6$ 38,155 46,239 59,994 63,623 68,374 69,403 70,048 67,638 67,638 67,638 67,638 67,638 67,638
Sub-total

60,295 69,639 83,394 87,023 92,854 93,883 94,528 92,118 92,118 92,118 92,118 92,118 92,118
Total E$

3$ 6,005 6,961 8,306 8,777 9,246 9,417 9,472 9,182 9,182 9,182 9,182 9,182 9,182
Contingencies (approx 10%)

76,600 91,700 95,800 102,100 103,300 1041400 101,300 101,300 101,300 101,300 101,300 101,300
Total Operating Costs g$ 66,300

/ The wage for a uil3mr, laborer or nightsatchman is BS%40 per anmum.

/pFr details se Table 6 A- 6.
3/ Veterinary services at I1SO per acimal per annr.
J/ Artificial isaination at zo10 per cow, including 2 repeat inseairstiom if necessary.
5/ At Et0 per b calfp.e
61 20,000 kn/y0sr at 1*0.2O per km.
1/,500C hours per year at E$5 per hour-
unit per arnUIR based on the following: 60 1 of water Per ani7al unit par day and water at a oest of E$0.20 per 1,000 1.
, Cost is U$4.40 per anisa
P/ At 16.7% of 3*60,000, or 310,000 per annm.
10/ At 5% of cost.
it 311 per ba per amm.
A
Fbr purchase of seed for green fodder prodcction.
 ETHIOPIA
ADDIS ABABADA3R!YDEEWPM3KT PROJECT

Holleta tud Farm - 100 Cows

Sar
FWaaal Pro-ib¢tions

e --- aears
a! Before 1 2 3 4 5 6 7 8 9 10 11 12-15
iTmP _ Development

- Cash Inflow

Sale of Cattle 10,380 12,200 14,320 37,470 57,680 63,500 64,200 63,400 64,200 64,200 64,200 123,250 122,650
b4 58,450 58,450
Sale of Nilk 29,316 38,016 52,602 51,018 70,818 73,953 77,154 70,140 70,140 70,140 70,140
Short-Term Loan _ 26,384 56,813 73,767 57,522 31,979 808 - - _- - -
- - -
Lob-Tem Loan _ 37,000 - - - - - - -

Total 39,696 113,600 127,735 162,255 186,020 169,432 142,162 133,540 134,340 1314,340 134,340 181,700 181,100

Cash Outflow

37,000 - - - - - - - - - -
Iuveatment: Long-Term Loans
Operating Cost 66,300 76,600 91.700 96,900 102.100 103,300 104,000 101.300 101.300 101,300 101,300 101.300 101.300

Total 66,300 l3, 600 91,700 96,900 102,100 103,300 104,000 101,300 101,300 101,300 101,300 101,300 101,300

Before Debt Service (26,6014) - 32,035 65,355 83,920 66,132 38,162 32,240 33,000 33,000 33,000 80,400 79,800
Annual Cash Balance

Debt Service

Interest on Short-Term Loan 1/ - - 2,506 5,397 7,008 5,465 3,038 77 - - - - -

Amortisation of Short-Term Lqan _ - 26,384 56,813 73,767 57,522 31,979 808 - - - - -

Interest on Long-Term loan_/ - - 3,145 3,145 3,145 3,145 3,145 3,145 747 - - - -

Amortization of Long-Term Loan 2/ - - - - - - - 28,210 8,790 - - - -

32,035 65,355 83,920 66,132 38,162 32,240 9,537 - - - -

Total - -

Debt Service (26,604) - - - - - - - 23,463 33,000 33,000 80,1400 79,800

Annual Cash Balance After

Annual Incremental Cash Balance _ 26,604 26,60L4 26,604 26,604 26,604 26,6014 26,6014 51,067 56,6014 56,604 107,004 106,404

Cash Balance 26,604 53,208 79,812 106,1416 133,020 159,624 186,228 209,691 266,295 322,899 429,903 536,30714/
Cummlative Incremental _

Annual Incremental Herd Value _ 8,000 30,800 34,100 (1,900) 700 - - - - _

I/ 9.5% p.a.
2 8.5% p.a. on the outstanding balance.
6 years of grace. c
/ Total term of 8 years, including
GCuilati-e incremental cash balance for year 15.
 ETBIOPIA

6338_ABABADAJ3 NOW TNJ~

-4 N T,d.ea

- - - - -N--1-6-16
- - - - - - - of-bdYe - - - - - - - - - - - - - -

HeTfeRD
. . C.Y . , C. I S. i'. M. C. B. C. 3 4 5 -

RNRD NOSITrOI

Retire C .ttl e

Com. No. - 20 - - 2 1 2 2 3 3 3
Tn-Caif Heirer No. S - - - _ 1 - - 1 N - 9 9
Boll Cc 16 - 16 - . - - - - - -
Heifer 9-24 Montho No. 7 T -
Streg l N. 13 - - - - - - 1 1 1 1
o -l o No. 2 - - - - - - - - 9 9 9 S
Sub-Totl No. 63 _3 4f _ _ 1 _ 9 _9
9
ftroSim Type Cattle

cm l i No. __ 22 31 25 26 32 31 31 31
In_Colf H*tfer No. __. 25 _ 17 - e 11, 0 9 9 9
Heifer Calve. No. 9 _ 9 _ 10 16 12 17 18 20 18 18
Bull
Heir Cal"ve
r 9-24 M-teh. Noo - - - 9 1- 1
10 6
15 1
_ 2
_3
F oriin Bullo No. 8 _ 8 - 8 2 3 1 1 1 1 1' 1
Sub-Totel No. 25 40 57 61 56 SS 59
Tot l NNob r . 63 - 73 49 57 61 56 59 59 59 59
TrH Animl its No. 47 57 31 41 41 41 41 41 41 41

Heif. C.lve No. 9 - 1 9 13 20 13 17 20 20 20 20

Bol Calve. No. 9 - 9 9 12 6 16 20 20 20 20
eTotal N91 bero _ No. 18 18 - 18 25 39 31 33 40 40 40 40

PURCHASES

Po2 He 6. 1 Mfrhl No. _30 201 1- - 3

otal Nw-bera No.. - _ 30 _ 20 - 8 - _ _

Sleare
Cows = 7aNo. No. 1
1 -1
_ 1 -- 21 -1 -_ 6 1 -6 -7 - 1 -2 1
tn-Calf Heifes No. 1 _ 1 _ . _ 10 - 6
Htarr ir e(o ) Ho.. 1 1 _ 1 3 4 3 2 2 2 2 2
ittll e9-2 No. I _ 1 _ 1 1 2 2 1 1 1 1 1
Heifers 9-2C Maltv No. I _ 1 _ 1 _ _ 1
Bullha No. - . _ 2 _ 1fer
Ster. No. -

Totl Numbers No. 15 _ 6 2 4 6 8 8 3 4 5 6 5

C.ol Bt- o No. 4 - 4 - 24 2 6 5 6 7 8 7 8

In-Cr Hifdt No. 1 _ _ _ 6 _ _10 5 6 6 6
Harr n Heifers (OCrn) No. 1 _ 1 10 1 2 2 2 2 2
bacrren Helf ,s (Purch..ed) No. - -- 3 - 2
rc.tle 9024 H1 No . _ _ _ 15 _0ths
HetSfr Celv,at N - - - 8
Cull Calve Nc.. 8 11 17 14 15 19 19 11 19
Bung No . - _ 2 _ - . - - - - - 1-3 -
St"r/ - No. 5 20 _attle.

Total Nbire No. 11 - 27 3 62 15 23 20 33 3 35 35 35

i/RDUCTION DATA

Cmoneption R t* CouS S 75 _75 - - 87 87 87 87 87 87 87 87

Gonoepticn Rate -Heifers % 85 - fiS 9° 90S 90 - 90 90 90 90 90
xortality,

Heifer C.valv/ % 30 10 - ;0 20 20 20 10 10 10 10 10
1ka Caivey S 1C _ 10 _10 10 10 10 5 5 5 5 5
Cow CUintg Rate %i 1S _ _ _ 10 1S 17 17 17 20 20 20
Calstrg Interva t Noth. 18 18 _- - 34A 14 14 14 14 14 314
JLg at First Caving Nonths 30-36 - 30.36 -_ 24-30 24-36 24-36 24-36 24-36 24-36 24-36 24-36

I/ N. C. Natin Catte..

L/ E. C. - uNpopa Type Cattle.

I/ A Friesiano bull in purohased med mototr sold In year. 8 nd 12.

V looluding still-births .

