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In September 2010, four CGIAR Centers – CIAT, ICARDA, ILRI and WorldFish – formally submitted a proposal on ‘livestock and fish’ to the CGIAR Consortium Board (CB).

We just received feedback and guidance on the proposal. Overall, the Consortium Board “appreciates the innovations in this proposal, and its overall quality. The Board considers that, with a few additional improvements, the proposal will be ready to be submitted to the Fund Council.”

The Board and the reviewers also raise some important questions about our proposal: We need your help to respond to some of the critical questions raised by the reviewers:

Question 1: Can we really expect livestock and fish production ‘by the poor’ to contribute meaningfully to nutrition ‘for the poor’?

Question 2: How best to partner with the private sector in pro-poor livestock and fish value chain development?

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Livestock products in a supermarket in Mozambique. The vibrant and emerging livestock markets in developing countires offer new economic opportunities for smallholders (Photo: ILRI/Mann)

Across much of the world, especially in developing countries, market opportunities for livestock products are increasing rapidly as a result of rising demand for animal products driven by growing populations, rising incomes and urbanization. These new markets have created opportunities for smallholder livestock producers, including poor rural farmers, to benefit from ready markets for milk, eggs and meat. But as markets expand, they also often give way to complex supply and distribution channels and the need for high-value products that can end up locking out smallholders from enjoying the benefits of these expanding markets.

How do smallholders maintain their ability to contribute to and benefit from the complex systems that will inevitably result as livestock markets grow?

According to researchers John McDermott and Berhanu Gebremedhin, from the International Livestock Research Institute (ILRI), and Karl Rich and Heather Burrow, from the Norwegian Institute of International Affairs and the University of New England, Australia, respectively, assessing existing relationships in these increasingly complex livestock value chains can not only reveal the reasons behind the increasing complexity of these systems, but also identify potential opportunities for smallholders and show policy and other constraints that can be addressed to encourage more of them to engage in the markets.

In findings presented in The role of livestock in developing communities: enhancing multifunctionality, a new book co-published by the University of the Free State South Africa, the Technical Centre for Agricultural Rural Cooperation (CTA) and ILRI, the researchers suggest areas that can be improved to encourage smallholder participation in livestock value chains. These include ‘local and informal markets, which offer the primary initial growth potential in poor countries’ and post-production systems such as that for processing manure for fuel and for processing hides and skins, which can provide important value addition for smallholders.

Smallholders are best at managing informal production environments, where they can make good use of household labour and low-cost production inputs. The authors cite widespread successful smallholder dairy production systems in South Asia, East Africa and Latin America, which are thriving.

This book reviews how smallholders are participating in emerging and growing livestock markets in Ethiopia and South Africa. The authors note that smallholder participation in livestock markets is particularly influenced by whether organizations within the livestock value chain encourage smallholders to join their organizations, which promotes ‘chain-level interventions that give opportunities for smallholders to participate in markets’.

In Ethiopia, for example, the emerging dairy market is served by farmer organizations like the Ada’a Cooperative in Debre Zeit, an hour’s drive from Addis Abba, which is working to provide feeds and animal health services to members, to improve local dairy breeds and milk collection and to introduce value-added processing. These efforts have led to a tenfold increase in milk collection, to 2.6 million litres, between 2000 and 2005, a gradual strengthening of smallholder links to markets, and a growing demand for breeding and feeding services, which are starting to be met by private companies.

‘There is evidence that setting up and maintaining strong organizations to manage market chains not only leads to improved economic benefits for producers but also leads to broader social benefits like gender development and education,’ the authors say. They recommend improving animal breeds, improving animal nutrition and integrating input supplies and knowledge and financial and market services into the market systems. ‘Smallholders are more likely to benefit from market initiatives when these markets are oriented towards sellers, where enabling policies from government exist and where collective action and support is mobilised . . . .’

