Proceedings of the workshop on the regional exchange network for market orient dairy development sec 3


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Proceedings of the workshop on the regional exchange network for market orient dairy development sec 3

  1. 1. 7/7/12 Proceedings of the Workshop on the Regional Exchange Network for Market Orient Dairy Development Produced by: Agriculture and Consumer Protection Title: Regional exchange network for market oriented dairy development... More details SECTION III : STRATEGIES FOR SUSTAINABLE DEVELOPMENT OF MILK PRODUCTION, PROCESSING AND MARKETING IN DEVELOPING COUNTRIES. MARKETING OF DAIRY PRODUCTS UNDER A CHANGING ECONOMIC ENVIRONMENT: THE CASE OF ZIMBABWE Ms M. Matanda14 Abstract The marketing of agricultural products including dairy products in Zimbabwe has been characterized by a complex pattern of regulations and institutional involvement. In Zimbabwe the processing and distribution of milk was under a monopolistic parastatal the Dairy Marketing Board (DMB) which has been recently commercialised and is now Dairy Zimbabwe Limited (DZL). The marketing of dairy products with no or little value added was tightly controlled. The introduction of the Economic Structural Adjustment Programme (ESAP) has resulted in reduction and in some cases removal of regulatory control in dairy processing and marketing. The removal of regulatory control has been both a blessing and a curse to participants in the industry in that it opened up the industry for participants to operate the way they want but it also exposed the industry to foreign competition. As a result of operating in a controlled environment the local dairy sector was commodity and production oriented instead of being market driven and consumer oriented which is line with most global food industries. A market led orientation focusing on variety, nutritional factors, food safety and consumer awareness issues need to be addressed in Zimbabwean agribusiness in the dairy sector. Consumer orientation calls for adoption of a strategic marketing approach where dairy producers. processors and marketers combine the 4 Ps in the most optimal way so as to meet consumer needs. The availability of information and of regional exchange network becomes desirable and necessary as the regional exchange network could facilitate searching, screening and monitoring of exchange processes in regional markets. 1.0 Introduction The highly regulated marketing of agricultural products has been reviewed by economists policy makers and participants in the agricultural sector i.e. farmers, processors and marketers as one of the major problems facing the agricultural sector. The Economic Structural Adjustment Programme (ESAP) policies are aimed at among other things improving efficiency and resource utilization, generating employment as well as developing an industry which is more responsive to consumer 1/20
  2. 2. 7/7/12 Proceedings of the Workshop on the Regional Exchange Network for Market Orient Dairy Development The deregulation of the Zimbabwean Dairy Sector was initiated in 1991 with the decontrolling of the producer and consumer prices. In 1994 further ESAP provisions were instituted freeing the industry from decades of Government control. The decontrolling of the dairy sector was viewed as the major impetus needed to vitalize the sector. The decontrolling policies have resulted in varied impact on the marketing of milk and diary products in the country. Dependency on a single marketing channel became a thing of the past as new players (private dairies) entered the industry. Producers now have alternative markets and do not have to depend on a single purchaser, the Dairy Zimbabwe Limited (DZL) (see Figure 1). To the Zimbabwean, the deregulation of the dairy sector has resulted in the importation of exotic diary products. Suddenly the playing field has changed and the change has resulted in a highly competitive market place, making the local industry vulnerable. Production costs keep on escalating whilst market share figures keep creeping down and local produces have to find ways to survive this globalization of the market. It is therefore imperative that the diary sector should try to look at ways of enhancing its competitiveness so as to ensure its survival. 14 Lecturer in Agribusiness, Management and Food Marketing, Department of Agricultural Economics & Extension, University of Zimbabw e Figure 1: Fluid Milk and Dairy Producers Marketing Channels in Zimbabwe Historically, the complexities and significance of the marketing functions have mostly been ignored. The new economic environment calls for development of a market oriented dairy industry. The adoption of a strategic marketing management approach in meeting consumer demands is indeed necessary. 2.0 Background Information Milk production in recent years has been subject to substantial fluctuations, with supplies doubling in the 1980s to 250 million litres/annum. The drought, coupled with increased cost of production inputs have been sighted as the factors which have the greatest negative impact on the dairy 2/20
