Dairy Sector Development in CAADP and Country Investment Plans, presented by Joseph Karugia at the Dairy Development Learning Event co‐sponsored by ESADA, Land O’Lakes, Heifer International and USAID April 23rd, 2012

1. Dairy Sector Development in CAADP
and Country Investment Plans
Presentation made at the
Dairy Development Learning Event
co‐sponsored by ESADA, Land O’Lakes, Heifer International and USAID
April23rd, 2012
Joseph Karugia
Coordinator, ReSAKSS‐ECA
j.karugia@cgiar.org

2. Outline
• Introduction
• CAADP Principles
• Dairy Sector in NAFSIPs and Regional Agric Programs
• Role of Development Partners
• Role of Private Sector in NAFSIPS and Regional
Investment Plans
• Conclusions and Some Food for Thought…
2

3. Contribution of the dairy sector to the
economy
• Livelihoods and income generation for smallholder farmers
through production of high value products
• Contribution to household asset base for finance and
insurance
• Contribution to household nutrition security especially for
vulnerable members (children, the sick, and the elderly)
• Direct contribution to the soil fertility through manure and
organic matter
3

4. Value of production and growth rates in the
dairy sector by region
Region % of total Average Annual Growth Rates (%)
value of
production
1961‐ 1971‐ 1981‐ 1991‐ 1961‐
1970 1980 1990 2000 2000
Sub‐Saharan 4.8 2.3 1.6 2.9 2.1 2.1
Africa
Eastern Africa 8.6 2.5 3.2 5.0 2.5 3.4
Southern 6.6 1.9 ‐0.3 ‐0.1 1.2 0.3
Africa
Western 1.2 3.3 2.4 1.4 2.1 2.1
Africa
Source: ReSAKSS, 2008 based on FAOStat, 2002
4

5. Contribution of the dairy sector to annual
household income (USD) by production system
Example from Kenya
Production System
Income Category Intensive Semi‐Intensive Extensive
Annual % of total Annual % of total Annual % of total
income income income income income income
Net recurrent 234.9 34.3 190.4 32.0 7.3 10.0
cash income
Income from 137.8 20.1 97.9 16.4 75.3 13.2
sale of animals
Recurrent 205.0 29.9 205.5 34.5 316.3 55.4
income in kind
Non‐market 107.4 15.7 101.9 17.1 121.7 21.3
socio‐economic
benefits
Total net annual 685.1 100 595.7 100 570.6 100
income
5
Source: Small Holder Dairy Project, Policy Brief no. 7

6. Some constraints facing the dairy sector (1)
1. Degradation of Natural Resources (limited arable land,
depletion of water and feed resources)
2. Poor infrastructure‐ affecting trade and service delivery / access
to markets‐‐‐key because dairy products are highly perishable
3. Frequent droughts which affect availability of water and feed for
livestock causing increased livestock mortalities
4. Standards: Investments are needed to improve standards
• Need to improve milk quality so as to be able to produce high quality
milk powder, which is the main export product
• Good quality to enhance milk marketability and price.
6

7. Some constraints facing the dairy sector (2)
5. Limited capacity in quality milk handling (technical
know how and facilities) especially in the informal
dairy subsector
6. Inadequate political will to support the dairy sector,
low public investment, poor access to agriculture
extension
7. Livestock diseases:
• affect milk productivity and profitability of dairy farming
• pose public health concerns
7

8. What is CAADP?
• Continent‐wide framework for the development of African
agriculture
• A set of pledges made by African leaders to take explicit
responsibility for the development of the continent ‐ endorsed at
a summit meeting of the AU in Maputo in July 2003.
• Emphasis ‐ Africa’s ownership and country leadership in
programme implementation
• CAADP seeks to add value to country efforts aimed at enhancing
agricultural development programmes
• (e.g. ASDS‐Kenya, ASDP‐Tanzania)
8