‘Commodity-based trade approaches’ also help to bring more smallholders into the market. In Ethiopia, for example, a phased export program for beef that allows quarantine, vaccination and disease control followed by observation in an export-zone feed lot before slaughter has provided a way of certifying meat as disease-free for export to Middle Eastern markets.

The authors warn, however, that not all livestock value chains will be accessible to smallholders. Few of Africa’s small producers export beef and other meat because these products are governed by unique tariff systems and international trade rules and are open to international competitors.

The book recommends regular review of the performance of value chain systems to ensure they are responsive to both small-scale producers and changing consumer demands.

Read more about The role of livestock in developing communities: enhancing multifunctionality.

Download the full text.

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This week, partners in the ‘imGoats’ project meet in India to finalize plans and outcomes for the project.

The project – official title ‘Small ruminant value chains to reduce poverty and increase food security in India and Mozambique’ – is funded by the International Fund for Agricultural Development (IFAD) and is implemented by the International Livestock Research Institute with CARE (Mozambique) and The BAIF Development Research Foundation (India).

The project aims to transform goat production and marketing in dryland India and Mozambique from an ad hoc, risky informal activity to a sound and profitable enterprise and model that taps into a growing market.

Download the project brochure

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Participants in this week’s ‘Workshop on Gender and Market-oriented Agriculture’, organized by ILRI in Ethiopia, visited two women farmers in Debre Zeit (Picture credit: ILRI/Habtamu)

On the third and last day of the ‘Workshop on Gender and Market-oriented Agriculture: From Research to Practice’ (AgriGender2011), organized by the International Livestock Research Institute (ILRI) this week (31 January–2 February 2011) in Ethiopia, two women farmers shared how they transformed themselves from farm labourers to agricultural businesswomen as they increased both their food production and marketing.

In a field visit to Debre Zeit, a town 50 kilometres southeast of Addis Ababa, the workshop participants visited Tigist Weycha, a mother of three and dairy producer. Weycha is a member of the local Ada’a Dairy Cooperative that processes about 5,000 litres of milk a day obtained from farmers in the area. She owns 12 cattle, including 7 improved-breed dairy cows. She has been in the milk business for six years, though her livestock husbandry experience goes back 11 years.

‘Each day I deliver between 50 and 60 litres of milk to the cooperative and I make about 5,000 Ethiopian birr (US$294) a month in profits. Dairying is very profitable here and income from this work is maintaining my household and educating our children,’ says Weycha. Her husband, after losing his job when a project that employed him in the town closed down, joined her in the farm work and they are now together enjoying the benefits of keeping dairy cows.

Weycha is a beneficiary of the Improving Productivity and Market Success of Ethiopian Farmers (IPMS) project, which began in 2005 with funding from the Canadian International Development Agency. IPMS is implemented by ILRI and other partners on behalf of the Ethiopian Government.

A goal of the IPMS project was to help improve livelihoods of the poor in Ethiopia by linking rural smallholder producers to markets. The project connected Weycha with the Ada’a Cooperative, which became a reliable buyer of her milk. Project staff also gave her training in managing her dairy farm business and animals and the benefits she has accrued are clear to see six years on.

‘The cooperative pays us after every two weeks. And this money is deposited into a personal bank account which I manage for the benefit of my family,’ Weycha says.

Weycha is one of the successful dairy farmers in Debre Zeit. With support from her family and her husband—who is trained in animal health management and uses this expertise on the farm—she has excelled as a model dairy farmer. And this despite the fact that dairy farmers in this area have to pay dearly for veterinary services and drugs, when these are available, and for animal feeds, the price of which fluctuates. Weycha feeds her cows mostly on maize and teff residues and alfalfa. She supplements this with oil cake and molasses that she buys every two weeks from traders in Debre Zeit town.

Participants also visited another beneficiary of the IPMS project, Elfnesh Bermeji, a beekeeper who makes 50 birr for every kilogramme of honey she sells from her 20 modern and traditional hives. She harvests the honey two times in a year and the income she has earned from selling the honey has enabled Bermeji to build a home and to educate her children, who are now supporting themselves after graduating from university.