Noomeb*r 12, 1970

 NrHIOPIA

AMIS A3BARA
DAIRr DEVELOPWNTPROJECT

Medium Size Far Model - 40 Cows

Inveatments Obsts and Financing

Total

Units Unit Cost Tota Goat Units Unit CoCta2 Total Cost Coat
_ --

On-Farm Investment

Fencing 1,300 in 0.80 1,040 2,700 a 0.80 2,160 3,200

Covahad 250 M 30 7,500
2
Manager's House 50 m 60 3,000 - 3,000
Water Piping 1,000 m 2.15 2,150 - 2,150
Water Trough 1 200 200 _ _ 200
Water Pump 1 270 270 _ - 270
Spray Pump 1 80 80 - - 80
Milk Cows (30 1) - 12 60 720 720
Milk Buckets - 8 15 120 120
Nilk Filter - 1 50 50 50
Surface Cooler _ - 1 180 180 180
Cart 1 780 780 - 780
Small Equmaent and Tools - 100 _ 100 200
Establishebnt of Alfalfa V 1 ha 245 245 - 245
Friesian Reifer,s
170-190 kg Yf 30 600 18,000 20 600 12,000 - 30,000
Contingencies
(approximately 10%) 3,635 1,340 330 5.305

Total Investment 37,000 15,500 1,500 54,000

DDL Loan 3/ 26,200 15,500 1.500 143,200

Farmar's Contribution - 10.800 - 10.800

Total Financing 37,000 15,500 1,500 54,000

V The cost of establiiing 1 ha of alfalfa was based on the foflowing assumptions: (a) soil preparation cost E$ 52 per ha; (b) fertilizer cost for establishmnut
of 1 ha E$ 73; and (c) seed cost E$ 120 per ha.
2/ The ag of Friesian beifers weighing 170 to 190 kg should be aproxintotely 9 months.
The ry Development Agency (DDi) loan is equivalent to 80% o te totl investment ost.
4Thefarmsra contribution is equivalent to 20% of the total inrestment cost, but it is made entirely in the first year.
 ADDIS ABA ]DI DEMLOP1E41T P30JECT

lNr Rie sa .'Iadel - 10 Gows

Prje zt_oso ns, nd0ffEVet

iF i3~~~~~~~~~~~~~~~~~efore
----------------------------------------------------------------- Years -------------------------------------------------------------------- __:=-___
rrcK UPNIT Devel- i 2 3 h 5 6 7 8 9 10 U 12 13-15
R ~~~~~~~~~~~~opment
MILK sALES

Cows in k - T.t.1 No. 13 12 12 21 30 24 26 31 30 30 30 30 30 3D

Csw in Milk - atwve No. 13 12 12 - - - - - - - - - -
Cows in Milk - Friesisn No. - - - 21 3r 2!1 26 31 30 30 30 30 30 3D
Heifers in Yilk -Total No. 4 5 29 16 - 8 13 8 9 9 9 9 9 Y
H.eifsrs in MilkH ive No 4 5 5 - - - - - - - -
Heifers in Milk -Friesian No. - - 24 16 _ 8 13 8 9 9 9 9 9 9
Milk Yield per Cow - N3tiv 1/year 500 5°° 500 - - - - - - - - - - -
Xilk Yield per Cow - Friesian 1/year - - - 2,400 2,400 2,500 2,500 2,600 2,600 2,700 2,700 2,800 2,800 2,800
NIlk Tied per Heifer - IAtive 1/year 400 400 400 - - - - - _ - - - - -
KIlk Yield per Heifer - Friesian 1/year - - 1,800 1.8_O - 1,800 1,800 1,900 2,000 2,100 2,100 2,200 2,200 2,200
Total Klk Pr.dictiqo '00 1 81 80 512 792 720 744 884 958 960 999 999 1,038 1,038 1,038
Milk Fed to 0alves '00 1 32 32 72 64 48 60 72 72 72 72 72 72 72 72
Milk for Ssle '001 49 48 440 728 672 681 812 886 888 927 927 966 966 966
Milk P rice 16/1 0.29 0.33 0.33 0.23 0.33 0.33 0.33 0.30 0.30 0.30 0.30 0.25 0.25 0.25

TotAl Milk Sales 5* 1,421 1,584 14,520 24,021 22,176 22,572 26,796 26,580 26,640 27,810 27,810 21,150 24,150 24,150

CATTLg SAjM/

Cull Ow ES 240 240 1,740 900 750 900 1,090 1,200 1,050 1,200 1,200 1,200 1,200 1,200
Di-Golf Heifere 3* 70 - 420 - - 8,000 4,000 4,800 4,600 4,o800 ,800 1,800
4,800 1,80
Barren Hafers E$ 60 420 240 - 120 240 240 240 240 240 240 2420 240
9-24 Ibath Old Young Zattla 3$ - - 600 - - - - - - - - - -
Retlve Calms 320 - - - - - - - - -
Friesian Boll Calves 3$ - - 330 510 420 450 570 570 570 570 570 570 570 570
G1U1 Ball a/Steer. 3 750 3,00o - - - - - - 300 - - - 300 -

Total Cattle Sales 3$ 1,120 3,660 3,650 1,l1O 1,290 9,590 9,860 6,810 6,960 6,810 6,810 6,810 7,110 6,810

Total Innome ZS 2,541 5,244 18,170 25,431 23,466 32,162 32,656 33,390 33,600 34,620 34,620 3D,960 31,260 3D,960

ORLITM 000TS

Salar7 for Na ger Zt - 3,500 3,500 3,500 3,500 3,500 3,500 3,900 3,500 3,500 3,900 3,500 3,500 3,500
Salaries for Jbo:;/ 3$ 1,200 1,800 1,800 2,400 2,400 2,400 2,400 2,400 3,000 3,000 3,000 3,O00 3,000 3,000
Feed COtsV 3$ - 2,940 5,250 4,995 5,280 5,115 5,685 5,490 5,733 6,030 6,030 6,315 6,315 6,315
Veterinary Irvice5/ Z$ - 375 735 855 915 840 885 885 885 885 885 885 885 885
A.I. Servie 3 _ 280 133 370 300 320 390 390 380 390 390 390 390 390
?archase/P.eplaceaant of a BtlUt - - - - 700 - - - 700 - - - 700 -
I,ard Ta ES 60 60 60 60 60 60 60 60 60 60 60 60 60 60
Fwage Production / 3E - no 220 333 440 550 880 880 1,100 1,100 1,100 1,100 1,100 1,100
Mieellanesoe including Repairs and
HaintAnce Z$ 200 400 400 S00 600 700 900 1,100 1,100 1,100 1,100 1,1M0 1,100 1,100

Total Operating Ocets 5S 1,460 9,465 12,395 13,010 14,195 13,105 11,700 14,705 16,455 16,065 16,065 16,350 17,050 16,350

/ 200 1 per native calf and 400 1 per Friesian heifer calf.
2/ Price easeuptione int 3ES ntive coil sow 60; Friesian cull cow 150; native in-calf heifer 70; Friesian in-calf heifer 800; ntive tarren heifer 60; Friesian barren heifer 120; 9-24 wantbB old rative cattle 40;
native clf 20; Friesian bull calf 30; native call bull! steer 150 and Friesian coll bull 300.
2 One farm worker at %*$0 per annu..
For details ame Table S Annex ?7.
Veterinary services at IS per anil per ca ms.
Artificial inaemination at 3*10 per cow or heifer, including 2 repeat insesiamtons if necessary.
A/JtEa per ha.w
Prce assumptions for the establishmnt of 1 ha of mate and vetchea or broad beans or passa
(a) soil preparatlon and sowing , 3*25.00
(b) 100 kg of iasonieso-ho.phate Zt3836.50
(c) 50 kg of Or. E, 18.50
(d) Seed , 3*30.00

