Institutional and policy factors for transforming

smallholder dairy farming towards a

sustainable food system

Evidences from Market Oriented Rural Enterprises

(MORE-Milk) Project
Paper presented on 1st international conference on
“Transforming Food Systems through Climate Smart Agriculture (CSA)
27-28 October 2022
Haremaya

Kaleb Kelemu, Fasil Kelemework, Moges Gobena, Dinkneh Asfaw, Patricia Wall, Richard Onyango, Paul Wagstaff, Mekdes Wolde
 Institutional and policy factors for
transforming smallholder dairy farming
towards a sustainable food system

Evidences from Market Oriented Rural Enterprises

(MORE-Milk) Project

Paper presented on 1st international conference on “Transforming Food Systems

through Climate Smart Agriculture (CSA)
27-28 October 2022
Haremaya
Kaleb Kelemu, Fasil Kelemework, Moges Gobena, Dinkneh Asfaw, Patricia Wall,
Richard Onyango, Paul Wagstaff, Mekdes Wolde
 Presentation Outline

• Background
• The MORE-MILK Project
• Food system approach
• Dairy sub-sector and Sustainable food system
nexus: Evidence from MORE-Milk Project
• Institutional and policy factors limiting contribution
of dairy sub-sectors towards a sustainable food
system
• Conclusions and Suggested Action Points
 Background
• Livestock sector role in improving nutrition, income, livelihood (35%-40% of
agricultural GDP, 20% GDP, and 20% foreign exchange earnings & dairy subsector is
a significant component of this.
• 21% of the roughly 70 million heads of cattle considered as milking or dairy
cows
• potential to change smallholder farmers’ lives and livelihoods
• However, livestock is a major contributor to GHG emissions estimated to 56%
of the total GHG emissions (FAO & New Zealand Agricultural Greenhouse Gas
Research Centre, 2017).
• Therefore, very essential to transform dairy sub-sector to realize its full potentials
(income, nutrition, employment, and sustainable food system).
• But how?
• Institutional changes (including policy interventions) are amongst critical factors to
transform dairy sub-sector.
The Market Oriented Rural Enterprises-(MORE-MILK)
Project
• Abichu Gne’a woreda
• Milk productivity and production were far below
potential
• Challenges- poor genetics, poor quality and feeding
practice, low access to services and inputs, poor
markets access
• Objective- improving the income & nutrition status
of about 750 SHF
• Used an integrated approach to building a
sustainable dairy farming through
• Components-breed improvement (AI), improved
forages/feed, health management, market access
and capacity building as well as promoting milk &
dairy product consumption.
MORE-MILK) Project… (Results)

• average milk productivity by increased by

867 % (increase from 1.24 to 12 liter per
day).
• Increased availability quality feed through
(improved forages, residue management &
feed treatment). 12 liter per/day
• Increased processing & marketing of dairy
products (collective marketing)
• Dairy cooperatives strengthened (material, ~ 9 cows
financial, technical support) expanded their
business operations
1.24 liter/day
• Increased consumption
• a 32% increase on disposable income,
profitability & re-investment
FOOD SYSTEM APPROACH (FSA)
 The approach recognize the context that population is rapidly growing, demand for
nutritious food increase
 It looks into all the processes associated with food production and food utilization:
growing, harvesting, packing, processing, transporting, marketing, consuming and
disposing of food remains.
 Recognize how to satisfy growing food demand while mitigating adverse impacts of
the process on the environment
 It considers the complexity and interconnectedness of the various drivers, activities
and issues relating to a sustainable dairy system
 the approach used as a framework for analyzing how institutions and policies
dictate transformation of dairy sub-sector and enhance its contribution for a
sustainable food system.
DAIRY SUB-SECTOR AND SUSTAINABLE FOOD
SYSTEM NEXUS: EVIDENCE FROM MORE-
MILK PROJECT

 Dairy sub-sector is an integral part of the broader food

system
 Transforming dairy sub-sector automatically contribute
for building a sustainable food system (increased
productivity, income, better market, consumption,
employment, profitable dairy enterprises, sustainable
climate sensitive feed production etc)
 The experience of MORE-Milk project show how a
transformed dairy sector can contribute to a
sustainable food system by influencing its key
components (economic, social, food and nutrition,
environment)
DAIRY SUB-SECTOR AND SUSTAINABLE FOOD SYSTEM NEXUS…

Increasing milk productivity as cornerstone for transformed dairy sub-sector and a

sustainable food system [1]
• Milk productivity is bed rock for a transformed dairy sub-sector & a sustainable
FS
• project has significantly increased milk productivity as average milk yield has
risen from the baseline 1.24 liter/day/cow for local cows and 2.82
liter/day/cow for cross breed cows to 12 liter/day per cow (, which is a 867%
and 325 % productivity gain).
• Technically efficient dairy farmers have gained18 to 24 liter/cow/day
• productivity gain is pathway to increased income, employment, nutritional and
food security, health (consumption)
• However, milk yield variability observed across season which fluctuate
between 11.5 liter per day/cow to 6.7 liter/day/cow (requires investment on
improved feed production and conservation).
DAIRY SUB-SECTOR AND SUSTAINABLE FOOD SYSTEM NEXUS…

Increased household income & dairy business profitability [2]

 a food system is considered sustainable
if the activities conducted by each food
system actor are commercially or fiscally
viable (profitable enterprises).
 Increased income, profitability and
reinvestment are necessary condition
for gaining economic and social benefits
 project beneficiaries’ income has
increased by 32% (ETB 106, 751 to ETB
141,465.3)
 Profitability (Benefit-Cost ratio is 1.54 )
DAIRY SUB-SECTOR AND SUSTAINABLE FOOD SYSTEM NEXUS…

