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Delivery of advisory and technical services for dairy smallholder production systems: The concept of dairy hubs


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Presentation by Jo Cadilhon and Isabelle Baltenweck at an Africa Union - Interafrican Bureau for Animal Resources (AU-IBAR) meeting on the role of public and private sector in livestock service delivery in Africa held at Naivasha, Kenya on 5 December 2012.

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Delivery of advisory and technical services for dairy smallholder production systems: The concept of dairy hubs

  1. 1. Delivery of advisory and technicalservices for dairy smallholder productionsystems: the concept of dairy hubs Jo CADILHON and Isabelle BALTENWECKAU-IBAR meeting on the role of public and private sector in livestock servicesdelivery in Africa, 5 December 2012, Naivasha Sopa Lodge, Kenya
  2. 2. ILRI in briefILRI a member of the CGIAR Consortium which conducts food and environmental research  to help alleviate poverty and increase food security  while protecting the natural resource base India Mali 700 staff 100 scientists and researchers more than 30 scientific China disciplines Vietnam Two large campuses (Kenya, Ethiopia). 2012 budget USD 60 mill. Laos ILRI works with a range of Nigeria partners Mozambique Sri Lanka Kenya Ethiopia Thailand ILRI’s vision: A world made better for poor people in developing countries by 2 improving agricultural systems in which livestock are important.
  3. 3. Outline of presentation1. Using hubs for pro-poor livestock value chains development2. The East Africa Dairy Development Project  EADD background, vision and objectives  EADD hubs model  Assessment results: provision of extension services by EADD hubs3. Way forward for extension services by dairy hubs 3
  4. 4. Pro-poor livestock development and value chains ILRI fosters a demand-led development model Informal markets provide substantial opportunities and can be made to function well Market access and utilisation can be improved by:  Access to inputs  Access to services  Training and institutional capacity building  Reduced transaction costs  Better risk management Improved market access and utilisation improve the livelihoods of the poor  Involving multiple actors  With benefits to women 4
  5. 5. The role of hubs in pro-poor livestock development Collective action is a knee-jerk response by development actors Hubs show promise:  As an intervention  As a means of intervening What are appropriate organizational and institutional mechanisms in various contexts?  Intensive versus extensive production systems  Strong versus poor government support  Dynamic versus low private sector involvement 5
  6. 6. What do hubs do?Hubs provide a critical mass of producers, products orinputs use, thus attracting other market actors  Hubs provide a contact point  They reduce communication costs  They reduce transactions costs  Hubs enable countervailing market power  They provide for network effects: knowledge, technology and innovation  Hubs facilitate peer pressures 6  Etc.
  7. 7. ILRI contributions to dairy hubs projects Design, implement and analyse baseline survey Support the design and implementation of a monitoring and evaluation system for hubs Analyse results from monitoring system Collate and document lessons learned, including on issues related to gender and youth Design, pilot test and monitor selected interventions related to feed, animal production and marketing Support projects’ technical activities on extension, breeding and improving milk quality, etc. 7
  8. 8. EADD background A large proportion of the farming population in East Africa consists of subsistence farmers with low market orientation for both farm inputs and outputs Smallholders are limited by low levels of production, product quality and market infrastructure:  Low feed and fodder quality  Post-harvest losses  Lack of processing equipment ILRI partnered with Heifer International and other organizations to pilot test a new dairy development model in East Africa: the East Africa Dairy Development Project was launched early 2008 with financial support 8 from the Bill & Melinda Gates Foundation
  9. 9. EADD vision and objectivesVision Transform the lives of 179,000 smallholder farming families (approximately 1 million people) by doubling their household dairy income in 10 yearsObjectives Harness information for decisions and innovation Expand access to markets Increase productivity andefficiencies of scale 9
  10. 10. EADD1 pilot phase – Factsheet  Scope  Duration: Jan 2008-Jun 2012  Budget: USD42.85m (BMGF)  Investment fund: USD5.0m  BMGF: USD2.5m  Heifer: USD2.5m  Partners  BMGF  HI – lead  TNS – business development  ILRI – knowledge-based learning  ABS – genetics & breeding  ICRAF – feeds & feeding  Structure (>120 staff)  Country offices  Kenya  Rwanda  Uganda 10  Regional office