TOTAL ESI10.00
 ADDIS ABLBA DAIRY DEVBLPMENT PROJECT

editm Size Farm Model - 40 Cows

Financias Pro'ections

- ~~~~~~~~~~~~~~~~-----------------------------------------------------
Years ------------------------ __________-- ___________-_
12 13-15
Before 1 2 3 4 5 6 7 8 1' ii
a ITEM - Developsent

' Cash Inflow

1,120 3,660 3,650 1,4iO 1,2Su 5,590 5,866 6,810 6,960 6,810 6,810 6,810 7,110 6,810
Sale of Cattle
1,421 1,584 1L,52G 24,G24 22,176 22,572 26,716 26,58u 26,640 27,810 27,810 24,7,50 24,150 24,150
H Sale of Milk _ _ _
- 13,0U0 11,768 5,688 1,053 - - - - - _
'° Short-Term Loan 6 _ _
2 ,2uu 15,500 1,506 - - - - - _ -
° Long-Term Loan -

4 33,600 34,620 34,62G 30,960 31,260 30,560

Total 2,541 4,444 45,438 32,022 24,51> 32,162 32,656 33,390

Cash Outflow

10,800 - - - - - - - - - - -
Investment: (a) Farmer's Contribution -
15,500 1,50J - _ - - - -
(b) Long-Term Loan - 26,200
1,460 9,465 12,395 13,010 14,195 13,485 14,700 14,705 16,455 16.065 16,065 16,350 17,050 16,350
Operating Cost

1,460 46,465 27,895 14,510 14,195 13,485 14,700 14,705 16,455 16j065 16,06. 16,350 17,050 16,350
Total

1,081 (2,021) 17,543 17,512 10,324 18,677 17,956 18,685 17,145 18,555 18,555 14,610 14,210 14,610
Annual Cash Balance Before Debt Service

Debt Service
- 1,235 1,118 483 100 - - - - - - - -
Interest on Short-Term Loan 1/ -
Amortization of Short-Term Loan - - 13,000 11,768 5,o88 1,U53 - _ - - - - - -

3,545 3,672 3,672 3,060 2,448 1,836 1,224 612 - - -

Intereat on Long-Term Loan V - - 2,227
- - 7,200 7,200 7,2Gu 7,200 7,200 7,200 - - -
Amortization of Long-Term Loan 3/ - - -
6
- - _6,462 16,431 >,243 12,025 lu,2 u ,648 9,036 8,424 7,812 - _ _
Total

Annual Cash Balance After Debt Service 1,081 (2,021) 1,681 i,081 1,081 6,652 7,726 9,037 8,109 10,131 13,743 14,610 14,210 14,610

Annual Incramental Cash Balance (3,102) - - - 5,571 6,645 7,556 7,.A8 9,05- ,,662 13,529 13,129 13,529

- (3,1u2) (3,102) (3,1u2) (3,102) 2,46j 9,114 17,070 24,098 33,148 42,810 56,339 69,468 110,055 4/
Cumulative Incremental Cash Balancea

14,890 (500) 3,000 1,700 70O0 - - - - - - -

Annual Incremental Herd Value - 18,140

1/ 9.5% p.a.
2/ 8.5% p.a. on the outstanding balance.
2/ Total tarm of 10 years including 4 years of grace.
1r
4/ Cumulative incremental cash balance for year 15.
 AWI3 ABfB3 DAt DKZ T MWET
small ram - 10 GUIe_

Before - - - - - - --- d of lear - - - - - - - - - - - - - - - - - - - - - - - - - - - - _

cT T nlllTT Deoerlnt 1 2 3 4 5 6 7 8 9 i9 11 12 13 14 15

Native Stoek
N H1EDKFo8TO
1
Cowe No. 5 4 4 5 1 - - - - - - - - _
Io-Salf
n Reifera so. 1 2 2 1
S Calves go. 3 2 - - - - - - - - - - - - -
Heifers 9-24 bonths No. 2 2 2 - - - - - - - - - _- _
Bulla go. 1 - - - - - - - - - - - _ _
Osme No. 2 2 2 2 2 2 2 2 2 7 2 2 2 2 2 2
Sb-Total *o. 14 12 10 8 3 2 2 2 2 2 2 2 2 2 2 2

Ir,Ved Stock
cowo Wo. - - - - 4 5 5 5 S 5 6 8 a B 8 a
Tn-CalfStfHr No. - - - ? 2 2 2 2 ? 4 2 2 2 2 2
Heifer Calvea No. - , 2 2 3 3 3 2 3 2 3 4 4 4 4 4
Hifars 9-24 llotb No. - - 2 2 2 3 3 2 3 - - - -

Sub-Total No. - - 2 4 U 12 13 12 12 12 13 14 1I4 14k 14 14

Tota aN*ers go. 14 _ 12 12 12 14 lk 15 1k 14_ 14 15 16 16 16 16 16
Total AIM-1D ts go. 11 10 10 10 1 1 12 12 1U 12 12 12 12 12 12 12

Totl Nxbere go. 4 6 6 6 L77 7 7 7 7 10 10 10 10 10

In-Calf Beaifws -Friesian x Zebu go. - - - _ 4 - _ _ _ _ _ _ _

O,x_ __ __u _ ___ Jo. - - 1 _ . - 1 1 - - 1 1 _- - 1 1 -

total N,ubw - No. _ I - 4 1 1 - 1 1 - - 1 1

MMALI?7

Co" No. - - 1 - - - - 1I - - - 1 - 1 -
In-Calf Heifer, No. _ - - - - - I1
Calves No. 1 1 1 2 1 1 1 1 1 1 1 2 1 2 1 2
Hdier 9-24 Hoct.s No. - 1 - - - 1 - - - - - - - - -

Total uNmbwe No. 1 2 2 2 1 2 1 1 1 1 2 3 2 2 2

Oall am. No. 1 2 1 1 51/ 2 2 1 2 2 1 2 1 2 1 2

fn-talf Heifer, No. - - - - - - _ - - 1 1 1 2 1
DBrren eifere No. - - - 1 - - - - 1 1 - 1 - 1
Bull Cy, Nogo. 1 3 2 2 3 3 k 3 4 3 k5 4 5 4
C0ue Bu1le/0xw Ko. 1 1 1 - - 1 1 - - 1 1 - - 1 1 -

Total. umbers No. 2 4 5 4 7 6 6 5 6 7 6 7 7 9 9 8

DUCT1M0
DATA
COcaptio Rate of Co- f 80 80 80 SO 80 85 85 85 85 85 87 87 87 87 87 87
Omnceptim Rate of Hfers % 90 90 90 90 90 90 90 90 90 90 90 90 90 9p 90 90
mortalitY

Adult %5 5 5 3 3 3 3 3 3 3 3 3 3 3 3 3
Heifer Calve.4 B 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20
BSu Calvese S 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10
CovwGlling Rate S 17 17 17 17 17 17 17 17 17 17 17 20 20 20 20 20
Barren Heifer Rat. t 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 la
Calving Interval Kmoth, 18 14 14 14 14 14 14 14 14 14 14 14 14 14 14 1k 1:

1/ Foor of these are in-calf. ob

p Includn ati3-1-irtba.
 E TH I O P I A

ADDIS ABRAADAIR! DFVELODPIMTPROJECT

Small Farm Model - 10 Cows

Investment Costs and Financing

1o2 3 Total
CDITE Units Unit=oTota Cost Units Unit Cost Total Cost Units UJnit Cost Total Cost Units Unit Cost Total Cost Cost

On-Fann Investment

gf Fencing 700 m 0.80 560 _ - 1400 m 0.80 1,120 1,680

Cowshed 1/ - - 0.25 600 150 0.75 600 450 600
Watering Facilities / 1,100 - - - 1,100
Spray PMp - 1 30 30 -30

Milk Cans (10 1) _ _- 6 25 150 150

Milking Buckets - - - 3 ?5 45 45
Small Equipment and Tools - - - 100 100
In-Calf Half-bred Heifers - - - 4 35C 1,400 1,400
Contingencies (approx. 10 ) 140 - 20 335 495

Total Investment 1,800 _ 200 3,600 5,600

Finan¢ing

DDA Loan3/ 1,500 200 3,300 5,000

Famner's Contribution 300 _ 300 600

1/ Cowshed size is 4 x 11 meters.

2/ For piping, water tank, water pump and trough.

3/ The Dairy Der'elopment

investment cost.
Agency (DDA) loan is equivalent to 90% of the total
C
 dYIlioptA
IIS 61AR6 DUN DE8OP1OT PEOJMOT

S11 ._0 MedeI - 10 3o.

Pro ectiopa of Ioneo and Coerating G00te

° Se~~~~ ~ ~~~~~~~~~~~~for-
- - - - - - - - - - - - - - - - - - -
1 2 4b
- - - - - - - - - - - - -Yr
5 6 7
- _--_
8
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -_
S 10 11 12 13 '4 15
- IlMIT U3NiT D-n:lp=ot

°MI-LK SiLES

3 3 4 2 5 5 4 5 5 5 6 7 S 7 8
Coec ir. ilk- Thal MN. 3
Go. i NMilk -MatA.c Ih. 3 3 3 4 2 1 - - -
- - - - - 4 5 4 3 2 1 - - - _
Co- i. Nilk-F1 No.
- - - 2 3 4 5 4 2 1
Coe in ilk - F2 N..
6 8
Mc. - - -- - - - 1 3 6
C"e ir ylk -7 3/1l 2
2 2 4 2 2 2 2 2 4 2 2 2
Heifere iD Milk- T4t.i No. 1 1
- - - - '
No. 1 1 2 2 - -- - -
lfeir ir. tlk -ati-e
Heifelri. Milk- F1 No. - - - - 4 2 2 -
- - - - _ _ 2 2 2 1 1 _ _ _ _
Heifer. ir. ilkk .
18o.
2
- - _ _ _ _ _ _ 1 3 2 2 2
Eeiferein lilk -F 3 /F4 No. -
;0 500 S0 500 500
Soo 500 - _ - - -
Milk Yieldper Cow - ti I/ar,
1,300 1,300 1,403 16C i400
Milk Tield per Cow..-1ye P 1 200
l/yeax _ - , , 1,400 1,500 1,602 1,600 1,700 1,00 1,700
Milk Yield per Cov - F2
_-/y. _ ,- , 1,800 1,00 1900 2,00 2,0DO
Yilk Tield per Cow - FF4
Milk Yield per Heifer - Native l/yer 400 400 400 420 -
Milk Yield per Heifer - F1 - 900 goo 1,000 -
_ - - - - 1,100 1,100 1,200 1 200 1, --
Milk Yield par Hefer- Or --
2
- - - - - - - - - 1,100 I o 1,500 1,600 1,600
Milk Yield per Reifer- 73/74 -
169
Total Milk Produotiot '01 19 19 23 28 46 71 85 74 92 97 104 152 155 178 182
4 8 8 12 122 12. 8 12 8 12 16 16 t6 16 16
Nilk Pad toCelre./ '00 1 6
3 3 3 3 4 4 4 4 4 4 6 6 6 6 6 6
Milk fr hore Coe,eaptioe '001
12 12 17 30 55 69 62 76 85 86 130 133 156 167 170
Milk for Sale '00 1 10 0.25 0.25 0.25
0.33 0.33 0.33 0.33 0.33 0.30 0.30 0.30 0.30 0.25 0.25
ilUkPriee 2$/j. 0.25 0.33

250 396 396 561 990 1,815 2,277 1,860 2,260 2,550 2,580 3,250 3,325 3,900 3,675 4,250
Total Milk Sale, 9$

CArTs ASLAS 2/
120 60 60 60 180 240 120 240 240 120 2f0 120 240 120 240
Ctll COYS B$ 60
Breding Co - - - - 480 - - -
Native In-cal.f 700 350
_ _ - - _ _ _ _ _ _ 350 350 350
