more milk in tanzania: entry points for extending the frontiers of dairy value chains in tanzania...

More Milk in Tanzania Entry points for extending the frontiers of dairy

value chains in Tanzania through hubs

Presentation at TSAP Conference A. Omore, L. Kurwijila and S. Nandonde

35th Tanzania Society of Animal Production (TSAP) Conference, Arusha, 23-26 October 2012

BACKGROUND: Projections indicate demand to 2020 outstrips supply

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20201,000,000,000

1,500,000,000

2,000,000,000

2,500,000,000

3,000,000,000

3% GDP Growth 2% GDP Growth Milk ProductionYear

Million Lts Milk/ Yr

Dairying in EA is the most important ag sector commodity for GDP gains in the medium term (ASARECA/IFPRI report)

BACKGROUND: Large Yield Gaps

0

1000

2000

3000

4000

5000

6000

Milk

yie

ld p

er L

acta

tion

(Kg)

Indigenous Crossbred Exotic

Mixed rain fed temperate/ highlan

d

Mixed rain fed humid/ sub-humid

Indigenous Crossbreds Synthetics Exotics

Large-scale commercial ranches

x1

x2

x3

x1

x2

x3 x3

y2

y1

x3

Xi = Yield gaps due to “animal husbandry practices” : 33 - 76 %Yi = Gap in productivity due to “genotype”: 18 - 74%

Source: Mwacharo et al., 2009

CONTEXT

Goal: To sustainably increase the productivity of small-scale livestock and fish systems to increase the availability and affordability of animal-source foods for poor consumers and, in doing so, reduce poverty through greater participation by the poor along the whole value chains for animal-source foods.

CGIAR Research Program on: More milk, meat and fish by and for the poor (LaF) is one of 15 CRPs in a re-organized CGIAR system

Strategic LaF Cross-cutting Platforms• Technology Generation• Market Innovation• Targeting & Impact

Inputs & Services Production Processing Marketing Consumers

R4D integrated to transform selected value chains In targeted commodities and countries.

Value chain development team + research partners

GLOBAL RESEARCH PUBLIC GOODS

INTERVENTIONS TO SCALE OUT REGIONALLY

Addressing the whole value chain to transform the sector over a decade

Major intervention with development partners

Approach: Solution-driven R4D to achieve impact

LaF:

Pre

pare

inte

rven

tion

Development Partners$90m

Performance Target:double production in x poor households Scaling out

Knowledge Partners $10m

Time 10 years

LaF: Strategic Research $10m

Working toward interventionsfor impact at scale

1 Technology development:

− Genetics− Feeds− Health


Commodity X in Country Y

2 Value chain development

3 Targeting: Foresight, prioritization, gender, impact

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

Delivering Livestock + Fish Programme

Structure: Three integrated Components

9 Target Value Chains

PIGS

AQUACULTURE

SHEEP & GOATS

DAIRY

Website for news updates on subscription: http://livestockfish.cgiar.org/

LaF Catalyst Role

Research

Investors

NARS

ARIs

LaFCG partners

Ministry

Investors

Development

NGOs

Private Sector

Website for news updates on subscription: http://livestockfish.cgiar.org/

Links to other CGIAR Programs (CRPs)

Current and anticipated CGIAR linked dairy VC projects in Tanzania in 2012

1. MilkIT: Promoting feed innovations ILRI/CIAT/TALIRI/SUA; IFAD 2. MoreMilkIT: Adapting dairy market hubs: ILRI/SUA/TDB; Irish Aid3. Safe Food Fair Food (SFFF2); - ILRI/SUA; BMZ 4. Livestock Data Innovation (LDIP) – MLDF/FAO/ILRI; BMGF/WB funded5. Integrated Crops and Goat project (CGP) – SUA/UA/ILRI; IDRC 6. EADD – HPI/TNS/ILRI/ICRAF/ABS; BMGF7. Equitable access to animal source foods - ILRI/WFC/SUA - AUSAid

Main challenge for solution driven research for development :

• How can research be more responsive?

