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Cooperative models to transform dairy value chains in Southern Africa

Presented by Carmen Jaquez (Land O Lakes) at the African Green Revolution Forum Working Session on Transforming Dairy Value Chains in Africa: Pathways to Prosperity, Nairobi, 8 September 2016

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Cooperative models to transform dairy value chains in Southern Africa

  1. 1. African Green Revolution Forum Working Session on Transforming Dairy Value Chains in Africa: Pathways to Prosperity, Nairobi, 8 September 2016 Cooperative models to transform dairy value chains in Southern Africa Carmen Jaquez
  2. 2. Farmer Cooperatives – The Model / Approach ˃ Cooperatives are businesses ˃ Farmers focused on common interest of engaging in business together ˃ Not social groups but does create social capital ˃ Aggregate farmers to capitalize economies of scale ˃ Aggregate farmer demand for inputs and services ˃ Aggregate supply of milk ˃ Farmers in cooperatives have greater technical competency ˃ Delivery of technical trainings ˃ Delivery of production enhancing inputs ˃ Aggregate farmers for efficient communications ˃ Social and health messaging (HIV/AIDS education, nutrition education, gender- related household messaging) Confederation / League (National, International) Cooperative Federation (Regional, National) Cooperative Unions (Sub-Region, County) Primary Cooperatives (Village, Sub-District/County) Individual Farmers
  3. 3. Evidence Base Examples of where it has worked ˃ Zimbabwe – Zimbabwe Association of Dairy Farmers (ZADF) ˃ Rebuilding Zimbabwe’s dairy systems (human & built capacity) ˃ 700% increase in # farmers delivery milk to MCCs ˃ Increase in per cow gross margin per lactation increased from $26 to $1,100 ˃ Access to improved breeding/breeds ˃ Reliable access to inputs ˃ Stable milk prices & consistent market ˃ Provided MCC/Coop financial analysis and advising service (Accounting Bureau Service) which increase financial transparency and increased farmer trust and motivation. ˃ Kenya – Meru Central Dairy Cooperative Union ˃ Focus on improving cooperative management and governance (2012-2015) resulted in: ˃ 11% decrease in farmers reporting problems with cooperative leadership ˃ 36.6% increase in HH income from dairy income ˃ 33.3% increase in farm-gate milk price ˃ Farmers primary reasons for remaining member of cooperative: Timely payments, Provision of other inputs/services, Stable milk price ˃ Land O’Lakes Agricultural Producer Organization (AgPrO) Reference Manual – A Field Practitioner’s Guide to Cooperative Development is available at: http://www.landolakes.org/Resources/Tools/Agricultural-Producer-Organization- (AgPrO)-Trainin
  4. 4. The Cooperative Lifecycle Framework As developed by M. Cook & M. Burress, 2009
  5. 5. Achieving scale Inputs needed to achieve scale/replicate ˃ Business focus needs business acumen ˃ Managers have business focus, not political focus ˃ Farmers come together for business, not social support ˃ Become an expert in milk aggregation and coop management before becoming expert in milk processing and sales of branded products ˃ Sector analysis and matching of best business approach ˃ Processors, input and service suppliers willing to work with and negotiate with cooperatives ˃ Time and consistent support ˃ Finance only when there is sound financial management and clear ability to service a loan or business case for investment. ˃ Cooperatives are dynamic and have a lifecycle ˃ Need skills to self-evaluate and re-invent themselves
  6. 6. Farmer Cooperatives – The Model / Approach Cooperatives are businesses Farmers focused on common interest of engaging in business together Not social groups but does create social capital Aggregate farmers to capitalize economies of scale Aggregate farmer demand for inputs and services Aggregate supply of milk Farmers in cooperatives have greater technical competency Delivery of technical trainings Delivery of production enhancing inputs Aggregate farmers for efficient communications Social and health messaging (HIV/AIDS education, nutrition education, gender-related household messaging)

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