9. CAADP Principles…
9

10. “Implementing the CAADP agenda is about embracing
CAADP principles and
applying the CAADP framework in the
development and design, implementing and evaluating
agriculture investment programmes; it is more than just
more financing and more investment programmes”
10
Photo credit: EADD

11. CAADP principles (1)
• Employ agriculture‐led growth to achieve MDG1 of halving
poverty and hunger by 2015
• Pursuit of 6% average annual sector growth at national level
• Allocation of 10% of national budgets to agriculture sector
• Exploitation of regional complementarities and cooperation to
boost growth
• Policy efficiency, dialogue, review and accountability (evidence‐
based policymaking)
• Partnerships and alliances to include farmers, agribusiness, civil
society – e.g. Kenya Agribusiness and Agro‐industry Alliance
11

12. CAADP principles (2)
• Enhancing peer‐review and sound analytical work across
countries
• Enforcing mutual accountability to ensure sustainable resource
utilization
• The principles are achieved through: the strategic functions of
CAADP, the guidance and involvement of the Regional Economic
Communities (RECs), and the national roundtable process
12

13. CAADP implementation steps and status in ESA
1. Focal Point 2. Process 3. Steering and
4.
appointed by launched by Technical
Endorsement
government Government & Committee
by Cabinet
REC instituted
Egypt, Eritrea, Mauritius,
8. investment 7. Compact 5. Stocktaking,
plan prepared 6. Compact Growth,
signed Investment
drafted
Analysis
DRC, Zambia
Burundi, COMESA,
Seychelles Comoros, Djibouti,
Swaziland Zimbabwe
Madagascar, Sudan
9. Investment 10. financing plan 11. assessment 12. Execution of
& instruments, &
plan reviewed review mechanism of program new investment
and validated agreed on execution programs
Kenya, Malawi, Tanzania, Ethiopia†, Rwanda†
Uganda
14. 2nd annual 13. 1st annual
review review
meeting meeting

14. The Dairy Sector in
NAFSIPs….
14

15. Some observations…
• Role of the livestock sector (including the dairy sector)
– not fully appreciated in the original four CAADP pillars (land and water;
markets and infrastructure; food security; and research and technology
adoption)
• Later articulated in the CAADP Companion Document
• Generally, contribution of the livestock sector is downplayed
– partly due to lack of empirical evidence to counter the prevailing
perception
• Emerging empirical evidence ==> potential contribution of
livestock sector much larger than is currently believed
• It has big potential to contribute to economic growth, poverty
reduction and food security.
15

16. Dairy sector in country compacts and NAFSIPs
Country Is the Dairy Sector explicitly Broad objectives
addressed In NAFSIP?
Kenya Yes Continued support of market
development and private sector
investments
Uganda Yes Increase milk production from 1.5 to 2.0
billion litres annually by 2014
Rwanda No; but role of livestock is Increase livestock ownership and
clearly articulated intensification of animal husbandry
practices
Ethiopia No; little elaboration of
livestock issues
Tanzania No; but livestock sector is Increase livestock sector growth from
mentioned 2.7% to 9% by 2021
Malawi Yes; the sector is just being Enhancing herd acquisition, improving
developed farm management, modernizing
processing facilities 16

17. The dairy sector in CAADP investment plans…
• Importance attached to the dairy sector is reflective of its
relative contribution to the economy
• Planned expenditures are aggregated at programme level ‐not
easy to isolate budget allocation to dairy
• Technical reviews ‐ countries to identify priority value chains
• Some of the programmes have direct or indirect effects on the
dairy sector (extension services, animal health, R&D, etc)
• Planned budgets are substantial in most of the countries…will
they be financed?
17

18. Trends in public expenditures in support of
the agricultural sector…
• Planned expenditures:‐
– PIF (Ethiopia) has a budget of USD 18.0 billion for 2010‐
2020 out of which the government will fund USD 15 billion
– TAFSIP (Tanzania) is set at USD 5.3 billion; bulk of it
financed by government
– Medium‐Term Investment Plan (Kenya) for 2010‐2015 is
set at USD 3.09 billion with government funding at 66%
18