• How can research deliver value beyond knowledge?

• How can research serve development in real time?

Entry points for More Milk in Tanzania Project: Key considerations

• Strong focus on pro-poor marginalised pre-commercial men and women and ‘growing’ inputs and outputs markets that serve them

• Explore new organizational models to achieve economies of scale

• Aim is to provide proof-of-concept on how marginalised groups can also be targeted successfully

• Generate evidence for influencing policy

Following are highlights of dairy VC R4D engagement and findings on entry points since Jan 2012

Objectives (derived from ASDS and Irish Aid Country Strategy Paper 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

Contributing objectives:– Develop scalable value chains approaches – Generate and communicate evidence on business and

organizational options – Inform policy on appropriate role for pro-poor smallholder-

based value chains

More Milk in Tanzania Project

Addressing 5 inter-related problems that face resource-poor milk producers

1. Dominant direct milk sales of small volumes. This precludes economies of scale ↑costs

2. Credit facilities are lacking. This contributes to low access to basic inputs and services or working capital to purchase them

3. Lack of appropriate organizational models for pre-commercial producers. These are required to facilitate collective action

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




Women participate more where there’s no collective milk bulking and marketing







Milk processing in Tanzania has been declining since 19901. Dominant direct milk sales of

small volumes. This precludes economies of scale ↑costs




Huge seasonal fluctuation in milk supply from traditional herd

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

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

11000

12000

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

)


Huge seasonality in milk supply from the indigenous vs. improved dairy cattle

09/04/2023 NAI/EGM/Mara Region/Kurwijila 21


Less rainfall variation in highlands

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

5

10

15

20

25

30

Lowland/extensive

Highland/semi-intensive


Less seasonal milk yield fluctuation with better feeding

January

Febru

ary

Marc

hApril

May

June

July

August

September

October

November

December

-

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

14,000.00

16,000.00

20092010Average


Source: SUA dairy research farm)

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


Entry Points:Spatially overlays was the initial step….

Prod systems: arid to humid/temperate

Persons/sq km (25)

+ =

Map A: Mixed prod sys + ↑pop

Map A Market access (0.5& 5hrs) Maps B & C : Mixed prod sys + ↑pop + ↓ & ↑ market access: = R-R & R-U

+ =R-U

R-R


Maps B : Mixed prod sys + ↑pop + ↓ market access: = R-R

R-R

Maps C : Mixed prod sys + ↑pop + ↑ market access: = R-U

R-U

Identified entry points in the field Maps + stakeholder consultations

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)


Detailed value chain assessments have been conducted at these sites

Morogoro: Kilosa and MvomeroMore Milk in Tanzania Project

Tanga: Lushoto and HandeniMore Milk in Tanzania Project

Which 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

Some EADD Hub Models being tested


Hubs are localized groups of smallholder producers with common interests in accessing inputs (feed, breeding, animal health) and services (training, credit, insurance), as a means to achieve a critical mass of supply

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.

Outcome Mapping identified the following hubs for piloting in the Tanzania context


Producers In

puts, $$

Inputs & services

$$

Payment agreement

Milk, C

attle

Check-off agreement

Inputs & Service Providers

Traders Milk Cattle

BASIC Dairy Market Hub

for 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

Targeting 50 villages with 8000 cattle keepers across 4 districts

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


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

Baseline for M&E planned for Dec 2012

Integrating other actors into the Tanzania dairy value chain R4D

Research

Other Investors

(e.g., IFAD BMZ)

SUA /TALIRI

Irish institutions

ILRI /Other CG partners

MLDFTDB, other

NGOs (DDF)

Investors (e.g., BMGF)

Development

Dev Partner

NGO

Private Sector

Organogram of DDF and stakeholder linkages

Dairy Development Forum

Secretariat: Tanzania Dairy Board

Stakeholder organisations

Academic & res institutions

Dairy development organisations

Membership organisations

Govt Private sector

Advisory Committee

Civil society

Key messages on 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

• New 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 and promises wider impact on marginalised

• Policy support for pro-poor shift needed
