1. Entry points for extending the frontiers of dairy value chains in Tanzania EXTRAPOLATE Workshop 05 Mar 2014, Zanzibar, Tanzania A. Omore

2. Four inter-related problems faced by resource-poor milk producers 1.Dominant direct sales of small volumes by smallholder producers that preclude economies of scale 2.Credit facilities for basic inputs and services or working capital are lacking. This discourages investment to improve productivity 3.Lack of appropriate organizational models for pre- commercial producers (complex cooperative models and technology-driven solutions have largely failed) 4.Seasonality of rainfall and related effects are strong Milk marketing outlets (NBS, 2003) Milk Buyer % Neighbours86.1 Local market5.5 Secondary market0.5 Processors1.4 Large scale farms0.2 Trader at farm4.5 Other1.7 TOTAL100.0 More Milk in Tanzania Project

3. 1.Dominant direct sales of small volumes by smallholder producers that preclude economies of scale 2.Credit facilities for basic inputs and services or working capital are lacking. This discourages investment to improve productivity 3.Lack of appropriate organizational models for pre- commercial producers (complex cooperative models and technology-driven solutions have largely failed) 4.Seasonality of rainfall and related effects are strong More Milk in Tanzania Project Women participate more in milk related tasks Four inter-related problems faced by resource-poor milk producers

4. More Milk in Tanzania Project Milk processing in Tanzania has been declining since 1990 1.Dominant direct sales of small volumes by smallholder producers that preclude economies of scale 2.Credit facilities for basic inputs and services or working capital are lacking. This discourages investment to improve productivity 3.Lack of appropriate organizational models for pre- commercial producers (complex cooperative models and technology-driven solutions have largely failed) 4.Seasonality of rainfall and related effects are strong Four inter-related problems faced by resource-poor milk producers

5. 1.Dominant direct sales of small volumes by smallholder producers that preclude economies of scale 2.Credit facilities for basic inputs and services or working capital are lacking. This discourages investment to improve productivity 3.Lack of appropriate organizational models for pre- commercial producers (complex cooperative models and technology-driven solutions have largely failed) 4.Seasonality of rainfall and related effects are strong More Milk in Tanzania Project Four inter-related problems faced by resource-poor milk producers

6. 1.Dominant direct sales of small volumes by smallholder producers that preclude economies of scale 2.Credit facilities for basic inputs and services or working capital are lacking. This discourages investment to improve productivity 3.Lack of appropriate organizational models for pre- commercial producers (complex cooperative models and technology-driven solutions have largely failed) 4.Seasonality of rainfall and related effects are strong More Milk in Tanzania Project Four inter-related problems faced by resource-poor milk producers

7. Huge seasonal fluctuation in milk supply from traditional herd

8. Farmer groups are struggling in most places except in Tanga More Milk in Tanzania Project

9. Tanzania Dairy (“Maziwa Zaidi”) – Goals and Pathways over the next 10-12 Yrs The dairy program has three principle goals: Smallholder farmers have reliable and consistent access to quality inputs and services in order to efficiently achieve high milk productivity; Smallholder famers have access to reliable, well-coordinated, and efficient dairy products marketing arrangements with resultant improvement in household income and livelihoods; Poor consumers have improved access to quality, safe, and nutritious dairy products at affordable prices to increase per capita consumption of the dairy products. Long term impacts will be achieved through four main pathways: Institutional innovations for reliable and consistent access to inputs and services; Innovative strategies for consistent and reliable access to Artificial Insemination materials and services, forage, and water; Generation of evidence for achieving impact at scale and influencing policy; Innovative strategies for increasing the consumption of dairy products.

10. R&D Focus in Tanzania Strong focus on pro-poor marginalised pre-commercial men and women Provide proof-of-concept on how marginalised groups can also be targeted successfully Generate evidence for influencing policy

11. Objectives Goal: Inclusive growth and reduced poverty and vulnerability among dairy-dependent livelihoods in relevant rural areas in Tanzania Outcome: Rural poor are more income secure through enhanced access to demand-led dairy market business services and viable organisational options, and low-income consumers have better access to affordable milk. More Milk in Tanzania Project

12. Contributing Objectives over 5 yrs 1.Develop scalable value chains approaches with improved organization and institutions serving resource-poor male and female smallholder dairy households 2.Generate and communicate evidence on business and organizational options for increasing participation of resource- poor male and female households in dairy value chains 3.Inform policy on appropriate role for pro-poor smallholder- based informal sector value chains in dairy sector development More Milk in Tanzania Project

13. Key messages on identified entry points Validity of the need to focus attention on ‘growing’ the existing informal system of milk production (with zebu cattle) and marketing to extend the frontiers of commercial dairying Organizational models to achieve economies of scale for access to inputs and services required to unleash incentives for raised productivity to levels that will justify bulking This is riskier than classical approaches but more inclusive in ensuring wider impact on marginalised Policy support for pro-poor shift needed

