First steps in dairy business BHAG: Dairy processing Biftu Selale Farmersrsquo; Cooperative Union found in Oromia Regional state in Northern Shoa Fiche Town in Grarjarso District. The union established in 2005 with 17 Primary Cooperatives. During establishment the union have a capital of 105 000 ETB (3 182 Euro). The union currently working with 125 PCs and total individual members of 99  445 (80865=Male and 18580=Female). The union works in 12 districts; 2 of the districts are special zones of Oromia surrounding Addis Ababa. The main crops are Teff  Barely  wheat  Bean  chickpea  lentil. The union are distributing coffee seed for the farmers. The operating area of the union is also conducive for animal husbandry. Many members raring animal and they have improved cows (Holstein Frisian) that can be estimated to be 80% of the livestock.There was a suggestion by the regional CPA about merging of Selala Dairy Cooperatives and Biftu Selale multipurpose FCU because Selala dairy Union went bankrupt. A financial study of the union was conducted before merging the union  based on this study Biftu decided not to merge due to the debt burden of Selala. Selale Dairy Cooperatives is bankrupt because of its losses of the factory (96 % of the factory is not functional) and the union has 30 million ETB loan from bank and 12 million ETB from individual members. Selale Dairy Coops needs around 20 million ETB to operationalize the current factory. Due to these reasons the board members and GA of Biftu Selala multipurpose FCU decided not to merge with Selale Dairy Coops. Biftu Union is now selected by the CPA to move into dairy business. The 30 milk PCs under Selale dairy can supply to the Union. Collection of milk has already started and is delivered to a commercial processor (Etete processing). Currently the Union is collecting between 3000-4000L per day. This is also the maximum Etete is willing to take. Therefore  the ambition is to set up own processing. However   there are many challenges for the milk like price  quality  and infrastructure. On top of that  in Ethiopia there are plenty of examples where investments in dairy didnt result in profitable businesses.The focus of the 2020 project is:- Legal clarity on the status of the dairy PCs. If they start working with the Union they should have the option to get dividend  for this they need to be allowed to join Biftu Union and stop Selale Union.- Professionalise and digitalise the accounting system- Assess the 30 dairy PCs and develop a support program- Strategic planning at Union level related to dairy with an expert- Continuation of the female leadership activities  focusing more on dairy PCs- Profitability analysis for two PCs for their dairy activities BHAG: Dairy processing.For this year the goal is to integrate the dairy PCs under the Union and to create a clear  focused strategy on setting up the dairy business together with the PCs. 1. There is a lot of focus within Ethiopia on the dairy sector. Multiple donors are also active in the area with mixed results. Due to the collapse of Selale Dairy Union the dairy farmers in the Fiche area have no support from a Union anymore. This is one of the reasons why the local government is asking Biftu Union to pick up the dairy business. Some of the PCs are already supported by SNV BRIDGE project but not the Union. Agriterra will step in at Union level and will also focus on the potential PCs in alignment with SNV.There is a lot of demand for the milk from the Fiche area but the quality is very poor. Farmers are highly incentiviced by traders to dilute their milk or add salt. Also most processors are not correcting this which is why the traders are able to sell this milk. The Union doesnt want to follow this approach and is focusing on high quality milk  if it cannot be sold they would like to start with small processing (butter  cream  cheese) themselves. Raw milk is not an option due to the market situation.As Agriterra we will focus on three aspects: Union  PC  political decisions. We want to get clarity on the legal status of the dairy PCs to make sure that if they start doing business with the Union they can also benefit optimally. A clear understanding of the situation of these PCs needs to be created so that proper solutions can be created for the farmers in those areas. Lastly the Union needs to develop a clear strategy on what to prioritize related to the dairy business.2. Monitoring and evaluation will be done based on the volume and quality of milk which the PCs and the Union collect and sell.3. We aim to create sustainability by focusing on the PCs. They play a vital role in supporting the farmers both in inputs as market. The Union should find a role next to that which can also be sustainable business wise.4. Concerning gender equality  we started already last year with the female leadership program. Back then the focus was on multipurpuse PCs which needs to be shifted a bit to the dairy PCs to align with the main objectives. Environmental sustainability is not clearly defined and should be created later on. Financial management will be handled at Union level  with an additional accountant we will implement the SAGE 50 training for the Union.