More milk by and for the poor: Adapting dairy market hubs

for pro-poor smallholder value chains in Tanzania

(Irish Aid Project)

24th – 25th January 2012

Amos Omore

Presentation at MilkIT Pre-inception Meeting, Nairobi

Introduction• Designed as support to CGIAR Research Program 3.7 for

Tanzania dairy VC • One inception year for research and R&D proposal

development for subsequent yrs (USD 450,000 for 2012)• Potential 4 more years for dairy VC R&D engagement

from 2013 – 2016.• Strong pro-poor , marginalised pre-commercial men and

women focus, • Aim is to provide proof-of-concept that such

marginalised groups can also be targeted successfully• To work closely with Tanz R&D institutions and influence

policy

Objectives (derived from IA CSP for Tanzania)

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. Inform policy on appropriate role for pro-poor

smallholder-based informal sector value chains in dairy sector development

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. Develop scalable value chains approaches with improved organization and institutions serving resource-poor male and female smallholder dairy households

Contributing Objectives during 2012 Inception Phase

1. Assess the current status of the Tanzanian dairy sector and identify appropriate entry points and partners for promoting a more pro-poor development orientation

2. Develop a strategy for strengthening the policy environment to better support pro-poor dairy development, capitalizing on ongoing engagement with key policy actors and previous successes in Kenya and Uganda

3. Identify sites appropriate for piloting pro-poor dairy development interventions that have been successful elsewhere in East Africa, and assess how those interventions need to be adapted to the Tanzanian context.

Addressing 4 inter-related problems that face resource-poor milk producers

1. Dominant direct milk sales by producers create diseconomies of scale

2. High risks associated with unorganised milk sales that discourage investment to improve productivity

3. Complex cooperative models and technology-driven solutions have largely failed

4. Suitable organisational models have been lacking

Milk marketing outlets (Kurwijila, 2010)

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

Farmer groups are struggling!

Performance of milk collection at Nnronga women dairy co-operative Society, Hai Kilimanjaro and CHAWAMU-Muheza Tanga (1994-2007)

050000100000150000200000250000300000350000400000450000500000550000600000650000700000750000

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

Which Dairy Milk Hub Model might be appropriate?

- -

- -

Chilling Plant Processing PlantCollection

Center

Sales to individuals andvendors

Sales to Processor

Diversified profit max through:higher prices for milk sold locallylower costs (transport, chilling) overall for milk handled

- -

Diversified Profit-Max Model for CPs

ActivitiesOutput 1: Current status of the Tanzanian dairy sector assessed and appropriate entry points and partners for promoting a more pro-poor development orientation identified

1.1 Understand policy environment:

1.2 Consult and sensitise stakeholders:

1.3 Develop and implement value chain assessment tool:

Output 2: Strategy for strengthening the policy environment to better support pro-poor dairying developed

2.1 Develop a pro-poor strategy for strengthening policy environment:

2.2 Improve quality assurance services: 2.3 Initiate process of strengthening of actors and their organisations: Output 3: Sites appropriate for piloting pro-poor dairy development interventions identified and available best bet interventions adapted to the Tanzanian context 3.1 Develop and implement tool for site selection:

3.2 Structured baseline surveys:

3.3 Develop best bet options for pilot interventions:

Activity Milestones

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48

Output 1: Current status of the Tanzanian dairy sector assessed and appropriate entry points and partners for promoting a more pro-poor development orientation identified

1.1 Understand policy environment: review, CF, situational report

AG

1.2 Consult and sensitise stakeholders: workhop report AO, all

1.3 Develop and implement value chain assessment tool: tools, VC maps and report

DB, AO, IB,

Output 2: Strategy for strengthening the policy environment to better support pro-poor dairying developed

2.1 Develop a pro-poor strategy for strengthening policy environment: strategy development

policy agenda paper, strategy report with M&E plan

AO, all

2.2 Improve quality assurance services: ToR & TDB contract with QA indicators

AO

2.3 Initiate process of strengthening of actors and their organisations: workshop reports AO

Output 3: Sites appropriate for piloting pro-poor dairy development interventions identified and available best bet interventions adapted to the Tanzanian context