These two Ethiopian women are examples of the many benefits of targeting women for capacity building. Their successes are bettering not only their own lives, but also those of members of their families and communities. These two women have, with the help of their spouses and families, transformed themselves into entrepreneurs in an area where few other women have managed to break with rural traditions. The success stories of Weycha and Bermeji should now give other women, and men, confidence to do the same.

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Read more about the ‘Gender and Market-oriented Agriculture: From Research to Action’ in the ILRI gender and agriculture blog.

Read more on Improving Productivity and Market Success of Ethiopian Farmers (IPMS) project

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The East African Dairy Development (EADD) project, implemented by Heifer International in partnership with the International Livestock Research Institute (ILRI), TechnoServe, the World Agroforestry Centre and the African Breeders Service Total Cattle Management, works to improve the lives of one million smallholder dairy farmers in Kenya, Rwanda and Uganda.

Started in 2008, the EADD project employs a ‘hub’ approach, in which farmers organize themselves in cooperative groups to pool resources and buy milk-cooling facilities. These facilities also provide services for improved animal breeds and fodder and offer farmers training in milk management practices. The project has successfully increased incomes for dairy farmers—including many women—in rural areas of East Africa.

The experiences of the project in working with women in the dairy value chain were shared by ILRI agricultural economist Isabelle Baltenweck in an on-going workshop on ‘Gender and Market-oriented Agriculture: From Research to Action’ (#AgriGender2011) being held this week at the ILRI campus in Addis Ababa, Ethiopia.

The EADD project is driven by the collective action of farmers who come together in these hubs, which help them collect and bulk milk. Most of these hubs centre on milk chilling plants set up by funds contributed by farmers themselves with additional support from the project.

The project also supports the participating farmers with feeds and animal health services. Other actors in the milk business, such as milk transporters and hardware suppliers, soon form around these hubs, which helps to create dynamic dairy value chains.

This “hub approach”, says Baltenweck, has led to improved access to inputs and services for women and other smallholders; it has brought services closer to the dairy producers, and given them access to credit and obtained better milk prices for them. ‘However,’ she adds, ‘women’s participation in the chain is still much lower than men’s.’

‘More male- than female-headed households have joined the hubs, even though a large number of spouses in many male-headed households have registered,’ says Baltenweck. ‘And we are finding that women household heads are making less use of animal health, feed and breed improvement services than male household heads, which is likely to lead to lower milk yields and income for the women.’

The project implementers are working to address this gap in women’s participation. A new strategy aiming to put more women on the front lines of the project should lead to more women joining extension work, including working as trainers and helping to make decisions in hub budgeting and operations.

This strategy is already yielding fruit. More women are now taking up leadership positions in the hubs and in related services in the project sites. The project partners are also focusing on improving hub governance and encouraging more women to participate in hub management and operations.

View the presentation:

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Agricultural intensification in many parts of Africa has meant that traditional food crops such as bananas and beans have entered sophisticated market chains which, though they provide benefits, also carry certain risks for smallholder producers, most of whom are women.

Jemimah Njuki, a Kenyan sociologist and gender specialist at the International Livestock Research Institute (ILRI), says that ‘despite women’s involvement in agricultural development in rural parts of Africa, how they benefit from this involvement is often unclear, because as commodity market chains become increasingly commercialized, they often end up marginalizing the women they sought to help in the first place.’

In a keynote speech at the opening of a workshop on ‘Gender and Market-oriented Agriculture: From Research to Action’ (#AgriGender2011) being held at ILRI’s campus in Addis Ababa, Ethiopia, Njuki noted that ‘with the emergence of regional and export markets, as soon as women’s crops become profitable, they are no longer women’s crops. And we can end up doing as much harm as good.’

