This study examined important factors determining the market participation of dairy cattle farmers in selected urban and peri-urban areas of Ethiopia. Descriptive and double-hurdle negative binomial count data (econometric) models were used to analyze the cross-sectional data that was collected from the farmers through a household survey. Results indicate that dairy farmers’ market participation and the marketing system in which they operate are poorly developed and are inclined to be informal. Though dairy farms' market participation varied by region, herd size, and farm owners’ socio-economic characteristics, more involvement was observed in the selling than in the buying of dairy cattle mainly due to limited space, disease incidence, and old age. Results from the econometric model suggest that farm owners’ selling and buying decisions took place in two separate stages (conception and action) and that each stage was influenced by sets of farm owners, farm and non-farm specific characteristics. The implication would be that most of the dairy farms would be forced to close business and the demand and supply gap would continue to persist. Improvement of the existing government attention towards dairy cattle business in urban and peri-urban areas is crucial for achieving better performance in the dairy marketing system and might be achieved through enforcement of urban-dairy production policies and organized (formal) market development such as the establishment of dairy production and cattle marketing hubs in peri-urban areas and trainings in animal husbandry practices considering the decision-making stages practiced by dairy farmers.
