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Inclusive investment opportunities to produce more milk in Tanzania’s dairy value chains – Exploiting the evidence

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  • Edgar Twine

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The vision of the Maziwa Zaidi Research for Development (R4D) program in Tanzania is to achieve an inclusive and sustainable development of the dairy value chain by 2023. Five years from its launch in 2012 program partners have generated significant empirical evidence that different technological and institutional innovations can be taken to scale to achieve greater productivity, profitability, and sustainability of the country’s dairy value chains.

The program’s outputs were complemented in 2016-2017 with a Livestock Master Plan that projected returns on investments across dairy and other livestock value chains over the next 15 years to 2031. Significant evidence and lessons for future R4D programs and to implement the second phase of the Agricultural Sector Development Program have also been generated.

This post is structured around the recent Maziwa Zaidi policy forum to highlight key policy relevant studies and evidence presented as posters in six thematic areas. Each identifies opportunities for inclusive investment and scaling that public and private sector organizations could exploit to grow the dairy sector and catalyze widespread innovation.

  1. Dairy production: feeds and forages technologies

The Dairy Development Forum identified shortage of feed (fodder and forage) as one of the three major constraints to milk production in Tanzania. This constraint can be eased first and foremost by farmers adopting improved forage species which have been found to increase milk production (see posters 18 and 25). Some improved forage species such as buffel grass and herbaceous legumes can grow well in semi-arid areas (poster 19), but good agronomic practices that include irrigation would be needed to achieve relatively high yields (poster 20).

Raising awareness among dairy farmers about the importance of improved forage species, and increasing farmers’ participation in dairy value chains are critical to enhancing adoption of improved forages (poster 24). In addition, innovation platforms are likely to accelerate the adoption of improved forages (poster 15).

For fodder, there needs to be greater investments in the compounded feeds sub-sector to improve both the quality and quantity of feed on the market. Feed quality certification, dissemination of information on policies and laws governing quality standards, and support towards establishing better feed testing facilities are some of the areas into which public and private funds could be invested (posters 2 and 14).

  1. Dairy production: genetics, farm efficiency and sustainability

Another major constraint to milk production in Tanzania is poor animal genetics. The national herd has only about 800,000 dairy cattle, while the rest (over 24 million) comprise mostly indigenous and a few beef cattle. Through the African Dairy Genetic Gains program (poster 5), genetic and genomics tools are being used to identify and certify high performing bulls in order to ensure that farmers in Tanzania obtain high grade bulls that are suited to their production systems. The program will establish the National Dairy Performance Center to receive and process data on dairying, working closely with the Partnership for Artificial Insemination (PAID) project.

The multiplication of high grade dairy cattle will be aided by artificial insemination, an intervention that can be implemented through dairy markets hubs. Dairy market hubs are characterized by collective action in form of group membership, and group membership has been found to increase the efficiency of dairy farmers (poster 26). Therefore it is not surprising that artificial insemination and dairy market hubs could facilitate the transition from milk production in the extensive feeding system, which is not profitable without public support (poster 31), to commercial dairying in the semi-intensive and intensive feeding system (poster 6).

More commercial dairying will lead to demand for better milk handling equipment as milk spoilage has been observed to cut revenues (poster 31). Such equipment include the Mazzican (poster 11) and milk coolers, which can significantly improve the quality of milk in the value chains. The challenge with milk cooling, however, is that most farmers operate in remote areas that do not have electricity. A potential solution lies in off-grid solar milk cooling systems (poster 7).

But how sustainable is commercial dairy farming in Tanzania? A study was undertaken to assess the sustainability of milk production by smallholder dairy farmers and pastoral cattle keepers using a set of 15 indicators capturing economic, social and environmental dimensions (poster 17). Combining all dimensions as well as considering each dimension separately, commercial milk production is generally not sustainable under current conditions without public funding that private actors can leverage. To make it sustainable will require private and public resources allocated to establish and strengthen farmer organizations and institutional arrangements embodied in dairy market hubs and innovation platforms, promoting climate-smart animal husbandry practices, and preventing and resolving land conflicts.

  1. Dairy markets and linkages

Although real-world markets are generally imperfect, dairy input and output markets in Tanzania are highly imperfect and this prevents milk producers from participating fully in these markets. For instance, it appears that the fodder market is characterized to a significant degree by oligopoly power (few producers/sellers but many buyers) and therefore it is not surprising that the quality of fodder produced and marketed is low (poster 16).  The More Milk in Tanzania project – a core project of, and one of several under the Maziwa Zaidi program – specifically aimed to inform dairy development efforts on how to enhance the participation of milk producers in markets for physical inputs, services, and outputs. The project has piloted dairy market hubs as an organizational model to strengthen business-to-business linkages among dairy value chain agents.

