Agritrade - CTAhttp://agritrade.cta.int/layout/set/custom_rss/Publications/(from)//(until)//(sortby)/date/(search)/simple/(nodeid)/5854/(pubtype)/7760-7765-7763-7761-7764Agritrade - CTA2018-08-16T07:01:59Zhttp://agritrade.cta.int/en/Fisheries/Topics/Market-access/Fish-markets-enhance-the-dagaa-fish-trade-in-the-sub-regionFish markets enhance the dagaa fish trade in the sub region2016-09-19T08:36:27Z
The role of fish markets has been underestimated in many African countries. Not only do these markets provide employment directly to the local population but also generate jobs within the logistics system. These markets also cater for important volumes of transactions in fish and fish products bringing in foreign exchange. Two examples of fish markets are discussed below.
http://agritrade.cta.int/en/Fisheries/Topics/Market-access/AAK-assist-the-grass-root-aquaculturistAAK assist the grass root aquaculturist2016-09-08T09:25:37Z
The Aquacultural Association of Kenya (AAK) established in 2007 is the national umbrella body for all fish farmers in Kenya. It focuses on issues affecting its members (20,000 to date and increasing) and also caters for the aquaculture industry at large. The association also serves as a link between fish farmers, the national and county governments, development partners, other farmer’s organizations and stakeholders within the aquaculture sub-sector.
http://agritrade.cta.int/en/Fisheries/Topics/Market-access/Africa-moving-towards-innovation-and-product-development-in-the-Fisheries-sectorAfrica moving towards innovation and product development in the Fisheries sector.2016-08-22T09:29:26Z
In Africa, women have always played an important role in the fisheries and aquaculture sector, be it in production or marketing of the fish landed or produced through aquaculture. Lately African women have started to express their potential into value addition and innovations in the sector. A brief on three such exceptional women follows.
http://agritrade.cta.int/en/Fisheries/Topics/Market-access/Sea-cucumbers-saving-lives-the-radical-charity-giving-Madagascan-fishing-communities-hopeSea cucumbers saving lives: the radical charity giving Madagascan fishing communities hope2016-08-01T15:14:03Z
As fish stocks dwindle, communities that rely on the ocean for their livelihood are struggling to survive. A charity in Madagascar is challenging the accepted wisdom of marine conservation with a combination of sea cucumber farming and family planning.
http://agritrade.cta.int/en/Fisheries/Topics/News-from-the-IOC-region/Enhancing-the-supply-chain-of-the-octopus-fishery-in-Mauritius-and-Rodrigues-and-crabs-in-MadagascarEnhancing the supply chain of the octopus’ fishery in Mauritius and Rodrigues and crabs in Madagascar2016-07-25T07:56:49Z
The Minister responsible for fisheries in Mauritius recently announced that in 2016 the octopus’ fishery would be closed for two months (August and September) at national level. This decision follows a voluntary pilot octopus closure project in the south of Mauritius funded by the SmartFish programme and implemented by the Mauritius Marine Conservation Society. Results obtained shows that the closure period impacted positively as the octopus increased in size and weight to the delight of the fishers concerned.
http://agritrade.cta.int/en/Fisheries/Topics/Market-access/The-Fishermen-Investment-Trust-FIT-back-on-railThe Fishermen Investment Trust (FIT) back on rail2016-07-12T09:32:07Z
The Fishermen Investment Trust was set up in 2006 by the government of Mauritius to cater for the needs of artisanal fishers in Mauritius and Rodrigues and act as the commercial arm of the Ministry of Fisheries. Its mission is to accompany the fishermen community towards social improvement through viable and sustainable initiatives. It aims to be a key player in the fishing industry while empowering the fishing community and being a partner in the socio-economic development of the country. Specifically, it is involved in the activities of fisheries and processing and marketing of fish and other fisheries industry-related activities.