  3. 3. 7/7/12 Proceedings of the Workshop on the Regional Exchange Network for Market Orient Dairy Development Per capita milk availability is 25 kg and falls far below the 33 kg average for the SADC and PTA countries. The range of dairy products sold in the country and the packaging used are given in Table 1. The table above indicates that Zimbabwe has a fairly well developed dairy processing industry. The Dairy Zimbabwe Limited is the major processor. Cadbury Schweppes, Lyons Broke Bond and several indigenous dairy processors are also involved processing over 226 million litres of hole milk equivalent annually (Government of Zimbabwe, 1994). 3.0 Critical Factors in Marketing of Dairy Products Milk is a highly perishable and complex product to handle due to the fact that it is a perfect medium for micro-biological contaminants. It however has the advantage that it is easily convertible into various diary products like cheese, yoghurt, butter oil and cream. The transformational at processes at times involve a series of sequential investment activities that are targeted at meeting specific consumer demand (Jaffee, 1995). The value addition options also provide a way of dealing with inter-market price differentiation occurring due to spatial factors. Normally, fluid milk prices are lower as one moves away from the source due to the high bulkiness for fluid milk (87% water) result in increases transfer costs i.e. handling and transportation costs. Less perishable products can have less transportation costs thereby making them cheaper away from the source. The increased need for sophisticated specialized haulage system in transporting fluid milk make the issue of value addition options more lucrative for smallholder producers in remote areas. Smallholder farmers could therefore diversify into value addition and convert raw milk into processed dairy products. Market research and analysis however, has to be undertaken before extensive value addition processing is done. Table 1: Dairy Products Manufactured in Zimbabwe PRODUCT PACKAGING - Plastic bottles Pasteurized Milk - Plastic sachets Cultured/Sourced Milk - Plastic sachets Sterilized Milk - Plastic bottles UHT - Plastic sachets - Foil paper Butter - Tinned - Plastic canisters - Clear plastic packets - Tinned Skimmed Milk Powder - Foil packets - Paper - Paper tins - Plastic cup and canisters Ice cream - Paper - Paper tins Yoghurt - Plastic 3/20
  4. 4. 7/7/12 Proceedings of the Workshop on the Regional Exchange Network for Market Orient Dairy Development - Plastic sachets Cream - Plastic cups Cheese - Clear plastic - Plastic bottles Flavoured Milk - Plastic sachets Cheese spreads - Plastic cups Flavoured powder (chocolate, creamsoda, - Tinned strawberry) Cheese Food - Clear plastic paper Chocolates - Paper Ice cream - Plastic cups & containers Detailed analysis of returns to value addition is needed so as to determine the marketing margins that could accrue to various members of the marketing chain. The other problem that faces producers and processor is that in higher income market segments, as income increase the demand for dairy products decreases see table 2. Innovative marketing strategies are therefore, needed to promote demand by introducing new products that are natural, nutritious but have low fat content. Development of specific brands and specialty products targeted at niche markets instead of bulk commodities is important for this market. The most feasible strategic behaviour of individual dairy producers and processor or small holder farmers should be the provision of high quality products so as to gain market margins by performing specific value addition functions. The consumer, globally and in Zimbabwe looks beyond the basic food and the generic milk. Table 2: Expected Changes in demand as per capital income increases Increased Demand Decreased Demand Poultry Red meat Fish Eggs Fruits Dairy production Vegetables Health, variety, convenience, nutritional factors and food safety are variables the consumer seeks for in food. The impact of production processing activities on the environment as well as the welfare of animals are also increasingly becoming important to the consumer. Table 3 gives the various issues participants need to take cognisance of so as to come up with a relevant and acceptable product offering in dairy product marketing. Zimbabwean dairy processors and distributors have already found these factors to be important as they are loosing market share to dairy imports from France, South Africa and the Netherlands which focus on above concerns. Foreign salt free cheese and low fat yorghurts are being successfully marketed in Zimbabwe. Irrespective of market segment served by the dairy processors, there are some basic issues all participants in the dairy industry have to take not of the following: Smell/Odour Taste 4/20
  5. 5. 7/7/12 Proceedings of the Workshop on the Regional Exchange Network for Market Orient Dairy Development Flavour Sight These factors are at most times determined at the downstream end of the production chain i.e. inputs into dairy could determine above factors. it important for breeders, processors and other dairy production marketing chain to know the preference of consumers in respect to these factors. No matter the packaging on distribution network and customer services offered if the basic preferences above are not met the product will not sell. Informal interviews carried out by the writer in Harare (November 1995) established the following issues: a. Packaging Zimbabwean packaging of dairy products was regarded on average as poor, unattractive and lacking in imagination. The packaging of cheese, fresh cream were picked up as typical examples of a poorly packaged product vis-a-vis imported brands. b. Taste and Sight Local producers were viewed as having less innovativeness in the introduction of new flavours of dairy products i.e. sugar-free