In-Ceif Heifero k' _
BerrenHeitere
H5 i $ - 60 - - - - 80 - 80 - I 80 80
Bull C;al a s$ - 50 75 50 50 75 75 100 75 100 75 100 125 100 125 100
E$ 150 150 150 - - 150 150 - - 150 150 - - 150 150 -
CMll B411,/Oaeo

210 320 285 170 590 405 465 220 395 490 425 690 595 920 1,095 770
Total Cattle Sale. E$

460 716 681 731 1,580 2,220 2,742 2,080 2,675 3,040 3,005 3,940 3,920 4,820 4,770 5,020
Total Inco=5 $

OPERATINGCOSUO

Feed Cots1/ V E- - 60 120 240 285 368 345 435 653 765 870 938 1.05 1103 1.200
S-rviec 2$ - 20 40 110 120 130 120 120 120 130 146 160 140 130 140
Veteriaary-
5$ _ 60 70 70 110 90 90 80 100 90 120 130 120 ¶60 130 160
A.I. Service 5/ 150
Replaceet o? Oe 6/ s$ - - 150 - - 150 i5o - - 150 150 - - 150
20 20 20 20 20 20 20 20 20 20 20 20
Led T- I/ 8$ 20 20 20 20
80 80 80 80 100 100 100 i5o 150 150 150 150
Mi.cellan.oooc 8 50 5E 50 50

300 560 745 838 645 775 1,133 1,285 1,310 1,368 1,695 1,693 1,650
Total Operating C.ota 1* 70 130 370

1/200 1 .per etie calf and 400 1 per ieproved heifer calf.
/P.1rioe amepti..o i
On $: ea.tle eul1 eeu,. 60; improved cull -ou 1201 native in-calf brooding coo- 120; in-ealf orcee-bred heifer - 350; otiee beaven heifer - 60; ijproed berren heifer - 80;
Obuclf - 251 ed .011 bIa1/o= - 150.
],or bet~1 ileec Tble S Racer 8 wo
eiclery terrieh*t SS 0 pr ieprftd tcital per r.
frOitf including 2 repeat lest:dnations
ation at 11$l0 per cow or heifer,
l tt1iase if aceesary.
_ twrieet2en pr cxc -1150.
tAt 4 Iperb..
 EThOPIA

AMDIS ARARA DAIRY DVELPXMNT POJECT

,Sm,ll Farm Model - 10 Cows

Financila Projiections
(Se)

--------------- Years -…------------------------------…-_________________________

ram Before 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Development

Cash Inflow

Sale of Cattle 210 320 285 170 590 405 465 220 395 490 425 690 595 920 1,095 770
I. Sale of Milk 250 396 396 561 990 1,815 2,277 1,860 2,280 2,550 2,580 3,250 3,325 3,900 3,695 4,250
'1 Short-Term Loan - - - - - - - - - - - -
Log-rarm Loan - 1,800 - 200 3.600 - - - - - _ - - - - -

Total 460 2,516 913 1,297 5,180 2,220 2,742 2,080 2,675 3,040 3,005 3,940 3,920 4,820 4,790 5,020

Cash Outflow

Investments Long-Term Loan - 1,800 - 200 3,600 - - - - - - -

Opeeating Cost 70 130 370 300 560 745 838 645 775 11133 1,285 1.310 1.368 1.695 1,693 1,650
Total 70 1,930 370 500 4,160 745 838 645 775 1,133 1,285 1,310 1,368 1,695 1,693 1,650

Annual Cash Balance Before Debt Service 390 586 543 797 1,020 1,475 1,904 1,435 1,900 1,907 1,720 2,630 2,552 3,125 3,097 3,370

Debt Service

Intereat on Short-Term Loan -_ _ 22 35 - - - - - -

Amortization of Short-Term n 232 366- - - - -
Interest on Long-Term Loan _ _ _ 153 153 170 476 439 398 354 306 255 199 138 72 -
Amortization of Long-Term Loan 3/ _ - - - - 439 476 517 561 609 660 716 777 845 -

Total _ _ 153 407 571 915 915 915 915 915 915 915 915 917 - -

Annual Cash Balance After Debt Service 390 586 390 390 449 560 989 520 985 992 805 1,715 1,637 2,208 3,097 3,370

Annual Incremental Cash Balance - 196 - - 59 170 599 130 595 602 415 1,325 1,247 1,818 2,707 2,980

Cumulative Incremental Cash Balance 196 196 196 255 425 1,024 2,154 1,749 2,351 2,766 4,091 5,338 7,156 9,863 1 2, 84 3W

Annual Incrasental Herd Value _ (190) 140 230 1,810 20 200 (100) (100) 100 700 200 - - -

VY 9.5% p.a.
2/ 8.5% p.a. on the outstanding balance.
3/ Total term of 10 years including 4 yeara of grace.
/ Cumulative cash balance for year 15. C.
 MANEX9

ETHIOPIA

ADDIS ABABADAIRY DEVELOPMENT

PROJECT

Shola DaiPlant - Technical Aspects

1. The present value of Shola Dairy Plant is estimated at E$900,000,

comprisingbuildings, E$300,000:machinery and equipment,E$400,000; and
vehicles, E$200,000. Buildings have been financedby Government loan;
UNICEF has financedmachinery, equipment and vehicles; and UNICEF and
FAO have provided scholarshipsand technical advisors. Table 1 shows
the amortizationof the UNICEF loans, to be repaid in milk supplied to
selected groups of beneficiaries (such aa schools and hospitals) over a
10-year period, and projectionsof income and operating expenses of the
Plant.

2. Shola's daily throughputin the peak season is expected to

exceed its 30,000-liter capability by Project years 4 or 5. Additional
investmentsare required and proposed for financingunder this Project.
These investments (Table 2) have been determined in consultationwith
the UNICEF Regional Office for East Africa.

3. Machinery and equipmentwould represent more than half of the

proposed investments. Particularlyimportant would be the installation
of a stand-by generatorbecause of power breakdowns that occur occa-
sionally. In year 1 and in year 4, another 10,000-litermilk storage tank
would be needed, and in year 4 an additionalbottling line. A bigger
milk separator would replace the old one in year 2 and a small plastic
bag filling unit would allow packaging of cream and other fresh milk
products. In year 5, the installation of an automatic butter wrapping
machine would be necessary. Equipment for extending milk stores and some
small installationsfor cheese production are needed for storage and pro-
cessing of an expected increaseof unsold milk. Capital necessary for small
milk plant equipmentwould be E$8,000 in years 1, 2 and 3 and E$12,000 in
years 4, 5 and 6. More flexible distributionof milk and other dairy pro-
ducts would be made possible by installation of eight refrigeration units
in selected selling centers.

4. Shola Dairy Plant lies about 5 km outside the capital. Therefore,

housing for five key techniciansnear the plant would be required, espec-
ially for those working on double shift during the night. Shola needs
about 300 m of water Ser day, which at present comes from the public
supply at E$0.50 per m . To be independentof this fairly expensive and
often insufficientsupply, the financing of a water supply for the plant
 ANNEX 9
Page 2

is justified,especiallyas it would greatly reduce costs. In the course

of expandingmilk collection and distrlbution,the number of collecting
and selling centers should be raised as proposed. During the Project's
duration, eight additionalmilk trucks and three minibuses would be
purchased. Replacementcosts for vehicles are included in Shola's opera-
ting costs.

5. Projection of income and operating costs of the Plant are shown

in Table 3.
 EIHIOPIA

ADDIS ABABA DAIRYDEVELOPMENT

PROJECT

Shola Dairy Plant

Financial Prections

_ _______ Years- --- …- …~~~ ~~~

Before 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Cash Inflow
Sale of Yilk and Butter 1,563 2,888 3,851 4,814 6,161 7,124 8,087 8,196 8,893 9,416 9,765 9,061 9,373 9,686 9,998 10,311
Long-Term Loan from ADDC1/ - 279 110 109 198 56 57 - - - _ _ - - _-

Total 1,563 3,167 3,961 4.923 6,359 7,180 8,144 8,196 8,893 9.416 9,765 9,061 9,373 9,686 9,998 10,311

Cash Outflow

Investment: Long-Term Loan - 279 110 109 198 56 57 - - - - - - - - -

Payment to Farmers for Milk 986 1,807 2,409 3,011 3,8514 4,457 5,059 5,147 5,585 5,913 6,132 5,293 5,475 5,658 5,840 6,023
Operating Costs 442 611 813 961 1,191 1,353 1,530 1,831 1,962 2,059 2.12lL 2,188 2.253 2.316 2.379 2j

Total 1,428 2,697 3,332 4,081 5,243 5,866 6,646 6,981 7,547 7,972 8,256 7,481 7,728 7,974 8,219 8,467

Annual Cash Balance Before Debt Service 135 470 629 842 1,116 1,314 1,498 1,215 1,346 1,4414 1,509 1,580 1,645 1,712 1,779 1,844

Debt Service
I. On Borrowings Before Takeover by DDA:
(a) UNICEF Loa
Interest - 92 82 73 64 55 46 36 27 18 9 -
Amortization 115 115 115 115 115 115 115 115 115 110 -