http://agritrade.cta.int/en/Fisheries/Topics/Interview-points-of-view-from-ACP-EU-stakeholders/An-interview-with-Mr.-Chris-Short-SmartFishAn interview with Mr. Chris Short, SmartFish2016-05-10T16:36:54Z
Mr Chris Short has more than 30 years of professional experience in the field of Business and Trade Development related to the fisheries sector. He is also well versed in other areas such as planning, project feasibility, evaluation and bankable projects. Chris has contributed in developing artisanal fisheries in a number of countries with special emphasis on value-chain assessments and upgrades for improved trade. His most recent activities include business planning and development for international investments and trade related to fisheries and aquaculture projects.Is regional fish trade a myth in the region?Regional trade is growing and will continue to grow. Due to an historic focus on outside markets such as Europe, the data available that records regional trade is less clear, with large volumes of unrecorded fish trade going unnoticed. Experience from the region shows that in fact regional fish trade is immense and is only stopped from growing due to a lack of supply. Fish trade does not mean food security, as fish that could well be consumed in a country, may well be exported, leaving the home population wanting. Imports of cheap fish and export of fish for a higher price is a general philosophy, but can also mean that local fish of better quality is exported, whilst imported lessor quality fish becomes the only affordable source of fish protein for the majority of a generally poor population base.Is regional trade a myth? Definitely not! It is there and assuming supply is maintained, will only increase in the future. It is hoped that as this develops, national level food security will be a priority for Governments. Unfortunately the greed for profits does not always focus attention on the real issue of future food security.How is the Indian Ocean Commission-SmartFish Programme supporting the enhancement of regional trade in the fisheries sector?Regional fish trade is not something that is easily enhanced with such a small programme budget compared to the regional requirements. However, a key issue facing fish trade regionally is the ability to move fish whilst maintaining quality. Fishing methods, handling on boats, landing and handling fish onshore, as well as artisanal processing methods and poor logistics and transport means that the majority of fish are poor quality by the time they reach even the closest markets. Even fresh fish sold close to the point of capture are not in good shape a few hours after leaving the water.IOC SmartFish programme has focused attention of establishing what standards should be through regional level protocols, standards development and communication, however the translation of this to the various fish supply chains is the challenge. This has been supported by comprehensive and wide-spread training either directly to value chain actors, or through training of trainers who then provide training to a wider stakeholder audience. Campaigns with videos and messages have been disseminated in a number of countries including targeting schools as well as fishing communities. Value chain support activities to improve methods of handling, with equipment for improved landing, processing, packaging and retailing have also been used.Again referring to budgets, the programme is relatively small and cannot possibly support all the needs of such a vast area, so a piloting approach to demonstrate what is possible has been the only realistic way forward, with communication to others in the region on what is possible to encourage uptake of improved methods once the incentive of profit potential is understood, when activities that show potential are quickly copied by others.How has value chain analysis benefitted the fisheries sector in Madagascar?The primary example for VCA in Madagascar has been with a focus on mud crab. Analysis was undertaken for the species and identified various points where post- harvest losses were occurring. This included quality losses and a related loss in price, as well as volume losses (death of crabs resulting in no sales). As a result of this analysis many activities have been implemented to improve the situation, from new capture technique to increase catch, to holding methods to keep crabs alive and transportation systems (simple stackable crates) that prevent losses compared to previous methods of using sacks for instance that meant that the crabs would not survive the trip to markets.The overall impact of this has been significant, with IOC SmartFish taking the ideas to many communities around the country with immediate interest due to the financial incentive demonstrated. A huge part of the success of this initiative is that the methods are easily replicated cheaply so many people can copy quickly and see immediate gains.Can you give us an insight on future developments in the fisheries and aquaculture sector from an IOC-SmartFish perspective?The future is all about enough protein for a growing population and the contribution of fish to that protein requirement. Population in the region is growing extremely fast and there is not enough fish to satisfy demand. The consumption of fish in Africa is generally lower than other areas on average; this is more related to a lack of fish for the population, than a lack of actual demand. The challenge facing the future of the sector therefore is where will the fish come from? Supply of fish for this growing population first comes from existing capture fisheries, which unfortunately is poorly managed in the region. Aquaculture is growing slowly in the region as compared to other areas of the world, but is gaining interest and will eventually be a major contributor, as long as countries move to aggressively remove risks that currently prevent a larger number of serious investors coming to the