ice-cream and fat-free yoghurt. Local cheese varieties were also regarded as too salty. c. Convenience Some imported dairy products were regarded as offering more convenience to the consumer i.e. sliced cheese from South Africa. d. Food Safety Due to better packaging some imported products were viewed as being safer from micro-biological contaminants than local products in poorer packages. The packaging of most brands of Zimbabwean cheese products was viewed as poor. e. Health Consciousness The lack of varied brands of sugar free, low fat content and fat free dairy products was regarded as a weakness of the local dairy processors as they were not catering fully for the health conscious consumer. Table 3: Variables the Dairy Sector Needs to take Note of in Dairy Production and Marketing Variable Source of the Issues That Needs Addressing Food Safety - Free of microbiological contaminants - Additives and Preservatives - Antibiotic residues Convenience - Packaging (size, type of material) - Suitability for use to target market Targeted product design i.e. fridge free margarine UHT milk, milk - flavoured drinks Focus on health concerns by focusing on health concerns i.e. low Nutrition - fat, salt free, fat free etc. and nutritionally modified food are becoming 5/20
  6. 6. 7/7/12 Proceedings of the Workshop on the Regional Exchange Network for Market Orient Dairy Development Environmental Safety - Critical for export market and high income groups and joint ventures with foreign dairy processors. Education on how food moves from paddock to the table and how to Consumer Awareness - prepare and store certain foods. 4.0 Conclusion The above issues indicate that food consumption patterns are changing in Zimbabwe. There is need for constant market research so that the dairy industry can develop focused marketing strategy to develop and satisfy individual consumer needs in target markets through the provision of quality reliability and variety. There is also need for promotional activities of utilization and benefits of dairy products. References Baker, M. (1992). Marketing: An Introductory Text. MacMillan Education, Ltd. London. Dahl, D. and Hammond, J. (1977). Market and Price Analysis. McGraw Hill, Inc. Government of Zimbabwe - Support for Deregulation of the Dairy Industry May (1994). Consultant Report for Ministry of Lands, Agriculture and Rural Development Jaffee, S. and J. Morton (1995). Marketing Africas High Value Foods: A Comparative Experience of an Emergent Private Sector. The World Bank, Washington. Kilmer, R. and W. Armbruster (eds) (1987). Economic Efficiency in Agricultural and Food Marketing. lowa State University Press. Kotler, P. and G. Armstrong (1981). Principles of Marketing Practice. Hall International Editions. Englewood Cliffs. Discussion It appears that marketing specialists can make significant contribution to Question: development of the dairy sector, but why do not they avail information to technocrats? The changing economic environment has brought in new changes, previously dairy technocrats could serve in organisations without collaborating with specialists from Answer: other fields. The new economic order calls for collaborative approach between production and marketing specialists. The issue that there is limited demand in rural areas could be a fallacy the Comments: aggregate of demand of rural population is very big and needs special considerations. In India the high income group consume 10%, the middle group 80% and the low Comments: income group 10%. There is therefore need to develop marketing strategies for all the market segments. Have you undertaken any consumer surveys to access the acceptance of specific Question: dairy products? No, until recently, the dairy industry has been a very closed industry and consumer Answer: studies done were classified information. So little comprehensive research has been done on consumer behaviour. As a result of the monopolistic structure of the industry the DMB ignored consumer needs. The entry of new milk processing companies, has resulted in a change of Comments: this 6/20
  7. 7. 7/7/12 Proceedings of the Workshop on the Regional Exchange Network for Market Orient Dairy Development Question: Is it possible to process and still have an affordable product for the rural poor? There is need to put emphasis on appropriate milk processing techniques technology whilst techniques, tapping of indigenous knowledge systems or dairy Answer: processing could help in reducing costs and making products acceptable to the consumer. THE GROWTH OF PRIVATE DAIRY ENTERPRISES IN NEPAL: CHALLENGES AND OPPORTUNITY Tek B. Thapa15 Abstract The contribution of milk in the national GDP is over 5% and nearly 50% of the livestock GDP. Thus the growth of dairy sector has a vital bearing on the overall development of the country. Above 70,000 dairy farmers deliver milk, and above three thousands people are engaged in the milk processing industry in both rural and urban areas. The Dairy Development Corporation is the major actor in the Nepalese dairy industry, it has four market milk plants, one skimmed milk powder plant, one product plant and nine small cheese plants. Private sector participation is however on the increase and more than fifty small, medium and large scale dairies are operating. A 100,000 litres per day market milk plant is under construction in the Kathmandu valley. Ten cottage scale yak cheese plants are managed by the private sector producing around 70 tons annually. Thousands of people are engaged