White Gold: Opportunities for Dairy Sector Development Collaboration in East Africa

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White Gold: Opportunities for Dairy Sector Development Collaboration in East Africa White gold: Opportunities for dairy sector development collaboration in East Africa Nathaniel Makoni Tsehay Redda Jan van der Lee Raphael Mwai Akke van der Zijpp White Gold Opportunities for Dairy Sector Development Collaboration in East Africa Nathaniel Makoni 1) Raphael Mwai 2) Tsehay Redda 3) Akke van der Zijpp 4) Jan van der Lee 5) 1 ABSTCM Ltd 2 PPD Consultants 3 EDBD Services 4 Wageningen University 5 Centre for Development Innovation, Wageningen UR Centre for Development Innovation Wageningen, March 2014 CDI report CDI-14-006 Makoni, N; Mwai, R; Redda, T; Zijpp, A. van der; Lee, J. van der. 2013. White Gold; Opportunities for Dairy Sector Development Collaboration in East Africa. Centre for Development Innovation, Wageningen UR (University & Research centre). CDI report CDI-14-006. Wageningen. Abstract A study of the dairy sector in six East African countries was followed by a dairy expert consultation in Uganda in April 2014. The objective of the initiative was to explore possibilities to improve coordination among development agencies, investors and other value chain stakeholders and governments, and for creating synergy within and between the different countries. This report describes outcomes of both study and consultation and is intended to serve as a reference document for all stakeholders. It includes recommendations and priority actions that should enable stakeholders to capitalize on the opportunities in the East African dairy sector and clarify the roles of various partners in this endeavour (donors, public sector, and private sector). Study and consultation were initiated by the Inter-Agency Donor Group (IADG) on pro-poor livestock research and development. Keywords: dairy, dairy value chain, milk, livestock, cattle, donor collaboration, East Africa, Kenya, Ethiopia, Tanzania, Uganda, Rwanda, Burundi This report can be downloaded free of charge from www.wageningenUR.nl/cdi (“publications”). © 2014 Centre for Development Innovation, part of the Dienst Landbouwkundig Onderzoek foundation, P.O. Box 88, 6700 AB Wageningen, The Netherlands. T + 31 (0)317 48 68 00, E [email protected], www.wageningenUR.nl/cdi. The Centre for Development Innovation uses a Creative Commons Attribution 3.0 (Netherlands) licence for its reports. The user may copy, distribute and transmit the work and create derivative works. Third-party material that has been used in the work and to which intellectual property rights apply may not be used without prior permission of the third party concerned. The user must specify the name as stated by the author or licence holder of the work, but not in such a way as to give the impression that the work of the user or the way in which the work has been used are being endorsed. The user may not use this work for commercial purposes. The Centre for Development Innovation accepts no liability for any damage arising from the use of the results of this research or the application of the recommendations. The views expressed in this draft report are those of the authors and under no circumstance can be attributed to the organizations associated in IADG that asked for this report. CDI report CDI-14-006 Photos: Bram Wouters (cover); Henric Verjans and Jan van der Lee (back) This report was made possible with thanks to the following funding partners: Contents Preface 5 Acknowledgements 6 List of abbreviations and acronyms 7 Executive summary 10 Part I: IADG East Africa Dairy Expert Consultation (EADEC) 1 Summary of outcomes EADEC 17 2 Donor collaboration agenda 19 2.1 Introduction 19 2.2 Donor collaboration 19 2.3 Thematic priorities & lead agencies 19 2.4 Follow up activities 21 3 Consultation - Key discussion items 23 3.1 Presentation of study results 23 3.2 Sector development approaches 23 3.3 Sector governance for sustained, resilient, inclusive milk market development 26 3.4 Sustainability concerns 27 3.5 Market development 28 3.6 Dairy farming input and service provision 29 4 Background to the initiative 32 4.1 Introduction 32 4.2 Objectives for the expert consultation 32 4.3 Participation 32 4.4 Program and location 33 4.5 Organization 33 Part II: East Africa Dairy Sector study 1 Introduction 35 1.1 Purpose and limitations 35 1.2 Report structure 35 2 Recommendations 36 3 Comparative analysis of East African dairy sectors 47 3.1 Common characteristics of dairy sectors in East Africa 48 3.2 Comparison of dairy value chain structures in East Africa 52 3.3 Challenges shared across the region 53 3.4 Opportunities across the region 57 3.5 Comparative economic, environmental, gender and social performance programs of country dairy sectors 58 3.6 Emerging regional dairy issues and prospects 60 3.7 Donor policies and collaboration 61 4 Country dairy value chain summaries 63 4.1 Burundi 63 4.2 Ethiopia 64 4.3 Kenya 65 4.4 Rwanda 66 4.5 Tanzania 67 4.6 