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Dairy commercialization presentation moses nyabila

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Dairy commercialization presentation moses nyabila

  1. 1. UNLOCKING VALUE OF SMALLHOLDER DAIRY THROUGH HUB MODEL – CASE OF KENYA Moses Nyabila – EADD
  2. 2. East Africa Dairy Development Project <ul><li>Funded by a grant from The Bill and Melinda Gates Foundation </li></ul><ul><li>4 year (2008 – 2011) farm-to-table industry development project </li></ul><ul><li>Primary objective of doubling incomes of 179,000 small holder dairy famers, transforming livelihoods of 1 million people </li></ul><ul><li>Implemented by a consortium of 5 partners led by Heifer International </li></ul><ul><li>Currently in 2 nd year of a 4 year pilot program implemented in Kenya, Uganda and Rwanda </li></ul>
  3. 3. The Basis for the project <ul><li>The Problem </li></ul><ul><li>East Africa is an agricultural economy </li></ul><ul><li>Small-scale, resource-poor farm communities </li></ul><ul><li>115 million people, half subsisting on less than $1 per day </li></ul><ul><li>Women responsible for 80% of food produced in Africa, but have little to show for it </li></ul><ul><li>Opportunity </li></ul><ul><li>Declining food intake, </li></ul><ul><li>Poor education and health services, </li></ul><ul><li>Degraded and disappearing grasslands for their herds, </li></ul><ul><li>and little-to-no access to commercial market systems . </li></ul>
  4. 4. Introduction to Kenya dairy sector <ul><li>4 billion liters of milk produced by 1.2 million farmers annually </li></ul><ul><li>Small holder farmers produce 70% of milk </li></ul><ul><li>10-15% of production is processed </li></ul><ul><li>50-60% of dairy farmers subsist on less than 2 dollars per day </li></ul>
  5. 5. Challenges facing the small holder farmers <ul><li>Economics = poor efficiencies </li></ul><ul><li>Fragmentation = majority of small holders on their own </li></ul><ul><ul><li>Poor supply of inputs and services </li></ul></ul><ul><ul><li>No bargaining power </li></ul></ul><ul><ul><li>No reliable largely informal markets </li></ul></ul><ul><li>Diluted government led extension </li></ul><ul><li>Climate change </li></ul>
  6. 6. Why the hub model? <ul><li>Unlocks potential of rural economies </li></ul><ul><ul><li>Attracts investment to rural Africa </li></ul></ul><ul><ul><li>One stop for collection of quality milk for processors </li></ul></ul><ul><ul><li>Contract = assurance of market </li></ul></ul><ul><ul><li>Access to services and input for farmers </li></ul></ul><ul><ul><li>More sustainable compared to government and donor support </li></ul></ul>
  7. 7. The Solution – Transforming Chilling plants to Business Hubs TRANSPORTERS TESTING FARMERS FIELD DAYS FEED SUPPLY AI & EXTENSION VILLAGE BANKS OTHER RELATED MEs HARDWARE SUPPLIERS CHILLING HUB
  8. 8. How Farmers pay for Services through the Business Hub TRANSPORTERS FEED SUPPLY AI & EXTENSION HARDWARE SUPPLIERS FARMERS VILLAGE BANK SERVICES & INPUTS CHILLING HUB
  9. 9. Examples of success: <ul><li>Tanykina Dairy </li></ul><ul><li>Milk Chilling </li></ul><ul><li>15,000 litres/day </li></ul><ul><li>3,500 farmers </li></ul><ul><li>Muki Dairy Co-operative </li></ul><ul><li>Milk Chilling </li></ul><ul><li>25,000 litres/day </li></ul><ul><li>2,500 farmers </li></ul><ul><li>Sabatia Dairy </li></ul><ul><li>Chilling </li></ul><ul><li>9,000 litres/day </li></ul><ul><li>2,000 farmers </li></ul><ul><li>Wakulima Dairy Ltd. </li></ul><ul><li>Milk Chilling </li></ul><ul><li>22,000 litres/day </li></ul><ul><li>5,300 farmers </li></ul>Over 13,000 farmers $6.3m p.a. Over 70,000 Liters Daily
  10. 10. Requirements for successful hub <ul><li>Commitment by farmers and government </li></ul><ul><li>Corporate approach to management </li></ul><ul><li>Collaboration with suppliers </li></ul><ul><li>Start up support by skilled NGO or donor </li></ul>
  11. 11. <ul><li>We are looking for partners for scale up phase </li></ul><ul><li>Governments </li></ul><ul><li>Processors </li></ul><ul><li>Suppliers </li></ul>www.eadairy.org
  12. 12. Thank you!

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