Background

Adigudum union was established in 1997 E.C to address the multifaceted challenges smallholder farmers
face in the production and marketing of agricultural products and hence improve the living standards of its
member farmers and the general society. Twenty-four primary cooperatives comprising 28,675 household
smallholder farmers are operating under the umbrella of the union. The union operates in three Woredas
of the southeastern zonal administration namely in Hintalo, Wojerat Esra Adi and Adigudom town. Its
headquarter is located in Adigudom town and has been engaged on providing its member farmers with
agricultural inputs, Agro-equipment supply, agricultural mechanization services, general merchandising
business, animal fattening. The union has also been facilitating various training programs to build the
technical, management and marketing skills of the member. Its mission is to end nutrition-related death
and diseases of its members and the people of Tigray through the production and distribution of crop and
animal products at reasonable prices. Its vision is to becoming the leading union in Ethiopia for improving
the standard of living of its member and the broader society. The activities of the union have been
obstructed due to the outbreak of the 2020 war affecting its members and the people of Tigray. In
response to this, the management of the union decided to revitalize its existing operations and expand to
new business areas. The management of the union conducted situational analysis with the objective of
indentifying business operations mutually beneficial to its members and the society it serves. Accordingly,
the union learned that 3 out of 10 children in Tigray region are wasted and 6 percent are severely wasted.
Likewise, 55-80 percent of pregnant and lactating women are wasted. Only 1-3 percent of children aged 6-
24 months are meeting their minimum acceptable diet. This is inflicting distressing damage in children,
stunting children’s growth, impairing their brain development, and leaving them susceptible to diseases. It
is also affecting the life of women and more susceptible to disease and deaths. The union decided to
reverse the situation by collecting, processing, packaging and distributing milk products at reasonable
prices to children and women in Tigray region.
Project Objectives:
General Objective
The general objective of this project is contribute to improved livelihoods of smallholder farmers and
balanced diet of women and children by collecting, increasing productivity, processing, packaging and
distributing milk products in Tigray.
Specific Objective
The specific objectives of this project are to:
 Collect, process, package and distribute 360,000 liters of milk annually
 Introduce improved breads of milking cows
Program Description: (Provide the detailed description of your proposed interventions).
 Objective 1: Collect, process, package and distribute 360,000 liters of milk annually
 Theory of change
Program Description
Activity 1.1: Organize sensitization and awareness creation workshop
Three consultative and awareness creation workshops will be organized to generate favorable member
farmers’ readiness to embark on establishing milk collection, processing, and packaging and distribution
center in the three Woredas of operations. Representatives of primary cooperatives, representatives of
government officials at regional, zonal and Woreda levels representing the bureau and office of agriculture
and administrators, land administration experts, representatives of CSOs working on improving the
livelihoods of farmers, financial and credit institutions will participate in these workshops. Furthermore,
representatives from agricultural research institutions and universities, representatives of farmers’
association, agricultural inputs suppliers; and potential agro-processers will participate in the awareness
creation consultative workshops. The union will facilitate the awareness creation consultative workshops.
This workshop will help farmers supply milk for further distribution and processing and hence avoid
wastage particularly during the fasting period, during which milk products are normally disposed and /or
sold at low price. The sensitization and awareness creation workshops will lay the foundation for
improved incomes of farmers and enhance access to nutrition rich dairy products and hence, contribute to
the reduction of nutrition related children and women diseases and deaths.

