Update on dairy value chain
development in Nicaragua and
Honduras
Michael Peters and Rein van der Hoek (CIAT)
CGIAR Research Program on Livestock and Fish
Planning Meeting
ILRI Nairobi
27-29 September 2011

Why?
 Dairy products important dietary component across social strata
 Consumption growth rates 6.7/11.7% Honduras/ Nicaragua
 Per capita consumption low (100 kg milk equivalent/year)
 Urbanization/population growth, 56 million people, 40% in cities in 2030
 400,000 small scale livestock producers in Central America (1/2
Honduras/Nicaragua), 75% of income from milk sales
 Dairy sector 2nd fastest growing livestock sub-sector in region
 Growing diversity of consumer preferences > opportunity for small
industries to enter into market niches

Limitations
 Poor quality and productivity (5 to 10 milking cows,
30 animals per farm, 3 to 5 l milk/cow/day)
 Strong seasonal variation of production and prices
 Market linkages and organizational capacity weak
 Lack of information and technology
 Lack of quality based incentive systems
 Lack of integration with formal sector

Projects and capacities
to build on: Projects
 CFC ‘Enhancing Beef Productivity, Quality, Safety, and Trade
in Central America’ ILRI/CIAT
 ‘Value chain focus and targeted interventions can be effective in
generating benefits to small cattle producers, but best
opportunities for dairy production’
 Tropileche ILRI/CIAT
 Technology driven projects

Projects and capacities to
build on: Partners
 Long term presence in region/staff placed in Managua,
expertise in forages/feeds and value chains
 Old and new partners NARS, INTA,DICTA, CATIE,
Universities in region, international NGOs such as
CRS, local and regional NGOs (SERTEDESO, SIDE,
FIPAH)
 Link with private seed sector

Projects and capacities to build on:
Improved forages, processing,
working with farmers
 Highly productive forages with adaptation to
drought and/or water-logging
 Forage conservation technologies directed at
smallholders
 Farmer based seed supply and concentrate
production
 Experience with value chain work in Central
America
 Working with farmers

Engagement as part of CRP
 Communication with old (NARS, SIDE) and new
partners (CRS),
 Side and CATIE were part of consultation on
priority themes and priority regions (link with CRP
1.2, see also next 2 slides)
 Need for additional expertise in M&E and gender
analysis (through CRP); Animal health (but focus is
on service provision

Drought prone areas in Central
America
< 4 dry months
4-6 dry months
> 6 dry months
sequía
Drought prone
Fuente: FAO, 2002

Priority regions
 Nicaragua
Las Segovias
Matagalpa
Chinandega
León
Carazo
Raan
 Honduras
Yoro (Centro - Norte)

Entry points to enhance smallholder dairy
production: Overcoming production, supply
and market constraints
 Production: Enhancing dairy productivity and quality
 Supply: Overcoming seasonal variation and improving quality
and hygiene
 Market/Institutions: Responding to increasingly stringent food
safety standards for internal and external markets (trade
liberalization and urbanization)
 Other considerations: Social justice (gender, value chain
equity), ecological footprint and market differentiation

Planned activities: Overcoming the
constraints
 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

Outcome pathway
certifications of private aninal health services/small holder
Social justice along value chain; ecological sustainability
Outcome: Actor(s)
Increased competitiveness of informal
Changes enabling environment: Recognition of
actors in dairy value chains
Marketing: Link smallholders with formal
markets, year round availability of Research:
SIDE;CATIE;
Supporting:
devlopment;
differentiated high quality dairy products NARS
Associations
Transport and processing: Provide Supporting
Research:
consumers year round with high quality SIDE, CATIE
Supporting:
NARS,
dairy producs: traceability systems Development
Farm and community level - Improved
production
productivity, milk quality and hygiene,
efficient input services, strengthen local Research:
NARS;SIDE;
Supporting:
Developmen;
dairy clusters, seed supply systems CATIE Association;NGOS

Gaps
 Adoption of forage grasses in LAC will happen, but M&E and
gender analysis to strengthen
 Regional focus of private sector seed partner
 Integrated analysis and innovation of value chains
 Secured funding for working with partners, operations and staff
Resource mobilization:
 Proposal CFC – advanced to Project pipeline
 Collaboration CRS – link with long term initiatives for improved
livelihoods, food security and NRM