region (political, security, financial and other risks all contributing).Together with fish farming, imports are a necessary requirement and will always be a large contributor to the sector’s activity. Imports are a quick and easy way forward to feed the population, but risk of poor quality has to be controlled in the process. Another real potential exists in the reduction of post-harvest losses, which would immediately contribute a significant volume of the requirements. So the future of the sector will be a combination of many factors that keep supplies of safe to eat fish available in the region as the population grows.Unfortunately the timing of these contributors of fish supply are out of sync, in that capture fisheries have reduced supply, aquaculture is not providing much at all, imports are increasingly poor quality fish, (significantly from Asia) and post-harvest losses continue to remain high, despite all the communication on the subject. This is all happening whilst countries and projects, such as SmartFish, continue to promote the consumption of fish. Clearly much work is still to be done in the region to bring the fisheries sector to its full potential as a supplier of good quality protein for the future.
http://agritrade.cta.int/en/Fisheries/Topics/Interview-points-of-view-from-ACP-EU-stakeholders/An-interview-with-Mr.-Keith-Andre-President-FPAOIAn interview with Mr. Keith André, President FPAOI2016-05-10T15:14:02Z
You have recently been elected as the president of the “Fédération des Pêcheurs Artisans de L'Océan Indien” and the Federation has been officially launched. What are your priorities?The first thing would be to set up the organisation i.e. ensure that all the paper works are done which includes the official registration of the organisation. The organisation will be based in Reunion Island, so I also need to ensure that we have the necessary space for the staff, which will soon be recruited. I would also need to get the support and official recognition from the Fisheries Authorities of the region. Another aspect which I would need tolook into urgently is the funding of the organisation. Here seeking assistance from donor organisations both at the regional and international level would be a priority. In the same context, I would also like to request the assistance from other development partners, like the SmartFish Programme, CTA, UNDP and others.I would like also to prioritize the capacity building for the leaders of the organisation in the first instance to ensure that we do have a capable leadership at the head of the organisation.We are presently working on a programme of activities for the first year of operation and hope that this will serve as a guide for activities to be undertaken at a later stage.Another priority would be the development of an active network. This would include retired resource persons who can provide a helping hand to the organisation. I am pretty sure that there are many people willing to assist us.You mentioned capacity building. Would that also include fishers of the region?The fisheries sector is presently undergoing drastic changes. With the phenomenon of climate change, we are not sure what will happen in the years to come. I think that artisanal fishers should also be ready to adapt to changing environment. We have noted that in some of the countries e.g. Mauritius, Madagascar there has been a decline in landings over the last few years from the artisanal sector. However, no measures have so far been proposed to the fishing community. Fishers are facing a difficult time. We would like to be able to make suggestions to the concerned authorities and work hand in hand to better cope with this kind of situation. That is why building capacity of fishers is a top priority.With assistance from development partners, we will fine-tune the kind of training needed in each country as the level of development of the artisanal sector in the IOC countries differs. So training will focus on specific needs of the countries in question. How does the artisanal sector contribute to the development of the sector and the countries in general in the IOC region?Artisanal fishers of the region are already contributing towards food security and indirectly alleviating poverty, thus helping the countries concerned in achieving the millennium development goals. Furthermore, they provide fresh fish to the local market for local consumers and the tourism industry. Note that in the region, basically all fresh fish landed comes from the artisanal sector, be it in Mauritius, Seychelles, Madagascar, Comoros or Reunion island. Seychelles also have a fleet of semi industrial fishing boats contributing to the landings of fresh fish whilst in Mauritius a few semi industrial fishing boats are also landing fresh fish for local consumption. Hence, fishers are very much part and parcel of the development of the sector.As an example, landings from the artisanal sector in Mauritius are valued at around 2.4 million US$ and in Comoros it is estimated at around 45.7 million US$. So you can see the impact it has on saving in foreign exchange.Can you give us an insight on how you see the future of the organisation?The FPAOI will in the longer-term link with other similar organisations such as the CAOPA, CNFO, ICSF and others. By sharing experiences, I think we can better serve the fishing communities of our region. we would also like to see a more sustainable artisanal fishery in the region and closer collaboration with the fisheries authorities and other RFMOs in the South West Indian Ocean.The main issue I see is the funding of the organisation, but we are seeking solutions. I am confident that the FPAOI has much better days ahead. Our aim is to raise the level of fishers including their income and contribute more to the development of our respective countries and the region in the broader sense.The task ahead is not easy, but we have a good team and determination to succeed.
