Entry points for extending the frontiers of dairy value chains in Tanzania EXTRAPOLATE Workshop 05 Mar 2014, Zanzibar, Tanzania A. Omore

Entry points for extending the frontiers of dairy value chains in Tanzania

EXTRAPOLATE Workshop

05 Mar 2014, Zanzibar, Tanzania

A. Omore

Four inter-related problems faced by resource-poor milk producers

1. Dominant direct sales of small volumes by smallholder producers that preclude economies of scale

2. Credit facilities for basic inputs and services or working capital are lacking. This discourages investment to improve productivity

3. Lack of appropriate organizational models for pre-commercial producers (complex cooperative models and technology-driven solutions have largely failed)

4. Seasonality of rainfall and related effects are strong

Milk marketing outlets (NBS, 2003)

Milk Buyer%

Neighbours 86.1

Local market 5.5

Secondary market 0.5

Processors 1.4

Large scale farms 0.2

Trader at farm 4.5

Other 1.7

TOTAL 100.0

More Milk in Tanzania Project






Women participate more in milk related tasks



Milk processing in Tanzania has been declining since 1990











Milk processing installation 1995-2000. (Total approx. 315,000 l/day)

Processor name Installed capacity (litres/day)

1 Azam Dairy 3,0002 Tommy Dairy (Hakifanyikazi) 15,0003 Tan Dairies 15,0004 Tanga Fresh Ltd 40,0005 Ammy Brothers Ltd 2,0006 Brookside (T) Ltd (Hakifanyikazi) 45,0007 International Dairy Products 5,0008 Mountain Green Dairy 1,5009 Arusha Dairy Company 5,000

10 Kijimo Dairy Cooperative 1,00011 Longido (Engiteng) 50012 LITI Tengeru 50013 Terrat (Engiteng) 50014 Orkesumet (Engiteng) 50015 Naberera (Engiteng) 1,00016 Nronga Women 3,50017 West Kilimamnjaro 1,00018 Mboreni Women 1,00019 Marukeni 1,00020 Ng'uni Women 1,00021 Kalali Women 1,00022 Same (Engiteng) 50023 Fukeni Mini Dairies 3,00024 Kondiki Small Scale Dairy 1,200

25 Musoma Dairy 40,00026 Utegi Plant (Ex TDL ) (Hakifanyikazi) 45,00027 Makilagi SSDU 1,50028 Baraki Sisters 3,00029 Mara Milk 15,00030 Mwanza Mini Dairy 3,00031 Kagera Milk (KADEFA) 3,00032 Kyaka Milk Plant 1,00033 Del Food 1,00034 Bukoba Market Milk Bar 50035 Bukoba Milk Bar - Soko Kuu 50036 Mutungi Milk Bar 80037 Salari Milk Bar 80038 Kashai Milk Bar 80039 Kikulula Milk Processing Plant 1,00040 Kayanga Milk Processing Plant 1,00041 MUVIWANYA 1,00042 SUA 3,00043 Shambani Graduates 400044 New Tabora Dairies 16,00045 ASAS Dairy 12,00046 CEFA Njombe Milk Factory 10,00047 Mbeya Maziwa 1,00048 Vwawa Dairy Cooperative Society 90049 Gondi Foods 600

Less than 5000 litres/day

5000-30,000 litres/day

More than 40,000 litres/day

Key

26

12

16

6

7

8

12

9

4

5

10

3

11131415

17

18

19

20

2122

23

24

42

45

25272829

3031

32

3233

34 35 3637 38 39

4041

43

4647

48

49

46

D.R.C

Pemba

Unguja

LINDI

RUKWA

TABORA

IRINGAMBEYA

RUVUMA

SINGIDA

MOROGORO

KIGOMA

PWANI

ARUSHA

DODOMA

SHINYANGA

TANGA

MARA

KAGERA

MANYARA

MTWARA

MWANZA

MANYARA

KILIMANJARO

DAR ES SALAAM

I N D I A N O C E A N

KENYA

UGANDA

RWANDA

BURUNDI

ZAMBIA

MOZAMBIQUE

Milk processing installation 1995-2000. (Total approx. 315,000 l/day)

Processor name Installed capacity (litres/day)