Cautionary tale
Njuki told a story to illustrate this. It’s about a farmer named Mercy that she knew and worked with in Malawi. Mercy is a smallholder bean farmer from Chinseu Village who often intercropped her beans with maize on her small plot of land. Using little fertilizer or other farm inputs, Mercy produced between 50 and 100 kilogrammes of beans in a good year. Her family consumed half her bean crop at home and she sold the remainder on the roadside near her village. She used the money she earned from the sale of the beans to buy food and clothes for her family.

When a new farming project was started in Chinseu, Mercy got access to improved bean varieties and markets. Because the new bean variety could not be intercropped, she had to grow the beans on a different plot of land from her maize. The investment paid off, however, and in the first year she produced nearly one ton of beans. To sell the increased produce, she needed to find new markets, and these were far from her village. Her husband thus started to transport the surplus beans to the city for bulking and sale there. He began spending less and less time at home, and sometimes he spent the income from the beans before he reached home. Meanwhile, Mercy remained at home, often with less bean income than she had before she began to adopt the ‘improvements’.

Doing right by women does right by everyone
Njuki believes that market-oriented agriculture will succeed in helping women only if it moves beyond ‘doing right for women.’ ‘We should not include gender development in agriculture to help women only; we ought to focus on women because if we do not, there will be adverse repercussions for the incomes, nutrition and empowerment not only of women but also of households, communities and countries.’

To get market-oriented agriculture to work for women, Njuki suggests the following ways of raising the often under-recognized role of women in agricultural production.

Increase women’s decision-making in agricultural projects to enable them play a role in identifying markets and commodities in specific value chains. ‘We should not push any one commodity at women to bring about change; we must first understand from them what they need.’

Work with both men and women because women live in households and communities that include their husbands, brothers and other men. ‘If we do not put money in pockets of men, we will not manage to put money in the pockets of women.’

Raise women’s assertiveness and leadership skills by linking them directly with (especially urban) consumers who buy their products so that the women producers understand at first hand how markets work and what kinds of products their clients prefer.

Encourage women to come together in groups, which give them better bargaining power to access banking and other financial services.

Increase women’s access to technologies and inputs and services to ensure that they can on-goingly adopt production practices needed to meet new and changing market needs and demands.

Njuki recommends that projects widen their indicators of success beyond just increases in women’s income. ‘We need to expand our indicators to look at the distribution of this income. We need to know which households and individuals are benefiting. We need to pay attention to labour issues.’

Finally, Njuki warns that success in work aiming to redress gender imbalances depends on a multitude of actors working together. ‘No one (woman) can whistle a symphony. It takes an orchestra to play it,’ she concluded, quoting Halford Luccock. ‘These initiatives need to be driven and replicated by many individuals and organizations working together to scale up community successes regionally.’

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The Hon. Wondirad Mandefro, Ethiopian State Minister of Agriculture, today delivered a strong opening address at an international workshop being held in the Ethiopian capital, Addis Ababa, this week.

The workshop, ‘Gender and Market-oriented Agriculture: From Research to Practice’, is being organized and hosted by the International Livestock Research Institute (ILRI), which for several years has been implementing a project of the Ethiopian Government on ‘Improving Productivity and Market Success of Ethiopian Farmers’.

The state minister made the following points.

• Despite having made rapid progress over the last decade, Ethiopia was ranked 157th out of 168 countries in the Human Development Index prepared in 2010 by the United Nations Development Program.
• Among Ethiopia’s urgent needs is the need to enhance the quality of life of its women, particularly the 85% of Ethiopian women who live in rural areas.
• In the countryside, peasant farming is the main livelihood and it requires heavy labour that exacts a heavy physical toll on both women and children.
• Only 34% of Ethiopian women have attended primary school; only 28% have any post-secondary education.
• Only 8% of the seats in the Ethiopian Parliament are held by women.
• Ethiopian women earn incomes (average of US$516) that are just half that of Ethiopian men (US$1008).
• Ethiopia’s national targets for gender equality in agriculture, first set in 1993 in a National Policy on Women, are not yet met, due largely to women’s low education levels, low involvement in household and community decision-making, and low rewards accruing from the country’s agricultural and economic development.
• Women’s access to markets is particularly constrained in Ethiopia, indicating that redressing the gender imbalance in the country’s market-oriented agriculture will yield high returns.
• By removing the constraints Ethiopian women face in both education and the labour market, it is estimated that the country could add almost 2 percentage points to growth of its gross domestic product every year between 2005 and 2030.
• If we consider in addition the effects of a ‘gender-equal’ agriculture on national growth, the expected economic benefits of including women in development strategies become huge.