in production and marketing of indigenous dairy products like Ghee, Chhurpi, Khoa, etc. The industry has made significant contribution in rural income and employment generation, and subsequently rural poverty alleviation. The acute shortage of trained manpower is the major constraint hindering the growth of this sector. In particular private sector is worst affected. To promote this sector, a National Dairy Training Facility equipped with a pilot dairy plant should be established to organize, regulate and provide need oriented training programs. Beside this, the National Dairy Development Board (NDDB) needs strengthening and the decision to restructure the Dairy Development Corporation (DDC) could help in promoting private dairy business. Local capabilities of the Nepal Dairy Science Association and Nepal Private Dairy Association should be fully exploited and strengthened. 15 Chief-editor of Nepal Dairy Science Association, and currently w orking as Dairy Processing and Marketing Advisor in the Dairy Enterprise Support component of ATS Project funded by US AID. 1.0 Introduction At present, livestock contributes 31 percent to the total agricultural GDP of the country. Milk is by far the most important livestock commodity (nearly half of livestock GDP), with meat being next, much of which is a by-product of the milk subsector (APP 1995). Average per capital annual milk consumption amounts to about 45 liters. Annual milk production is about 876,000 tons which is over 5% of GDP at current market price (HMG 1990). The new constitution of the Kingdom of Nepal (1990) put emphasis on the commercialization of the agricultural sector. Presently the government is also putting emphasis on free market economy, and private sector development. The country has a population of 21.3 millions, a population growth rate of 2.3%, urban population is 14%, per capita GNP is estimated at US $ 180, GDP growth is 2.9% per annum, and inflation rate is at 7/20
  8. 8. 7/7/12 Proceedings of the Workshop on the Regional Exchange Network for Market Orient Dairy Development The total milk production from cow and buffalo is presented in Table-1. Table 1: Total Milk Production in Nepal in 1992/93. Species Population Milk Production (MT) % share in Production Cattle 6,237,231 260786 29.75 Buffalo 3,072,682 615808 70.25 Total 9,309,913 876594 100 2.0 Status Of The Dairy Industry Accelerated growth of the dairy sector is essential to the overall growth of the agriculture sector. Poverty alleviation and enhancing of womens participation are also the major objectives of dairy development in Nepal. The growth of the dairy sector calls for increased participation of the private sector in production, processing and marketing. The status of the public and private sectors is separately dealt with briefly below. 2.1 Dairy Development Corporation Dairy Development Corporation (DDC) dominates the formal dairy sector. DDC operates four market milk plants and one mini-product plant with total pasteurization capacity of 31,000 litres per hour (LPH). A pilot skimmed milk powder (SMP) plant of 2,000 LPH (176 kg SMP/hour) has been in operation for last one year, with output averaging three tons. DDC also operates one cow milk cheese and one buffalo milk cheese plant producing 2,500 and 1,800 litres per day respectively. Yak cheese has been produced in Nepal for over 40 years. It is marketed primarily to foreign tourists visiting Nepal and in 1994 DDC expatriates living in Nepal. These are nine yak cheese factories in five districts producing an estimated 76 tons of yak cheese but these are facing closure. In the last three years private producers of yak cheese have also emerged and at least 10 private yak cheese factories are in existence producing an estimated 47 metric tons of the 1994 total production. Approximately 4,000 individuals are entirely dependant on earnigs from yak cheese (excluding Kathmandu based marketeers). Industry revenue and foreign exchange earnings for 1994 are estimated to be Rs. 31,981,175 (this includes the value of butter produced with yak cheese) (Colavito 1994). In the 1993/94 farming season DDC collected 39.87 million liters of fresh milk through 395 Milk Producers Associations and 382 Milk Producers Co-operatives, and produced 56.97 million liters of market milk, 1 million kg of butter, 0.7 million liters of yoghurt, 497 mt of ghee, 165 mt of yak and other cheeses and etc. DDC has employed one thousand three hundred and twenty one people to manage the entire operation; out of which only 55.6% are technical staff. 2.2 Private Sector Dairy Enterprises About fifty cottage, medium and mechanized dairies are in operation under private sector ownership and management. Nearly fifty percent are located in the capital city, Kathmandu valley. Most of the private processors operate at cottage scale ranging from 400 to 3000 liters per day (LPD). Small scale entrepreneur operate business starting 100 to 1000 LPD, whereas medium scale operate between 1000 to 3000 LPD. The dairies with the facility of HTST pasteurization, packaging and cold storage are described as mechanized dairies. At present, there are only four with total per hour processing capacity of 10,000 LPH. A 100,000 LPD market milk plant is under construction and installation in Kathmandu city. It is expected to be the largest private sector dairy plant in Nepal. However, many more entrepreneurs are exploring the possibility of 8/20