Feeding practices [3]

• Improving the existing feed production
&practice is one of the project’s intervention.
• Before the project, main feed were largely
low-quality feed products, (crop residues and
native pastures of poor nutritional value
(which are deficient in nitrogen, minerals and
vitamins), with consequently very low
digestibility likely to increase GHG emission
• Promoted alfalfa, tree lucerne, oats and
vetch, elephant grass and Desho grass (being
widely grown by farmers).
• Cost of feed constitutes about 70% of the
total cost of dairy farm enterprise
DAIRY SUB-SECTOR AND
SUSTAINABLE FOOD SYSTEM NEXUS…

Improve Quality of Milk Yield [4]

• The project implemented to improve the
quality of milk yield
• Activities are improving feed
management, proper hygiene and
sanitation practices and provision of
milk collection and processing
equipment to beneficiaries.
• strict quality monitoring systems
(material support and technical training)
DAIRY SUB-SECTOR AND SUSTAINABLE
FOOD SYSTEM NEXUS…

Improved Market Access [5]

• Efficient and effective milk supply chains are
essential to lowering the risks of food
insecurity, malnutrition, food price fluctuations
and can simultaneously create jobs
• The project supported market access through
establishment of milk collection and sales
centers, and capacitating cooperatives
• But still market is a challenges (seasonality of
demand)
• establishment of strategic milk reserve- to
manage seasonality of milk production
and the resulting price volatility.
DAIRY SUB-SECTOR AND SUSTAINABLE FOOD SYSTEM NEXUS…

Increased Milk Consumption Milk Consumption/ Capita (Liters),

(Makoni, N. et al. 2014)
• Fact-per capita annual 99
consumption of dairy is just 11%
(22 liter/annum ) of WHO’s 55
recommended levels (Farrell, 40
23 22
2021). 6
• Low income, limited Kenya Uganda Rwanda Tanzania Ethiopia Brundi

availability/affordability, nutrition
knowledge are driving factors
• The project addressed this
challenge through increased milk
productivity and a campaign ‘milk-
day’ event at schools (which with a
motto ’Drink Milk: Today and
Everyday”)
INSTITUTIONAL AND POLICY
FACTORS LIMITING CONTRIBUTION
OF DAIRY SUB-SECTORS TOWARDS A
SUSTAINABLE FOOD SYSTEM

Support giving institutions work in silos leading to

fragmented and uncoordinated services provisions
[1]
• Weak actors coordination mechanisms of
actors and their services could negatively
affect the dairy sector’s potential
contribution for a sustainable food
system.
• Addressing complex challenges of dairy
sub-sector actors need to coordinate their
role to boost synergies and minimize
trade-offs for a sustainable food system.
• Kenyan ‘Ethiopian Dairy Board (EDB)’ good
example for effective actors. coordination
Institutional and policy
factors…
AI services Landscape: Poor AI services and the policy environment [2]
• An effective AI service which should be provided at bigger scale
should be placed as cornerstone of interventions that aim at
increasing dairy productivity.
• AI service provision very weak (quality and area coverage) (<1%
coverage-attributed to inadequacy of technically well-equipped AI
technicians, poor infrastructure, and shortage of equipment and
facilities
• Low private sector participation in AI service provision, subsidized
AI service blocked private sector entry into the system
• Subsidy/incentive to cover private sector attract them into
the system
Institutional and policy factors…

Inadequate marketing services: Low resource

capacity of cooperatives [3]
• limited technical, financial, human and
physical resource capacity of the
cooperative to as to collect, store,
process and sale milk.
• As a result, coops are far from achieving
economy of scale
• The project has provided material
support (processing, storage facilities
and equipment, milk collection centers
built up)
Institutional and policy factors…

 Weak private sector and challenges of sustainable

supply of productivity enhancing technologies, inputs
and services [4]
 Limited availability and access to financial services [5]
 The need for Incentives to farmers and private actors
[6]
 Raising the level/scale of operation of cooperatives is
the only way to achieve economy of scale and dairy
business sustainability [7]
 Need for strong regulatory
environment/system/procedures [8]
CONCLUSIONS AND
SUGGESTED ACTION POINTS
• For building a sustainable food system, transform the
dairy subsector (productivity, income, consumption, re-
investment with greater degree of sustainability) [1].
• Improving feeding practices to reduce greenhouse gas
emissions [2].
• Incentive to attract and keep the private sector in dairy
value chain [3].
• Strengthen smallholder dairy producers and dairy
cooperatives widely engage in the production,
conservation and management of improved feed [4].
CONCLUSIONS AND SUGGESTED
ACTION POINTS…
• Increase deployment of well-trained AI technicians,
introduce incentive schemes for private sector and
benefit packages for reducing AI technician’s turnover
[5].
• Establishment of strategic milk reserve- to manage
seasonality of milk production and the resulting price
volatility-path way towards transformed dairy sub-
sector [6].
• Need for holistic approach to transform dairy sector
(technology-management-market-input). Missing
single element of the holistic approach led to low
performance of the dairy sector [7].
CONCLUSIONS AND
SUGGESTED ACTION
POINTS…
 Strengthen overall capacity of dairy
cooperatives (financially, technical,
infrastructure and facility, human resources
and financial management system) [8].
 Strengthening financial capacity of the
cooperatives
 Regular undertaking of market
intelligence is key for cooperatives to
make informed decisions.
 Increase scale of operation through
increasing quantity milk supplied to the
cooperative by members.
 The technical and managerial capacity of
dairy cooperative has to be strengthened.
 Reform cooperatives adopt one-stop shop
model of service provision