Observations studytour Tanzania(16 – 20 November, 2013)

LIVES team – Dirk Hoekstra, Azage Tegegne, Berhanu Gebremedhin, Muluhiwot Getachew

Programme

Date / Activity
17th Nov. 2013 / Travel to Morogoro. On the way visited a private collection centre in Chalinze that collects and retails milk in Dar es Salaam
18th Nov. 2013 / Visits to Shambani Graduates processing plant in Morogoro town and the following locations in Mvomero district: Wami Sokoine, Wami Dakawa villages, Dumila sub-town collection centres, farmers (parge and small scale), milk outlets (e.,g. Kiosks)
19th Nov, 2013 / Discussion- organization and institutional issues in dairy development at the Dept of Animal Science and Production, Sokoine University of Agriculture
20th Nov,2013 / Departure to Ethiopia

Interventions/innovations observed during the trip are highlighted since they may be of interest for the LIVES project dairy value chain development.

Observations are also madeon potential interventions for the benefit of the CRP partners working on dairy value chain development in Tanzania and elsewhere.

  1. Dairy marketing and processing

Most milk is sold directly by farmers near urban centers to individuals or small scale institutional buyers (such as restaurants). Price received is around Tanzania Shillings (TZS) 1,000/literfor sates to consumers/restaurants (lower during wet season)[1].

Commercial sale of chilled milk is almost entirely handled by the private sector with the exception of the Dairy Union in Tanga which has its own collection centers, where members bring their milk (a legacy from its past). The Union registers daily milk sales of these farmers and sells the milk to a private processor(Tanga Fresh) on behalf of the farmers. The money thus received from Tanga Fresh by the Union is then paid to the farmers, after deducting a service charge per liter of milk delivered/sold(broker role). The Union has shares in Tanga Fresh.

Most milk collection/cooling seem to be handled by private companies, who may use private collectors to buy for them in rural areas. Good examples were observed north of Morogoro in Dumila sub-town, where youngstersuse their motor bikes to purchase milk from farmers/pastoralists up to 40 km away from the collection centers. Price paid to farmers by private companies is TZS 700/liter at the collection center (around 500 TZS/liter during the rainy season) and at farm gate around TZS 600/liter, which leaves a margin of about TZS 100/liter for the motor cycle transporter. A maximum of about 120 liters is carried per motorcycle trip.

A Masai youngster supplying milk to a collection center

In the privately operated collection centers, cooling tanks have been installed and staff is employed to receive,test and record the purchased milk.Payment is made every 10 days. Testing includes checking for adulteration with water (lactometer) and freshness or acidity (coagulation test with alcohol). It was noted that in the Morogoro area, several private companies have their own collection/cooling center in small towns in the pastoral areas. Recently Tanga Fresh also moved in with their own collection centers in districts in Morogoro since they want to expand their operations in Tanga with UHT processing (more than 400km away!!!). It was also noted that some of the collection centers close their business during the dry season (often for about 6 months of the year) when feed and milk supply is low. Some collection centers stored molasses (in tanks) for their customers to mix with straw and hay. However it was found that some farmers preferred to use the molasses to brew local alcohol for human consumption.

Private companies may then process the milk or sell it through a distribution system into the informal fluid milk market in bigger consumption centers. Some trucks with coolingtanks are used, since chances of spoilage are high because of the high tropical temperatures.An example was seen in Morogoro, where a milk processing factory was started by three young Sokoine University of Agriculture graduates in 2002. Initially pasteurization was done manually and sachets were also sealed manually with small manual sealing machines. Now they have more advanced machinery and they receive about 2,000liters of milk/day. Although they have the capacity to process 4,000 liters of milk per day, they only process1,000 – 1,500 liters into pasteurized milk, yoghurt and ghee. They purchase milk at around TZS 600/liter from 4 collection centers and they sell pasteurized milk at 1000 shillings for half a liter in Morogoro.Most processing companies are working at only 30% of their capacity due to the shortage of milk.

An interesting small scale business processing model was demonstrated by a young business graduate who recently started processing and selling soured milk in 4 local restaurants which he had provided with glassdoor refrigerators displaying “his” product (cost about TZS 400,000/fridge). He purchases/processes about 50 liters/day and he pays farmers 1,000/liter. He buys plastic cups (about 0.3 liter) and sells 3 cups at around 2,000. His net profit is around TZS 35,000/day (not accounting for deprecation of the fridges).

Manually operated packing machineA glass door refrigerator for selling soured milk

It’s interesting to note that the role of cooperatives in milk marketing/processing has declined over time and was taken over by the private sector. This could be considered as a lesson for Ethiopia.

