Platform for African – European Partnership in Agricultural Research for Development

Monday, May 12, 2014

Opportunities for Dairy Sector Development Collaboration in East Africa

8 May 2014. Kampala, Uganda. The Livestock and Fish CGIAR Research Program supported the Global Knowledge Initiative’s (GKI) dairy value chain collaboration colloquium.

The Collaboration Colloquium brought together participants representing research, business, development organizations, and government to share knowledge, build skills, and explore opportunities for partnership.

These activities were aimed at addressing challenges offered by seven individuals or “Challengers” working in the dairy value chain:
  1. Clayton Arinanye of the Uganda Crane Creameries Cooperative Union; 
  2. Fred Kabi of Makerere University; 
  3. James Lwerimba of World Wide Sires; 
  4. Billy Butamanya of the Uganda Cooperative Alliance; 
  5. Henry Njakoi of Heifer International; 
  6. Tom Sillayo of Faida Market Link (Faida MaLi); and 
  7. Mayasa Simba of the Tanzania Dairy Board. 
The event featured four facilitated steps designed to reveal possible pathways to partnership: (1) identifying shared goals; (2) mapping key aspects of the challenge; (3) identifying resources for strategic action; and (4) testing and strengthening ideas.

Challenges like poor access to veterinary care, inadequate knowledge of breeding practices, and insufficient market access make it difficult for farmers, processors, and other stakeholders to capture the full benefits of dairy production in East Africa.

Overcoming these multi-faceted challenges requires integrated solutions that maximize the expertise and engagement of stakeholders all along the dairy value chain. The Global Knowledge Initiative (GKI) designed the Dairy Value Chain Collaboration Colloquium to spur the creation of such solutions.

The Tanzania dairy value chain partners were able to refine the challenges they are addressing in Tanzania dairy, increase the networks for solving common problems and access to seed money USD 20,000, a challenge prize organized by GKI, that would be available to crystallize action for concepts around the challenges that win.


“White Gold: Opportunities for Dairy Sector Development Collaboration in East Africa”
March 2014, 138 pages

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.

The main emerging regional dairy issue is the recent interest in investment in the dairy sector by regional (e.g., Brookside of Kenya) and international milk processors (e.g., Friesland Campina, Nestle and TetraPak). This interest is a reflection of the confidence the processors have in adequacy of milk supply or potential for increased milk supply. This is likely to change the nature of dairy business in the region in that it will promote milk quality improvement and a commercial orientation along the whole dairy value chain.

To this end, lead milk processors in Kenya, Rwanda, and Uganda are currently exploring quality based milk payment systems. Also, the entry of international dairy companies such as Friesland Campina is a game changer as it forces East Africa operators to develop efficient and competitive supply chains and create supplier loyalty and traceability as opposed to random milk buying. It would lead to milk quality improvements and stability in milk supply chains through introduced incentives. Since all this is just initiating, the logistics for this integration and time frame to impact smallholder dairy remain speculative.

1-3 April 2014. Masaka-Mbarara, Uganda. IADG East Africa dairy expert consultation. The Inter-Agency Donor Group on pro-poor livestock research and development recently completed a successful dairy expert consultation in Uganda. The three-day event gathered over 50 dairy experts from six East African countries and beyond.. Within the purpose of coordination of dairy sector development investments in East Africa, the expert consultation aimed to offer an opportunity to reflect with stakeholders on the finding of a recent study carried out on behalf of IADG, and to define and prioritise actions to capitalize on the opportunities in the East African dairy sector. The roles of various partners in this endeavour (public sector, private sector, farmers, civil society actors, and knowledge institutes) were subject of discussions as well.

The study and the consultation were a follow up to the 14th IADG annual meeting on pro-poor livestock research and development in May 2013 that recommended that better coordination by development agencies on dairy development in East Africa would be good for all parties. The consultation proved to offer a unique opportunity for exchange on current issues in the dairy sector in East Africa. 

The presentation of the results of the study “White Gold: Opportunities for Dairy Sector Development Collaboration in East Africa” by the lead consultant Nathaniel Makoni kicked off discussions on key issues in dairy sector development in Kenya, Tanzania, Burundi, Rwanda, Uganda, and Ethiopia. Field visits to farms, milk collection centres, a processing plant, and a breeding centre gave additional impetus to discussions.
  1. Increasing the availability and quality of feed and fodder. This was highlighted as the key factor to increase production and productivity of dairy in the region. Public roles include research, development and enforcement of regulations and certification; private roles include expansion of feed business, fodder farming & trade, and creating linkages with processors and farmers to shape extension; farmers may see feed and fodder cropping as a business opportunity as would service providers.
  2. Other production-related factors. Requires due attention including i) quality of milk from cow to consumer; ii) availability of and access to land for production of feed & fodder; iii) breeding – country specific needs vary from increasing the availability of crossbred heifers to effectiveness of the public & private AI services; and iv) animal health - attention is warranted by the threat of zoonoses like tuberculosis, brucellosis, and food & mouth disease; threats to human health and trans-boundary trade call for effective national and regional public responses.
  3. Large scale farms can play a larger role in linking smallholders to commercial value chains, as nucleus farms that provide inputs (like heifers and feed) and services (like bulking and extension); inclusion of smallholders is a chain-wide necessity (bulk supply and livelihood) in which processors, input suppliers, governments and NGOs can all play a role; smallholder inclusion and growth does not happen by itself however, and requires adequate incentives.
  4. Informal marketing (which has to be stratified in categories like cottage industry, licensed traders, petty traders, etc.) was acknowledged for its crucial role in the current situations of wide market diversity, weak chain linkages, lack of infrastructure like roads and electricity, and sub-optimal enforcement of regulations. Licensing of traders is a hotly debated issue. Privatization, (self-) regulation, and enforcement are required for improvement of input- and outputs markets, including issues like quality of feed, veterinary services, and milk quality assurance. Slow formal value chain growth calls for diversified approach to development of informal sector. Also the crucial role of cooperatives and the governance and management of cooperatives as from a business perspective was underscored.
  5. Market development has to be achieved through measures like school milk feeding programs and milk consumption campaigns, but especially through product diversification that increase demand, and hence stimulate supply while contributing to improved human nutrition. Prices may decrease when milk quality improves, milk losses decline and processing capacity is utilized. The milk consumption increase may also come naturally with the growth in the urban population and a middle class with disposable income that is evident in cities across the region.
  6. Increasing women and youth participation in the value chain and increasing the benefits they derive from participation (e.g. in starting dairy farms, assisting farmers in fodder production, milk transportation and testing) was highlighted as a key sustainability concern, as were profitability and shared value along the dairy value chain, and the ecological footprint of dairy production - manure management and water use are growing concerns.
  7. Capacity development requires major efforts at different levels: from practical training to graduate level; from the input supply and farming to processing and retail; from farm/firm level to value chain services at sector level; capacity needs include the capacity to supply industry data on farm/business levels, value chain/market level, and sector level, which is notoriously weak and hampering sector development.

    A range of possible activities where identified in these areas, be it for private, public or civil society actors. In all areas a better balance is required between public funding (national and international governments) and private investments. While no blue print can be given for the widely varying political contexts in these countries, donor agencies were recommended to improve coordination between themselves and national governments, and to avoid funding that distorts markets, like provision of equipment or temporary management capacity.

Published on 22 Apr 2014
Through development collaboration within the East African dairy sector will this commodity truly become the 'white gold' resource of the region?

Geert Westenbrink, Policy Coordinator at the Ministry of Economic Affairs, Agriculture and Innovation of the Netherlands postulates this notion.

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