Isabelle Baltenweck
Deputy Program Leader, Policies Institutions and Livelihoods
International Livestock Research Institute
Smallholders produce the bulk of the milk in many African countries. Dairy farming is a source of livelihoods for millions of women and men, providing source of nutrients for the family, income from the sale of milk, and other farm products like manure. Individually, they generate low volumes and are often scattered over large areas and are therefore less attractive to private sector agribusiness partners. The question is how smallholders can access inputs and services, increase production and sales to meet the increasing demand for milk and milk products.
Farmers’ collective action can create economies of scale, both in marketing the milk and in providing inputs and services. The concept of dairy business hubs has been used, as collective farmer-owned, or managed, milk bulking and/or chilling businesses from which farmers may also gain access to other services they need for their dairy enterprises. A hub approach will start by identifying the organisational and institutional arrangement(s) required for farmers to get together (through, for example a co-operative or a public limited company) and supporting the group in moving toward this desired state. At the same time, market agents are sensitised and supported to provide business linkages to the producers organisation. By working with the private sector and building the capacity of producers to run and own their organisation, this approach aims at ensuring sustainability of the market linkages when project support ends.
ILRI was involved in the design, implementation and evaluation of dairy hubs in four countries of East Africa (Kenya, Rwanda, Tanzania and Uganda). Active suppliers of producers organisations supported by the East African Dairy Development project have seen an increase in milk productivity in their cross bred animals of between 50 and 60 per cent depending on the countries, with the largest increase recorded in Kenya. Even though difference in methodology between baseline and final evaluation prevents clear comparison, overall, there has been an increase in dairy income in nominal terms for the three countries and in real terms for Uganda (between 30 % and 130 %). For cattle keepers to have long-term access to markets, beyond a project support, the team developed a tool that assesses the PO’s progress towards sustainability using both production and business dimensions, for example its ability to run Board elections regularly and freely or PO members’ ability to access feed inputs on credit. A Producers Organisation ‘graduates’ when it reaches a certain score (60 %), meaning that external support, from development partners, is no longer required. Data have shown that on average, it takes 7.3 years for a PO to reach ‘graduation’. Sites in Kenya and Rwanda have progressed significantly faster than Ugandan sites, while preexisting sites have done so much faster than all the other hub types.