For these reasons, the Ethiopian Government has instituted an Agricultural Growth Program that is focusing on increasing the involvement of women and youth in projects to increase agricultural productivity and market access for key crops and livestock in selected woredas (districts) in the country.

A project, ‘Improving Productivity and Market Success of Ethiopian Farmers’ (IPMS), implemented by ILRI on behalf of the Ethiopian Ministry of Agriculture and funded by the Canadian International Development Agency, has led to several successes, such as doubling the income of women fattening sheep in Goma, benefiting women dairy and honey farmers in Ada’a, helping women in Dale start an initiative that is supplying pullets for semi-commercial poultry producers, and increasing the levels of butter production and sales by supporting women with livestock fodder interventions.

The lessons, strategies and approaches raised at this workshop, and an understanding of what makes them effective in the Ethiopian context, should be immensely helpful to us in designing strategies to scale them out for the agricultural transformation to which the Ethiopian government and people are firmly committed.

Find the whole speech by the minister on ILRI Gender and Agriculture Blog.

Follow discussions on this and related topics at a workshop being held this week on ILRI’s campus in Addis Ababa, Ethiopia, on this main ILRI News Blog, on ILRI’s Gender and Agriculture Blog, or by searching for ‘AgriGender2011′ on social media websites such as Twitter (quotable quotes), Facebook (blog posts), SlideShare (slide presentations), Flickr (conference and other photographs) and Blip.tv (filmed interviews).

Read a full 68-page research report: Opportunities for promoting gender equality in rural Ethiopia through the commercialization of agriculture, IPMS Working Paper 18, ILRI 2010.

Read a 13-page general brief from which these recommendations were extracted: Empowering women through value chain development: Good practices and lessons from IPMS experiences, January 2011.

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A three-day international workshop opens tomorrow (Monday 31 January 2011) in Addis Ababa, Ethiopia, focusing on women’s place in market-oriented agriculture in developing countries.

The workshop is being convened by the International Livestock Research Institute (ILRI) on behalf of a project of the Ethiopian Government implemented by ILRI called ‘Improving Productivity and Market Success of Ethiopian Farmers’ (IPMS). It is being held at ILRI’s principal, Ethiopian, campus.

The workshop organizers hope to identify the most useful products of gender research for the commercialization of smallholder agriculture—and to get these into wider practice.

Most development experts agree that gender is arguably the biggest ‘missing link’ holding back agricultural development in poor countries. But as Madeleine Bunting argued recently in the Guardian’s Poverty Matters blog:

‘It’s odd. There is now a powerful consensus about the central role of women in development. They are the key agents of change given their impact on the health and education of the next generation. Everyone is agreed that women’s empowerment is vital, and it crops up in countless speeches by politicians all over the world. And yet change is achingly slow—embarrassingly so. . . . Women’s rights are in danger of becoming a wordfest.’

The participants at this week’s workshop in Addis Ababa are aware of the danger of saying too much and doing too little. The workshop participants include scientists, development experts, donor representatives and policymakers already working in Africa and other regions to give women greater access to markets and agricultural ‘value chains’.

They will present and discuss research-based evidence on promising strategies for addressing this missing link and hope to begin work to develop a new paradigm for market-oriented research and funding that directly serves women’s interests.

The workshop will draw heavily on experiences of the IPMS project, which started six years ago with funding from the Canadian International Development Agency.