(b) GoversuIne/Loan
Interest - 28 25 22 20 17 114 11 8 6 3 - _ _ _ _ _
Amortisation 35 35 35 35 35 35 35 35 35 35 -

II. On Borrowingsa r5 er Takeover by L0A:

Interest _ - - 24 33 42 59 64 60 45 30 15
Amortization of Long-Ter Joan-4/ - - - - - - 109 175 175 175 175 - - - - -

Total 270 257 269 267 264 269 370 420 394 362 190 - - -

Annual Cash Balance After Debt Service (135) 213 360 575 852 1,045 1,128 795 952 1,082 1,319 1,580 1,645 1,.;2 1,779 1,844

Annual Incremental Cash Balance - 348 495 710 987 1,180 1,263 930 1,087 1,217 1,454 1,715 1,780 1,847 1,914 1,979

Cumulative Incremental Cash Balance - 348 843 1,553 2,540 3,720 4,983 5,913 7,000 8,217 9,671 11,386 13,166 15,013 16,927 18,906

1/ Shola Dairy Plant is part of the Dairy Development Agency (DDA), therefore, this is an internal loan.
2/ 8.0% p.a. on outstanding balance.
'5/ 8.5% p.a. on outstanding balance.
JT/ Total term of 10 years including 5 years of grace.
IT

Noveemher
12, 1970
 E T I0 O P I A

ADDIS ABAEtA nIR1

fLV9.OPM! PFRWT

Shola DLiry Plsat

Pr,,3oti0 of l1nSs, d Op-tigx Costs

X 2dore ~ ~~~~~~~~~~~~~~~~~
1
--------------
2 3 4
_-----------___-------_------___------------------------------_--
5 6 7
Y-
8
--------------
9
--------------.----------------------------------------------
1 11 12
______
13 14
_____:_
15
£ ITEM UIIIT Dpopeat

- SAL3 OF DIMU PRODUCTS

37 42 47 51 54 56 '3 60 62 64 66
,. lfk Th,ghpt por y 000 1 10 15 20 25 32
0.50 0.50 0.45 0.45 0.45 0.45 j.40 0.40 0.40 0.40 0.40
IYlk R8t,tl Prtcn 8$ par 1 0.40 0.50 0.50 0.50 0.50
J 7,627 7,681 8,335 8,825 9.152 8.26 8,716 9,007 9,297 9,588
c MI/
of 1 000 Et 1,453 2,724 3,632 4,540 5,811 6,719
S..8
0
558 591 613 635 657 679 701 723
51,, of 14ttmr- '000 38 l1 164 219 27h 350 405 460 515

7,124 8,087 8,196 8,893 9,46 9,765 9,061 9,373 e'.6 9,998 10,311
9ctsl Tn0,G. '000 E5 1,563 2,888 3,851 4,814 6,161

OP2RJTINO COSTS

467 540 613 686 745 788 818 847 876 905 934 964
L'rlect Cost of Pr s1rg1 000 PS 146 219 292 365
338 383 429 465 493 511 529 548 566 584 602
Tranwport of 'Om Z$000 91 137 183 228 292
230 257 279 296 307 .8 329 339 350 361
Co.teg' a 000 8$ 55 82 110 137 175 203
Yffrkstig 75 75 75 75 75 75 75
8000 F$ 54 60 65 70 75 75 75 75 75
Ad.instratire Ios *rd Sa.riesw 10 10 10 10 10 10
8 9 9 10 10 10 10 10 10 10
Printing, 8tationary, Tsep6o,pc 000 E$
Rsplacesst of CfirT Pla5 snd Lbsbor tory 130 130 130 130 130 130 130 130
'000 E3 - - - - - - - 130
Yadinscey and lquisetsf 80 80 80 80 80
48 48 80 64 64 64 80 80 80 80 SO
Raplacoent of Mlk Trcks'7/ 000 E$ 205 2.. 216 222
56 74 87 108 123 139 167 178 187 193 199
Contt.gendna (approx 10%)E/ :000 E$ 40

1,353 1,530 1,834 1,962 2,059 2,124 2,188 2,253 2,316 2,379 2,444
Sob-Total '000 E$ 442 611 813 961 1,191

5,059 5,147 5,585 5,913 6,132 5,293 5,475 5,658 5,840 6,023
to Fa-cer, for Milk 0oooE$ 986 1,807 2,409 3,011 3,854 4,457
Payent

5,045 5,810 6,589 6,981 7,547 7,972 8,256 7,481 7,728 7,974 8,219 8,467
70tal Op-rotlig Costs 000 Z$ 1,428 2,418 3,222 3,972

I/ At s 6 per 4.
2-/ Process..g cost, ocldiog dcp-oooation,
23
is 8$ n.04 per 1 of m:Lk.
3/ fronport cost, escludlo deprsdato ,n, is 8$ '^^5 p-r 1 of nilk.
/ 9$60.015 pcr 1 of rilk.
Includes
I/ cis]k. of milk -c1o1.tiag cnnters.
6/ Appro-stcly 10% of diry plant and loborotory -. chios,7 and npipae-t.
7 At s$ 16,0-0 per mlk t-ock.
/ Iaclodes s,intemnice of buildings and silk coIlectitg centers.
 ANNEX 9
Table 3

ADDBSARABAfA PROJET
DSEV7LOPMENT

Total
ITEM Unit!Cost 1 2 3 4 5 6 Cost

Milk throuihput per Day ('000 1) 15 20 25 32 37 42

Investment

(a) BdreadConstructionl
(a) ea8 (5) 40 - - - - - (5)40
New Milk Collecting Centers 5 (8) 40 (4) 20 (4) 20 , (16) 80
Replacement of TeMporary
Centers 5 (4) 20 4) 20 , , _ _ (8) 40
Milk Selling Oanters 0.6 (5) 3 5 3 ((5) 3 - (5) 3 (20) 12
Water (borehole) 18 (1) 18 - - (1) 18

Sub-Total 121 43 20 3 - 3 190

Refrigeration Units or
Selected Selling Centers 6 (2) 12 (2) 12 (2) 12 (2) 12 - - (8) 48
Laboratory Bquipment 1 1 1 1 1 1 1 6
Milk Plant Equipsent 8 8 8 12 12 12 60
milk Storage Tank (10,000 1) 25 (1) 25 - - (1) 25 - - (2) 50
Stand-by Eleotric Generator 40 (1) 40 - - - (l1 40
Milk Separator 9 - (i)
W - _ _ (1 9
Plastic Bag Filling Unit 3 - (1) 3 - _ _ _ (1) 3
Conversim Parte for
Peateurising Machii 2 _ (1) 2 - - - - (1) 2
Bottling Line 105 _ - - (1)105 - (1)1o5
Automatio Butter Wrapping
Machine 16 - - - - (1) 16 _ (1) 16
Equipsent for Extending
the Milk Store 10 - (1) 10 - - - (1) 10
Cbheee Vat 3 - - - - - (1) 3 (1) 3
Air-Condition for Cheoee Store 1 _ _ - (1) 1 (1) 1
Xilk Can. (50 1) 0.03 (160) 5 (200) 6 (200) 6 (200) 6 (200) 6 (200) 6 (1160) 35

Sub-Total 91 41 37 161 35 23 388

(o) Vehioles
(R°uoks 16 (2) 32 (1) 16 (2) 32 (1) 16 (1) 16 (1) 16 (8)128
Minibus 10 (1) 10 (1) 10 - - (1) 10 (3) 30

Sub-Total 42 16 42 16 16 26 158

Sub-Total 254 100 99 180 51 52 7S6

Contingencies (anproximatelyr 10%) 25 10 10 18 5 5 73

Total Investment 279 110 109 198 56 57 809

Financingz-

DDA Loan 279 110 109 198 56 57 809

.1/In the bodcy of the Table the figures in brackets represent the number of units of the item in question purchased in that year.

j/ The Dairy Development Agency (DUa) Loan is equivalent to 100% of the total investment cost.

Noveber 12, 1970

 ffBOPIA
ADDIS ABABADlIu DEVIIORW P10JET
Phasing of the Len,ding Prw.m

Phasine of Investmernt and Finncing Number and Phasing of Loan Ca,.tments

(E$ 1000)
- - - - - - - - Teare - - - - -- - -Years - - - - - - - - -- - - - - -
ITEM 1 2 3 4 5 6 Total 1 2 3 4 5 6 Total

Inveutment

Snall Dairy Farms 27 176 232 74 378 457 1,344 15 98 127 - - - 2I0
Medium Size Dairy Farms 1,480 1,619 1,218 1,201 387 35 5,940 40 27 20 2 _ 110
Private Cross-Breeding
Ranches 138 92 - _- - 230 3 2 - - - - 5
Honleta Dairy Stud Fam, 37 - - - - - 37 1 - _ - _ 1I
DDA Investment in
Abermossa 250 - - - - - 250 1 _ _ _ _ _ 1
Shola Dairy Plant 279 110 109 198 56 57 809 1 _- - I

S&b-Total 2,211 1,997 1,559 1,473 821 549 8,610 61 127 147 23 - - 358

Costa of Technical

Adini4strative Services g9o 1,020 960 790 710 690 5,080 n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Total 3,121 3,017 2,519 2,263 1,531 1,239 13,690 61 127 147 23 _ _ 358

Financing of Investment

Farirs 460 10 216 248 - - 1,234

DDA 347 372 403 412Y 423 52
Goverzment 200 - - - 200
IBED/mA. 2,11h 2,412 1,931 .1,612 1,119 816 10,004

Total 3,121 3,017 2,519 2,263 1,531 1,239 13,690

The Government contribution to investment of E$ 200,000 is a loan in kind ( cattle ) to DDA for cattle for Abernossa Cross-Breeding Ranch. 10
n.a.- not applicable.

%o.ver 12, 1970

 ANNEX11

ETHIOPIA

ADDIS ABABADAIRYDEVELMPMENT
PROJECT

Estimated Schedule of Disbursementof IDA ---

edit

- - - - Estimated - - - -
Amount Balance
Project End of Disbursed of Credit
Year Quarter ---- US$OOO ---------

1 0 0 h,400
1 150 4,250
2 400 4,ooo
3 690 3,710
4 990 3,410
2 1 1,270 3,130
2 1,550 2,850
3 1,830 2,570
4 2,110 2,290
3 1 2,331 2,069
2 2,552 1,848
3 2,773 1,627
4 29994 1,406
14 1 3,153 1,248
2 3,311 1,090
3 3,470 932
4 3,628 772
5 1 3,740 660
2 3,852 548
3 3,964 436
4 14,076 324
6 1 4,157 243
2 14238 162
3 4,319 81
4 4,hoo 0

November 12, 1970

 ADDIS ABAPADAli! 3VWEHDEW PROJECT
Dairy Develovaent nauey (MA)
Tecbnical and Administrative Staff Nauqdrents

--- -- Years - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
o 1 2 3 4 5 6
FH CATE3ORY Nuer Wit Cost Nwmber lunit Ue*t NwAber Unit Coat Number Unit Coet Number Unit Cost Number unit Cost
(0 E$) (000 .) (000 S$) (000) (000 E$) (ooE Es)

Oenral Manater 1 25 1 25 1 25 1 25 1 25 1 25
