Thoughts on promoting inclusiveness in dairy development

Thoughts on Promoting Inclusiveness in Dairy Development

A. Omore, L. Kurwijila, S. Worsley

Tanzania National Dairy Stakeholders’ MeetingDar es Salaam, 22 February 2013

Given current status and desire to extend the frontiers of commercial dairy value chains in Tanzania….

• Where are the new frontiers?

• What has so far hindered dairy development in these areas?• What are the main technological challenges?• What are the main organisational challenges? • What are the policy and institutional barriers, whether

written and un-written (mind-sets)?• What kinds of partnerships can overcome the challenges?

Key questions

A recent synthesis identified 4 inter-related key problems

More Milk in Tanzania Project

1. Dominant direct milk sales of small volumes that preclude economies of scale, resulting in high costs of production and marketing Milk marketing outlets (NBS, 2003)

Milk Buyer %Neighbours 86.1Local market 5.5Secondary market 0.5Processors 1.4Large scale farms 0.2Trader at farm 4.5Other 1.7TOTAL 100.0

More Milk in Tanzania ProjectKey problems

3%

97%

Processed milk and dairy productsInformally marketed raw milk (liitle value addition)

2. Credit facilities are lacking. This contributes to low access to basic inputs and services or working capital to purchase them

3. Lack of appropriate organizational models for pre-commercial producers. These are required to facilitate collective action

4. Seasonality of rainfall and related effects are strong. This is reflected in producers’ management of their animals’ reproductive cycle and transhumance. It exacerbates seasonality of feed availability and milk volumes

Key problems (cont’d)

Huge seasonal fluctuation in milk supply from traditional herd

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

11000

12000

Milk collection by a small scale processor from traditional herd in Morogoro, 2009

Average/month Total supplyMonthV

olu

me

of

mil

k (l

itre

s/m

on

th)

0

1000

2000

3000

4000

5000

6000

Milk

yie

ld p

er L

acta

tion

(Kg)

Indigenous Crossbred Exotic

Mixed rain fed temperate/ highlan

d

Mixed rain fed humid/ sub-humid

Indigenous Crossbreds Synthetics Exotics

Large-scale commercial ranches

x1

x2

x3

x1

x2

x3 x3

y2

y1

x3

Xi = Yield gaps due to “animal husbandry practices” : 33 - 76 %Yi = Gap in productivity due to “genotype”: 18 - 74%

Source: Mwacharo et al., 2009

Large yield gaps:

Low per capita milk consumption

Kenya Rwanda Tanzania Uganda0

20

40

60

80

100

120

140

160

180

200

220

Per capita milk consumption in EAC countries (Kenya, 2009; Rwanda 2011, Tanzania 2010 amd Uganda 2009)

Per capita WHO recommendation

Gap between investments in milk prodn., collection and processing capacity

Arush

a

Kiliman

jaro

Mara

Kagera

Mwanza

Tanga

Morogo

ro

Dar es

Salaa

mIrin

ga

Mbeya

05000

100001500020000250003000035000400004500050000550006000065000700007500080000850009000095000

100000105000110000

Gap between investments in milk prodn1. , collection and processing2 (1NBS , 2003 and 2TDB data 2012)

Marketable surplus milk /d (28% of wet season prodn -NBS-2003)Processing capacity (2012)Milk collection capacity (2012)Milk collected l/day (2012)

Region

Volu

me

of m

ilk/d

ay

Underutilisation of current milk collection capacity

Region No. Of milk collection units

(coolers)

Milk collected (l/d)

Utilised capacity

(l/d)

% MCC capacity utilisation

Arusha 17 2,600 3,280 (-)

Kilimanjaro 9 10,400 3,580 34

Mara 57 92,000 12,500 14

Kagera 3 (-) 150 (-)

Mwanza 1 1,500 (-) (-)

Tanga 42 95,900 40,734 42

Morogoro 9 19,300 6,266 32

Coast 8 5950 2998 50

Iringa 12 (-) 3,255 (-)

Mbeya 26 17,238 19,874 115

184 (55) 243,478 94,137 38.7

source :TDB data 2012; ( - )=+ incomplete data

Industry approach1. Invest where there are

likely to be high returns2. Go where there’s

already some dairy development

3. Promote capital intensive approaches like chilling plants

4. Promote modern breeds only

Examples of promotion of industry vs. inclusiveness

Inclusiveness approach1. Target the poor <$2/day2. Go to marginalised areas3. Meet the small-scale

producers in there current markets, that are often informal

4. Explore working with current assets of the poor, including traditional breeds

Possible DDF roles

1. Promoting a more inclusive orientation in investments through strengthening of public-private partnerships

2. Promoting professionalization and best practices

3. Acting as a platform for information and knowledge sharing including:

• as a national innovation platform to address systemic bottlenecks and co-create solutions

• facilitating mentoring of milk-shed level dairy innovation platforms

DDF is in a good position to promote inclusiveness and complement specific projects