  9. 9. 7/7/12 Proceedings of the Workshop on the Regional Exchange Network for Market Orient Dairy Development additional dairy plants to produce high value dairy products like cheese, processed cheeses, dried milk products and etc. There are also increasing opportunities for joint venture participation with the Nepalese partners. Each day nearly 130,000 liters of pasteurized milk is marketed in Kathmandu city, out of which the contribution of private sector is around 25%. 2.3 Indigenous dairy products production Private entrepreneurs also process and convert surplus milk into concentrated milk product like khoa for household use, and for marketing to the nearby urban centers. In the mid and western Nepal, raw ghee used to be collected by the ghee refineries from the hills and was processed, packed and exported to India. In the last decade these ghee plants have ceased operating. In remote or inaccessible areas, private entrepreneurs process milk into durable products like chhurpi (dried hard casein product with <10% moisture) and ghee (clarified butterfat). Though accurate production figure for indigenous dairy products are not available, chhurpi marketing is reported to be around 40 mt (1 million liters LME) in Kathmandu city alone (Neupane, 1995). More than 500 entrepreneurs are reported to be producing chhurpi specially in the remote hilly and mountainous region of Nepal. 3.0 Major Problems Faced By Private Sector Dairy Enterprises The major constraints faced by the private sector are: lack of regular dairy training program and training facility within the country; lack of conducive policy promoting the private sector dairy business; weak quality control and enforcement mechanism; and no specific financing program for promoting private dairy enterprises (not simple, straight forward and high interest rate). If the problems are to be prioritized, the single most problem is lack of trained manpower and dairy training facility (dairy research and training) in Nepal. A dairy training institution can help eliminate most of the problems related to product quality, product diversification, appropriate technology development and export marketing of Nepalese product like yak cheese. Other problems needing prompt attention are: i. limited diversification of dairy products; ii. lack of promotional campaigns for milk and milk products; and iii. lack of sufficient knowledge of the farmers in cooperative management, cooperative development and technical and business management. 4.0 Actions Needed To Facilitate Private Sector Movement The acute shortage of trained manpower has affected the private sector dairy industry. Entrepreneurs lack proper knowledge of managing dairy business efficiently. Some of the opinions expressed by private dairy entrepreneurs are presented in the box below: Mr Lila Dhar Sharma, one of private dairy entrepreneur who presented a paper in a recent workshop on “Assessing the priority needs of private sector dairy enterprises in Nepal” made the following remarks on human resource development; “To produce milk is not a very big thing, however preservation and value addition are very vital. We can have a separate ministry for the sports, but why can not we have a school for dairy science and technology? Dairy industry is quite large. There are more than 800 dairy cooperatives, 60–70 private dairies, around 20 yak cheese plants, 5 9/20
  10. 10. 7/7/12 Proceedings of the Workshop on the Regional Exchange Network for Market Orient Dairy Development milk plants, more than 500 Chhurpi makers, many more are coming up. Does it not justify to establish a dairy training center to provide training to the lower and medium level manpower? Thus an institution to impart training in dairy science and technology should be established to meet the manpower requirement of dairy processing industry”. If government wants to liberalize the economy and promote the private sector, some of the constraining acts, bylaws and regulations should be amended with subsequent change in the mentality of decision making bureaucrats. Thus, to impart training in milk processing and product manufacturing, a dairy training school should be established. Decision on mode of Restructuring of Dairy Development Corporation should not be delayed any more. Potential entrepreneurs are needing support in assessing feasibility, preparing dairy plant layout, selection of equipment and machineries and finally in operation and management of dairy plant. Technical support in product diversification, market studies, to produce consumer and demand led high value dairy products. Development of appropriate technology to the benefit of small and medium scale dairy entrepreneurs. Strengthen Private Dairy Association, which can lobby and pressurize the government resolving common problems. The quality monitoring and inspection mechanism should be strictly enforced. Incentive/premium pricing should be encouraged. Existing acts/regulations to be amended to promote the private sector growth. Private sector should have access to donors funds/support program. 5.0 Professional And Private Entrepreneurs Associations Formed Private dairy entrepreneurs have joined hands together in forming the Nepal Private Dairy Association which was formally established in April, 1995. Currently around 22 private dairies are members of the association. Similarly, an association of Nepalese dairy professionals called Nepal Dairy Science Association has been functional for the past three years. Both associations have been instrumental in creating awareness on relevant areas of the dairy industry through workshops, talk program, publication of review and research papers in various international forum like International Dairy Congresses, symposium etc. and Newsletter like Dairy Science Newsletters for the benefit of industries and professionals. 