  11. 11. EADD hubs At the heart of EADD is the hub approach which aimed to increase dairy income of poor dairy farmers through various interventions along the value chains so as to improve farm productivity and market access Dairy hubs serve as community anchors for industry knowledge sharing, business services and market access The hub approach as implemented by EADD facilitates the emergence or strengthening of a network of inputs and services providers and the set up of a credit facility mechanism Progressively the hub becomes a platform used by other inputs and services providers to reach smallholder farmers Possible add-ons include inputs for activities other than dairy, savings and credit facilities, household expenses (food, medical and school expenses), energy saving solutions (bio-gas and solar panels) When fully functioning, the dairy hub is a dynamic cluster of services and activities that generate greater income for dairy farmers 11
  13. 13. EADD approach1. Beneficiaries are selected based on need, opportunity and initiative2. Farmers are mobilized into cooperatives, associations or producer companies3. Companies are assisted to set up infrastructure to market milk and deliver inputs to members through the ‘Dairy Hub.’4. EADD staff provide technical assistance to producer companies to achieve farmer goals in a sustainable manner 13
  14. 14. Some lessons learned fromthe EADD hub approach Hubs should be seen as an approach, rather than a model, with various ‘options’ to choose from, depending on farmers’ capacity, state of the industry and external environment:  Hubs centered around provision of inputs and services  Hubs centered around bulking without cooler  Hubs centered around chilling plants In some locations, the chilling plants were not successful to catalyse farmers around the hub but other services provided were useful to farmers Provision of inputs and services, including advisory services can be done in-house, like in the case of a cooperative, or out-sourced For advisory services, it is important to embed services in the hub for accountability and sustainability issues 14
  15. 15. Assessment of extension servicesprovision by hubs Overall, 82 dairy farmer business association (DFBAs) were supported in three countries and their progress monitored in early 2012 EADD-supported sites were assessed on 5 dimensions:  Feeding  Breeding  Animal health  Milk quality  Extension services structures Scores can vary between 0 (low level of development) and 100 (fully developed sites which no longer require external assistance) Sites with scores above 60% are considered ‘mature’ and require only minimal external support 15
  16. 16. Sites of EADD hubs assessment exerciseNumber of DFBAs staged List of DFBAs staged 16
  17. 17. Actual development scores are distributed from 7.5 to 62 (%) Kenya Rwanda Uganda 70.00 65.00 Highest 60.00  62.0 (TANYIKINA, Kenya) 55.00 50.00 45.00 40.00 75% quartile Score  42.0 (GASI,Rwanda) 35.00 Median 30.00  34.8 (ZIGOTI, Uganda) 25.00 20.00 25% quartile  27.3 (KIBOGA WEST, Uganda) 15.00 10.00 5.00 Lowest  7.5 (NSAMBYA, Uganda) 0.00 - 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0 55.0 60.0 65.0 70.0 75.0 80.0 85.0 90.0 95.0 100.0 PercentileSource: 2012 Stage Gate Assessment Data, May 2012 17
  18. 18. Results for advisory services indicators Most producers’ organizations in Kenya have extension units, unlike in Uganda and Rwanda where the organizations are less mature and capacity is lower Less than half the sites are able or willing to spend own funds on supporting extension, meaning that other sources of funding are requiredSource: 2012 Stage Gate Assessment Data, May 2012 18
  19. 19. Results for advisory services indicators• Most producers’ organizations in Uganda and Rwanda found it difficult to attract and retain qualified managers• Most organizations have linkages with governments and other institutions• Strategies to reach women partial in the majority of sites; no strategies in the rest of the sites 19Source: 2012 Stage Gate Assessment Data, May 2012
  20. 20. Way forward: capacity building modelsfor hubs in EADD2 Focus on provision of advisory and technical services Assess effectiveness, efficiency and sustainability of four main extension approaches using hubs in various environments What approach works best to reach out to women, youth and poor farmers?  Bundled services by private extension agents  Private extension agents contracted by hub  Value chain partner provides extension to farmers  Use public service extension services Assess whether the approach can be used in other livestock value chains (pigs and small ruminants) Compare hubs with other capacity building models: cooperative, private franchised system (SIDAI), etc. 20
  21. 21. Thank you for your attentionFeedback welcomeEmail: 21