IPMS published a full report of its gender research in a working paper that appeared in December 2010, ‘Opportunities for promoting gender equality in rural Ethiopia through the commercialization of agriculture’, and yesterday released a 13-page brief for the general public, ‘Empowering women through value chain development’, that highlights findings and lessons the project learned, and the good practices it supported, in its four years of implementing projects in ten pilot learning woredas (districts) in four regions of the country. In this work, an IPMS gender research team set out to ‘mainstream’ best gender practices, specifically by increasing access by rural Ethiopian women to market-oriented agricultural resources, technologies and knowledge.

The IPMS gender working paper adds significantly to the literature available on women and agricultural development, which despite demonstrable need, remains thin. Few studies have ever been conducted on women’s role in Ethiopian agriculture, for example. This is despite the fact that 85% of Ethiopian women live in rural areas where virtually all households are engaged in small-scale farming of one kind or another, and despite the fact that most Ethiopian women continue to have far fewer opportunities than men for personal growth, education and employment.

The unequal power relations in Ethiopia, as elsewhere, are maintained by policies, programs and information systems that reman directed primarily at men. A recent paper published by Agnes Quisumbing and Lauren Pandolfelli, researchers at the International Food Policy Research Institute (IFPRI), demonstrates how dysfunctional it is to ignore or marginalize women in development interventions: reviewing 271 World Bank projects, the authors found that by addressing the needs of both men and women, projects increased by 16% the long-lasting value of the benefits the projects generated.

Across four major regions and ten pilot learning communities, the IPMS gender researchers worked with Ethiopian research and development officers to strengthen women’s leadership and negotiating skills not only in farmer groups and local associations but also in their own households. The specific aim was to increase the women’s participation in market-oriented agricultural production. The project and government staff encouraged women to organize themselves into producer groups for various agricultural commodities and into marketing groups that could collectively demand and get higher market prices than individuals could get.

Women throughout the developing world suffer from unequal access to agricultural training and other resources, despite recent World Bank estimates that they carry out 40–60% of all agricultural labour in the world. The lead author of the IPMS working paper, Ethiopian scientist Lemlem Aregu, says: ‘Having only second-hand information passed on by their husbands and other men greatly reduces women’s ability to innovate and fulfil their productive potential. And this, of course, holds back commercial agriculture in these countries.’

Ranjitha Puskur, an Indian scientist who has led a gender research team in the IPMS project and now leads an Innovations and Livestock Systems project in ILRI’s Markets Theme, says that one way to start to change this situation is to scale up women’s work in agricultural commodities that have traditionally been the province of women.

‘Women posses animal-raising skills honed by years of living in rural areas,’ Puskur says. ‘A good entry point for helping them to better market those skills is to focus on poultry raising and other agricultural work that is often left to women to oversee. These enterprises then become sources of self-reliance, providing women with the means of generating a daily small income, with which they can meet their household expenses. With this experience, women are encouraged to move further up the ‘livestock ladder’ and to begin participating in other, traditionally male-dominated, kinds of livestock production.’

Follow discussions at this workshop on this main ILRI News Blog, on ILRI’s Gender and Agriculture Blog, or by searching for ‘AgriGender2011′ on social media websites such as Twitter (quotable quotes), Facebook (blog posts), SlideShare (slide presentations), Flickr (conference and other photographs) and Blip.tv (filmed interviews).

Read the full 68-page research report: Opportunities for promoting gender equality in rural Ethiopia through the commercialization of agriculture, IPMS Working Paper 18, ILRI 2010.

Read the 13-page general brief: Empowering women through value chain development: Good practices and lessons from IPMS experiences, January 2011.

Read more of what Madeleine Bunting has to say on the Guardian’s Poverty Matters Blog: Women’s rights are in danger of becoming a wordfest, 27 January 2011.

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A dairy farmer feeds her cows in Kenya. A new global study says competitive dairying offers small-scale dairy producers in Africa a pathway out of poverty (photo credit: East African Dairy Development Project)

Investing in the dairy sector and growing it into a competitive industry would offer small-scale dairy producers in sub-Saharan Africa opportunities to increase their incomes, meet food requirements and find a way out of poverty, according to a new study that assesses global perspectives for smallholder milk production by the Food and Agriculture Organization of the United Nations (FAO).