19. Public agricultural spending and commitments:
agriculture spending as a share of total spending
• CAADP Target = 10% of total
expenditures allocated to
agriculture sector
• Africa as a whole has not met
Ethiopia
10% target
– Since 1980, the annual & Malawi
average has been between
10%
4 and 6% Madagascar, Swaziland,
Sudan, Tanzania,
Uganda, Zambia &
Zimbabwe
5%
Burundi, DRC, Egypt, Kenya,
Mauritius &Rwanda
Sources: Based on ReSAKSS data collected from various national government sources and IMF 2009.

20. Public sector support to agriculture sector…
• Will the public sector meet its commitments?
• Furthermore, even when budget is allocated, often absorptive
capacity is problematic
– absorptive capacity of development expenditure by
agriculture sector ministries in Kenya is about 88%
• Not clear whether some critical areas for dairy sector are
adequately funded; extension services, disease and vector
control, among others
20

21. Dairy in COMESA and EAC
• No regional CAADP compacts in RECs (COMESA, EAC, SADC, IGAD)
… but some progress
• All RECs have agricultural programmes/initiatives that are
relevant for dairy
– Trans‐boundary animal diseases
– Livestock trade and marketing – various NTBs, MIS
– policies, product standards, SPS standards
• Need for programme and interdepartmental coordination
indicated ‐ through Regional CAADP compacts
21

22. Role of Donors and Private
Sector in CAADP…
Role of donors articulated; that of the
private sector is recognized but private
goods are not clearly identified nor is
financing strategy clear
22

23. Development partners and implementation of
NAFSIPs… (1)
• Compacts and NAFSIPs: agreed national targets and goals
• DPs supporting agriculture and rural development in the
countries have committed to support implementation of
NAFSIPS
• Donors are expected to:
– Design practical actions for funding priority areas as identified in the
NAFSIPs, in line with their priorities
– Insure resource alignment and harmonization of efforts
– Assume more responsibility in intervention design, implementation
– M&E is key at all levels
23

24. Development partners and implementation of
NAFSIPs… (2)
• Donors Commitments:
– Enhanced alignment efforts
– Increased support to NAFSIPs
– Global Donor Platform for Rural Development has set up a
CAADP DP Task Force – key technical and financial partner
agencies working on ARD
– MDTF at WB to support the CAADP processes
– L’Aquila Food Security Initiative
– Global Agriculture and Food Security Programme (Ethiopia,
Rwanda have benefited)
– Feed the Future Initiative (FtT) 24

25. Need to invest in M&E and knowledge systems
• Difficult to quantify progress in the performance of the country’s
agricultural sector without a coordinated and well designed approach to
monitor progress
• M&E at all levels: Intervention (project/ programmes), sector/ national,
continental (CADDP Africawide M&E Framework)
• Mutual accountability framework: accountability on commitments by the
CAADP partners – on finance, actions, and results.
• Need for coordination and harmonization of efforts in M&E: Joint
reviews, joint data collection efforts, etc
• Collaboration between national, regional and continental actors
• Support countries to build and enhance national capacity in data
collection, analysis and reporting which are crucial to developing
strong M&E systems
25

26. How can the Private Sector
Engage?
26

27. Dialogue…
• Early (but also continuous) dialogue with the government in the
CAADP processes, advocate for dairy constraints to be included
in the priority list
• Articulate clearly the value addition by the private sector in the
process
• To do the above, the private sector needs to have dedicated
liaison people that are capable of managing / coordinating
multiple partners
27

