More milk by and for the poor:
Adapting dairy market hubs
for pro-poor smallholder value chains in Tanzania
(Irish Aid Project)
Presentation at MilkIT Pre-inception Meeting, Nairobi
24th – 25th January 2012
Amos Omore

Introduction
• Designed as support to CGIAR Research Program 3.7 for
Tanzania dairy VC
• One inception year for research and R&D proposal
development for subsequent yrs (USD 450,000 for 2012)
• Potential 4 more years for dairy VC R&D engagement
from 2013 – 2016.
• Strong pro-poor , marginalised pre-commercial men and
women focus,
• Aim is to provide proof-of-concept that such
marginalised groups can also be targeted successfully
• To work closely with Tanz R&D institutions and influence
policy

Objectives
(derived from IA CSP for Tanzania)
Goal:
• Inclusive growth and reduced poverty and
vulnerability among dairy-dependent livelihoods in
relevant rural areas in Tanzania
Outcome:
• Rural poor are more income secure through
enhanced access to demand-led dairy market
business services and viable organisational
options, and low-income consumers have better
access to affordable milk.

Contributing Objectives over 5 yrs
1. Inform policy on appropriate role for pro-poor
smallholder-based informal sector value chains in
dairy sector development
2. Generate and communicate evidence on business and
organizational options for increasing participation of
resource-poor male and female households in dairy
value chains
3. Develop scalable value chains approaches with
improved organization and institutions serving
resource-poor male and female smallholder dairy
households

Contributing Objectives during 2012
Inception Phase
1. Assess the current status of the Tanzanian dairy sector
and identify appropriate entry points and partners for
promoting a more pro-poor development orientation
2. Develop a strategy for strengthening the policy
environment to better support pro-poor dairy
development, capitalizing on ongoing engagement with
key policy actors and previous successes in Kenya and
Uganda
3. Identify sites appropriate for piloting pro-poor dairy
development interventions that have been successful
elsewhere in East Africa, and assess how those
interventions need to be adapted to the Tanzanian
context.

Addressing 4 inter-related problems
that face resource-poor milk producers
1. Dominant direct milk
sales by producers create
diseconomies of scale Milk marketing outlets (Kurwijila, 2010)
2. High risks associated with
unorganised milk sales %
that discourage Milk Buyer
investment to improve Neighbours 86.1
productivity Local market 5.5
3. Complex cooperative
models and technology- Secondary market 0.5
driven solutions have Processors 1.4
largely failed Large scale farms 0.2
4. Suitable organisational Trader at farm 4.5
models have been lacking
Other 1.7
TOTAL 100.0

Farmer groups are struggling!
Performance of milk collection at Nnronga w omen dairy co-operative Society, Hai
Kilimanjaro and CHAWAMU-Muheza Tanga (1994-2007)
750000
700000
650000
600000
Volume of Milk (Litres)
550000
500000
450000
400000 Nnronga
350000 CHAWAMU-Muheza
300000
250000
200000
150000
100000
50000
0
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Year 2007

Which Dairy Milk Hub Model might
be appropriate?
Diversified Profit-Max Model for CPs
Collection
Chilling Plant Processing Plant
- -
Center
Sales to Processor
- -
Sales to
- -
individuals and
vendors
Diversified profit max through:
higher prices for milk sold locally
lower costs (transport, chilling) overall for milk handled

Activities
Output 1: Current status of the Tanzanian dairy sector assessed and appropriate entry
points and partners for promoting a more pro-poor development orientation identified
1.1 Understand policy environment:
1.2 Consult and sensitise stakeholders:
1.3 Develop and implement value chain assessment tool:
Output 2: Strategy for strengthening the policy environment to better support pro-poor
dairying developed
2.1 Develop a pro-poor strategy for strengthening policy environment:
2.2 Improve quality assurance services:
2.3 Initiate process of strengthening of actors and their organisations:
Output 3: Sites appropriate for piloting pro-poor dairy development interventions
identified and available best bet interventions adapted to the Tanzanian context
3.1 Develop and implement tool for site selection:
3.2 Structured baseline surveys:
3.3 Develop best bet options for pilot interventions:

