Report on East African dairy

A report on six East African countries ­ Burundi, Ethiopia, Kenya, Rwanda, Tanzania, and Uganda ­ has been released by the Centre for Development Innovation in the Netherlands. It was made on request of the Inter-Agency Donor Group on Pro-poor Livestock Development. It includes recommendations on areas of donor support and collaboration, a regional dairy sector analysis, country dairy profiles, and current donor programmes in the dairy sector.

The study found items of concern such as strategies to deal with raw milk markets and identification of sector challenges, which have received less attention than they deserve. Milk prices are too high for most consumers and attention to the inefficiencies in the dairy value chain should considerably reduce consumer prices.

Given the needs and challenges facing the region, donors could assist and collaborate with governments and other stakeholders, as follows:

• Assist target governments to develop tangible dairy sector investment incentives.
• Promote innovation by entrepreneurs through pooled investment grants and challenge funds. Coordinated donor efforts can yield positive results as showcased in the Uganda dairy rehabilitation program that was implemented from 1986 to 2004, where the shared value and zero funding gaps yielded desirable dairy sector growth exceeding 4% per annum.
• When investing in the dairy value chain the potential of shared value across the chain should be apparent and convincing. Cost/benefit ratios for partners/institutions along the chain should be derived to provide information on the functionality of the institutions and provide an
• indication of potential on shared value achievement.
• When funding projects, donors may want to recognize that dairy business is not a short-term but a long term venture. Success depends on selecting suitable areas with fertile land and water resources, and potential for abundant fodder production, such that if dairy farming is practiced as a business, other types of agriculture can be outcompeted; target educated farmers who have potential to innovate and early adopt; sustainable extension provision, and continuous capacity building in best dairy practices so as to open opportunities for less educated, resource poorer farmers; supply loyalty schemes; and adoption of commercially oriented producer organization models. Success factors for milk buyers will include reliable market through wet seasons, seasonality and quality premium incentives and timely milk payments. Budgeting for this process should start with outcomes needed and work back to determine cost benefit analysis and what it entails.
• Private or public sector allocation of specific value chain meta-institute funding ideally is the responsibility of functional stakeholder platforms such as those organized by the Dairy Genetics East Africa programmes in Kenya, Uganda and Tanzania; they should be responsive to the prevailing stage of dairy development in each context.
• Facilitate dairy sector development programmes that support technical capacity building, infrastructure development (eg, roads & electricity supply), and investment programmes for productivity enhancing technologies at farm level, bulk milk transportation tanks and milk cooling facilities at MCCs or milk bulking centres.
• Support development of data collection and collation systems and studies to inform sector management, investors and developing partners.
• Develop project implementation plans with target communities and stakeholders, rather than imposing or prescribing them. In general, project planning needs to be participatory and inclusive of the private sector and key stakeholders to avoid poor implementation and guarantee sustainability.
• Support development of adequate commercially-run learning facilities such as practical training centres sustained by tuition fees or mandatory milk levies, particularly for work experience on different size commercial farms, MCCs, processors, and retail outlets. This should include facilities for capacity building in extension skills, organizational skills, dairy technology, financial literacy, and business management. Such colleges can be run on regional basis through decentralized regional campuses connected to universities and agricultural technical and vocational training institutes.
• Following priority setting in line with private sector needs, strengthen publicly funded dairy research across the region, including a focus on applied research especially focusing on immediate production constraints. Strengthen extension and establish farmer demonstration farms. Stakeholder participation in defining research priorities should be promoted.
• Considering that more than 70% of smallholder dairy farmers are women, promote policies for greater women inclusion and empowerment in the region through co-ownership of land, property inheritance rights and productive resources, reducing drudgery by access to finance for mechanisation, and facilitating equitable earning through inclusive business models, access to credit, fair compensation, and access to jobs along the dairy value chain. Engage gender specialists and organizations to assist in facilitating gender equity in the dairy value chain.
• Facilitate involvement of youth in the dairy sub-sector eg, in starting dairy farms, assisting farmers in fodder production, milk transportation, and testing. Also, mainstreaming youth into dairy activities in preparation to take over as the older generation retires or adult men get engaged in urban employment.

There should be attention to environmental mitigation including development of eco-friendly pasture management and cattle feeding systems, utilisation of dairy effluent for energy generation, and environmental management awareness and education. Donors can also assist in advocating for natural resource management, introduction of climate smart technologies and environmental custodianship.

Donor funds should encourage entrepreneurship and not hand out free goods and services. Donor programmes should not be prescriptive, but adopt a participatory approach that includes private sector to identify priority areas and implement feasible programmes for community enterprise development.

Most of the above recommendations arise from the similarities in dairy value chains across the region, in which the informal sector dominates (80% or more of milk produced). However, prevailing policies and the development stages of individual country dairy value chains determine the complexity of the key players and support services available. Clearly, the existence of more value chain players and support services indicates a progression towards formalization of the system and increased investment in the sector.

For further information please visit www.wageningenUR.nl/cdi