6.0 On Going Dairy Development Projects Basically two projects namely the Dairy Enterprise Support Component of ATS Project funded by USAID and NDDB strengthening project funded by DANIDA are in operation. In addition DANIDA is supporting milk quality improvement program for DDC and private dairies. 6.1 Dairy Enterprise Support Program The project goal is to promote the “Increased Contribution of private sector to Income Growth in the Dairy sector”. The end of project outcome will result in the “Sustained increase in private sales of cash crops, specifically fresh and powdered milk, cheese, ghee and other dairy products, by private dairies, entrepreneurs and MPAs”. The program supports the private dairy enterprises and farmers cooperatives through technical assistance, training and services on demand (feasibility and market studies). The program is concentrating its activities in the following four major areas; Skill development, improved marketing, institutional strengthening and dairy sector policy 10/20
  11. 11. 7/7/12 Proceedings of the Workshop on the Regional Exchange Network for Market Orient Dairy Development These activities are implemented in close consultation and liaison with NDDB, and coordinated with Nepal Private Dairy Association (NPDA), Nepal Dairy Science Association (NDSA), DOAD, DOF, farmers group and other organizations as and when required, and monitored periodically through the establishment of base line and appropriate monitoring and evaluation systems. 6.1.1 Achievements Made So Far a. Skill development The main purpose of this activity is to enhance knowledge/skills of the farmers and the extension workers in dairy production, processing and marketing. Training organized; Dairy entrepreneurs training in dairy processing; Farmers training in: dairy animal feeding and seed production from stylo; and Publication of field manuals on each of the above subjects for the use of the farmers, dairy entrepreneurs, dairy technicians and the extension workers. Similarly, training in animal health for AHW is under way. b. Improved marketing The main purpose of this activity is to increase private sector participation in dairy production, processing and marketing. c. Various workshops organized: i. To encourage participation of Milk Producers Cooperatives in dairy processing and marketing in Butawal, Nepal, a workshop on “Options for Milk Processing and Marketing through MPCSs/MPAs in Butwal” was organized. ii. “Berseem and Stylo Seed Production and Marketing in Nepal” was organized. iii. “Sanitary Milk Handling and prospects of Product Diversification in the Private Sector Dairy Processing in Nepal” iv. “Assessing the priority needs of private sector dairy enterprises in Nepal”, in joint collaboration with Nepal Private Dairy Association. d. Various studies conducted: i. To promote yak cheese production and marketing in Nepal, a cheese sector study was carried out in September 1994. The study recommended that dairy technology volunteers should be recruit from international agencies to work with cheese (to support the cheese producers in research and training); training for cheese makers, and cheese training facility within the dairy training center; and tax systems for yak cheese production and marketing should be rationalised. ii. To promote processing and marketing of high value dairy products, a study on “Dairy Products Diversification” has been carried out. The study made following two sets of recommendations: enhancing market access, such as products and sales promotion, quality improvement, supply management and distribution network, packaging and review of government industrial policy, export/import regulations, and review of Food Act governing the minimum quality requirements of dairy products; 11/20
  12. 12. 7/7/12 Proceedings of the Workshop on the Regional Exchange Network for Market Orient Dairy Development Production Support such as: physical facilities, improved technology, human resource development, raw materials supply, government policy on milk pricing and providing donors support to private sector. iii. Similarly, to examine the feasibility of establishing a dairy plant in Butawal a study is underway. This activity will identify feasible type and size of dairy plant that could be established in Butawal. iv. To promote marketing of dairy products “Campaigns” preparation is underway. Once it is completed advertisements for various dairy products will be carried out through radio, TV, posters, leaflets, news papers etc. e. Institutional strengthening With the initiative and technical support from DESC, Nepal Private Dairies Association has been established, and is functional. 6.2 DANIDAs Support Program: National Dairy Development Board (NDDB) strengthening project is in operation. In addition, DANIDA is also assisting DDC and private dairies to safeguard the raw milk quality at collection points and subsequent stages of handling, and supporting dairy farmers through dairy cooperatives. 