Professionalizing cooperative management and marketing of processed dairy products

Adaa Diary Cooperative Society (founded in 1997) is a primary cooperative located in Adaa Woreda, Debre Zeit town, approximately 100km south from Addis Ababa. The overall purpose of the cooperative is to improve its members' income through establishment of well-organized access to market system for its members. For this, it collects raw milk at a fair price from members and adds value on it by processing and reselling it to consumers using different channels. Adaa has a processing factory, where it is able to process around 15.000 liters of milk a day, mainly into pasteurized milk. Next to that small amounts of butter, cheese and yogurt are made. Currently, the daily milk intake is around 2500 liters a day, which is rather low compared to some years ago, where the cooperative managed to collect around 10.000 liters a day from over 900 members. Reason for the significant drop in production was a serious governance crises in combination with problems in repayment of loans. In 2012, 425 members were still determined to save their cooperative by electing a new board to revive the cooperative business. In April 2014 Agriterra conducted a company assessment at Adaa and decided based on this assessment to support Adaa in strengthening the cooperative. While working with Adaa on the 2014 Action Plan it turned out that there was still severe board interference within the daily management of the cooperative. Therefore it was only partly possible to implement the Action Plan. Because little development was visible, Agriterra together with the Regional Cooperative Promotion Agency addressed its severe concern on the future of Adaa. Fortunately Adaa and various governmental stakeholders started to address the governance problems at hand and after 3 special General Meetings, a new board was elected in August 2015 and roles and responsibilities were clearly outlined and bylaws and cooperative regulations adapted. As a results of the changes within Adaa, Agriterra offered Adaa its support in a second Action Plan for 2015. Unfortunately at the start of the 2015 Action Plan the general manager was arrested on suspision of corruption. At that moment also several staff and board members resigned resulting in a management crisis. Agriterra in negotiation with Adaa agreed to put the Action Plan on hold. Now at the start of 2016 Adaa has settled its management problems including the hiring of a new manager and other staff. Agriterra has indicated that it is willing to develop a new Action Plan for 2016 in order to start afresh, but this is supposed to be the final phase-out Action Plan, unless Adaa shows significant progress and positive atttitude towards working with Agriterra in 2016. The 2016 Agriterra action plan will focus on the following key critical areas: - Strengthening the overall governance capacity of board, control committee, and management. - Increasing the active membership from 175 farmers to 250 and the daily milk intake from 3500 liters to 5000 liters. - Accessing 2 million Birr working capital loan and increase own internal capital in order to realize on time milk payment to farmers and to buy various inputs. - Increase output marketing of high quality processed dairy products through developing and implementing sound branding and marketing strategy. - Developing a HR manual and facilitate implementation of sound HR structure and procedures.