Activity 1.2: Establish milk collection centers

This project will establish three milk collection centers in three potential areas earlier in this case in
Adigudom town, Hiwane town and Hinatalo town. The rural areas surrounding these towns have very high
potential for milk production while their access to markets is limited due to lack of transportation access
and low productivity per household, which have been limiting their capacity to fetch their products to
market potential areas. Establishing the collection centers will help solve the transportation challenges and
hence, help farmers receive better prices for their products and avoid milk wastages. To this end, the
collection centers will significantly improve not only the incomes of farmers but also the access of balanced
food for wasted children and women. The collection centers will be cold rooms with access to solar energy
and will be equipped with quality control devices to test acidity and potential milk contamination to ensure
quality and safety of the milk collected.
Activity 1.3: Establish milk processing and packaging facility
This project will establish one central milk processing and packaging facility to process pasteurized milk
and milk products. The packaging materials will be degradable carton papers coated with aluminum to
avoid potential environmental pollution. This facility will process different types of dairy products including
but not limited to, cream, yoghurt and cheese. The facility will not only help to increase milk shelf life but
also introduce high-quality-high nutrition dairy products to the market. To this end, the processing plant
will have significant contribution to reduction of milk wastages and hence to avoid lost income
opportunities for farmers. In addition, the newly introduced processed milk products will command
reasonably higher prices for farmers and enhance availability of high nutrition food items for children and
women vulnerable to nutrition deficiency. The plant will be equipped with complete set of cream
separator, pasteurization, pressing, quality and packaging machineries to process 1,000 liters of milk daily.
Activity 1.4: Introduce cold transportation system
This project will introduce cold transportation system in collecting and distributing milk from the source to
the markets. The introduction of the cold transportation system will help avoid milk wastage due to short
product life and lack of transportation access of smallholder farmers. The cold transportation system will
collect milk from the collection centers, deliver it to the processing plant, and then distribute to the
markets in the major cities of the region. For this purpose, one cold transportation vehicle will be procured
and deployed to achieve the project objectives.
Activity 1.5: Deliver training and installation services
This project will provide different capacity improvement training to different employees working in the
milk collection, processing and distribution facilities. The training programs will focus on improving the
equipment and machineries operating and maintaining capacities of the employees. Furthermore,
extensive training will be delivered to enhance the knowledge and skills of quality assurance personnel on
quality control and food safety and hence reduce potential risks of supplying unsafe dairy products. This
will training programs will be on job training programs to be delivered during the installation and testing
programs. Furthermore, training session will be organized to enhance the plant management skills of
persons in charge and the marketing and distribution of the proposed plant’s milk and milk product.
Objective 2: Introduce improved breads of milking cows
Activity 2.1: Procure and distribute 45 improved milk cow breads
Despite of its obvious benefits, livelihood security and nutrition of farmers, the productivity of milking
cows of Tigray even prior the war has been very low due to poor genetics, low reproductive performance,
poor quality and varying seasonal availability of feed, high disease incidence and parasite challenges, and
low accessibility to services and inputs. To this end, this project will introduce improved high productivity
milking cows by procuring and distributing the cows to the primary cooperatives on loan basis. The
cooperatives will distribute the cows to their members on agreed up and objective criteria. The calf
delivered from the cow will be returned to the union for redistribution to gradually replace the low yield
indigenous breads with high yield exotic breads. Furthermore, 10 percent of the sales revenue generated
from the milk and milk products will be maintained in the union for use in acquiring additional milk cows
for distribution to other members. In this way, the project aims at increasing the supply of milk in the
region and hence improves the living standards of farmers and society.
Activity 2.2: Provide initial animal feeds and medicines
To ensure that the cows are healthy and fed the project will supply initial animal feeds and medicines on
credit to the primary cooperatives, which in turn to the individual farmer.
In executing the programs listed above, the project will invest on the procurement of different types of
equipment, vehicles and services. The project will invest on the procurement of different types of milk
processing machineries, cold transport vehicle, animal feed and medicine, office furniture and equipment
for the processing facility and milk collection centers. The products of the proposed facility include but not
limited to pasteurized milk, different types of creams, yoghurt, and cheese. To produce these products
milk will be collected in collection centers. Next, quality and safety of the collected milk will be checked,
which is followed by processing of the safe milks into different dairy products during which quality checks
and controls will be made. And products checked for quality will be packaged and distributed to the
markets. The list of equipment and the sources of funding is summarized in the following table.