Two types of hubs have been tested: producer organization – or collective action-based hubs and milk trader-based hubs. In the project, collective action has taken three forms: producers in a formal group collectively bulking and selling milk to a processor, producers in a formal group individually selling milk to milk traders, and producers in a formal group individually selling milk to final consumers (poster 3).

Proper functioning of the hubs depends on the level of business skills of value chain agents and the level of organizational development of producer organizations. Training, coaching and close mentoring of milk producers and traders on dairy enterprise planning and management would greatly help to strengthen business linkages (poster 32). Also, it is important to periodically assess the development of producer organizations towards being self-sustaining. There are five stages of organizational development, with the fifth stage being the stage at which the producer organization is fully self-sustaining. Of the 30 producer organizations that the project worked with, more than a half are in stage one, meaning that without additional external support, they are likely to perish (poster 35). This would erode the benefits that milk producers have derived from collective action and market hubs in general, such as increased access to credit (poster 27) and higher dairy income (poster 1).

  1. Multi-stakeholder and innovation platforms

Innovation platforms, or more generally multi-stakeholder platforms (MSPs) when hubs are included, facilitate information sharing and greater collaboration among value chain actors. In Tanzania, their role in technology transfer is evident as already mentioned for the case of improved forage species. A hierarchy of MSPs at village, district, regional and national levels can improve policy making and planning to achieve greater farm productivity and household incomes (poster 23). They can stimulate growth of markets through business partnerships in the value chain that would catalyze more widespread innovation and result in more and better quality milk (poster 10).

At the national level, the Dairy Development Forum (DDF) facilitates the flow of information to regional platforms (poster 8). However, DDF members have been debating whether or not formalization of the DDF as a private sector-driven organization would enhance its effectiveness (poster 30). If formalized, members would have to determine how to support its operations and enhance its effectiveness.

  1. Dairy policy

A supportive dairy industry policy is necessary to ensure that the industry achieves a positive influence on nutrition outcomes in low income households (poster 9). Maziwa Zaidi’s contribution to informing Tanzania’s dairy industry policy has been through its contribution to the Tanzania Livestock Modernization Initiative (TLMI) and formulation of the Livestock Master Plan (LMP – poster 4). Implementing policy proposals contained in the TLMI would increase milk producer and consumer welfare by about three million U.S. dollars annually (poster 29). The LMP recommends private and public investments in improving animal genetics, feed, animal health, and value addition (poster 4). However, it is important to assess the potential environmental impacts of the investments since productivity-enhancing interventions might have negative impacts on the environment (poster 22). The Maziwa Zaidi program has also provided vital lessons for the implementation of components 2 and 3 of the second phase of the country’s Agricultural Sector Development Program (posters 12 and 13).

  1. Inclusive dairy development

Promoting inclusive dairy value chain development not only focuses on increasing the participation of smallholder farmers in value chains but also takes into consideration the roles, needs and vulnerabilities of specific categories of smallholders such as women and the youth. For instance, it was found that the impacts of risk on milk production are greatest for youths operating in the informal dairy value chain (poster 28). Also, men and women in a given cattle keeping household have different roles regarding milk production (poster 21) and the use and management of animal feeding safety nets such as ololilis (poster 34). The definition of ownership of cattle varies according to gender norms, and as such, gender-responsive approaches are needed to ensure that women’s ownership of livestock supports gender equity (poster 33).

The policy forum was co-hosted by Maziwa Zaidi implementing partners led by the International Livestock Research Institute (ILRI) and comprising on the research side, the International Centre for Tropical Agriculture (CIAT), Sokoine University of Agriculture (SUA) and Tanzania the Livestock Research Institute (TALIRI); and, on the development organizations side, the Tanzania Dairy Board (TDB), Heifer International Tanzania, Faida Market Linkage, Local Government Authorities and various private sector value chain actors who were involved in testing of various interventions under Maziwa Zaidi. The Agriculture Non State Actors Forum (ANSAF) co-hosted the forum itself.

Download a report of the meeting

Presentations from the meeting included:

See photos from the meeting / See recent products from the Maziwa Zaidi program

 

See past stories on CGIAR livestock work in Tanzania