Activity Milestones
More milk by and for the poor: Adapting dairy market hubs for pro-poor smallholder value chains in Tanzania - 13 Jan 2012
Qtr/Month/week in 2012
Activity Milestones Qtr1 Qtr2 Qtr3 Qtr4
1 2 3 4 5 6 7 8 9 10 11 12 Performance ILRI lead
1 2 3 4 5 6 7 8 9 1 1 1 1 1 1 1 1 1 1 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 Indicators
0 1 2 3 4 5 6 7 8 9 person
Output 1: Current status of the Tanzanian dairy sector assessed and appropriate entry points and partners for promoting a more pro-poor development orientation identified
seek feedback on CF conduct report at
reviews, develo prepare review, CF,
1.1 Understand policy environment: develop tools p CF
from key national situational
report
stakeholder AG
situational report
partners analysis meeting
identify
hold
1.2 Consult and sensitise stakeholders: stakeholder reporting workhop report AO, all
wkshop
s & invite
tools, VC maps and
1.3 Develop and implement value chain assessment tool: develop tool implement tool reporting DB, AO, IB,
report
Output 2: Strategy for strengthening the policy environment to better support pro-poor dairying developed
policy conduct
during agenda Outcome policy agenda
above paper to Mapping paper, strategy
2.1 Develop a pro-poor strategy for strengthening policy environment: stakeholder
strategy development AO, all
inform OM workshop report with M&E
wkshop plan
ToR & TDB
ToR & contract
2.2 Improve quality assurance services: for TDB
contract with QA AO
indicators
stakeholder
2.3 Initiate process of strengthening of actors and their organisations: workshops to workshop reports AO
develop agenda
Output 3: Sites appropriate for piloting pro-poor dairy development interventions identified and available best bet interventions adapted to the Tanzanian context
develop toolkits, implement docume
3.1 Develop and implement tool for site selection: criteria tool nt sites
toolkits, reports IB, SFL
analysis & reporting, with
agree CRA baseline data and
3.2 Structured baseline surveys: with SUA
conduct baseline survey focus on targeting IB, AO
report
interventions
desk review of:
guide for
a) past Initial best-bet
identify potential interventions, AO
successes & interventions develop and submit proposal for engage dev
3.3 Develop best bet options for pilot interventions: failures and b) evaluated (ex-ante )
development
pilot interventions partner
proposal, inception coordinates,
partner yr report contract all
best bet and described
with dev partner
interventions
PC appointed
(initially on form SC
identify & engage progress report final report
consultancy), Post- and hold 2nd SC progress & SC
General administrative & coordination doc advert posted,
consultants, incl from (+financial) & (+financial) & AO
1st meeting meeting reports
Ireland meeting with IA meeting with IA
meeting with IA, meeting
project office set up
Notes: ILRI Persons involved: AG=Ayele Gelan, AO=Amos Omore; IB=Isabelle Baltenweck, DB=Derek Baker, AN=Alice Njehu, others from Sustainable Livestock Futures (SFL) Group and Research Methods Group. Tanz/SUA
Persons involved: PC=Project coordinator (to be seconded by SUA, initally engaged as a condultant), value chain researchers & consultants. PC to help facilitate stakeholder engagements. Project to have close linkage with IFAD Feed and
Gates/WB Data projects. Project Coordinator (part-time) and Post-doc (full-time) to be involved in all activities at different levels as per ToRs.

Exploring synergies
MilkIT What can be done together
with Irish Aid (give/receive)
Component 1. Institutional strengthening
1a. Mechanisms for enhancing innovation capacity through local
stakeholder platforms to address dairy value chain constraints
1b. Approaches for involving local stakeholders in analysis of dairy VC
1c. Basket of intervention strategies emerging from dairy VC analysis
Component 2 Productivity
2a. Strategies for implementing local feed-related innovations emerging
from stakeholder platforms that enhance dairy incomes
2b. Methods for enhancing diffusion of local feed-related innovations
among dairy smallholders for income benefits through productivity
increases
2c. Strategic lesson learning on appropriate dairy feeding strategies and
technologies
Component 3. Knowledge sharing
3a. Mechanisms for sharing knowledge at local and regional levels
3b. Mechanisms for sharing knowledge across project countries and
among global R4D projects
Co-ordination

Exploring synergies
Irish Aid What can be done together with
MilkIT (give/receive)
Output 1: Current status and entry points
1.1 Understand policy environment:
1.2 Consult and sensitise stakeholders:
1.3 Develop and implement value chain assessment tool:
Output 2: Strategy for strengthening the policy
environment
2.1 Develop a pro-poor strategy for strengthening policy
environment:
2.2 Improve quality assurance services:
2.3 Initiate process of strengthening of actors and their
organisations:
Output 3: Sites selection and developing best bet
interventions
3.1 Develop and implement tool for site selection:
3.2 Structured baseline surveys:
3.3 Develop best bet options for pilot interventions:
General administrative & coordination activities (e.g.,
steering committee)