The status and prospects for smallholder milk production—A global perspective, a study jointly published by FAO and the International Farm Comparison Network and released September 2010, says ‘making smallholder dairy production more competitive could be a powerful tool for reducing poverty, raising nutrition levels and improving the livelihoods of rural people in many developing countries.’

The study notes that rising milk demand, which is growing by about 15 million tonnes per year in developing countries, provides a chance for small-scale dairy farmers to raise their milk production, which would not only create jobs but also help to ‘establish sustainable dairy chains that can meet local consumer and world market demands’. ‘Growing consumer demand for dairy products in developing countries, driven by population growth and rising incomes, offers important market opportunities for smallholders,’ the report adds.

The Africa-based International Livestock Research Institute (ILRI) is at the forefront of helping small-scale dairy producers benefit from the dairy sector through projects such as the Smallholder Dairy Project, which contributed to a review of the Kenya dairy policies beginning in 2004, eventually leading to remarkable benefits of over US$230 million for Kenyan milk producers, vendors and consumers in the past 10 years. Interventions of this project have also led to a three-fold increase in milk production across areas where the project worked with small-scale dairy farmers.

ILRI is also helping to implement a Heifer-International-led East Africa Dairy Development project in Kenya, Rwanda and Uganda that is improving the dairy incomes of over 170,000 dairy farmers. The project is organizing farmers into cooperative groups to pool resources and buy milk cooling facilities, improve animal breeds, improve fodder and train farmers how to better manage their milk business. In the past two years of the project’s implementation, changes in attitude among dairy farmers have led to economic benefits that are improving the livelihoods of East Africa’s small-scale dairy producers.

Around 150 million small-scale dairy farming households (750 million people) are engaged in milk production globally, with most of them in developing countries, according to the study; some six billion people, most of them in developed countries, consume milk and milk products.

With global prices for dairy products expected to rise in coming years, the report notes that small-scale milk producers ‘have very competitive production costs’ and thus calls for small-scale dairy producers to be organized in order for them ‘to compete with large-scale, capital-intensive, “high-tech” dairy farming systems’. ‘Better farm management practices, expanding dairy herd sizes and increasing milk yields could easily improve smallholder labour productivity, making dairy sector development a potent tool for poverty reduction,’ the report says.

The study, however, cautions that ‘smallholder dairy production will only be able to reach its full potential if some of the threats and challenges the sector is currently facing are addressed. In many developing countries, smallholders lack the skills to manage their farms as “enterprises”; have poor access to support services like production and marketing advice; have little or no capital to reinvest with limited access to credit; and are handicapped by small herd sizes, low milk yields and poor milk quality.

Dairy sectors in developing countries also face the challenge of competing with massive policy interventions (price support, milk quotas, direct payments, investment support programmes, export subsidies) in developed countries, which create a competitive advantage for dairy production in developed countries and penalize dairy farmers in developing countries, the report noted.

Smallholders are also affected by trade liberalization, which increasingly exposes them to competition from large-scale corporate dairy enterprises that are able to respond more rapidly to changes in the market environment.

Any dairy development strategy, the study recommends, must not exclusively focus on dairy producers but improve competitiveness throughout the entire dairy production chain, targeting farmers, input suppliers, milk traders, processors, retailers and others.

This article is adapted from a press release ‘Small-scale dairy production: a way out of poverty’ published by FAO on 29 September, 2010.

