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Transcript of White Gold: Opportunities for Dairy Sector Development Collaboration in Ethiopia & East Africa-Dr....
Nathaniel Makoni, ABSTCM LtdRaphael Mwai, PPD ConsultantsTsehay Redda, EDBD ServicesAkke van der Zijpp, Wageningen UniversityJan van der Lee, Centre for Development Innovation, Wageningen UR
White Gold: Opportunities for Dairy Sector Development Collaboration in Ethiopia & East Africa
African Dairy Conference & Exhibition
KICC, Nairobi
September 26, 2014
Study Countries
Outline
1. Dairy Status
2. Key Issues• Regional level• Country Level
4. Follow up Donor Collaboration Agenda
5. Conclusion
Dairy Status
Commercial
(High)
Small-scale(Low)
ProcessorAggregator/Transport MCC Transport RetailInputs &
services
To market –raw warm milk Consumer
To Market - Unpasteurized
To Market
To Market – raw milk
Cottage industry
To market –value added
Dairy Value Chains Scenarios - East African Countries
East Africa Dairy Development Trajectory
Tanzania
Burundi
Ethiopia
Kenya
Rwanda
Uganda
> 80% Informal Sector
97%
95%
90%
80%
Formal13%
Informal87%
Formal:Informal Sector
80%
80%
Regional Economics Data
Kenya Rwanda Tanzania Uganda Ethiopia Burundi
943
620 609547
454
251
GDP /Capita WB 2012/13
Kenya Rwanda Ethiopia Uganda Burundi Tanzania
8
6 6
3 3
1.53
Dairy Contribution to GDP (%)
?
Significant investments in dairy production
National Cattle, & Dairy Cattle Data
Ethiopia Tanzania Kenya Uganda Rwanda Burundi
49.2
21 1812.8
1.5 0.7
National Cattle Population (Million)
Kenya Tanzania Uganda Rwanda Ethiopia Burundi
3.5
0.68 0.650.2 0.19 0.01
Improved Dairy Breed Population (Million)
Kenya Rwanda Uganda Tanzania Burundi Ethiopia
19
13
53
1.4 1
Improved Dairy Cattle as % of Na-tional Cattle Population
Kenya & Rwanda lead in dairy genetics infusion
Improve artificial insemination cost & efficiency of delivery
Burundi Ethiopia Kenya Rwanda Tanzania Uganda
13
26
12 13 15 12
35
63
30
57
83 86
AI Cost/Service (US$) & Farmgate milk equivalent/Service (liters)
AI use <20%Sexed <2%
Kenya Rwanda Tanzania Uganda Ethiopia Burundi
18.0
12.0
5.84.6
0.3 0.2
Annual AI as % of National Herd
Regional AI Status
National bull studs in all Countries
National Milk Production / Year (Million Liters)
Kenya Ethiopia Tanzania Uganda Rwanda Burundi
4400
3300
16501190
45073
Total Regional Production = 11.06 Billion
Potential Demand = 48.5 Billion
Estimated Gap = 37.4 Billion
Uganda has least cost/ ltr. for farm-gate and processed milkEthiopia risks to be uncompetitiveThe farm gate prices reflect feed costs
Regional Farm Gate Prices/Liter (US$)
Ethiopia Kenya Burundi Rwanda Tanzania Uganda
0.41 0.390.36
0.220.18
0.14
Kenya Uganda Tanzania Ethiopia Rwanda Burundi
2.9
1.0
0.40.2 0.2 0.2
1.2
0.6
0.1 0.1 0.0 0.2
Installed vs Utilized Capacity (Million Liters)
Milk Processing Capacity
Kenya has the dominant regional dairy processor
Some claimed installed capacity is uninstalled Under-utilized capacity across the region averages 49%
What is the effect of low capacity utilization on milk price & consumption?
• Rwanda & Burundi have high cost of pasteurized milk due to (OH & packaging 50%)
• Uganda has lowest price of pasteurized milk
Regional Milk Processing and Packaging
Rwanda Burundi Ethiopia Tanzania Kenya Uganda
1.19
0.980.87
0.650.59
0.38
Processed Milk Price/Liter
Dairy Product Range (8)
Brookside, NKCC, Pearl & SALL
Ethiopia Tanzania Kenya Uganda Rwanda Burundi
92
4943
36
12 11
24
12 8 6 2 14 4 4 6 5 4
National, Urban Population (Million) & % Urban Growth Rate
Population Urban Urban Gr. Rate
Burundi
Ethiopia
Uganda
Rwanda
Tanzania
Kenya
270
470
510
620
630
930
Gross National Income Per Capita - East Africa (USD)
Population, Urbanization, Income Growth and Milk Consumption/Capita
Kenya Uganda Rwanda Tanzania Ethiopia Burundi
99
5540
23 196
Milk Consumption/Capita (liters)
1. Region’s consumption < FAO rec. 200l/Capita
2. Potential demand remains high
Overarch
ing challe
nges &
Issues
Low milk consumptionPoor
infrastructure & access to
markets
Low cow productivity:feed&breed
Lack of conducive policy &
incentives
Limited research & extension
Low farmer education & organization
National & Tranboundary diseases
Limited official industry data
Low female & youth
involvement
Seasonal milk supply
Poor milk quality
Inadequate financial services
JESA Integrated Dairy Model
JESA Commercial Farm Milk supply 50%
Smallholder Farms -Milk supply 50%
Price premium $0.4 vs $0.3AI, Extension, Finance & Veterinary services
Value Proposition
US$0.4/ litre
RDCP-II AssistanceUS$28,875
Inyange Franchise Model
Blessed Dairy Consolidation & Quality improvement Model
Now 2 trucks
RwF 300RwF 320
RwF 250
RwF 400
RwF 180
Follow-up activitiesafter Expert Consultation
Masaka-Mbarara, Uganda, April 2014
Follow up
1. National level – stakeholder processes ongoing or coming soon
2. Donor collaboration – thematic priorities affirmed by IADG meeting Sept 16-18followed up by lead agency per theme
Donor agenda - Thematic priorities
1. More milk from roughage2. Breeding for more and better animals3. Healthy animals4. Strengthening of farmer organizations and access to finance5. Safeguarding and rewarding good milk quality6. Better policy through better availability of data on farm/firm-,
chain-, and sector level 7. Competency of dairy farmers, staff, and entrepreneurs along
the value chain 8. Sustainable intensification related issues – biogas and closing
the nutrient cycle
Thank You
“White Gold” report can be downloaded from:
edepot.wur.nl/307878