Building Strong Stakeholder Support for Collaborative Actions:

1. 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

2. The Context of dairy in East Africa • 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.

3. Context (cont’d) Traditional Dairy Market Model

4. 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

5. 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.  Where? Region produces est. 8 billion litres of milk p.a http://ergodd.zoo.ox.ac.uk/livatl2/bvmilkprodcapita.htm

6. 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. Our geographic scope Who we work with 45,000 • 110,000 farmers in Kenya • 45,000 farmers in Uganda • 24,000 farmers in Rwanda • At least 30% women 45,000 110,000 120,000 24,000 24,306 Target At Dec 2012

7. Approaches: Market access Model Value-Chain/ Hub Model

8. The dairy value chain Formal/High end market Regional Enabling Environment (Quality standards & trade policy) Export market Informal/Low end market Consumers (High end) Local / National Enabling Environment Consumers (Low end) Retail Outlets Milk kiosk/ canteens Processors Informal traders DFBA (CP hubs) Support markets • BDS services (Transport, AI, extension, etc) • Financial Producers Organizations (DMGs/DIGs/FCs) Input Suppliers

9. The Solution – Transforming Chilling Plants to Business Hubs Farmers OTHER RELATED MEs HARDWARE SUPPLIERS CHILLING HUB VILLAGE BANKS FIELD DAYS TESTING AI & EXTENSION FEED SUPPLY TRANSPORTERS

10. CHILLING HUB How Farmers pay for Services through the Business Hub HARDWARE SUPPLIERS VILLAGE BANK AI & EXTENSION FEED SUPPLY FARMERS SERVICES & INPUTS TRANSPORTERS

11. Emerging Rural Economies (Kenya) Rural Village Banks jointly owned by farmer shareholders, being established

12. New Prosperity in Rural Africa! Over 180,000 Liters Daily $15.0m p.a. • 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 • Olkalou Dairy Ltd. • Milk Chilling • 21,000 litres/day • 3,296 farmers • profitable • Kabiyet Dairy Plant • Chilling & AI & Agrovet • 32,000 litres/day • 3,300 farmers • profitable Over 83,000 farmers

13. Major Accomplishments • 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)

14. Major Accomplishments

15. 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.

16. 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

17. Achievement at farm level Transitioning from local to exotic breeds…

18. Economic benefits and spillover • 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

19. Achievement at dfba level • 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

20. Projected stage distribution in December 2013

21. Challenges-profitability of dairy farming • 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

22. Challenges-performance at DFBA level 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

23. Asanteni Sana!