7.0 Conclusion: The contribution of the dairy sector is significant in the national economy by generating employment at producers, processors and marketeers levels, thereby facilitating the flow of urban money to the rural milk producers, greatly helping in rural poverty alleviation. The acute shortage of trained manpower is the major constraint hindering the growth of dairy industry especially within the private sector. To strengthen the Nepalese dairy industry, following issues should be attended in priority; Establishment of National Dairy Training Facility equipped with a pilot dairy plant that can organize regular and need oriented training programs. Regular operation costs are to be met by commercial processing and marketing of dairy products by the pilot students dairy. Existing institutions like Kathmandu University have expressed interest attaching dairy training program if a pilot dairy plant is funded. Appropriate technology development and dairy research can be carried out if this type of facility is established. NDDB is at the infantile stage, it should be fully strengthened to plan and coordinate total dairy development activities in the country. Decision on DDC restructuring could clear a way for future dairy development plans and programs. Local capabilities of Nepal Dairy Science Association and Nepal Private dairy Association should be fully exploited, and these institutions should be strengthened. REFERENCES: APP (1994) Draft 20 Year Agriculture Perspective Plan, Livestock Sector. Prepared by National Planning Commission/HMG/N/ADB Manila. Asiaweek (December, 1995) Vital 12/20
  13. 13. 7/7/12 Proceedings of the Workshop on the Regional Exchange Network for Market Orient Dairy Development Colavito, L.A. (1994). The Yak Cheese Industry of Nepal: An Industry Analysis and Strategy for Future Development, study conducted by DESC/ATSP. DDC (1995) An Introductory Bulleting on Dairy Development Corporation. DESC (1995) Proceedings of the Workshop on “Assessing the Priority Needs of Private Sector Dairy Enterprises in Nepal (October 18–19, 1995) Organized by Dairy Enterprise Support Component/Atsp in Collaboration with Nepal Private Dairy Association. DESC (1995) Six Monthly Report (January 15– July 15, 1995), Dairy Enterprise Support Component/ATS Project, Nepal. HMG (1991), HMG/DANIDA Ten Year Dairy Development Plan 1990–2000. Neupane, N. (1995) A Report on High Value Dairy Products Diversification Study, conducted by Dairy Enterprise Support Component/ATSP. Upadhaya, R.M. and Thapa, T.B. (1995). Policy Constraints/Facilitation of Private Sector Involvement in the Yak Cheese Sub-Sector of Nepal. Paper presented at the consultative meeting organized jointly by Agro-enterprise Center/FNCCI/USAID, Ministry of Agriculture Winrock International (November 21–22, 1995) in Kathmandu, Nepal. Discussion: Question: What is the level of dairy imports to Nepal? The quantities fluctuate but more Skimmed Milk Powder (SMP) is imported during Answer: the dry season. Comment: Some participants had queries on consumer acceptance of buffalo milk. Comment: The people in Nepal prefer buffalo to cows milk as it had more fat. Question: How does the National Dairy Development Board help the dairy industry? The NDDB was in infant stage and it needs strengthening before it can offer effective Answer: help to the private sector, the NDDB however, has the mandate to promote private sector dairy industry in Nepal. INTERNATIONAL LIVESTOCK RESARCH INSTITUTE ILRIS RESEARCH TO SUPPORT MARKET ORIENTED SMALLHOLDER DAIRY DEVELOPMENT WITH PARTICULAR REFERENCE TO EASTERN AND SOUTHERN AFRICA W. Thorpe 16 Abstract The presentation outlined the research of the International Livestock Research Institute (ILRI), a global institute within the Consultative Group for International Agricultural Research, which was established in January 1995. It absorbed the resources and programmes (ILRAD) and the International Livestock Centre for Africa (ILCA). ILRIs mandate is to carry our strategic and applied international public-good research on livestock to the benefit of poor people in developing countries. (Slide 1) SLIDE 1: ILRIS RESEARCH TO 13/20
  14. 14. 7/7/12 Proceedings of the Workshop on the Regional Exchange Network for Market Orient Dairy Development MARKET ORIENTED SMALLHOLDER DAIRY DEVELOPMENT with particular reference to EASTERN and SOUTHERN AFRICA - ILRI, its MANDATE and PROGRAMMES - ILRIs DAIRY SYSTEMS RESEARCH - SOME RESULTS FROM EAST AFRICA STRATEGIC and APPLIED INTERNATIONAL PUBLIC-GOOD RESEARCH The institutes six research programmes (Slide 2) include Production Systems Research which has a major sub-programme on “Market Oriented Smallholder Dairy” (MOSD). This is supported by and interacts with two strategic programmes “Utilization of Tropical Feeds” and “Livestock Policy Analysis” which target dairy systems (Slide 3). The MOSD research is largely field based and is implemented through ecoregional consortia in Sub-Sahara Africa with expansion into Latin America and Asia planned for 1996 (Slide 4). The research takes a systems approach (Slides 5 & 6) tackling policy and technical issues within a conceptual framework covering the consumption, marketing, processing and production sub- systems of the dairy sector (Slide 7). Selection of research sites across the spectrum of dairy development (Slide 8), reflecting variation in market orientation, crop livestock interaction and production intensity, will allow cross-site comparisons and the interpolation and extrapolation of results. Important products are research methodologies for analysing dairy systems that identify policy, socio-economic and technical constraints and highlight development opportunities (Slide 9). 16 International Livestock Research Institute, Nairobi, Kenya SLIDE 2: INTERNATIONAL LIVESTOCK RESEARCH INSTITUTE (ILRI) - Production Systems Research - Utilization of Tropical Feeds - Livestock Policy - Conservation of Biodivesity - Animal genetic resources - Forage genetic resources - Animal Health Improvement - Development of disease control technologies - Implementation of disease control technologies - Genetics of disease resistance - Strengthening NARS - Training - Information/Publishing - Networks SLIDE 3: SUPPORTING STRATEGIC RESEARCH PROGRAMME - UTILIZATION OF TROPICAL FEED RESOURCES NUTRIENT PARTIONING FOR MILK, REPRODUCTION AND : 14/20