3.1 Develop and implement tool for site selection: toolkits, reports IB, SFL

3.2 Structured baseline surveys: baseline data and report

IB, AO

3.3 Develop best bet options for pilot interventions:

guide for interventions, proposal, inception yr report contract with dev partner

AO coordinates, all

General administrative & coordination progress & SC meeting reports

AO

Notes: ILRI Persons involved: AG=Ayele Gelan, AO=Amos Omore; IB=Isabelle Baltenweck, DB=Derek Baker, AN=Alice Njehu, others from Sustainable Livestock Futures (SFL) Group and Research Methods Group. Tanz/SUA Persons involved: PC=Project coordinator (to be seconded by SUA, initally engaged as a condultant), value chain researchers & consultants. PC to help facilitate stakeholder engagements. Project to have close linkage with IFAD Feed and Gates/WB Data projects. Project Coordinator (part-time) and Post-doc (full-time) to be involved in all activities at different levels as per ToRs.

policy agenda paper to inform OM

More milk by and for the poor: Adapting dairy market hubs for pro-poor smallholder value chains in Tanzania - 13 Jan 2012

implement tooldevelop tool

form SC and hold 1st meeting

2nd SC meeting

progress report (+financial) & meeting with IA

final report (+financial) & meeting with IA

engage dev partner

Initial best-bet interventions evaluated (ex-ante ) and described

develop and submit proposal for pilot interventions

desk review of: a) past successes & failures and b) best bet interventions

identify potential development partner

identify & engage consultants, incl from Ireland

analysis & reporting, with focus on targeting interventions

conduct Outcome Mapping workshop

implement tool

12

during above stakeholder wkshop

ToR & contract for TDB

agree CRA with SUA

develop toolkits, criteria

document sites

conduct baseline survey

identify stakeholders & invite

hold wkshop

reviews, develop tools

develop CF

stakeholder workshops to develop agenda

reporting

3 42 5

Qtr3

reporting

seek feedback on CF from key national partners

conduct situational analysis

prepare report

report at stakeholder meeting

PC appointed (initially on consultancy), Post-doc advert posted, meeting with IA, project office set up

Performance Indicators

ILRI lead person

Qtr/Month/week in 2012Qtr1 Qtr4Qtr2

6 7 8 9 10 111

Activity Milestones

Exploring synergiesMilkIT What can be done together

with Irish Aid (give/receive)Component 1. Institutional strengthening1a. Mechanisms for enhancing innovation capacity through local stakeholder platforms to address dairy value chain constraints

1b. Approaches for involving local stakeholders in analysis of dairy VC

1c. Basket of intervention strategies emerging from dairy VC analysis

Component 2 Productivity2a. Strategies for implementing local feed-related innovations emerging from stakeholder platforms that enhance dairy incomes

2b. Methods for enhancing diffusion of local feed-related innovations among dairy smallholders for income benefits through productivity increases

2c. Strategic lesson learning on appropriate dairy feeding strategies and technologies

Component 3. Knowledge sharing3a. Mechanisms for sharing knowledge at local and regional levels

3b. Mechanisms for sharing knowledge across project countries and among global R4D projects

Co-ordination

Irish Aid What can be done together with MilkIT (give/receive)

Output 1: Current status and entry points

1.1 Understand policy environment:

1.2 Consult and sensitise stakeholders:

1.3 Develop and implement value chain assessment tool:

Output 2: Strategy for strengthening the policy environment

2.1 Develop a pro-poor strategy for strengthening policy environment:

2.2 Improve quality assurance services:

2.3 Initiate process of strengthening of actors and their organisations:

Output 3: Sites selection and developing best bet interventions

3.1 Develop and implement tool for site selection:

3.2 Structured baseline surveys:

3.3 Develop best bet options for pilot interventions:

General administrative & coordination activities (e.g., steering committee)

Exploring synergies