Nathaniel Makoni, ABSTCM Ltd Raphael Mwai, PPD Consultants Tsehay Redda, EDBD Services Akke van der Zijpp, Wageningen University Jan van der Lee, Centre for Development Innovation, Wageningen UR White Gold: Opportunities for Dairy Sector Development Collaboration in Ethiopia & East Africa Inter Agency Donor Group Meeting, Masaka-Mbarara, Uganda April 1 to 3, 2014
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White gold - Opportunities for Dairy Sector Development Collaboration in East Africa - Makoni et al. 2014
This report presents findings from desk studies and country visits on the six East African countries (Burundi, Ethiopia, Kenya, Rwanda, Tanzania, and Uganda) made on request of the Inter-Agency Donor Group on Pro-poor Livestock Development, as per study terms of reference. It includes recommendations on areas of donor support and collaboration, a regional dairy sector analysis, country dairy profiles, and current donor programs in the dairy sector.
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Nathaniel Makoni, ABSTCM LtdRaphael Mwai, PPD ConsultantsTsehay Redda, EDBD ServicesAkke van der Zijpp, Wageningen UniversityJan van der Lee, Centre for Development Innovation, Wageningen UR
White Gold: Opportunities for Dairy Sector Development Collaboration in Ethiopia & East
Africa
Inter Agency Donor Group Meeting, Masaka-Mbarara, Uganda
April 1 to 3, 2014
Study Countries
Outline1. Terms of Reference
2. Methods
3. Analysis & Findings
4. Key Issues & Recommendations• Regional level• Individual Country Level
5. Suggestions on Donor Contribution
6. Conclusion
Terms of Reference
Country assessments:• Value chains • Enabling environment (Policy dairy sector, organizations, training)
• Donor programs• General analysis• Recommendations for action.
1. Desk Studies/Country Review
2. Country Studies & validation visit• Key informant meetings• Focus group discussions• Field observations
3. Countries visited: Burundi, Ethiopia, Kenya, Rwanda Tanzania & Uganda
ProcessorAggregator/Transport MCC Transport RetailInputs &
services
To market –raw warm milk Consumer
To Market - Unpasteurized
To Market
To Market – raw milk
Cottage industry
To market –value added
Dairy Value Chains Scenarios – Ethiopia & East African Countries
Ethiopia & East Africa Informal Dairy Sector
Tanzania
Burundi
Ethiopia
Kenya
Rwanda
Uganda
97%
95%
90%
80%
80%
80%
Formal13%
In-for-mal87%
Formal:Informal Sector
Burundi
Ethiopia
Kenya
Rwanda
Tanzania
Uganda
0 100 200 300 400 500 600 700 800 900 1000
GDP /Capita WB 2012/13
US $
Economics Data
Burundi
Ethiopia
Kenya
Rwanda
Tanzania
Uganda
2.4
7
8
6
1.53
3
Dairy Contribution to GDP (%)
?<3
Burundi
Ethiopia
Kenya
Rwanda
Tanzania
Uganda
0.010.19
3.50.2
0.680.65
Improved Dairy Breed Population (Million)
Burundi
Ethiopia
Kenya
Rwanda
Tanzania
Uganda
0.645
49.2
18
1.5
21
12.8
National Cattle Population (Million)
Dairy and National Cattle Data
Burundi Ethiopia Kenya Rwanda Tanzania Uganda
0.360.41 0.39
0.220.18
0.14
Milk Farm Gate Price US$/Litre
Uganda has least cost/ ltr. for farm-gate and processed milkEthiopia risk to be uncompetitiveThe farm gate prices reflect breed, feed costs, warm chains
Farm Gate Prices
Burundi Ethiopia Kenya Rwanda Tanzania Uganda
0.980.87
0.59
1.19
0.65
0.38
Processed milk price US$/litre
Highest cost of pasteurized milk is in Rwanda & Burundi (OH & packaging 50%)Uganda has lowest price of pasteurized milk
Milk Processing & Packaging
Dairy Product Range (8)
Brookside, NKCC, Pearl & SALL
Burundi
Ethiopia
Kenya
Rwanda
Tanzania
Uganda
73
3300
4400
450
1650
1190
National Milk Production /Year (million litres)
Total = 11.06 BillionPotential Demand =48.5 BPotential Gap = 37.4 B
National Milk Production & Consumption
Burundi
Ethiopia
Kenya
Rwanda
Tanzania
Uganda
FAO Rec.
0 20 40 60 80 100 120 140 160 180 200
6
19
99
40
23
55
200
Milk Consumption/Capita (litres)
Burundi
Ethiopia
Kenya
Rwanda
Tanzania
Uganda
20000
210500
2900000
160000
410500
1018000
Milk processing Capacity (Litres/day)
Milk Processing & Utilized Capacity
Burundi
Ethiopia
Kenya
Rwanda
Tanzania
Uganda
Average
85
60
40
20
27
61
49
Utilized Capacity (%)
Key Issues & Recommendations
Overarc
hing c
hallen
ges
Low milk consumptionPoor
infrastructure & access to
markets
Low cow productivity:feed&breed
Lack of conducive policy &
incentives
Limited research & extension
Inadequate farm
management National & Trans-boundary
diseases
Limited official industry data
Low female & youth
involvement
Seasonal milk supply
Poor milk quality
Inadequate financial services
1
10
9
8 7
6
5
4
3
2
1112
1. Low Milk Consumption in Ethiopia & East Africa Countries
3. Kenya - Githunguri Dairy 4. Tanzania - Tanga Fresh
Other Regional Integrated models
11. Lack of Conducive Policies and Incentives
• Support EADRAC to develop appropriate milk quality standards
• Formation & strengthening of dairy coordination and advocacy bodies
12. Low Female and Youth Involvement
Empower women through:1. Co-ownership of land and productive resources2. Gender equity land tenure 3. Reducing drudgery – adoption of equipment4. Equitable earning through inclusive business &5. Facilitate involvement of youth in the dairy sub-sector
Abby Sugrue 2012 - LOL/USAID KDSCP
70% of dairy smallholder farmers are women
milk transportation
milk testing
fodder production
starting dairy farms
There is High Unemployment for Youth
Country Specific Issues
Burundi
Issues• Power shortage – Rusizi III project• Lack of large volume milk buyers to serve the expanded
formal supply base • Competitiveness of local milk supply with imports• Challenge to expand & maintain cold chain • Credit & Finance –short term & unstable currency• Weak farmer advocacy bodies & lack of dairy coordinator
Ethiopia
Issues
• Low Consumption - Religious & cultural fasting days
• Rural warm milk chain –Ayib & butter line
• Weak private sector contribution
• Weak farmer advocacy bodies & lack of dairy coordinator
Issues• Milk quality & weak regulatory framework
• Oligopoly- 90% processing is under 3 companies
Kenya Dairy Board managing director Machira Gichohi said they banned milk hawking in urban areas because some "unscrupulous" businesspeople are adulterating .
Kenya
Rwanda
Issues• Large involvement of public sector – ownership?• Inadequate legislation and enforcement of milk quality
standards• Gishwati milk basin poor road infrastructure • High cost packaging as result of plastic ban