  16. 16. 7/7/12 Proceedings of the Workshop on the Regional Exchange Network for Market Orient Dairy Development Slide 8: Research Sites, Characteristics And Linkages AEZ Site Market Crop × Liv. Production IARC Region orient. interaction intensity collaborators Cool highlands Kenya* +++ +++ +++ ICRAF-AHI ECAf Ethiopia* ++ +++ ++ Humid/sub-humid Nigeria* ++ + + IITA-MS Sub-humid Ghana +++ + + (CARNET) Sub-humid/semi- WAf Nigeria* ++ ++ + IITA; ICRISAT arid Mali ++ +++ + (CARNET) Semi-arid/arid Senegal ++ + + (CARNET) sub-humid/semi- ICRAF; CIMMYT; LAm Various +/+++ +++ +/++ arid ICRISAT CIAT-Forest Humid Peru ++ + + LAm margins Humid/sub-humid C. Rica ++ + ++ CIAT-CA Hillsides Asia IRRI; ICRISAT * ILRI inter-dusciplinary team SLIDE 9 CONCEPTUAL FRAMEWORK AND RESEARCH METHODOLOGIES - UNDERPINS DESIGN OF SYSTEMS and RELATED RESEARCH by - ILRIs lbadan, Addis and Nairobi teams and their partners - proposals for: Southern Africa SACCAR Latin America CIAT African Highlands 16/20
  17. 17. 7/7/12 Proceedings of the Workshop on the Regional Exchange Network for Market Orient Dairy Development - RESEARCH METHODOLOGIES for CHARACTERISING SUB-SYSTEMS - CONSUMPTION Mullins 1994/95 Field tested in Dar-es-Salaam with FAO Mulins - MARKETING Jabbar, Tambi, Mullins - PRODUCTION Rey, Agyeman CARNET/IDRC workshop: Ghana, Mali, Nigeria, Senegal - RESEARCH METHODOLOGY for SYSTEMS TYPIFICATION Shapiro The component research projects carried out in Eastern Africa were oulined and their linkages with national and regional organisations and projects were explained (Slide 10 & 11). SLIDE 10 ECO-REGIONAL - HIGHLANDS OF EAST AND CENTRAL AFRICA (ASARECA) ETHIOPIA : FOOD/FORAGE INTER-CROPPING : CROSSBRED DAIRY COWS FOR TRACTION (+ FAO WORKSHOP) : DISEASES OF INTENSIFICATION SOCIO-ECONOMIC AND BIOLOGICAL FACTORS AFFECTING DAIRY : PRODUCTION : MILK PROCESSING TECHNOLOGIES SLIDE 11: ECO-REGIONAL - HIGHLANDS OF EAST AND CENTRAL AFRICA (ASARECA) KENYA (+ UGANDA + ?) : POLICY, SOCIO-ECONOMIC AND TECHNICAL CONSTRAINTS OF DAIRY PROB. LINKAGES TO FAO TICK AND TICK-BORNE DISEASES PROJECT : FORAGE LEGUMES FOR DAIRY AND NATIONAL R.M. (ICRAF) In Southern Africa, a regional project of dairy systems research has been prepared with SACCAR and is under consideration by donors for funding (Slide 12). It and the related research in Eastern Africa, along with ILRIs current Cattle Research Network (CARNET) provide excellent opportunities for effective linkages with the proposed regional dairy network. SLIDE 12 EASTERN AND CENTRAL AFRICA THROUGH ASARECAS ICRAF-led AFRICAN HIGHLANDS INITIATIVE BENCHMARK SITES - KIBALE, KAKAMEGA/MASENO, EMBU, GINCHI, etc. SOUTHERN AFRICA PROPOSAL WITH SADC/SACCAR - 1992/93 REVIEW AND PLANNING WORKSHOPS - 1994 PROPOSAL PREPARED/REVISED - 1995 SACCAR BOARD 17/20
  18. 18. 7/7/12 Proceedings of the Workshop on the Regional Exchange Network for Market Orient Dairy Development SUBMISSION TO DONORS The presentation concluded by emphasising the importance of addressing client needs. Results from dairy consumption and marketing studies in Mombasa, Kenya, and Dar-es-Salaam, Tanzania, highlighted the contrast between consumer preferences and their current consumption patterns, the result of the failure of domestic, local supply to satisfy demand for dairy products (Slide 13, 14 & 15). Similarly, research and development projects must identify and address priority issues throughout the dairy system and act to meet the unsatisfied demand for the policy options and technological innovations required to foster the development of domestic dairy sectors in Eastern and Southern Africa. SLIDE 13 SLIDE 18/20
  19. 19. 7/7/12 Proceedings of the Workshop on the Regional Exchange Network for Market Orient Dairy Development Slide 15 Comparison of Consumer Preferences vs Consumption for Sample Households Discussion: ILCA and ILRI are moving into other areas other than cattle production research 19/20
  20. 20. 7/7/12 Proceedings of the Workshop on the Regional Exchange Network for Market Orient Dairy Development Comments: ILCA and ILRI should also focus on goats and buffaloes. The dairy goat and buffalo technology is regarded as superior to cows in some regions. The smallholder dairy sector does not have access to ILRI research work. How can Question: information be made available to this sector? Research and work done by ILRI is demand driven by countries in Southern and West African Regions. National Institutes have access to information on ILRI and Answer: have the mandate to distribute information in specific countries. The suggested network could help im ensuring better information extension and establishment of linkages. A follow-up on information utilization should be done by research organisations to Comment: ensure the information is effectively utilized. Bi-annual follow-up is done but there is little feedback from intended consumers as Comment: responses are rarely forthcoming. The issue of information utilization needs further 20/20