1 Azam Dairy 3,0002 Tommy Dairy (Hakifanyikazi) 15,0003 Tan Dairies 15,0004 Tanga Fresh Ltd 40,0005 Ammy Brothers Ltd 2,0006 Brookside (T) Ltd (Hakifanyikazi) 45,0007 International Dairy Products 5,0008 Mountain Green Dairy 1,5009 Arusha Dairy Company 5,000

10 Kijimo Dairy Cooperative 1,00011 Longido (Engiteng) 50012 LITI Tengeru 50013 Terrat (Engiteng) 50014 Orkesumet (Engiteng) 50015 Naberera (Engiteng) 1,00016 Nronga Women 3,50017 West Kilimamnjaro 1,00018 Mboreni Women 1,00019 Marukeni 1,00020 Ng'uni Women 1,00021 Kalali Women 1,00022 Same (Engiteng) 50023 Fukeni Mini Dairies 3,00024 Kondiki Small Scale Dairy 1,200

25 Musoma Dairy 40,00026 Utegi Plant (Ex TDL ) (Hakifanyikazi) 45,00027 Makilagi SSDU 1,50028 Baraki Sisters 3,00029 Mara Milk 15,00030 Mwanza Mini Dairy 3,00031 Kagera Milk (KADEFA) 3,00032 Kyaka Milk Plant 1,00033 Del Food 1,00034 Bukoba Market Milk Bar 50035 Bukoba Milk Bar - Soko Kuu 50036 Mutungi Milk Bar 80037 Salari Milk Bar 80038 Kashai Milk Bar 80039 Kikulula Milk Processing Plant 1,00040 Kayanga Milk Processing Plant 1,00041 MUVIWANYA 1,00042 SUA 3,00043 Shambani Graduates 400044 New Tabora Dairies 16,00045 ASAS Dairy 12,00046 CEFA Njombe Milk Factory 10,00047 Mbeya Maziwa 1,00048 Vwawa Dairy Cooperative Society 90049 Gondi Foods 600




Key

26

12

16

6

7

8

12

9

4

5

10

3

11131415

17

18

19

20

2122

23

24

42

45

25272829

3031

32

3233

34 35 3637 38 39

4041

43

4647

48

49

46




KeyLess than 5000 litres/day



Less than 5000 litres/dayLess than 5000 litres/day

5000-30,000 litres/day5000-30,000 litres/day

More than 40,000 litres/dayMore than 40,000 litres/day

Key

26

12

16

6

7

8

12

9

4

5

10

3

11131415

17

18

19

20

2122

23

24

42

45

25272829

3031

32

3233

34 35 3637 38 39

4041

43

4647

48

49

46

26

12

16

6

7

8

12

9

4

5

10

3

11131415

17

18

19

20

2122

23

24

42

45

25272829

3031

32

3233

34 35 3637 38 39

4041

43

4647

48

49

46

D.R.C

Pemba

Unguja

LINDI

RUKWA

TABORA

IRINGAMBEYA

RUVUMA

SINGIDA

MOROGORO

KIGOMA

PWANI

ARUSHA

DODOMA

SHINYANGA

TANGA

MARA

KAGERA

MANYARA

MTWARA

MWANZA

MANYARA

KILIMANJARO

DAR ES SALAAM


KENYA

UGANDA

RWANDA

BURUNDI

ZAMBIA

MOZAMBIQUE

D.R.C

Pemba

Unguja

LINDI

RUKWA

TABORA

IRINGAMBEYA

RUVUMA

SINGIDA

MOROGORO

KIGOMA

PWANI

ARUSHA

DODOMA

SHINYANGA

TANGA

MARA

KAGERA

MANYARA

MTWARA

MWANZA

MANYARA

KILIMANJARO

DAR ES SALAAM


KENYA

UGANDA

RWANDA

BURUNDI

ZAMBIA

MOZAMBIQUE








Huge seasonal fluctuation in milk supply from traditional herd

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

500100015002000250030003500400045005000550060006500700075008000850090009500

100001050011000115001200012500

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

Average/month Total supply

Month

Vo

lum

e o

f m

ilk

(lit

res/

mo

nth

)

Farmer groups are struggling in most places except in Tanga

Performance of milk collection at Nnronga women dairy co-operative Society, Hai

Kilimanjaro and CHAWAMU-Muheza Tanga (1994-2007)

