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India-Tanzania-Uganda – Boosting dairy cooperatives

Organization(s):

World Bank

Country (ies):

Knowledge Providing Country: India Recipient Countries: Tanzania, Uganda

Overview:

A knowledge sharing initiative was launched in 2008 to collate and apply lessons from India's successful experience in developing its dairy sector to support more rapid growth of Tanzania's and Uganda's dairy industries. Participants in the exchange were exposed to a range of new strategies for increasing milk and dairy product consumption and improving marketing and production practices. The improved understanding and subsequent adoption and adaptation of these key strategies are intended to improve food security, nutrition, and incomes in the poorest communities in these two countries.

Background:

OBJECTIVE
The overall objective of the India-Africa exchange between AMUL dairy cooperative of India and East Africa was to enable the development of an improved approach to strategy, production, and cooperation in the dairy sectors of Tanzania and Uganda, with the ultimate aim of increasing local milk production and consumption.

DEVELOPMENT CHALLENGE
There is a buoyant East-Africa regional market for milk and dairy products. Uganda and Tanzania both have good potential—as yet not fully developed—as producers. Production is growing rapidly in Uganda and the country is already estimated to be self-sufficient in milk. Most off-farm sales are processed and marketed through a large and vibrant informal sector that is able to meet a need that the formal market cannot: milk that is both cheap and readily available for which producers are paid prices that the formal sector cannot match. While this speaks well of the informal sector, it means that most of the formal sector's processing enterprises are running below capacity. In Tanzania, imported products comprise the bulk of milk sales, but local production is increasing steadily. Here the informal sector plays an even bigger role than in Uganda.

There are a number of key constraints impeding further development of the dairy value chains in Uganda and Tanzania, some of which are common to both countries—for example, the sectors' inability to cope with the seasonality of production; the lack of data for effective planning and management of the different links in the value chain; the limited capacity and coverage of dairy producer, processor, and marketing cooperatives and associations; and the poor, rural, feeder road network.

EXPECTED
Expected short-term outputs were better cooperation among small milk producers; introduction of improved or adapted technology at milk collection points and processors; improved collaboration among producers and processors; streamlining of regulatory requirements; and improved capacity at the National Dairy Boards of each cooperating country.

WHY ENGAGED
In both Uganda and Tanzania, government and stakeholders have recognized the opportunities that the dairy sector provides. It can contribute substantially to achieving the Millennium Development Goals of reducing child and maternal mortality, while increasing income for small rural households. A crucial part of the information exchange is for participants to gain improved understanding of marketing and pricing strategies that will help them compete successfully with other beverages in the market.

How Political Context / Previous Cooperation Influenced the Planning Process India and East Africa have a long history of cooperation. Also, having recently revolutionized itself developmentally speaking, India was a natural choice. The Indian model was first introduced to Africa by interested practitioners from Ethiopia, Tanzania, and Uganda who visited India.

Implementation:

ACTIVITIES and MODALITIES
The project evolved in several phases. The first was a study tour to India, focused on exchanging experiences, discussing key sector issues, reviewing the model and approach in operation, and so forth. This was completed in June 2008. The second phase was a three-day return visit and stakeholder workshops in both Uganda and Tanzania. In the final phase, the teams will link key activities with ongoing programs and World Bank-funded operations, such as linking regulatory reform activities with private sector projects to improve the business environment and developing links between small farmer associations and with agricultural advisory services. ROLES and RESPONSIBILITIES of STAKEHOLDERS
Ugandan and Tanzanian participants were hands-on practitioners and policy makers directly tied to the dairy industry. This included dairy producers and processors as well as government officials directly involved in developing, managing and regulating the dairy sectors in their respective countries.

Indian participants included dairy producers and processors - members from the AMUL dairy cooperative. Indian government officials were not part of the exchange.

Outcomes:

Planned and unplanned outcomes included
1) Ugandan and Tanzanian milk producers recognized the need for collective organization and aggressive product marketing.

2) Cooperatives have begun to create pooling / collection centers. Dairy producers are often providing the material inputs necessary for these facilities to function.

3) As a direct result of the visit, both dairy producers and processors gained an understanding of the range of dairy products possible and the need for inputs along the value chain to make production possible along with the need for marketing to advertise these products to consumers.

4) Producers in Uganda and Tanzania learnt the benefits of low cost additional feeding supplements that mitigate the negative effects that dry and limited-rainfall seasons have dairy production.

5) At a policy level, the exchange encouraged an ongoing debate in Uganda emphasizing the dangers of unprocessed milk. Formal regulations are under consideration.

6) Indian companies realized that East Africa presents a growing market for dairy processing machinery and equipment. Discussions between Indian and East-African counterparts stemming from the exchange are ongoing.

Are these outcomes sustainable? Could they be replicated in similar contexts?

Yes, although this program was only recently completed and benefits are still accruing. A follow up conference is planned for Summer 2010.

Aid Effectiveness:

Support from National Government and Alignment with National Priorities
Leadership from both countries have realized the value that nutritional value affordable milk presents to their people (especially the young), the potential that a strengthened dairy sector could mean for their economies, and that development of the dairy sector is needed. Ministers from Uganda and Tanzania requested this exchange by official letter to the World Bank.

Harmonization with other programmes and development actors
In addition to coordination with Ugandan and Tanzanian Dairy Development Authorities (government agencies responsible for developing, managing and regulating the dairy sector in these countries), this project was done in parallel to the World Bank's Private Sector Competitiveness Project (PSCPII) in Uganda and the World Bank's Private Sector Competitiveness Project in Tanzania both focus on skills training, capacity development, and grants for machinery and equipment and business development. It was also complementary to USAID / Land o' Lakes funded programs, which analyzed the dairy industry value chain in these countries.

Managing for results

The aim of this program was to affect practitioners and policy makers with a direct connection to the dairy industry in Tanzania and Uganda– from supply to consumption.

Capacity Development:

Capacity development benefits (individual, organizational or systemic level) & Lessons to improve the overall enabling environment, (especially through improved incentives for better public services)
1) Ugandan and Tanzanian milk producers recognized the need for collective organization and aggressive product marketing.
2) Cooperatives have begun to create pooling / collection centers. Dairy producers are often providing the material inputs necessary for these facilities to function.
3) As a direct result of the visit, both dairy producers and processors gained an understanding of the range of dairy products possible and the need for inputs along the value chain to make production possible along with the need for marketing to advertise these products to consumers. 4) Producers in Uganda and Tanzania learnt the benefits of low cost additional feeding supplements that mitigate the negative effects that dry and limited-rainfall seasons have dairy production.
5) At a policy level, the exchange encouraged an ongoing debate in Uganda emphasizing the dangers of unprocessed milk. Formal regulations are under consideration.
6) Indian companies realized that East Africa presents a growing market for dairy processing machinery and equipment. Discussions between Indian and East-African counterparts stemming from the exchange are ongoing.

Changed relationships between the providing and receiving countries / governments / organizations The governments in Tanzania and Uganda further noted the need for the dairy industry to work together under the Cooperative movement. This would help especially in production and marketing of produce.

Duration:

August 2008, 1 year.

Budget (Optional):

$60,000

Name of Primary Contact Person:

Michael Wong / Moses Kibirige

Title of Primary Contact Person:

Senior Private Sector Development Specialists / Financial and Private Sector Development

City:

Washington, DC