ETHIOPIAN DEVELOPMENT RESEARCH INSTITUTE

Cows, missing milk markets and nutrition in rural Ethiopia

John Hoddinott, Derek Headey and Mekdim Dereje

IFPRI ESSP-II EDRI

December 13, 2013 Hilton Hotel, Addis Ababa

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Structure of Presentation

Introduction

Data

Estimation strategy

Results and Discussion

Summary

Policy recommendations

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Introduction In rural areas, is child nutrition affected by what goods the

household produces?

Conceptually, if there are complete markets, production and consumption decisions are separable

=> production decisions do not affect consumption

But if markets are missing, this will no longer be true

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Introduction, cont’d Milk is an instructive good to consider Missing markets are widespread because product is perishable

• In Ethiopia, 85% of all milk produced is consumed by the producing household

• Domestically processed milk is largely available only in urban areas

Milk is important for growth in early life• Cow’s milk contains insulin-like growth factor I (IGF-I).• Also important source of animal-sourced protein, amino

acids, calcium, iron, B-12 and other micronutrients Reducing undernutrition is important for both intrinsic and

instrumental reasons

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Data This study is based on Agricultural Growth Programme (AGP)

baseline survey data (in high potential agricultural localities) Very large (n=7,930) household survey fielded in 2011. Data collected on agricultural assets, agricultural production,

foods consumed by children in previous seven days, anthropometry of children 0-60 months• Around one quarter of children consumed milk in the last 7

days; one of the most important sources of protein for young children, in what is otherwise a highly undiversified diet

• About 64% of households own at least one cow• High level of stunting (47%)

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AGP enumeration areas(red) , major markets (yellow) and population density

Source: http://www.gafspfund.org/content/ethiopia. Market towns (light circles) are from FEWSNET, and population density at the woreda level is from the 2007 National Census of Ethiopia. Notes: Population density categories (in persons per square kilometer) from lightest to darkest are 0-31, 31-101, 101-139, 139-195, 195-537, 537 and above.

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Estimation strategy

We use our cross sectional data to look at associations between owning at least one cow and:• Whether a child 6-24m consumes milk in the 7 days prior to

the survey• The number of days that the child consumes milk in the 7

days prior to the survey• Anthropometry, i.e. HAZ (Height-for-Age) and stunting

We use regression techniques, controlling for child, maternal, household head, household and location characteristics

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Estimation strategy , cont’d

Outcome variables:• Child (age 6-24m) consumed milk in last 7 days• Number of days child consumed milk in last 7 days• Anthropometry (HAZ, stunting)

Use regression techniques that can take care of the nature of the outcome variables and different sensitivity tests to establish the basic results.

Include as controls: child sex and age; care givers education and age; characteristics of the head (age, education, sex); region dummy variables; and capital goods for agriculture - land operated by the household for cultivation and the ownership of at least one cow.

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Basic results

Household owns at least one cow. Impact on:

Marginal effects on Anthropo-metry: 6-24m

Anthropo-metry: 12-24m

Any milk consumption in last 7 days

# days milk consumed in

last 7 daysStunted Stunted

22.5%*** 1. 3 *** -5.5%* -9.9%***

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Basic results: Looking for missing marketsHousehold owns at least one cow. Impact on:

Food Market in village No food market in village

Any milk consumed

# days milk

consumed

Stunted12-24m

Any milk consumed

# days milk

consumed

Stunted12-24m

18.9%*** 0.7** 11.4% 22.2%*** 1.3*** -12%***

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Discussion of the results1. Cow ownership considerably increases likelihood of milk

consumption and frequency of milk consumption2. Cow ownership greatly reduces the likelihood of stunting3. When missing foods market in the village, higher effect of

cow ownership on both milk consumption and nutrition4. To test the validity of the basic results, we run different tests:

Including additional controlsDifferent specificationsDifferent estimation strategyDifferent data set (EDHS-2000): Increased probability of

daily milk consumption by 28 per cent points; Reduced stunting by 5.8 percentage points

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Summary

Evidence that ownership of cows is associated with higher milk consumption by children 6-24m and in this age group, and especially in children 12-24m, improvements in HAZ and reductions in stunting

Magnitudes of effects are large – reduction in stunting of approximately 6-10 percentage points

Some evidence that the existence of food markets can partially substitute for own production

Need to be cautious; not an experimental study, though results are robust to a number of checks and alternative model specifications

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Policy recommendations

Chronically undernourished children accumulate less human capital in school and likely economically less productive as adults

This implies that interventions that reduce chronic undernutrition have high economic returns

Given our results, we see three possible classes of intervention:1. Intervention to increase cow ownership

Rural households commonly have the skills to keep milk cows The nutritional value of cow ownership is large But with continued human population growth and increasing

competition for feed and water, this is not sustainable

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Policy recommendations

2. Intervention to increase dairy productivity More research on the sector; the current budget allocated to

the livestock sector is proportionately low Encourage adoption of foreign breeds and hybrids

3. Intervention to increase dairy market development Introduction of technologies for reducing perishability and

health risks of milk productsEncourage establishment of milk cooperatives and monitoring

the quality of their products.

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Policy recommendations

Investments in improving dairy production and value chains may be a “win-win” proposition:Providing higher incomes to producersMaking milk more widely available for consumption by

pre-school children

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Thank you!