Lowyer 1 12 1 12 1 12 1 12 1 12 1 12

PRWOCTIIN DIVISION

Production Nanager / 1 100 1 100 1 100 1 100 1 100 1 100

Asistant Production
Nanager - - - - - - 1 12 1 12 1 .12
Ve. a'd (Disease
cOirnol) Y 1 80 1 80 1 80 - - - - - -
eterinaran (Disease
Control) - - 1 12 1 14 1 14 1 14 1 14
Artificial 1 80 1 80 - - - - -

Artificial Insenation 1 7 1 7 1 8 1 8 1 8 1 8
specialit 2
Dary Devel)pmst 0fficarS - 1 80 1 80 1 80
DuiryDevelpAmt, cfioer 2 8 2 8 3 8 3 8 3 10 3 10
Veter?ne7 Assiatsats 1 7 2 7 3 7 3 7 4 8 4 8
Dairy tendon Officers - - 1 7 2 7 4 7 5 8 6 8
Principal, Farmers'
Training Center 1 7 1 7 1 7 1 7 1 7 1 7
Inseminatore 2 3 4 3 7 4 7 4 7 4 7 4

FINANCIAL DIVISION

Financial mnager I 1 100 1 100 1 100 - -

Finan.rial uager _- - - - 1 1 5 1 15
Assistant Financial Manager 1 12 1 12 1 12 - - - - -
Chef Accountant 1 12 1 12 1 12 1 12 1 12 1 12
Loan officers 2 7 3 7 3 7 3 A8 3 8 3 8
Accouts Clerke 3 5 4 5 4 5 4 6 4 6 4 6

PEOCESI & NLFINO DIMSION

Processing & Nartting

Manager 1 15 1 15 1 15 1 15 1 15 1 15

MISC]IANEOUS

Drivers 4 2 4 2 4 2 4 2 4 2 4 2
Mewermployees 5 3 7 3 8 3 10 3 10 3 10 3

1/ ept for the Marketing & Processing Manager all staff of Shola Dairy Plant and Holleta Dairy Stad Farn are excluded frmn this table.
IntaernatonaJ.y recruited personnel.
 ITa1OPIA

ADDIS ADA DM1 fLIOPST PRojECT

1Rir Dovekpment Agency (DDA)
Coeta Of Tebhial and ksraIstrative Services 1/

-- - years- - - - - - - - - - - - - - - - - - - - - - - - --r- Years- - - - - - - - - - - -

CA7StoRr 1 2 3 4 5 6 Total 1 2 3 4 5 6 Total
E0sW( US I000 Equi)v.
Foreian zc143nae Costs

DDA Technical and Ajsinis-

trative staffrr/ 349.o 446.0 374.0 162.0 90.0 90.0 1,511.0 139.6 178.4 149.6 64.8 36.o 36.o 604.4
Travol 25.0 25.0 5.0 - - - 55.o 10.0 10.0 2.0 - - - 22.0
TranD ort Vehicles 3/ 63.0C/ 18.0 10.0 14.0 - -- 1o5.o 25.2 7.2 4.0 5.6 - - 42.0
opernting Ccats of Transport
Vehicloo _W 32.0 43.0 47.0 63.0 63.0 6g o 31t 10.8 17.2 1B.8 25.2 25.2 25.2 124.4
Tehoica. Egqtdpment 15.0 9.0 6.o 6.o 6.0 6.0 : 6.0 3.c 2.4 2.4 2.4 2.4 19.2
Offico Eqcisment 15.0 5.0 - - -- - 20.0 6.o 2.0 - .- - - 8.0
Semen and Liquid Nitrogen 14.4 33-3 52.0 59.2 63,8 66.5 289.0 5.7 13.3 20.8 23. 25.5 26.6 115.6
Training Center Equipmect 5.0 - - - - - 5.0 2.0 - - - - - 2.0
Offiac E ,2enMA 5.- 5.0 5.0 5.0 5.0 5.0 30.0 2.0 2.0 2.0 2.0 2.0 2.0 12.0
Field Studies5/ 15.0 40.0 40.0 40.0 4o.o 15.0 190.0 6.o 16.0 16-o 16.^ 16.0 6.0 76.0
Contingencioal>approX. 10%) 61.6 60.7 48.5 38.3 29.8 22.1 261.0 24.7 24.3 19.4 15.3 11.9 8.8 104.4

subtotal 600.0 685.0 587.5 387.5 297.6 267.6 2,825.0 240.0 274.0 235.o 155.0 119.0 107.0 1,130.0

Local Cofst

DDA Technical apd Admifla-3

1;atit7e Staff 21 185.o 243.0 278.0 302.0 323.0 331.0 t1662.0 74.0 97.2 111.2 120.8 129.2 132.4 664.8
Transport Vehicles 27.0 7.0 5.0 6.o - - 45.0 10.8 2.8 2.0 2.4 - - 18.0
Operating Cocts of Transport 4
Vebiolon 12.0 13.0 17.0 13.0 13.0 13.0 81.0 .8 5.2 6.8 5.2 5.2 5.2 32.4
Teebnical EquLpment 5.0 3.0 2.0 2.0 2.0 2.0 16.o 2.0 1.2 0.8 0.8 0.8 0.8 6.4
Offico Nqtzp±nt 15.0 5-0 - - - - 20.0 6.o 2.0 _- - - 8.0
Semen and Liquid Nitrogen 1.6 3.7 3.0 3.7 4.2 4.8 21.0 o.6 1.5 1.2 1 .5 1.7 1.9 8.4
~Triing Center Equipmeat 7.0 - - - - - 7.0 2.8 - - - - - 2.8
Offioc Expenses 5.0 5-0 5.0 5.0 5.0 5.0 30.0 2.0 2.0 2.0 2.0 2.0 2.0
Rent for DTilding 12.0
15.0 15-0 15.0 15.0 15.0 15.0 90.0 6.o 6.o 6.o 6.o 6.o 6.o 36.0
Field Sgudics 10.0 10.0 10.0 10.0 10.0 10.0 60.0 4.0 4.o 4.o 4.o 4.o 4.o 2o.0
Contingencies (approx. 10%) 27.4 30.3 37.5 45.7 40.2 41.9 223.0 11.0 12.1 15.0 18.3 16.1 16.7 89.2

Subtotal 310.0 335.0 372.5 402.4 112.4 122.6 2,255.0 164.o 134.0 149.0 161.0 165.0 169.0 902.0

Total Coots 910.0 1,020.0 960.0 790.0 710.0 6so.o 5,080.0 364.o 408.0 384.0 316.0 284.0 276.0 2,032.0

y/ Holleta Dairy Stud Farm and Shola Dairy Plant arm excluded from this table.
2/ Irncludig p25,000 in year 1 and E$ 50,000 in each of the years 2 a2Wd3 for technieal serrices :v rdlc marketing and processing.
J Purch1c of 7 jeeps and 4 sall cars in year 1, 2 jeeps and 1 small car in year 2, 1 jeep and 1 siall car in year 3, and 1 jeep and 2 small cars in year 4.
/ AssuAing 20,000 km per jeep per annus 0 200 per km, and 40,000 km per small car per annum S 100 per km.
/ 3acntia.137 research on grassland and forage crop production. °
r
Exeluding the salary of the Marketing and processing Manager, which is included under Shola Dairy Plant.
 ANNEX 3
Table3

ETHIOPIA

ADDIS ABABADAIRY DEVELOPMENT

PROJECT

Dairy DevelopmentAgency (DDA)

Breakdown of Costs of Technical and Administrative Services

DDA Veterinary 4ad Technical

CATEGORY Administration A.I. Services Services Total
- -E$!OOO - - - - - - - - - --
Salaries 545 801 1,827 3,173

Travel 5 15 35 55

Vehicles 5 45 100 lo
Vehicle Operating Costs 6 130 256 392

Technical Equipment - 22 42 64

Office Equipment ho - _ 40

Semen and Liquid Nitrogen 310 _ 310

Training Center Expenses - - 12 12

Office Expenses 60 - - 60

Rent for Buildings 90 - _ 90

Field Trials and Demonstrations - - 250 250

Contingencies 79 140 265 48

Total 830 1,463 2,787 5,080

November 12, 1970

 ANNU 12
EMKIOPIA T%b'i 4

ADDIS ABABA DAIR D1UWLFAMT FBtU !

D irY D.velopt Ageacy (DDA)

piretal F!deetl

---------------------------------------------------- ______________ ProAv: Y - ----------- ~-~------------------------------- ------------------------------

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

CASH ii1W

Prar JDA Credit fo,

De,el.o.nt of DDA Fa 90 78-- - - -_-_ _ . - _ - - _ _ _

Sh.l. Dairy Plnt 279 110 109 198 56 57 _ _ _ _ _ _ _ _ _ _ _ _ _
Adeini.t0.ti-o/T.,hnIcal
Servmic Cost 298 315 282 P32 213 182
Fo,.I,v C00t. of 0.1.-00. c i/ 302 372 306 1I5 85 85

S9b-Tatal 969 865 697 595 354 324

5oflnmlt Lo-.0 to P-rchute
Ab..Do... Cattl, 200 --- - - - - - - -

10n. for Workirg CapttOl 189 145 112…- - - - - - - - - -

Soroic. Ch-,g. -. D.iry L-,a

by AIDS t 2%: - 25 5i 84 106 122 129 123 114 102 88 74 59 44 30 18 19 4 1
Inet fro-

Arti1ia.l In-1n 9-rojo.

-t-on 13 32 48 55 60 64 62 63 65 67 69 75 75 75 75 75 75 75 75 75
OcteflOary bor40,ic 23 53 79 108 128 142 146 145 145 145 146 148 150 150 150 150 150 150 150 150
Cottle 001., eo bberno,,a 74 64 57 98 153 137 137 333

C.lh SOopl0. f00.:

Ho11.t ralry Stud F-a _ _ _ _ 23 33 33 80 80 80 80 80 80 00 80 80 80

Shol. Dairy naDt 470 629 942 1,116 1,314 1.498 1.215 i.346 1.444 1.509 1.580 1.645 1,712 1,779 1.884 1,884 1,84 1,884 11884 1.884

T.t.1 C6.h Inflo. 1,937 1,813 1,993 2,046 2,115 2,287 1,689 2,033 1,801 1,856 1,963 2,722 2,076 2,128 2,219 2,207 2,208 2,193 2,190 2,189

CASE OUTFWW

OnoestIteot or

'IDA P- 90 78 - - _ - _ _ _ _
Ahol. 2nlry PIant 279 110 129 198 56 37 _ _ _ _ _ _ _ - _ _ _ _ _ _

Qora-lr, C..,.

Adi,lnior0-tleTerob.10 08-D-eo 910 1,020 960 0 7 7o 690 6670 67 640 670 670 670 740 740 740 740 740 740 740 740
Ab.rno--. P-1, 95 55 52 66 6 1 60 49 _ _ - - _ _ _ _ _ _ _

8ub_tot.1 1,374 1,263 1,121 1,254 831 788 730 ng 640 670 670 670 740 740 740 740 740 740 740 740
Debt Seroice

nt re, t.00:

Pu.dM C,0, tDA C-rdit, -. e 1/2% - 43 75 101 129 146 162 159 153 145 135 123 110 96 82 68 55 41 27 14
Ioee fror Wo-ling Capltel at
9 1/2% - 18 i4 11…- - _ - _ - _ _ _ _
I-.0, to Purcha-e Abe-tosa
Cat ]r*t6 /29 - 13 13 13 13 13 13 13 - - - - - - - - -

Repoynefl ar:

fPnd, frr IDA Credit --- 48 85 119 157 184 211 211 210 211 210 211 211 210 211
Loan. fr. Wo-king Capital - 189 145 112 … ……
L-a. to Paroahe Alorno- o C.ttle - 0 …- - - - - - - - - -

Total C--h Outflo. 1,374 1,525 1,368 1,291 943 949 953 976 1,112 972 989 1,004 1,061 1,046 1,033 1,018 1,006 992 977 965