14. Identified field sites (+ target groups/typologies)

15. Project sites

16. Dairy Market Hubs (DMHs) with emphasis on improving access to inputs and services through business development services (BDS) and check-off arrangements: a) DMHs revolving around chilling plants or accessing them (if under-utilized) through transport arrangements that provide both outputs marketing and inputs and services through check-offs; b) DMHs revolving around check-offs for inputs and services provided through milk traders; and c) DMHs revolving around check-offs for inputs and services provided through cattle traders. Hubs for piloting in the Tanzania context

17. Producers Inputs, $$ Inputs & services $$ Payment agreement Milk, Cattle Check-off agreement Inputs & Service Providers (BDS) Traders Milk Cattle BASIC Dairy Market Hub for Provision of Inputs and Services on Check-off Illustration of a hub for provision of inputs and services on credit without collective bulking and marketing

18. Strategic Cross-cutting Platforms Technology Generation (Feed, genetics, health Market Innovation Targeting & Impact (includes gender) Consumers Design of integrated R4D to extend the frontiers of dairy value chains to achieve wider impact in Tanzania Value chain development team + research partners INTERVENTIONS TO SCALE OUT NATIONALLY Addressing the whole value chain with downstream emphasis Intervention with development partner Cross-cutting: M&E, communications, capacity building

19. Identified dairy policy issues in inputs and services ANIMAL HEALTH: a) Certification of para-vet practitioners is overly restricted by regulations

20. Identified dairy policy issues in inputs and services GENETICS: a) Certification of artificial insemination (AI) technicians is too restricted (by the Veterinary Surgeons Act) for efficient delivery of services b) The regulator of breeding services is also an active practitioner. What is the optimal public-private-partnership (PPP) for delivery of breeding services? c) Animal registration, recording and evaluation are administered by too many bodies d) Animal registration, performance recording and genetic evaluation are administered solely by a government agency with inadequate capacity to deliver on the service. What is the optimal PPP for this? e) Animal Breeding Bill needs to be submitted to Attorney General f) Brucellosis needs to be made a notifiable disease so testing and control are made mandatory and publicly funded g) There is no information system capturing livestock identification, registration, recording for breeding improvement and traceability

21. Identified dairy policy issues in inputs and services FEEDS: a) Compounded feed standards are variable and are based on recommendation of cattle with high genetic composition. Related technical question is how to develop recommendations that take into account genetic potential of cattle b) Feed quality is variable in spite of the standards i.e. poor enforcement of standards and lack of stakeholders participation c) Sourcing and importation of forage seeds are heavily controlled by the government thus restricting free flow d) Training and certification of small scale forage seed producers are currently restricted e) Certification of small scale compounded feed producers who are currently considered illegal (this restricts opportunities to grow markets and improve quality)

22. Identified dairy policy issues in inputs and services VALUE CHAIN DEVELOPMENT: a) Lack of stakeholder controlled small-scale dairy traders’ and business providers’ associations to contribute to empowerment of their members

23. Implementation & Innovation Monitoring and evaluation Data collection and analysis Dialogue Agenda setting Policy change cycle to address the constraints Update status of policies, procedures, regulations (ILRI) Analyze options for rationalization & harmonization Facilitate national and regional dialogue Identify drivers of policy change Quantify impacts of Policies Disseminate best practices share and exchange information Quantify impacts of policies Identify impact pathways Identify drivers of policy change

24. DDF to play key role in dialogue Dairy Development Forum Secretariat: Tanzania Dairy Board Stakeholder organisations and projects MilkIT & More MIlkiT LoL Heifer-Tanz SNV Others MVIWATA

25. Grow the dairy herd Fill gaps in dairy technology & agribusiness skills / capacity address feeds scarcity Space for nurturing multi-stakeholder processes to address challenges on how to: Regional Platform District Platform FARMER ASSOCIATIONS AT VILLAGE LEVEL DAIRY DEVELOPMENT FORUM District Platform Working groups

26. Proposed interventions from the last DDF Farmer Organizations Prioritize dairy production regions/do an inventory of farmer groups (TAMPRODA can do this) Analysis of strengths, weaknesses, opportunities and threats (SWOT) of existing groups (TAMPRODA can do this) Create an inventory of existing techniques/tools and translate English manual to Swahili to increase awareness (Heifer International can do this) Policy group to develop less cumbersome registration procedures Need to develop and know rules guiding the sector (breeding policy) Policy and Regulations Commitment and speedy formulation of Inclusive breeding policy (MLFD, DDF, TDB) promote breeder association to do recording Constructive lobbying by stakeholders Task force group members to document what they will do and report at the next DDF

27. Candidate Scopes Contribution of dairy to household income Contribution of dairy income to household livelihoods Contribution of improved access to inputs and services (dairy market hubs) to household income / livelihoods

28. CGIAR is a global partnership that unites organizations engaged in research for a food secure future. The CGIAR Research Program on Livestock and Fish aims to increase the productivity of small-scale livestock and fish systems in sustainable ways, making meat, milk and fish more available and affordable across the developing world. CGIAR Research Program on Livestock and Fish livestockfish.cgiar.org livestockfish.cgiar.org Thank You