Cost items Quantity Unit price USD Estimated cost Source of Fund
Selected breeds 45 2000 90,000.00 Transforming Agriculture
Feeding and medical supply lump sum 25000 25,000.00 Adigudom Union
Cold rooms for Collection center 3 3850 11,550.00 Transforming Agriculture
Solar energy for cold rooms 3 3000 9,000.00 Transforming Agriculture
Transportation vehicle 1 20000 20,000.00 Transforming Agriculture
Pasteurization machine 1 12000 12,000.00 Transforming Agriculture
Packaging machine 1 7000 7,000.00 Transforming Agriculture
Cream separator machine 1 5000 5,000.00 Transforming Agriculture
Cream churner machine 1 1000 1,000.00 Transforming Agriculture
Deep Refrigerator 2 2000 4,000.00 Transforming Agriculture
Packaging materials Lump sum 1000 1,000.00 Transforming Agriculture
Milk quality testing materials 3 500 1,500.00 Transforming Agriculture
Office equipment and Furniture lump sum 2000 2,000.00 Transforming Agriculture

1. Sustainability and Scale:

Adigudom union will begin collecting, processing and distributing milk and milk products from not
more than 500 member farmers. This figure is far more insignificant relative to the potential of the
area for milk production. In effect, the union will scale up its initiatives first to reach out its milk
producing member farmers following the same model. The 10 percent retained cash will be used to
replace indigenous breads with high yield exotic breads to make sure that the supply of milk for
further processing is sustainable. The practice will then be scaled-up to the regional level adopting
the same model. Furthermore, to ensure that the project is sustainable from market perspectives,
the regional initiative will explore neighboring regions and over the long term will penetrate the
international market by diversifying its dairy products. Furthermore, 10 percent of the project cost is
devoted to technical and managerial capacities necessary for sustainable operation of the proposed
project. The union will also funnel resources from its other business operations to ensure that the
project is sustainable and is scaled-up to achieve its intended long-term objective. By taking these
and other innovative initiatives, the union will ensure that the project will stand in its own and will be
scaled-up to improving the living standards of farmers and consumers alike.
2. Nutrition-informed, locally led solution:
Studies continue to report that the number of wasted children and women continue to engulf the
regional state of Tigray particularly after the war. One of the major reasons for child and women
wastage is attributable to lack of nutrition rich and balanced food access. The union has made deliberate
decision to embark on the collection and processing of milk and milk products to address the growing
number of wasted children and women and solve the rampant milk wastage in the operation area of the
union. Processed milk and milk products are inherently market oriented whose market size grows with
population growth and malnutrition. In effect, the union’s investment on milk and milk products
processing aligns with Transforming agriculture priorities for supporting projects aligned to consumer
preferences for nutritious foods and healthy diets.
3. Environmental Impact
The potential area of milk processing activity having adverse effect on environmental potential is materials
used in packaging processed products. The union recognizes this from the outset and plans to mitigate the
environmental impacts of its packaging materials by using degradable aluminum coated carton papers.
With this exception, the project does not have any severs potential environmental impact and instead will
have positive impact by effectively management of waste products and converting them in to natural
manure and Biogas energy.
4. Inclusivity:
Women are traditionally marginalized from social, economic and political affairs with long lasting
consequences on their wellbeing. Women represent 34.36 percent of the members of Adigudom Union
and 50 percent of the project beneficiaries will be women led households. Women need direct support of
high yield milk cows and also need market linkage support for their milk due to their economic conditions
and their limited access to markets for their products. By prioritizing women, through direct support and
creating market linkages to the otherwise disposable milk product, this project will improve the living
conditions of the farmers by creating additional income generating opportunities. Likewise, persons with
disabilities are among the marginalized social groups deserving support to address past discriminatory
practices and war caused economic deprivations. To this effect, 10 percent of the project beneficiaries
targeted by this project for direct support and market linkage support will be persons with disabilities.
Similarly, the majority of the youth in the project areas and the region have been marginalized from the
economic participations, which has exasperated during the wartime. To this effect, 20 percent of the
project beneficiaries will be youth, with the majority female youth. The remaining 20 percent of the
project beneficiaries receiving direct support and market linkages support will be male economically
deprived household farmers.

