Inclusive commercial and sustainable dairy value chain development in Kericho County-Suzanne van...
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Inclusive commercial and sustainable dairy value chain development in Kericho County Robin Mbae, Luke Kessai, Suzanne van Dijk African Dairy Conference - 26 September 2014
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To achieve the global 2°C target both developed and developing countries must mitigate their GHG emissions Developed countries pledged US$ 100 billion p.a. by 2020 for climate change action in developing countries NAMAs (Nationally Appropriate Mitigation Actions) are a key element of climate policy Kenya´s dairy sector is rapidly increasing. Currently it contributes 4 % to Kenya‘s GDP and provides income to 700,000 families. However, sustainability and productivity enhancing investments are crucial for Kenya to maintain leading position in East Africa and to capture related socio-economic development benefits Hence within the National Climate Change Action Plan, the State Department of Livestock and the Climate Change Unit within MoALF need to prepare a NAMA in the livestock sector that aim to realize a triple win Pilot Kericho County
Transcript of Inclusive commercial and sustainable dairy value chain development in Kericho County-Suzanne van...
Inclusive commercial and sustainable dairy value chain development in Kericho County
Robin Mbae, Luke Kessai,Suzanne van Dijk
African Dairy Conference - 26 September 2014
© UNIQUE forestry and land use GmbH
Introduction
• To achieve the global 2°C target both developed and developing countries must mitigate their GHG emissions
• Developed countries pledged US$ 100 billion p.a. by 2020 for climate change action in developing countries
NAMAs (Nationally Appropriate Mitigation Actions) are a key element of climate policy
Kenya´s dairy sector is rapidly increasing. Currently it contributes 4 % to Kenya‘s GDP and provides income to 700,000 families. However, sustainability and productivity enhancing investments are crucial for Kenya to maintain leading position in East Africa and to capture related socio-economic development benefits
Hence within the National Climate Change Action Plan, the State Department of Livestock and the Climate Change Unit within MoALF need to prepare a NAMA in the livestock sector that aim to realize a triple win
Pilot Kericho County NAMA implementation will inform national level for further consideration
© UNIQUE forestry and land use GmbH
Increasing milk deficit: booming business
Kenya Ethiopia Uganda Tanzania -
1,000
2,000
3,000
4,000
5,000
6,000
4,919
3,618
1,190 1,847
Milk production in 2011 (Million liters)
Kenya Ethiopia Uganda Tanzania0
20
40
60
80
100
12099,9
39.231.6
38.7
Milk consumption in 2011 (L/capita/year)
With FAO recommended consumption levels, the potential demand for these countries would be 42 Billion Liters per year
Potential yield gap: 31 Billion Liters per year
Potential yield gap in Kenya: 3.5 Billion Liters per year
FAO, 2014
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High growth potential of the dairy sector
Demand shifts:• Population growth • Growing prosperity• Urbanization
More rich and diversified diets
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Dairy in Kericho County: situation today
• Dominated by smallholders• Crossbreeds or purebreds (Friesians, Fleckvieh)• Low inputs low productivity (average 3 L/cow/day)• Low resilience to climate change• High emissions per kg milk• Inadequate institutional and marketing support
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Main constraints
Feed Feeding practices
Market access Disease control
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Investment proposal
Improving productivity: feed, zero grazing, health and waste management
Agroforestry fodder production and water harvesting to reduce seasonal variability
Farmers organized in co-operatives, managing chilling plants
Intensive extension support
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Phased implementation
Aspired scale: 35,000 farmers Investments required for fodder trees, zero grazing units and
milk chilling plants
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Institutional set-up
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Financial feasibility
IRR of 34 % before and 26 % after taxes at co-operative level Triples net revenues at farmer level, from US$ 528 to US$ 1,662
per farmer per year (3 13 L/cow/day)
-300.000
-200.000
-100.000
0
100.000
200.000
300.000
400.000
500.000
600.000
700.000
1 2 3 4 5 6 7 8 9 10
US
Dol
lars
Years
Annual cashflows incl. tax
Cumulative cashflows incl. tax
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Triple win
Increased productivity resulting in• Income generation US$ 1,662 per farmer per year• Employment: 82,000 direct jobs, 14,800 jobs in processing and
19,100 in the informal sector• Food security & nutrition: 320 Million Liters of milk per year,
benefitting 1.5 Million consumers Increased climate resilience due to improved soil conditions and
water harvesting Emission reductions 2,337,000 tons CO2-equivalents within 10
years
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FinancingInvestment stage (US$)
Set up Early MaturingPRIVATE SECTOR FINANCE (CONCESSIONAL LOANS)Upfront feed sourcing costs and fodder planting investments 7,000,000 22,000,000 22,000,000
Zero grazing unit investments 18,000,000 54,000,000Milk chilling plant investments 300,000 1,000,000 2,000,000
PUBLIC AND CLIMATE FINANCEExtension (investments and costs) 400,000 1,000,000 3,000,000
Monitoring costs 500,000 1,000,000 2,000,000
TOTAL 8,000,000 43,000,000 83,000,000
Additional public finance from investments of Kericho County Government in milk chilling plants, infrastructure and disease control
© UNIQUE forestry and land use GmbH
Monitoring
Interventions have to be measurable to demonstrate benefits: productivity, resilience and mitigation
Monitoring serves farmer and implementation partners Benefits• Benchmarking of productivity, income• Better matching of feed inputs and milk yields• Enables timely interventions
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Way forward
Detailed feasibility study Clarification of roles and responsibilities Implementation planning and framework Environmental impact assessment Investments (public & partnerships)
© UNIQUE forestry and land use GmbH
CONTACT
Suzanne van DijkUNIQUE forestry and land use [email protected]+49 761 20 85 34 39
Robin MbaeState Departement of LivestockClimate Change Unit [email protected]+254 722 38 19 31
