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There are potentials for dairy production and processing in Ethiopia. However, producers are dominated by small scale dairy producers who sold fresh than processing to its products in Bishoftu town. Dairy producer’s participation in dairy processing was analyzed by objectives of factors affecting producers’ participation in dairy processing and level of processing. Data were collected through Censuses of 141 dairy producers and it was conducted by dividing them into three different scale farm producers. Accordingly producers who have 1-5 dairy cows were categorized as small scale producers, 6-10 medium scale producers and >11 dairy cows were taken as large scale dairy farms. Based on this classification there were 100, 34, and 7 small, medium and large scale dairy respectively in the town. Among these producers 25 small scale, all 34 medium scale and 6 large scale dairy producers were processors. It was assumed that all large scale were processors, but one producer was found to be non-processor and was omitted from census survey. So, the survey was conducted with 140 dairy producers in the town. Data were analyzed using econometric models, Heckman two stages. The result of the first stage probit model indicated that number of adults negatively affects producers’ participation in dairy processing; whereas total dairy output per cow and training affect positively and significantly. In Heckman second stage model, the number of adults in the household negatively affects the level of processing while total dairy output per cow, land holding, access to dairy processing equipment and dairy related training in dairy processing affect positively and significantly. Therefore, producers’ socioeconomic factors and institutional factors needed to be strengthened by supportive activities like training for capacity building of producers. Keywords: Dairy, processing, Censuses, Bishoftu, probit DOI : 10.7176/JRDM/61-02 Publication date: November 30 th 2019

Factors Affecting Dairy Producers’ Participation in Dairy Processing and the Level of Participation in Bishoftu Town, East Shewa, Oromia, Ethiopia