2.Milk production system

The total cattle population in Tanzania is about 22.7 million of which 0.72 million are crossbreeds. The total number of households (HHs) with local cattle is estimated at 1.6 – 1.7 million. About 130,000 (latest estimate 248,000) households have crossbreeds and most HH with crossbreeds also have local breeds.

In the area visited (North of Morogoro), milk is produced by agro-pastoralists (transhumant) and crop/livestock farmers. It was noted that in this area and perhaps in Tanzania as a whole, pastoralists and crop/livestock systems are often located in the same geographical location (as compared to Ethiopia, where the systems are geographically separated i.e. lowlands-highlands).

Feeding animals appears to be the main constraint and feed shortages results in a fluctuating supply of fluid milk. Farmers harvest Napier grass found along riverbanks. Some grasses have been introduced for the uplands (Buffel grass; Cenchrus ciliaris or African foxtail grass; syn. Pennisetum ciliare (L.), but not much evidence can be seen in the country side. As Napier grass requires a lot of water, care has to be taken not to introduce it as a rain fed crop – as observed in some sites. There was also no evidence of interventions to improve grazing land (range) management as a project component to improve feed resources in this dry and hot environment. With the exception of molasses, farmers and extension staff seem to have little knowledge on the use of industrial by products and crop residues in the target area (north of Morogoro) – see input supply system. It was noted that rice straw and rice bran are not used for feeding dairy cows. One advanced Masai family which had started commercial milk production (with technical assistance provided by Sokoine University and an NGO) reportedly harvested hay from enclosed grazing land. This farm also purchases readymade dairy mixes from commercial feed suppliers in Morogoro. They also had a molasses tank on their farm.

Poor condition dairy cowsA molasses tank

Local breeds dominate, although some crosses can be seen (mainly with Holstein Friesian and with Boran). The crossbred animals are not in good shape and one can clearly observe water, feed and heat stress which compromises their capacity to survive, produce and reproduce in this difficult environment. The Masai family had also purchased crosses for their dairy farm (HH head is a cattle trader)[2]. Further questioning of the family revealed that traditionally, milk is not sold in the pastoral areas, but used for home consumption and suckling calves. The main marketable product in the traditional pastoral system is sale of female animals for other farmers/pastoralists to reproduce or cross for milk production[3] and sale of young bullsfor fattening. Young bullsare sold to ranches to fatten for about 3 months[4].

Improved housing for dairy cows owned by a Masai family

The CRP program would like to extend the frontiers of dairy value chains in Tanzania to marginalized groups. Marginalized can be interpreted as marginal areas which were not previously targeted for commercial dairy production – like the pastoral areas in Tanzania as well as individuals who had not been included/or were marginalized in the dairy value chain in the highlands and pastoral areas. To prove that this is feasible it may be good to determine/model ex-ante the best possible use for livestock land use in these harsh pastoral environments. An economic analysis of fattened animals and/or producing animals for fattening versus raising/keeping animals for milk production may shed some light on this. Farmers do mention the regular source of cash income as an advantage of keeping dairy cows. A female farmer also mentioned the sale of dairy heifers, instead of keeping them herself for milk production as an option.

To reach marginal farmers/groups for the dairy value chain it may be good to explore why such farmers were/are marginalized. In IPMS/LIVES, distance was considered as a major factor determining market participation and the efforts made to leverage transport services/cooling technologies seen in Tanzania should definitely contribute to including marginalized farmers. We also had good experiences with this approach in IPMS and are planning to expand this in LIVES, using GIS models based on travel time. Still, CRP should also consider the capacity/willingness of marginalized farmers/groups to participate in market-oriented production. Experience shows (IPMS and others) that not all marginalized farmers have green fingers and fire in their eyes, i.e. commercial dairy production is not for all farmers who presently keep a cow!!!

  1. Supply of inputs/services

Little or no evidence was found of a forage seed/planting material multiplication system in the area visited. One private milk collector had tried to establish a nursery for grass species – for distribution/sale to dairy farmers - but there seemed to be a considerable lack of knowledge on choice and management of species (to put it mildly). It is recommended to encourage multiplication of appropriate forage species by either the public and/or private sector (if found) that introduction of forages is one of the potential feeding interventions (results TechFit exercise?).

Poorly managed forage nurseryNapier grass grown under low rainfall condition

A rice processing unit and rice bran for sale to Dar es Salam

Sunflower oil extraction and sunflower cake

Crops in the area include seasonal production of rice along rivers and some oil seed crops (sunflower). Sugar cane is produced/processed further along the road to Morogoro. Farmers use the molasses to mix with other ingredients.