Uganda 69 CDI report CDI-14-006 | 3 Part III: East Africa Dairy Sector study 1 Burundi dairy profile 72 1.1 Country background 72 1.2 Dairy value chain 73 1.3 Strengths, weaknesses, challenges and opportunities in dairy sector 81 1.4 Emerging dairy sector issues 82 1.5 Prospects for sustainable growth 83 1.6 Collaboration prospects 84 2 Ethiopia dairy profile 87 2.1 Country background 87 2.2 Dairy value chain 88 2.3 Strengths, weaknesses, challenges and opportunities in dairy sector 96 2.4 Emerging dairy sector issues 96 2.5 Prospects for sustainable growth 96 2.6 Collaboration prospects 97 3 Kenya dairy profile 100 3.1 Country background 100 3.2 Dairy value chain 100 3.3 Strengths, weaknesses, challenges and opportunities in the dairy sector 107 3.4 Emerging issues in the dairy sector 107 3.5 Prospects for sustainable growth 108 3.6 Collaboration prospects 108 4 Rwanda dairy profile 110 4.1 Country background 110 4.2 Dairy value chain 111 4.3 Strengths, weaknesses, challenges and opportunities 118 4.4 Emerging dairy sector issues 119 4.5 Prospects for sustainable growth 120 4.6 Collaboration prospects 121 5 Tanzania dairy profile 123 5.1 Country background 123 5.2 Dairy value chain 123 5.3 Strengths, weaknesses, challenges and opportunities in dairy sector 129 5.4 Emerging dairy sector issues 130 5.5 Prospects for sustainable growth 131 5.6 Collaboration prospects 133 6 Uganda dairy profile 135 6.1 Country background 135 6.2 Dairy value chain 135 6.3 Strengths, weaknesses, challenges and opportunities in dairy sector 142 6.4 Emerging dairy sector issues 143 6.5 Prospects for sustainable growth 143 6.6 Collaboration prospects 144 References 147 Appendices 150 Appendix 1 - Terms of reference Appendix 2 – Donor programs in the six East African study countries Appendix 3 – Regional & individual country maps of the six study countries Appendix 4 – Milk collection centres in Burundi Appendix 5 – List of key institutions and individuals interviewed in the six study countries Appendix 6 – Summary of Ethiopia Dairy Directory Appendix 7 – Program of IADG East Africa Dairy Expert Consultation, April 1-3, Uganda Appendix 8 – EADEC Participant list Appendix 9 – Details on field visits Appendix 10 – PowerPoint of EADS presented during EADEC 4 | CDI report CDI-14-006 Preface Dairy has been indicated as a key agricultural sector to develop. In addition to providing a valuable source of regular income and nutrition to rural populations, it is a food product that is in high and growing demand among the growing and increasingly urbanized middleclass in East Africa and other areas. For the development of small children, small volumes of milk are a very important part of the diet. National governments, private companies, as well as development partners invest significantly in dairy in the East African highlands as they recognize the potential for both urban and rural food security and local economic development. Recognizing that growing investments necessitate better collaboration and exchange of information between stakeholders, the Inter-Agency Donor Group on Pro-poor Livestock Research and Development realized its unique position to take action. It decided to ask the Centre of Development Innovation of Wageningen University & Research centre to coordinate a study and stakeholder consultation in six East African countries. The study and local consultation were carried out by a team of consultants from the region in the final quarter of 2013 and first months of 2014. In April 2014, the results of the study were discussed in a 3-day consultation with a select group of experts from the region. As the guiding group for this initiative, we believe that the report provides a valuable overview of the strengths and weaknesses, opportunities and constraints of the dairy sector in the six countries, which can inform individual stakeholders to make better informed investment decisions. In addition to information on sector performance the report furthermore provides an assessment of national polices and institutions. It thus lays a firm foundation for further joint action of all stakeholders on the key issues that need to be addressed for sustained and sustainable growth of the sector. The report is intended to reach a wider audience, including policy makers. The Guiding Group for Dairy East Africa Donor Collaboration: Geert Westenbrink, Ministry of Economic Affairs, Netherlands (chair) Antonio Rota, IFAD Carola von Morstein, GIZ Irene Hoffmann, FAO Isabelle Baltenweck, ILRI Jean Ndikumana, ASARECA Joyce Turk & Jim Yazman, USAID Mike Nunn, ACIAR Windy Wilkins, Bill & Melinda Gates Foundation CDI report CDI-14-006 | 5 Acknowledgements We sincerely thank the public, private, and non-governmental organizations and individuals across the six East African countries who devoted their valuable time to interviews and meetings that fed into the study. We also thank the organizations and individuals that facilitated our interviews and data and information acquisition.
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