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Update on Dairy Value Chain development in Nicaragua and Honduras


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Presented by Rein van der Hoek (CIAT) at the CGIAR Research Program on Livestock and Fish Value Chain Development Team Meeting, Nairobi, 5-8 March 2012

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Update on Dairy Value Chain development in Nicaragua and Honduras

  1. 1. Update on Dairy Value Chain development in Nicaragua and Honduras Rein van der Hoek (CIAT) CGIAR Research Program on Livestock and Fish Value Chain Development Team Meeting Nairobi, 5-8 March 2012
  2. 2. Dairy Sector Nicaragua/Honduras• Generates more than 250,000 direct jobs, 1,600,000 indirect jobs, 2% GDP• 70% of cattle farms produce milk, double purpose animals, 75% income through milk• 50% of farms < 5 ha, extensive systems (> 1 head/ha), low productivity (3-5 kg/animal/day)• Constraints in VC: high inter-seasonal variation milk production and low milk quality• Many farmer asociations/cooperatives, but ..• Milk collection centers essential part of VC (be it small-scale)• Dairy processing plants variable sizes• Dairy products: limited variation, consumers prefer low prices over quality• Limited support from government, few incentives for innovations, intensification
  3. 3. Why work on Dairy VC Nicaragua-Honduras• Major sector, high potential but underdeveloped• Increase cash flow for small producers• Increase nutritional status (children)• Reduce volatility of prices for dairy products• Potential for high value dairy products• Gradual trade liberalization: improve competitiveness, develop differentiated high value products and to gain market access both locally and with partner countries.• Needs and opportunities for private investment• Multiplier effects in dairy basins
  4. 4. Planned activities• Improved forage, pasture and silvopastoral systems for higher productivity and seasonal stability• Improving milk quality/hygiene through better processing techniques• Value chain analysis focusing on improving economic conditions at producer level• Facilitating integration of informal stakeholders (small farmers, processors and traders) to more dynamic, differentiated markets• Enhancement of partnerships around specific market opportunities for the establishment of business models• Capacity building including technological innovation, farm management and linkage with service providers and industry• Emphasizing the concept of eco-efficiency
  5. 5. Present state Dairy VC work Nicaragua/Honduras• Diagnostics: information available for a large part, possible need for some specific baseline work• Production - Forages and feeding - on-going (> 10 years) – Various germplasm materials integrated in farming systems of small and medium farmers, different systems and uses – Impact on milk production (farm level)• Training and dissemination (government agencies, NGOs) - in development• Marketing aspects (niche markets, inclusion private sector) – in development• Proposal development, in collaboration with CIAT-CC people (link to CRP 7), GIZ, local institutions, private sector• Site selection – mainly depending on intervention sites (potential) partners, potential integration other sectors
  6. 6. CRP3.7 Component 2.2/2.3 Dairy value chain Nicaragua /Honduras MILESTONES PARTNERS Workplan activities (2012) Resources from (OUTPUT TARGETS) restricted projectsObjective 1. Improving the competiveness market integration of dairy processors using adequate enterprise models1.1 Identify good market GIZ, Private Sector Value chain diagnosis If CFC approvedopportunities for linkages between partners, National Identification of commercial around 2 millon USDsmall dairy farmers, small dairy Institutions, contacts interested in linking with (including Colombiaenterprises and market oriented National and smallholder dairy producers component) for wholedairy value chains (2012 or 2013). International NGOs proposal1.2 Design and implement Conduct gap analysis to identifytechnological and business upgrading needs Seed money forupgrading processes between small Workshop between farmers, dairy proposal developmentfarmers, small dairy enterprises enterprises and buyers to establishand commercial buyers (2012 or agreements for physical and process Other funds (NGOs,2013). upgrading IDB, private partners)1.3 Promote business and alliances Design sustainable tradingbetween small dairy farmers, small relationshipsdairy enterprises and buyers(2013/2014).1.4 Document lessons learned and Build feedback loops among projectshare emerging good practice participants(2014/2015) Share lessons learned, with other VC’s 3.7
  7. 7. Objective 2. Improving farm profitability, including farm management, forage based feeding, animal health, milkhygiene and on farm environmental issues MILESTONES (OUTPUT TARGETS) PARTNERS Workplan activities (2012) Resources from restricted projects2.1 Improve farm productivity GIZ, Private Sector Reviews If CFC approvedthrough activities related to animal partners, National Workshops around 2 millon USDfeed, health, and management. Institutions (including Colombia2.2 Improve and promote the quality Reviews component) for wholeof milk produced on farms and Workshops proposalcollection points (2014/2015).2.3 Strengthen the managerial Reviews Seed money forcapacity of small dairy farmer Workshops proposalassociations, small dairy enterprises developmentand selected dairy clusters.(2014/2015). Other funds (NGOs, IDB private partners)2.4 To prevent or mitigate on-farm Proposal development withenvironmental deterioration (2013 partners, some pilot workonwards) (Farmer) workshops2.5 Reduce carbon footprint through Proposal development withidentification and implementation of partners and private sector,“best practices”, “carbon-insetting” some pilot work(2013 onwards) (Farmer) workshops
  8. 8. Objective 3. Improving dairy product quality, including attention to food safety issues MILESTONES (OUTPUT TARGETS) PARTNERS Workplan activities (2012) Resources from restricted projects3.1 To develop products with GIZ, Private Sector Reviews on product If CFC approvedpotential in the market, feasible to partners, National development around 2 millon USDproduce in the local environment Institutions (including Colombia(2014/2015). component) for whole3.2 To develop a synchronized and Reviews - Improving quality proposalcontinuous quality control system from farm gate to consumeralong milk/dairy value chains Enhancing Food safety Seed money for(2014/2015) (traceability, regulations proposal compliance) development Other funds (NGOs, IDB private partners)