050000

100000150000200000250000300000350000400000450000500000550000600000650000700000750000

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Year

Volu

me

of M

ilk (L

itres

)

Nnronga

CHAWAMU-Muheza


Tanzania Dairy (“Maziwa Zaidi”) – Goals and Pathways over the next 10-12 Yrs

The dairy program has three principle goals:

• Smallholder farmers have reliable and consistent access to quality inputs and services in order to efficiently achieve high milk productivity;

• Smallholder famers have access to reliable, well-coordinated, and efficient dairy products marketing arrangements with resultant improvement in household income and livelihoods;

• Poor consumers have improved access to quality, safe, and nutritious dairy products at affordable prices to increase per capita consumption of the dairy products.

Long term impacts will be achieved through four main pathways:

• Institutional innovations for reliable and consistent access to inputs and services;• Innovative strategies for consistent and reliable access to Artificial Insemination materials

and services, forage, and water; • Generation of evidence for achieving impact at scale and influencing policy; • Innovative strategies for increasing the consumption of dairy products.

R&D Focus in Tanzania

• Strong focus on pro-poor marginalised pre-commercial men and women

• Provide proof-of-concept on how marginalised groups can also be targeted successfully

• Generate evidence for influencing policy

Objectives

Goal: • Inclusive growth and reduced poverty and

vulnerability among dairy-dependent livelihoods in relevant rural areas in Tanzania

Outcome: • Rural poor are more income secure through enhanced

access to demand-led dairy market business services and viable organisational options, and low-income consumers have better access to affordable milk.


Contributing Objectives over 5 yrs1. Develop scalable value chains approaches with improved

organization and institutions serving resource-poor male and female smallholder dairy households

2. Generate and communicate evidence on business and organizational options for increasing participation of resource-poor male and female households in dairy value chains

3. Inform policy on appropriate role for pro-poor smallholder-based informal sector value chains in dairy sector development


Key messages on identified entry points

• Validity of the need to focus attention on ‘growing’ the existing informal system of milk production (with zebu cattle) and marketing to extend the frontiers of commercial dairying

• Organizational models to achieve economies of scale for access to inputs and services required to unleash incentives for raised productivity to levels that will justify bulking

• This is riskier than classical approaches but more inclusive in ensuring wider impact on marginalised

• Policy support for pro-poor shift needed

Identified field sites (+ target groups/typologies)Region District Market access

classification Cattle population*

% improved dairy breeds

Dominant production system

Morogoro

Kilosa R-to-R 215,100 1 Extensive/Agro-pastoral (zebu)

Mvomero R-to-U 187,350 5 Extensive/Agro-pastoral (zebu) with significant semi-intensive & intensive (improved)

Tanga

Handeni R-to-R 126,780 1 Extensive/Agro-pastoral & Extensive/Sedentary (all zebu)

Lushoto R-to-U 119,492 24 Extensive/Sedentary (zebu) with significant semi-intensive & intensive (improved)

Project sites

Dairy Market Hubs (DMHs) with emphasis on improving access to inputs and services through business development services (BDS) and check-off arrangements:

a) DMHs revolving around chilling plants or accessing them (if under-utilized) through transport arrangements that provide both outputs marketing and inputs and services through check-offs; b) DMHs revolving around check-offs for inputs and services provided through milk traders; and c) DMHs revolving around check-offs for inputs and services provided through cattle traders.

Hubs for piloting in the Tanzania context

Producers In

puts, $$

Inputs & services

$$

Payment agreement

Milk, C

attle

Check-off agreement

Inputs & Service Providers(BDS)

Traders Milk

Cattle

BASIC Dairy Market Hubfor Provision of Inputs and

Services on Check-off

Illustration of a hub for provision of inputs and services on credit without collective bulking and marketing

Strategic Cross-cutting Platforms• Technology Generation (Feed, genetics, health• Market Innovation• Targeting & Impact (includes gender)

Inputs & Services Production Processing Marketing Consumers

Design of integrated R4D to extend the frontiers of dairy value chains to achieve wider impact in Tanzania

