ILRI Research Brief 56. Nairobi, Kenya: ILRI.
Rao, E.J.O., Mtimet, N., Twine, E., Baltenweck, I. and Omore, A.O. 2015.
This study sought to determine the types of dairy business hubs smallholder dairy farmers in Tanzania would prefer and need.
- Working closely with development partners, the International Livestock Research Institute (ILRI) has developed an approach to collective action, referred to as a dairy business hub (DBH).
- A DBH contractually binds dairy services to a milk buyer, enabling farmers to access milk markets, as well as inputs and services.
- The hub model is particularly useful in circumstances in which smallholder producers are scattered and produce low volumes, making it costly for traders/processors, as well as input and business service providers to provide services to farmers.
- Success depends on the hub’s adaption to the meet constraints faced by the respective smallholder dairy farmers. Current contracts imposed by milk processors, cooperatives or chilling plants may involve clauses, such as lagged payments (monthly or fortnightly) or other quality standards, unattractive to some farmers. Some farmers may also prefer a milk marketing arrangement, accompanied by input and/or service provision to alleviate the onerous capital constraints.
Related:Smallholder Milk Value Addition and Marketing in Kenya