Status of the eDairy ProjectKeywords 1. Automation

2. Computerization

3. ICT Development

Agenda

Automation in the dairy Sector Computerization of the dairy Industry The state of ICT in the dairy industry in Kenya Case study Kiambu county

1. Challenges

2. Lessons

3. Opportunities

ICT Relevance for East Africa’s common market Recommendations

1. Automation

o Automation can simply mean producing more in less time

o e.g. a digital scale with an inbuilt card reader records a single farmer milk weightment within 4 sec, and can therefore handle 360 accurate weightments in one hour; this is automation

o Here technology combination between the card & digital scale, work together to deliver more in less time

o Compared to the analogue crane scale which utilizes 45sec for a single farmer weightment ,this works out to about 80-100 weightments per hour

Computerization in the dairy

o Computerization in the dairy sector means the ratio of computers to users with relevant computer system skills

o These computers process data captured from automated processes in real-time

e.g. data downloads from digital scales, POS(from stores) and PDAs (from veterinary services)

1. This results in, information in form of reports

2. This information is the basis on which managers make informed business decisions.

ICT in the dairy sector

o This may be defined as the use of Information, communication and technology in the dairy sector

Use of precision tools e.g. digital scales & electronic milk analyzers

Use of DSS/MIS Tools

Use of Transaction processing tools over any support infrastructure

How has the dairy industry embraced ICT o The dairy industry in Kenya is still at its infancy as

regards to ICTo 95% of the operations in the dairy sector are manual or

semi-automatedo This can be attributed to the following:-

Dairies are rural based and communication infrastructure is still under developed e.g. most dairies don’t have basic internet access

None ICT compliant staff are employed at the dairies Resulting in low technology up take The prevalence of a high number of aging employees Cost of automation & computerization is highly prohibitive Limited ICT services providers in the sector

The Kiambu County Experience

The farmer before o Imprecise milk weightmentso Delays in monthly paymentso Transcription errors o Miss-trust between the clerks & farmerso Manual records prohibit farmers’ access

to loans o Farmers have resorted to multiple ways of

raising money to stay a float like hawking

Farmer behavior

o A Farmer milks his cow gets 20.1 kgs o Adds about a cup of water to top it up to 20.5 kgso Delivers his milk to the collection centre, clerk weighs

the milk and determines its 20.4 kgs but records 20.0kgs on account of the scale and spillage

o Farmer in this case loses 0.1 kgs, if the farmer didn’t add water he could easily have lost 0.5kgs

o The practice, is weightment to the nearest 0.5kgs, clerks are also aware that the farmer adds water and penalize them only for excessive water

At the dairy

o Milk collections are consolidated and transported to the processor

o Again at this stage the amount of water has increased by 23%

How ? Is it the Transporter??? Is it the Clerk???? Or is it the farmer???

At the Dairy

o The majority of operations are manual or semi-automated large volumes of data

o An A3 size book called the milk register is used to record monthly intake on which basis farmer payments are generated

o Pay slips are hand written and most dairies pay 10-15 days into the new month

o The operations are both labor intensive as well as labor extensive

o All financial records if any are manual & technical staff are turned into clerks

Still at the dairy

• Duplicate records are a common place

DAIRY Registered farmers

Active farmers

Duplicates Ghost Farmers

Dairy A 2,800 450 288 30

Dairy B* 13,500 6,500 560 155

Dairy C 12,000 3,500 499 60

Farmer after automation

o Immediate results of the digital scale deployment

Gain Monthly Annually

Accurate weightment

10 Kgs

120kgs

Financial Kshs 350 US$ 5 Kshs 4,200 US$ 60

Impact on the farmer

Increased Revenue from the same produce due to precise weightments

Timely monthly payments Access to produce statements Renewed confidence and

good working relationship with the clerk/dairy

Farmer access to financial services

High quality milk

Immediate benefits– The dairy saw an increase in milk collections on that

particular route of 99 kgs daily reflecting on a 10% increment on total monthly volumes from the same number of farmers

– Proving that automation has indeed rescued the dairy from

un accounted for loss of milk/milk hawkers- Improved milk quality - Elimination of ghost farmers and duplicate records- Timely automated farmer payments - Accuracy and efficiency in dairy operation leading to less

labor requirements- Simplified data capturing

Impact on the dairy

Impact on the processor

o Better quality milk, less rejectso Reductions in costso Increased quantity delivered meaning full processor

capacity utilizationo With the realization of full traceability of dairy

products, a wider market access is expected for finished dairy products

Challenges encountered

o Steep learning curve o Stakeholders’ mobilization & sensitizationo Technical Challenges

– Fear of and resistance to change– Limited technical resources– Communication infrastructure/bandwidth is costly– Lack of equipment

o Bridging two worlds 1st and 3rd worldo Defining the value chaino Structure of dairy operationso Interpretation of market needs/avoid an over

kill/accommodate local needs

Lessons learnt

o Project cost over shooto Stakeholder managemento Investment in the terms of technicalo The need for standardization of dairy

operations/computer related

Opportunties

o Training & Capacity buildingo Supply of equipmento Data migrationo Integration of middle and 3rd party applicationo Donor support & fundingo Ancillary and service industry involvement i.e.

MPESA etco Serveral spill offs

Recommendations

• What the government can do:– Enforcing dairy automation standardization/implementation

policies– Regulation and suitable supervisory framework– Farmer and other stakeholder mobilization– Funding

What can stakeholders/development partners do– Meaningful collaboration in project funding, farmer groups

mobilization

Processor– Adopting eDairy stem supportive policies e.g. buying milk

from eDairy system compliant dairies, employing some of the equipments in the eDairy system like digital milk analyzer for quality assurance

Recommendations

• What can dairies do?– Enforcing standards as they are in direct contact with the

farmers– Funds mobilization-it’s the farmers money that sustains the

project

ICT development a case for the East African Community

• Reduce costs and add value to the dairy supply chain• Spur economic growth – growth of IT-enabled

services, farmers can get better access to government and commercial services

• Employment generation• Information dissemination to all on dairy related

issues-empowerment all levels• Collection of historical dairy information can be used

for more effective planning and make improvements in yield and quality

Thank youRichard BatandaCTO -Agritrace