We observed that maize stover and husk is fed to dairy cows and there appears to be little knowledge in utilization and a lot seems to be wasted. There is no use of forage choppers (like the Kenya dairy system). Rice mills in the small towns produce husks and bran (rice polishing sometimes mixed with husk), however use in the area seems to be unknown for dairy/fattening. Rice bran is mostly used as pig feed.There are also a number of commercial sisal plantations for processing and making sisal fiber bags. Although we are not sure about the existence of processing plants around the farms, there is a possibility of using sisal waste as livestock feed, particularly when fortified with molasses and urea. A similar situation exists with oilcake produced from locally processed sunflower seed. Rice bran and oil cakeare presently sold to traders for sale outside the District[5] all the way to Dar-es-Selam and the highlands in Moshi, northern Tanzania.A quick inventory could determine the magnitude of this source of supplementary feed and its possible use in the local dairy and or fattening system. Presently a sack of rice bran is sold at TZS 3,000- 4,000/65 kg and oilcake for TZS 250/kg. Once found to be a viable option for supplementary feeding (TechFit?), a local entrepreneur may be assisted with formulating appropriate rations from the available ingredients. The introduction of this feed supply intervention can then be monitored as part of an action research program, including the use of graduate students from Sokoine Agricultural University.

Commercial sisal plantation

There is no artificial insemination service in the visited project area and farmers/pastoralists use bull service for their dairy operations. Heifer International introduced a bull service system several years ago (2001). They had provided a bull which is owned by the community. The bull operator charges 5,500 shillings/successful mating and it was estimated that the herd of about 87 cows was serviced once/year. When the projectstopped 10 years ago, the group continued the service and purchased a new bull after 4 years. Each group member had paid 20,000 shillings membership fee (cost of a bull 800,000 shillings).It may also be interesting to study this system as part of an action research program. However, depending on the choice of breed, hormone assisted mass insemination with mobile technical teams may also be used to improve breeds for either fattening or dairy.The experience of IPMS/LIVES in hormonal synchronization and mass insemination could be tested in Tanzania. A study tour by officials/community leaders from the Tanzanian CRP program to Ethiopia may be considered to learn about and assess the feasibility of this intervention.

Livestock diseases do not seem to be a major problem in the area. Farmers/pastoralist use the public sector service for vaccination and treatment. However, there are also private animal health service providers who operate on call basis and charge 2,000 shillings per visit.

  1. Environment/waste management

In areas where intensive dairy production is feasible, there is an opportunity to look at manure utilization for soil fertility management and biogas production. There was no activity in this regard. This could be an opportunity for CRP to expand the dairy value chain development to manure management in the form of fertilizer, rural energy and environmental impact.

  1. Gender

It was noted that women were involved in different components of the value chain, although the role was not always in decision making. The wife of the pastoralist farmer knew about the past and present farming system, but she referred to her husband (the trader) for issues related to finance. The woman dairy farmer we met seemed to be well trained for keeping dairy cattle (the cow and calf looked well) but since she was alone she was not very interested in expanding her herd, but preferred to continue in the less labor intensive system of producing cross breed calves/heifers. In the design of the expansion programs, such preferences could be further explored.

One of the milk collection centers was managed by a woman who understood the supply system well and was competent in milk quality control.

  1. Role of Dairy Board in marketing processing

The Tanzanian Dairy Board (TDB) tries, amongst others, to improve quantity and quality of milk passing through the various dairy value chain stages. An important tool is the registration of value chain actors’ i.e. dairy farmers, collectors and processors. Once registered, the actors are inspected for quality. So far about 350 members are registered– 120 producers, 68 processors and the rest are collectors at different levels, including small collectors who supply private companies.

To increase registration and checking, in particular dairy producers, linkages have been made with the District Administrations – 135 in total. These will assign staff for this registration/checking and capacity development process – after training provided by the Dairy Board[6]. Producers are classified into 3 categories – depending on the volume of milk produced/sold. Minimum quantity for registration is 10 liters/day. A registration fee, depending on the size of the business, needs to be paid (valid for 5 years). However, care has to be taken not to exclude farmers/pastoralist who sell lower amounts of milk.

A considerable proportionof processed milk is imported – a levy is charged which is a source of income for the Dairy Board. The main source of income for the TDB is the government who provides about 90% of the annual budget of USD 300,000.

Coordination and stimulating school milk program is also mandated to the Dairy Board and currently involves 145 schools and about 66,000 children. Programs are financed by parents (contribution), donors and processors (milk at reduced prices). Orphans are usually sponsored by donors. Schemes only operate in milk producing/processing districts. An action research study could be undertaken on this program, to determine good practices which can be shared not only tostimulate presentconsumption but also for future demand and consumption and possible government support. LIVES is very interested in piloting such a scheme in some of its dairy zones.