C-ah B2l-D:, 400Cr 2f40 SD-rtio 563 288 525 755 1,172 1,340 736 1,057 689 884 974 1,718 1,015 1,092 1,186 1,189 1,202 1,201 1,213 1,224

Coot of Loppinig-p -op.trlate tpocielit. .alrDo -ad other cnolr ,.t. Cot repaid
.re by ADDCto 0G-.ene*t.

Jar- 15, 1971

 ETHIOPIA
ADD!S ABABA DAIRY DEVELOPMENT PROJECT
DAIRY DEVELOPMENT AGENCY
ORGANIZATION CHART

BOARDOF DIRECTORS

GENERALMANAGER

FNNIAL DIVISION llPRODUCTION DIVISION |IRCESNG 3. MARKETING DIVISION

F~ ~~~~O -NFARMIIA
TEHIA J m a aNTX 8 2MK4Ir -

z
z
3<
 ANNEX 14

ETHIOPIA

ADDIS ABABADAIRY DEVELOPMENT

PROJECT

Milk Marketing and Prices in Addis AbaIba

1. At the end of 1968, the population of Addis Ababa was estimated at

about 685,000. of whoin.iabout45,000 were foreigners,Q,' beingEuropean.
Population growth over the period 1961 to 1968 was estimated at 6.2% per
annum, with natural growth accounting for 2.2% and immigration 4.0%. This
rate of growth is expected to continue for some years.
Milk uSIppl
___y

2. Milk is supplied to the Addis Ababa market through three channels:

(a) the Dairy DevelopmentAgency (DDA), an autonomousagency which

has taken over the assets of the Addis Ababa Dairy Industry
(AADI),a section of the Ministry of Agriculture,which operated
a milk collection,processing and marketing system;

(b) approximately10 large dairy farms that sell milk direct

to consumers and retailers;and

(c) at least 400 hawkers selling small quantitiesof milk.

3. AADI was establishedin 1966 and it took over a milk plant with
a capacityof 10,000 liters per day, built in 1962 with UNICEF assistance.
Again with UNICEF aid, the Shola Dairy Plant was completed in 1969 with a
capacity to pasteurizeand bottle 30,000 liters of milk per day.

4. A system of milk collectionhas been built up since 1961 within

a radius of 130 kmiof Addls Ababa on three main roads. Developmentof this
system is shown in the following table:

No. of Collecting Total Milk Average Milk per Center

Year Centers _terj/day) _ (liters/day)

1961 5 155 31
1962 6 590 98
1963 15 1,140 76
1964 16 2,400 150
1965 15 2,025 135
1966 24 1,850 77
1967 29 3,020 104
1968 32 4,060 127
1969 32 4,350 136
 ANNEX 14
Page 2

5. In addition to milk from these centers,DDA po>zahabes daily

an average of about 4,000 liters of milk from about 30 large dairy farms and
500 to 1,200 liters,which is delivered to the Shola Plant by the Chilalu
AgriculturalDevelopmentUnit. Growth in milk througlputof the system
now operated by DDA is shown below:

Milk
Year ('000 liters) IncreaLe, %

1961 288 -
1962 466 61.8
1963 669 43.6
1964 1,081 61.6
1965 1,168 8.0
1966 1,236 5.8
1967 1,854 50.0
1968 2,481 33.8
1969 3,070 23.7

6. In 1969 value of sales of dairy productionby AADI were:

pasteurizedmilk, E$1,077,000 (US$430,800);butter, E$146,000 (US$58,400);
cheese, E$10,000(US$4,000);and cream and yoghurt, E$4,000 (US$2,400).
The bulk of the butter and cream is derived from the reduction of fat
content of milk to 3%. Unsold milk. which representsa very small pro-
portion of intake, is converted into cheese.

7. As can be seen from the followingfigures, AADI experienced

sharp seasonal fluctuationsin milk supply:

1967 1968 1969

-'000 liters …

Total Milk Collections 1,853.6 2,480.6 3,069.9

Average Milk per day 5.1 6.9 8.5
Average Milk per day:
Lowest Month 3.2 (Feb.) 4.9 (May) 5.9 (April)
flighestMonth 7.9 (Oct.) 9.5 (Sept.) 11.7 (Oct.)

8. No reliabledata are available on output and sales of the 10

large commercial farmers selling milk outside the AADI/DDAsystem. However,
the manager of AADI estimated that in 1969 their sales totaled about 3,300
liters per day with a range from 50 liters for the smallest producer to
900 liters each for the two largest.
 ANNEX 14
Page 3

9. In a study on the Addis Ababa market for dairy products, dated

October 1969, the Batelle Advisory Group Technical Agency carried out a
survey of marketing of milk by hawkers in September 1969. The survey
covered 399 hawkers who purchased milk from about 1,500 farmers for sale
in Addis Ababa. Total milk sales were 4,050 liters per day, of which
3,180 liters were purchased from farmers and 870 liters were produced by
the hawkers' own cows.

Milk Prices

10. Until late 1970, AADI paid small dairy farmers E$0.25 (US$0.10)
per liter for milk delivered to collectingcenters. To the larger dairy
farmers, it paid E$0.28 to E$0.30 per liter, depending on the distance from
the Plant and method of delivery. It retailed milk at E$0.40 per liter
through 41 selling booths in the city. It has one selling center, equipped
with refrigeration,that operates throughout the day. The remaining centers
operate only from 6 a.m. to 9 a.m. daily. Demand for milk from MADI at E$0.40
per liter exceeded supply and a system of rationing to individual consumers
was imposed. However, it is estimated that one-third of AADI's sales was
to retailers and owners of milk bars, through which milk is resold at much
higher prices.

11. The prices obtained by the large commercial farmers selling

outside the AADI/DDAsystem are generally in the range of E$0.45 to E$0.50
per liter. These farmers supply supermarkets and hotels, which have a
regular demand for milk for resale to the higher income groups. In the
supermarkets,unpasteurizedfresh milk sells at E$0.75 per liter, sterilized
milk from Asmara at E$1.30 per liter and ultra-hightemperaturemilk from
Kenya at E$1.60 per liter. AADI was unable to capture any part of these
markets because it did not have sufficientmilk to guarantee supply in
addition to supplying its own selling booths. The Batelle survey found
that the average price paid by hawkers to farmers was E$0.25 per liter
while selling price was E$0.40 per liter.

12. In late 1970, AADI increased the retail price of its milk from
E$0.40 to E$0.50 per liter and its average price to producers from E$0.28
to E$0.33 per liter. At this price, it is expected that DDA will be able
to induce more commercial farmers to sell to it rather than deliveringtheir
milk to Addis Ababa. At the same time that it increased the retail price of
whole milk, AADI commenced selling reconstitutedmilk, made from imported
milk powder at a price of E$0.28 per liter.

Demand for Milk and Dairy Products

13. Although milk throughput of the AADI milk collection and market-
ing system has increased more than tenfold from 1961 to 1969, there has
been no difficulty in marketing virtually all of the milk available. Large
queues at AADI's selling booths and the fact that it has had to impose
 ANIJX 14
Page 4

rationing of its output indicate that larger quantities z!Ji1A be,eold at

present prices. Average jals f01omSaptmber -though Deaember 1969 were
of the order of 11,400 liters by A4DI and total sAles were probably a.4out
25,000 liters per day.

14. In addition to fresh milk sales, are fairly

;here large sales
of milk powder. Imp.orts to ftbiopia were just .under 2,000 tons ln 1967,
the last year for dbich figurescould be obtained. At a convewsin rate
of 6 liters of renonsAttute.d ntlk -per kg -of powder, this waould be aquivalent
to an average of about 55,000 liters per day, casting E$0.55 to E.$1.20 per
liter at re-tail prices charFgad li Addis Ababa. A large :proportSnfl f this
-milk powder is purchased by fo=Uzers s1xth 4h ;iucomes U74,ug u;Adi
Ababa because they are unable *Sobtab A,a V4Ar Aupply .of p4e;tetgrized
milk.
 ADDISA.UL MD¢II 231 P XOJES'l

Ploeial Rate, of Retem ta Frivately Osod rez,,tt

ITUS 01#TU 1 2 3 4 5 6 _9 _ O 11 12 13 14 IS