Value chain development team + research partners

INTERVENTIONS TO SCALE OUT NATIONALLY

Addressing the whole value chain with downstream emphasis

Intervention with development partner

Cross-cutting: M&E, communications, capacity building

Identified dairy policy issues in inputs and services

ANIMAL HEALTH:

a) Certification of para-vet practitioners is overly restricted by regulations

Identified dairy policy issues in inputs and servicesGENETICS:a) Certification of artificial insemination (AI) technicians is too restricted (by the Veterinary Surgeons Act) for efficient delivery of services b) The regulator of breeding services is also an active practitioner. What is the optimal public-private-partnership (PPP) for delivery of breeding services?c) Animal registration, recording and evaluation are administered by too many bodiesd) Animal registration, performance recording and genetic evaluation are administered solely by a government agency with inadequate capacity to deliver on the service. What is the optimal PPP for this?e) Animal Breeding Bill needs to be submitted to Attorney Generalf) Brucellosis needs to be made a notifiable disease so testing and control are made mandatory and publicly fundedg) There is no information system capturing livestock identification, registration, recording for breeding improvement and traceability


FEEDS:a) Compounded feed standards are variable and are based on recommendation of cattle with high genetic composition. Related technical question is how to develop recommendations that take into account genetic potential of cattleb) Feed quality is variable in spite of the standards i.e. poor enforcement of standards and lack of stakeholders participationc) Sourcing and importation of forage seeds are heavily controlled by the government thus restricting free flowd) Training and certification of small scale forage seed producers are currently restrictede) Certification of small scale compounded feed producers who are currently considered illegal (this restricts opportunities to grow markets and improve quality)


VALUE CHAIN DEVELOPMENT:a) Lack of stakeholder controlled small-scale dairy traders’ and business providers’ associations to contribute to empowerment of their members

Implementation & Innovation

Monitoring and evaluation

Data collection and analysis

Dialogue

Agenda setting

Policy change cycle to address the constraints

Update statusof policies, procedures,

regulations (ILRI)

Analyzeoptions for

rationalization & harmonization

Facilitate national andregional dialogue

Identify drivers of policy change

Quantifyimpacts ofPolicies

Disseminate best practices

share andexchange

information

Quantifyimpacts ofpolicies

Identify impactpathways

Identify drivers of policy change

DDF to play key role in dialogue

Dairy Development Forum

Secretariat: Tanzania Dairy Board

Stakeholder organisations and projects

MilkIT & More MIlkiTLoL Heifer-Tanz SNV OthersMVIWATA

Grow the dairy herd

Fill gaps in dairy technology & agribusiness skills / capacity

address feeds scarcity

Space for nurturing multi-stakeholder processes to address challenges on how to:

Regional Platform Regional Platform

District Platform

FARMER ASSOCIATIONS AT VILLAGE LEVEL

DAIRY DEVELOPMENT FORUM

District Platform

District Platform

District Platform

Working groups Working groups

Proposed interventions from the last DDF

Farmer Organizations • Prioritize dairy production regions/do an inventory of farmer groups

(TAMPRODA can do this) • Analysis of strengths, weaknesses, opportunities and threats (SWOT)

of existing groups (TAMPRODA can do this) • Create an inventory of existing techniques/tools and translate English

manual to Swahili to increase awareness (Heifer International can do this)

• Policy group to develop less cumbersome registration procedures • Need to develop and know rules guiding the sector (breeding policy)

Policy and Regulations• Commitment and speedy formulation of Inclusive breeding

policy (MLFD, DDF, TDB) • promote breeder association to do recording • Constructive lobbying by stakeholders

Task force group members to document what they will do and report at the next DDF

Candidate Scopes

• Contribution of dairy to household income

• Contribution of dairy income to household livelihoods

• Contribution of improved access to inputs and services (dairy market hubs) to household income / livelihoods

CGIAR is a global partnership that unites organizations engaged in research for a food secure future. The CGIAR Research Program on Livestock and Fish aims to increase the productivity of small-scale livestock and fish systems in sustainable ways, making meat, milk and fish more available and affordable across the developing world.

CGIAR Research Program on Livestock and Fish

livestockfish.cgiar.org

Thank You

http://livestockfish.cgiar.org/

Documents

Entry points for extending the frontiers of dairy value chains in Tanzania EXTRAPOLATE Workshop 05 Mar 2014, Zanzibar, Tanzania A. Omore