Building Strong Stakeholder Support for Collaborative Actions: The Case of the East Africa Dairy Development (EADD) Project

A presentation at the 4th Multi-Stakeholder Platform meeting, 15-17 Oct.2013 Ottawa, Canada. By Saeed A. Bancie

• 115 million people in East Africa - over half subsisting on less than $1 per day in an agricultural economy of small-scale, resource-poor farm communities.

• There are over 10 Million smallholder dairy farmers in East Africa using largely subsistence methods of animal husbandry.

• Families are caught in a downward poverty spiral, characterized by declining food intake, poor education and health services, degraded and disappearing grasslands for their herds, and little-to-no access to commercial market systems.

• Women are responsible for up to 80% of food produced in Africa. They frequently have the fewest resources and are particularly affected by economic poverty.

The Context of dairy in East Africa

Context (cont’d)

Traditional Dairy Market Model

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Why Dairy/Why East Africa?

• Heifer International had implemented small-scale dairy projects in EA for several years, with great success.

• The small-scale projects reached only a limited number of small-holders.

• Heifer decided to scale-up its dairy value chains model, in keeping with the organization’s development strategy to implement “bigger and faster” projects, to achieve greater impact on a critical mass.

• Recognizing that this could not be achieved by a single organization, Heifer decided to foment public-private sector-NGO partnerships to support the establishment of dairy value chains in rural communities.

• EA is an agricultural economy of small-scale, resource-poor farm communities with 115 million people, half of them subsisting on less than $1 per day.

Uganda

Rwanda

Bovine Milk Production per person: Africa

This map was produced by combining the high resolution cattle population map produced for Africa with estimates of milk production produced by the Livestock Development Planning System Version 2 (LDPS2). The resulting milk production data was then combined with the human population map to give the amount of milk produced per person. 

 

 

http://ergodd.zoo.ox.ac.uk/livatl2/bvmilkprodcapita.htm

Region produces est. 8 billion litres of milk p.a

Where?

5

Our geographic scope

EADD’S Impact goal

The lives of 179,000 families—or approximately one million people—are transformed by doubling household dairy income by year 10 through integrated interventions in dairy production, market-access and knowledge application.

Who we work with 110,000 farmers in

Kenya

45,000 farmers in Uganda

24,000 farmers in Rwanda

At least 30% women

Target

At Dec 2012

110,000

45,000

24,000

120,000

45,000

24,306

Approaches: Market access Model

Value-Chain/ Hub Model

Regional Enabling Environment (Quality standards & trade policy)

Local / National Enabling Environment

Support markets

• BDS services (Transport, AI, extension, etc)

• Financial

Producers Organizations (DMGs/DIGs/FCs)

Input Suppliers

Processors

Consumers (High end)

DFBA (CP hubs)

The dairy value chain

Informal traders

Milk kiosk/ canteens

Retail Outlets

Consumers (Low end)

Export market

Formal/High end marketInformal/

Low end market

The Solution – Transforming Chilling Plants to Business Hubs

TRANSPORTERS

FEED SUPPLY

AI & EXTENSION

TESTING

Farmers

FIELD DAYS

VILLAGE BANKS

OTHER RELATED MEs

HARDWARE SUPPLIERS

CHILLING HUB

TRANSPORTERS

FEED SUPPLY

AI & EXTENSION

HARDWARE SUPPLIERS

CHILLING HUB

FARMERS

VILLAGE BANK

SERVICES & INPUTS

How Farmers pay for Services

through the Business Hub

Emerging Rural Economies (Kenya)

Rural Village Banks jointly owned by farmer

shareholders, being established 14

New Prosperity in Rural Africa!

Tanykina Dairy• Milk Chilling & agrovet, AI & FSA• 35,000 litres/day• 5,850 farmers• profitable

Siongiroi Dairy Plant• Milk Chilling• 28,000 litres/day• 5,034 farmers• profitable

Kabiyet Dairy Plant • Chilling & AI & Agrovet• 32,000 litres/day• 3,300 farmers• profitable

Olkalou Dairy Ltd.• Milk Chilling• 21,000 litres/day• 3,296 farmers• profitable $15.0m p.a.

Over 180,000 Liters Daily

Over 83,000 farmers

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• Acceptance of dairy as viable business enterprise

• Increased milk production per household and per cow

• Greater access to secure dairy markets

• Financial benefits to complementary service providers (transporters, fodder providers, AI, agrovet)

Major Accomplishments

Major Accomplishments

EADD Quality Interventions

• EADD has partnered with various stakeholders to address raw milk quality in the region including– New KCC and Nestle EAR in Kenya– Sameer and Inyange in Uganda and Rwanda– Statutory bodies such as Kenya Dairy Board

and Uganda’s Dairy Development Authority. • To-date 190 Chilling Plant staff have been

trained in milk hygiene and testing. • Tetra Pak EA financed a quality best-

practice protocol at Metkei CP (Kenya).• Nestle EAR carried out audits at New KCC

and Sameer in Uganda.

EADD Quality Interventions

• A system of payment for milk quality has been variously proposed but yet to gain any traction with processors.

• Quality-based pricing standards and incentives locked into contracts between CPs & processors will speed farmer up-take of feed, breed and hygiene processes and increase self-regulation of milk quality by farmers.

• Notably, bacteria count in Rwanda have reduced from 48 million in 2009 to a maximum of 14 million in 2010.

• Milk rejection at CPs in Kenya has reduced by 50%; Uganda by 50% and Rwanda by 16% since the project started in 2008

Transitioning from local to exotic breeds…

Achievement at farm level

• Businesses contracted have substantially increased their incomes– Agro-vets, feed suppliers, AIs, food

stores – Check-off system helps to drive these

businesses– A few established feed, drug shops

negatively affected by competition• Farmers employ more workers, nearly all

male– USH 50,000 – 80,000 per month in

Uganda

Economic benefits and spillover

• Establishment of alternative milk market for dairy farmers

• Improved small farmers’ position in the dairy value chain

• Improved business management capacity of hubs since MTE

• Financial viability of some hubs

• Establishment of financial services and check-off credit

Achievement at dfba level

Projected stage distribution in December 2013

Stage 1 Stage 2 Stage 3 Stage 4 Stage 5

10

34

27

10

8

28

31

7

0

4

14

39

16

0

5

13

2322

10

2010 2011 2012 2013*

At current growth rates, 10 hubs will be in stage 5 and 22 hubs in stage 4 by December 2013

• Managing seasonal fluctuations (affects productivity and price)

• Inadequate access to extension services

• Economic constraints to adoption of improved practices

• Lack of gender parity in decision making and access to credit

• Limited capacity to mitigate climate change

• Limited financial incentive (at farm level) for shareholding

Challenges-profitability of dairy farming

Challenges• Governance (transparency, trust, representation,

communication, clarity of roles and responsibilities)

• “Extension is key” – yet extension services are not consistently prioritized

• Limited profit margin of milk bulking, limited negotiating power with private processors

• Limited business management capacity– need for further professionalization among boards and staff

• Few women in leadership roles

• Limited capacity of hub FSAs to provide dairy investment loans

Challenges-performance at DFBA level

Asanteni Sana!