Med:k=sine fta 1 ~-W

1oe 1g40 3

unoweuntalMilk r1s1ao '001 (1) 391 67T 623 635 7e3 837 ' e,E' 91e
r7 917 917 917 917
!nD antal llk 2
3$e^. (33) 12,903 22,407 20,559 20,955 25,172 25,110 05,179 06j ll4 26,3340 22Z925 22 925 22,925 22,925 22,925
Xoarzeuntal Cattlett Slam $ 2,540 2,530 290 170 8,4Wo 4.740 5,6so 5, 91i ,jrc 5,690 5,690 5,690 5,690 5,69o 31,120)]

ktb-Total E3 2,507 15,433 22,697 20,729 29,1425 29,919 30,800 31,010 32,30Y 32,030 28,615 28,915 28,615 28,615 54a,045

etaotmnt cos1ts r10 I i2 I, 0

15- -
Ilnravutol 09.rfttiog Coat, 14 8,c5 10,935 21,550 12,735 12,025 13,210 13,2145 114,995 14,605 14,605 1l4,890 15,590 14,890 1,890 14,890
Dmtersst on Short-Term Dobt as - 1,235 l,118 483 l00 - ---

Sub-Ttol 0$ lt5,005 27,670 314,168 13,218 12,125 13,210 13,2145 30,99r 11 r6c5 14,605 214,890 15,590 14,890 114,890 14,9

Notloremntal Cash-Flor 3$ (142,498) (12,237) 8,529 7,511 17,300 16,709 17,555 16,015 17,4.25 17,1A25 13,725 13,325 13,725 13,725 39,155

2lneWnial Rateof Return, 20.1%

gM11 an,rDairy Devei.aopmet odel=- 10 Covw

,o,,,fits
imoremsntal lilk4 Prod.,ctio,, '00 1 2 2 7 20 45 59 52 66 75 76 120 123 146 137 160
Inr.,msotal 0l81kProduction B$ 66 66 231 660 1,1485 1,947 1,560 1,980 2,250 2,280 3,000 3,075 3,650 3,425 I4,000
Cormuntal.Cattle Sai.or F7 110 75 (35) 380 195 255 10 15 280 215 480 385 710 885 3,6701/

Sub-Total B3 176 11,1 196 1,0140 1,68O 2,202 1,570 2,165 2,530 2,495 3,1480 3,460 4,360 4,310 7,670

Cotat,
InVeSt,UOlt Cost00 E 1,89G - 200 3,600 - - - - - - - - - -
Oaprating
Inoreeu,tal Costa 3$ 60 300 230 490 675 768 575 705 1,063 1,215 1,2140 1,290 1,625 1,623 1,580
Intrest on Short-Too, ioOt 06
r 22 35 - - - - - - - -

Sub-Total El 1,860 300 452 4,125 675 768 575 705 1,03 1,215 1,240 1,298 1,625 1,623 1,580

let InoretntalCash Flow 8* (1,684) (159) (256) (3,085) 1,005 1,434 995 1,460 1,1467 1,280 2,240 2,162 2,735 2,687 6,090

rinaniLel
Rate of Return, 213%

Privte Croae-Brradit, RawnhIodel - 200 One.

Deftite

Iuoraeoetal Cattle Sales 3* 2,600 2,050 3,380 2,460 24,S80 29,640 30,105 31,185 31,365 31,165 31,185 100,870)] -

Costs
Invest,ennt Cost, Ns 146,000 - - - - - - - - - - _
Inoremental OpratingC Costs Fs 14,109 6,738 6,864 10,019 11,188 31,456 10,789 10,859 11,552 10,852 10,852 10,852
Interest on Short-T.rm2 Debt 3 - - - - 7914
Sb-
Sub-Tota,l i. 50,109 6,738 6,864 10,019 11,982 11,456 10,789 10,859 11,552 10f,852 10,852 10,852 -

It t Otb_r'_ 2*orommtal
3$ (147,509) (4,668) (3,144) (7,559) 12,898 18,184 19,316 20,326 1,8013 20,333 20,333 90,018 -

PinanoflAl Rat. of Rt-,

] DCludst incrano.tal had ioaloo.

November 12, 1970

 ROp A

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Holleta Daix7 Stuid2 - 100 God

cixaCial P.,ktp of ReatIa

! - ~~~~~ ~ ~ ~~ ~ ~ ~~~ ~ ~ ~~ ~ ~ ~~~ ~ ~- - - - - -e - r t- - - *--- - - - - - - - - - -_e r

__3 9 ID 1' 1
a M _2' r 7 2 3 4

Benefits
1,291 1,291 1,291 1,291 1,291 1,291 1,251 1,291 L5C!
Incrernta1 Milk Sales '00 1 105 547 499 1,099 1,194 1,291

1h2,603 38,730 38,730 38,730 38,730 32,275 32,275 32,275 32,275 38.2;t
° Incrematal Milk Oales X$ 3,1465 18,051 16,467 36,267 39,402

53,020 53,820 53,820 53,820 54,120 53,820 53,820 53,820 103 iht_
Incremental Cattle Sales B$ 1,820 3,9140 27,090 J47,300 53,120 53,820

91,750 92,550 92,550 92,550 86,695 86,095 86,095 86,o95 135,9715

Sub-Total 13 5,285 21,991 43,557 83,567 92,522 96,423

Coats

- - - - - - - - - - -
Ineeatemnt Costs 2$ 37,000 - -

36,600 33,900 33,900 33,900 33,900 33,900 33,900 33,900 33,900 33, 9-C0
Incremental Operating Costs Z$ 9,200 24,300 29,500 34,700 35,900

- - - - -
Interest on Short-Term Debt 9$ - 2,506 5,397 7,008 5,465 3,038 77 - -

33,977 33,900 33,900 33,900 33,900 33,9x7 33,900 33,900 33,!oe

Sub-Total E$ h4 6,200 26,806 34,897 41,708 I41,365 39,638

56,785 57,773 58,650 58,650 58,650 52,795 5?3195 ;2,19195 ,,l5195 :

N!t Tncruiaital Cash low E$ (40,915) (4,815) 8,660 41,859 51,157

Financial Rate of Return: 53.2%

1/ Includes incremental hard value.

 ETHIO?IA

ADDIS ABABADAIRY'DEVELORET PROJECT

Econoemic Rate Of Returs

(13 'Q300

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Years - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
InEM 1 2 3 4 5 6 7 8 9 10 11 12 13 114 15.19 20

IEvestmenrts

vSmallDairy Farms 27 176 232 74 378 457 - - _ _ _ _ _ _

Medium Sise Dairy Farms 1,480 1,619 1,218 1,201 387 35 - - - - - - - - _
H, Private Cross-Breeding Ranches 138 92 - - - - - -_ -_ _ _ -
14° Holleta Dairy Stud Farm 37 -
° Abernossa Cross-Breeding Ranch 250 - - - -
Shola Dairy Plant 279 110 109 198 56
Sub-Total 2,all 1,997 1,559 1,473 821 549 - - - - - - - - -
Costs of Technical and Administrative
Services 910 1,020 960 790 710 690 670 670 640 670_ 670 670 740 7ho 740 740
Sub-Total 910 1,020 960 790 710 690 670 670 640 670 670 670 740 740 740 740
Incremental Operating Costs

Snall DairyFarms 1 10 40 68 87 140 170 164 158 212 273 295 309 ct 389 389
HediumSizeDairyFarms 320 654 917 1,224 1,307 1,373 1,420 1,498 1,558 1,583 1,627 1,654 1,650 1,652 1,654 1,654
Private Cross-Breeding Ranches 12 28 34 44 54 57 55 54 56 56 54 54 - - - -
olloteta Dairy Stmad?ara 9 24 30 35 36 37 3h 34 34 34 34 34 34 34 34 314
Abernossa Cross-Breeding Ranch 95 55 52 66 65 61 60 49 - - -
Shola Dairy Plant L' 1 167 367 498 643 791 976 1025 1,083 1,132 1,169 1,228 1,291 1,318 1,337
- -
1,337
Sab-Total 438 938 1,440 1,935 2,192 2,459 2,715 2,824 2,889 3,017 3,157 3,265 3,284 3,352 3,411s 3,414
Total Incremental Ccots Including
Investmets 3,559 3,955 3 9 4,198 3.723 8 3,385 3.494 3529 3,687 3,827 3 4,024 h4,92 4,154 4,154
Incremental Cattle Bales

Ssall Dir Farsia 2 12 21 12 w6 71 50 36 24 54 64 80 109 132 132 932

MediumStie Dairy Farns 102 170 131 124 4y, 428 529 677 608 629 629 638 634 632 632 3,430
Private Cross-Breeding Ranches 8 11 14 14 80 139 150 154 156 156 156 504 - - -
Holleta Dair Stud Farm 2 4 27 47 53 54 53 54 54 54 54 54 54 54 54
Abernossa Cross-Breeding Fanch 1004
74 64 57 98 153 137 137 333 - - - - - - -
Sub-Total 188 261 250 295 729 829 919 1,254 842 893 904 1,276 797 817 817 4,465
Incremental Milk Salets 2/ 4 655 1,550 2,136 2,780 3,395 3,787 4,036 4,302 4,521 4,692 4,950 5,230 5,3 5,1461 5,461
Earnings froam Artificial Insemination
and VetersaryServices 36 85 127 163 188 206 208 208 210 212 215 223 225 225 225 225
Total Increrental Income 228 10o01 1,927 594 3,697 4,430 4,914 51498 5,354 626 5.811 649 652 1 0,151

Balance (3,331) (2,9514) (2,032) (1,614) (26) 732 1,529 2,004 t,825 1,939 1,984 2,514 2,226 2,316 2,249 5,9?7

Economic Fate of Return ll.

D
Etoluding payments made for milk to farmers br ShoIa Dairy Plant.
2/ includes incremwntal herd values.
Calculatton
r/ is based on. a wholesale price cf rd2k of Z-$ 0.40 per liter, whtch is an estimite cf the price at cuich recon5t4tuted ghole aillk cculd be sald in Addia Abato.
the ekbj miLk pc-vier is imported from NE-, Zealand.
j/ Figure in parentbosis are negative.
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\ E T H I O PI A \f
_6- '< , e > e > ETHIOPIA

._. E / k j20 ,r S\- MALIA ADDIS ABABA DAIRY

A . * ,.DEVELOPMENT PROJECT
Holetx Orairy A A
ABABA EPermanent & ProposedMilk CollectingCenters
A r<A Biggerforms supplyingto ADDC
To Leke,pt inci, * Permanent collecting centers
\ ADDIS ABABA Doiry Industry
A? / /6 \ ^ 1]0 Proposednew collecting centers

< JZ 0 i Os ~~~~~~~~~All
weather roads

-- A;[1-~~~~~~~~~~~Der Z\i

To Jimmo- ul Bob j
0 10 7.0 30 40 50

XILOMETERS To Hoso.a
(cppro.imat3 scale) ToHosono To Chilalo

To Abcrnosso Ranch

. 2_
JlLY 1970