28. What does private sector bring to the table?..(1)
Some of the areas where the private sector has comparative advantage:
Role Comments
• Problem identification, priority setting, Partnership between public and private
planning sector
• Implementation of plans and monitoring Investments; key beneficiaries of
and evaluation programmes, progress review
• Advocating for policy and institutional Private sector has a key role to play in
reforms and alignment advocacy
• Agricultural research, including The private sector is increasingly
technology development becoming important
• Agricultural extension (better Various success stories of private sector
production techniques, animal health, involvement in extension
other technical support services)
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29. What does private sector bring to the table?..(2)
Role Comments
• Advocacy for elimination or streamlining Key role of the private sector and other
dairy regulations and procedures (both non state actors
tariff and non‐tariff)
• Develop inputs Key role of the private sector
• Seeds, fertilizer, pharmaceuticals
• Manufacture farm equipment including Key role of the private sector
less expensive machinery
• Distribution of inputs and machinery Partnership between government and
private sector (Agro dealers)
• Processing, packaging, marketing Key role of the private sector
(agribusiness)
29

30. Examples of PPP in livestock/ dairy subsector??? (1)
Example Objective/ Area Public and Private Partners
The Global Making livestock vaccines, Agricultural NGOs, health, development agencies
Alliance for diagnostics and medicines accessible investors and donors, AU/IBAR, European Union,
Livestock and affordable to the poor Governments, Regulatory authorities,
Veterinary commercial means for the Pharmaceutical companies, Civil society
Medicines registration, commercial distribution organisations
(GALVMED) and delivery of vaccines.
ECF vaccine by Develop and disseminate the East ILRI, The Institute for Genomic Research, The
ILRI and partners Coast Fever vaccine in Eastern Africa University of Victoria, Canada, the Ludwig
Institute of Cancer Research, Belgium, the Kenya
Agricultural Research Institute, the University of
Oxford, UK, donors
Farm Africa Dairy  Crossing local breeds with Farmers, animal health workers, banks and agro
Goat improved goat breed for higher dealers/veterinary stores.
(Ethiopia, Kenya, milk production,
 training in fodder production
Tanzania and
and animal health
Uganda)  Facilitate access to market
East Africa Dairy Promote more profitable production Heifer International, TechnoServe, ILRI and The
Development and marketing of milk. World Agroforestry Center (ICRAF), donors,
Programme farmers, processors, traders, government, banks
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31. Examples of PPP in livestock/dairy subsector?? (2)
Example Objective/ Area Public and Private Partners
Milk for Schools Provide a market for Government (Livestock, Health, National Food and
(Zambia) the smallholder dairy sector, Nutrition Commission), WFP, SIDA, USAID PROFIT,
diversify the agricultural sector Tetra Pak, Parmalat, Dairy Association of Zambia
and create a demand for high
quality locally produced milk.
One cow per Enabling every poor household Government, financial institutions, local
household (Rwanda) to own and manage an communities
improved dairy cow for milk,
meat and manure
Malawi Dairy Build the capacity of small dairy Government, Land O'Lakes , USAID , Local milk
Development farmers, local milk processing producers/dairies, financial institution, Monsanto
Alliance plants, and farmer‐owned milk
bulking
programs in order to improve
production and profitability.
31

32. Conclusions…
• CAADP, for the first time, offers an opportunity for all
stakeholders to contribute to Africa’s agriculture
development and achieve shared objectives and
goals
• Governments, DPs, private sector, and civil society
need to adopt policies and programmes and raise
investments to achieve agricultural targets and
objectives set out in NAFSIPs
32

33. Some food for thought… (1)
• Private sector is key to implementation of CAADP
and achievement of objectives
– How do we ensure that the appropriate role of the
private sector is properly clarified in NAIPs and
Regional CAADP Compacts?
• How do we ensure that small‐scale farmers and
business entities are represented and have a voice in
CAADP processes?
– Legitimacy and representation are problematic
33

34. Some food for thought… (2)
• What structures for effective engagement at the
regional level?
• What models of PPPs will work in agriculture? So far,
successful cases of PPPs seem to be in infrastructure
– Need to overcome perceptions of long‐term low
returns on investments and high risk in agriculture.
• What are the appropriate models for linking small‐
scale farmers to markets?
– Selling to large processors?
– Farmer organizations as processors?
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35. THANK YOU
Photos credit: EADD
www.ilri.org / www.resakss.org 35