5. Conflict sensitivity:

The project is designed to add value overall food system. At the first, the project will increase the quality
and quantity of milk. Next, the project will diversify the milk products into different products.. Then we will
invest on facilitating market access, market information, promotion research and advertising, credit
facilities and basic business and technical training for our members to create a suitable marketing
environment and this yields a great volume of milk products in the market. Therefore, the end users of our
product such as retailers and households will benefit more both financially and nutrition led solution.
6. Contribution and commitment

Our union proposed a 10% of project cost (USD25 thousand )as its contribution to the project
implementation and this will be used to cover personnel salary, consultant fee and some basic inputs for
production and marketing and testing of the project’s products . In addition to this if there is any price
escalation regarding the project cost our union is determined to cover fully from its own resource.
Adigudom Union has been providing different supports to its members since its establishment in 1997 E.C.
The union has proven track of records and experience to improve the living standards of its members
through the supply of different types of agricultural inputs, agro mechanization services, and training and
market linkages to the products of farmers. Experienced management manages the union with its
structures running down to the lowest administrative level across its three Woredas of operations. The
union has been working with governmental and non-governmental development organization, including
with Agricultural Transformation Agency and established Agrochemical Center. The union also worked with
VOKA and established multipurpose warehouse. Likewise, the union received office equipment and
furniture support from Feed the Future and distributed pesticides with Feed the Future.
 (Note:Sections3-5donotcounttowardstheoverallpagecountlimitof5pages,whichappliesonlytoSection2-
TechnicalApproach).

Section3:Detailed Budget(isnotrequired).
A detailed budget is not required for this APS. However, applicants are required to provide a summary of
the total activity budget showing amount of leverage contribution from applicant and the amount
requested from Transforming Agriculture. , Successfully evaluated APS applicants, if invited to respond
to the Request for Applications (RFA), will require submission of a detailed budget and narrative. The
total estimated budget for the joint initiative is US$ 250,000) of which the contribution from our union is
US$ $ 25,000.
Through the grant it will provide machinery and equipment, input funding for its ramp-up and launch,
including funding for initial staff training, key programmatic activities and external support as needed.
Our union will be supported by a combination of financial sources, representing the key stakeholders for
attaining our union objectives, it is important that the union also demonstrates its commitment by
committing resources for the project launch and operations. In conjunction, the ADIGUDOM UNION will
develop a potential customer’s mobilization strategy in order to engage potential interested
stakeholders (mainly cooperatives and unions). A narrative on the components of the budget is provided
below.
All procurement activities will be competitive to ensure value for money.
transfor
unit ming
price agricultu
cost items Quantity usd Estimated cost union share re share
Goods
90,000.0
Selected breeds 45 2000 90,000.00 0

Seeding and medical supply lumpsum 25000 25,000.00 25,000.00

Cold rooms for Collection 11,550.0
center 3 3850 11,550.00 0
Solar energy for cold rooms 3 3000 9,000.00 9,000.00
20,000.0
Transportation vehicle 1 20000 20,000.00 0
12,000.0
Pasteurization machine 1 12000 12,000.00 0
Packaging machine 1 7000 7,000.00 7,000.00
Cream separator machine 1 5000 5,000.00 5,000.00
Cream churner machine 1 1000 1,000.00 1,000.00
Deep Refrigerator 2 2000 4,000.00 4,000.00
Lump
Packaging materials sum 1000 1,000.00 1,000.00
14,400.0
Milk transporting containers 120 120 14,400.00 0
Milk quality testing materials 3 500 1,500.00 1,500.00
Office equipment and lumpsum 2000 2,000.00 2,000.00
 Furniture
sub total 203,450.00
Works
20,345.0
installation and training cost 20,345.00 0
consultancy ,Training and
project management
14,300.0
project management cost 14,300.00 0
Total 238,095.00
contingency 5% 11,905 11,905
224,999.
Grand Total 250,000 25,000.00 75

Investment: (Provide a short description of the planned investments necessary to achieve the program
description. Specifically list any equipment to be purchased that is over $500 USD per unit, list financial
institutions or other resources that will be accessed for the investment, describe what new processes or
new technology your company needs to make this investment succeed--identify the steps for making
the new product or service).
ATA- Agrochemical center
VOKA- Warehouse
Pesticides supply
Feed the future supported the union with office furniture
Potential for milk
Quality Control