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To read the complete report please visit: http://www.fao.org/docrep/012/i1522e/i1522e00.htm

To find out more about ILRI’s contribution to small-scale dairy production in Africa and Asia read the following related dairy stories from the ILRI news blog:

http://www.ilri.org/ilrinews/index.php/archives/2884

http://www.ilri.org/ilrinews/index.php/archives/3010

http://www.ilri.org/ilrinews/index.php/archives/3318

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A dairy farmer milks a cow in Kenya’s Nyandarua district. Kenyan small-scale dairy farmers are benefitting from  the dairy policy changes that began in 2004. (Photo credit: East African Dairy Development Project)

Recent findings from an assessment of the impacts of the Kenya dairy policy change of September 2004 show that changes in the sector, which incorporated small-scale milk producers and traders into the milk value chain and liberalised informal milk markets, have led to an increase in the amount of milk marketed, increased licensing of milk vendors and an increased demand for milk leading to benefits of US$230 million for Kenyan milk producers, vendors and consumers over the past 10 years (US$33 million per year).

The study, conducted between August 2007 and January 2008 among milk producers, vendors and dairy farmers in Nairobi, Nakuru, Thika and Kiambu towns, shows there was a threefold increase in marketed milk in all the towns with Nairobi recording a fourfold increase between 2004 and 2008. The findings also show that overall, ‘small-scale dairy operators have profited from quick, relatively high volume turnovers and welfare benefits to small-scale vendors have increased,’ since the introduction of the new policies in Kenya’s dairy industry.

According to the study ‘allowing licenced small-scale milk vendors to operate leads to increased milk supply to the retail market’ and it also found a continual increase in the number of small-scale milk vendors acquiring licences since 2004 to run milk bars to meet the increased demand for milk.

The study’s findings show that in Nairobi, the highest profits were gained by non-producer mobile traders, followed by milk bars and mobile transporters while in Nakuru those who benefited the most were producer mobile traders. The study, however, notes that the changes in policy also led to a decrease in market margins for retailers with an average 9% reduction across the surveyed towns. Milk traders in Nairobi experienced a reduction of Ksh 0.80 (US$0.012) per litre of milk sold.

With nearly 800,000 Kenyan smallholder households depending on dairying for their livelihoods and the dairy sector providing employment to over 350,000 people in milk collection, transportation, processing and sales; the dairy industry plays an important role in meeting the livelihood needs of poor Kenyan households as well as in contributing to Kenya’s economic development.

The study ‘Kenyan dairy policy change: influence pathways and economic impacts,’ was carried out by Amos Omore, a scientist with the International Livestock Research Institute (ILRI), among others researchers from Qatar University, Norwegian Institute of International Affairs and the World Agroforestry Centre (ICRAF). It assessed the impact of the Smallholder Dairy Project (SDP) and its contribution to the revised Kenya dairy policy and looked at the behavioural changes among field regulators and small-scale milk vendors resulting from recognition of their role in the milk value chain. The study also estimated the economic impact of the policy on producers, vendor and consumers.

Among the study’s other findings is that as a result of the new policies, milk handlers across the country are better trained, ‘with 85% reporting they had been trained on milk handling and quality control methods’ and that it is now much easier for producers and vendors to acquire licenses for their operations. Training and licensing is carried out by the Kenya Dairy Board and the Public Health Department who are now ensuring that licensed outlets and premises, especially those run by small-scale milk vendors, meet all hygiene, testing, sanitation and health requirements for milk handling. They also assist the milk vendors to meet these condition and this change in approach means that nearly all producers and traders understand the requirements of milk handling and quality control.

Kenya has made significant progress in liberalizing its dairy industry and is working towards training and licensing more small-scale milk vendors to allow them to fully engage in the formal milk sector. As a result of these experiences, the study says, there has been ‘behavioural changes among regulators and small-scale milk vendors that has led to positive economic benefits across Kenya.’

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To read the complete report and its findings, visit http://dx.doi.org/10.1016/j.worlddev.2010.06.008

The Smallholder Dairy Project which started in 1997 and ended in August 2005 was implemented by ILRI, Kenya Agricultural Research Institute and the Kenya Ministry of Livestock and Fisheries Development. It was funded by the UK Department for International Development. To read more about the project and its achievements, visit http://www.smallholderdairy.org/default.htm

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