http://agritrade.cta.int/en/Agriculture/Commodities/Dairy/An-interview-with-Amos-Omore-Country-Representative-International-Livestock-Research-Institute-TanzaniaAn interview with Amos Omore Country Representative, International Livestock Research Institute, Tanzania2016-03-25T12:01:04Z
Birungi:What is ILRI doing in Tanzania in relation to building the capacity of the various value chain actors?Amos: We have been involved in research and development (R&D) in Tanzania since 1997, working on market mechanisms, food safety and livestock policies. We increased our presence in the country by 2012 and finally opened an office in 2013 in order to engage more closely and effectively with stakeholders in addressing a number of challenges to improve poor people’s livelihoods through livestock. The current focus of our R&D is on sustainable intensification of mixed crop-livestock systems through increasing productivity of the smallholder dairy value chains. The current engagement emphasises a value chain approach as opposed to previous engagements before 2012. We are implementing various projects with partners under the CGIAR Livestock and Fish program known as “More milk by and for the poor”, referred to locally as “Maziwa Zaidi”. The ‘by’ and ‘for’ the poor are important because this is about both food and nutrition security. As you will appreciate, livestock is probably the most easily accessible source of important nutrients for improving nutrition. And for a country like Tanzania with a stunting rate as high as 42%, the large livestock population is a very good nutritional source to tap into. Improved productivity of livestock will therefore not only address income and food security but will also address nutritional security.As already stated, we aim to do this by focusing on improving the smallholder dairy value chains. Due to low milk availability the focus is around improving access to and use of inputs (e.g. feed, breeding, animal health) and services (e.g. training, credit) to improve productivity and grow the short market linkages in the value chain so that the milk can reach more consumers. The short market linkages mainly involve small scale milk traders who collect only 50 to 100 litres of milk daily and sell to neighbours and local milk outlets. We also engage with the few larger players operating in the value chain such as Tanga Fresh and ASAS Dairies in the Southern highlands of Tanzania to link them to emerging smallholder farmer groups that our partners have established. Our role as research partners is to monitor how they evolve and prove that the smallholders can be targeted successfully and therefore deserve more investments. I should refer you to the recent 2012/13 national survey report released by both FAO and the Tanzania National Bureau of Statistics (NBS) that shows the opportunity gap for improving livelihoods that can be exploited. The report shows that only 20% of rural livestock keepers in Tanzania currently use livestock extension services and those that do earn a net income of US$ 17 per animal (US$ 430 per herd) compared to only US$ 12 ( a net income of US$ 138 per herd) by those who don’t. This shows what can be achieved when producers can access and use livestock extension services. You can triple the annual income per household though interventions that reduce mortality rates and increase use of animal husbandry services. We are piloting interventions such as ‘dairy market hubs’ to achieve this. The ‘hubs’ bring together localised groups of smallholders with common interests in accessing inputs and services to achieve a critical mass of supply. As you will appreciate, when you have producers with small volumes of milk, they need to come together to enjoy economies of scale. To achieve our aim of inclusive development of the dairy value chain, we work through partnerships involving a range of national and international stakeholders. A more inclusive, viable, well-coordinated and efficient dairy marketing arrangements will contribute to improved income and livelihoods in rural areas. The focus on inclusivity entails a strong emphasis on gender. By working not only on the input and services side but also on the marketing management side; we aim to balance the ‘pull’ and ‘push’ factors that we think are required to upgrade the smallholder value chains. In addition, whenever you work with a predominantly informal value chain which is the case in Tanzania and most parts of the East Africa Community (EAC) countries milk is often not pasteurised and packaged before sale, therefore addressing milk safety is important. We are addressing milk safety (and the nutrition component of our work) in the same value chains in collaboration with another CGIAR program on Agriculture, Nutrition and Health. We want to ensure that consumers can access quality and safe products at affordable prices whether the milk is sold informally or formally.We contribute to capacity building at community and national levels. At community level, we are building dairy market hubs. The markets hubs act as flexible platforms that bring together farmers, with common interests in accessing inputs and services, and solving their problems collectively, and linking themselves with value chain actors and local government to access various services. These engagements extend to work in extensive areas where dairy farming has not taken root. Embracing these areas will help us generate evidence to prove a concept that poor marginalized communities in these areas can be targeted successfully. In the EAC generally, commercial dairy farming has only taken off in highland areas such as central Kenya or around Mount of Kilimanjaro and in the Southern highlands of Tanzania. This need not continue to be the case and is the reason we are testing the concept that commercial dairy farming can also take off in marginalised extensive areas provided they can access the required inputs and services. Our motivation is the many benefits of dairy farming for rural livelihoods, economic development and poverty reduction. For example a study by IFPRI and ASARECA, found that the most promising agricultural commodity for improving incomes in Eastern Africa is milk. The study ranked dairy as having the highest contribution to potential gains to agricultural GDP relative to other crop and livestock commodities. The contribution of dairy farming to rural livelihoods and nutritional security, especially in Kenya, demonstrates this quite well. So we are quite excited to use milk as a commodity of focus to improve the livelihoods of livestock keepers in Tanzania as well.In implementing the pilot interventions, we work closely with the Tanzania Dairy Board and Faida Market Linkages, a local NGO. We also work very closely with international development organizations that are based in Tanzania such as HEIFER International and SNV-Netherlands Development Organisation. Research partners involving ILRI and national research partners play the role of monitoring the impact of the interventions being tested at household and community levels besides conducting various experiments and targeted studies to identify solutions for specific constraints.The national research partners that are involved in generating evidence are Sokoine University (SUA) and Tanzania Livestock Research Institute (TALIRI). The capacities in the partnership (at individual and institutional levels) are enhanced as we work and learn together as well as through short- and long-term training opportunities for students who contribute to generation of research results. We also strengthen capacity at the national level where we set up the Dairy Development Forum (DDF) with a secretariat at the Tanzania Dairy Board which brings together value chain actors and other stakeholders involved in dairy research development in Tanzania to find solutions to common problems that individual organisations or private firms cannot address individually. The Forum also provides a space and opportunity for individual business linkages to take place. Studying how such platforms at national, regional and district various levels evolve and contribute to scaling out of innovations is of major interest in our research. That summarises the core of our current and long term research we do to improve smallholder dairy value chains in Tanzania. We look forward to consolidating the evidence on what works well, where and how in our key pilot sites in Morogoro and Tanga and use that to attract public and private investments for a pro-poor transformation of the smallholder dairy value chains.Additionally, we are embarking on new R&D projects that reinforce the work we are already doing on sustainable intensification. A three year endeavour starting 2016 will support the development of a platform for more efficient dairy production and upgraded dairy value chains. This platform will support the development and piloting of digital platforms through a farmer-focused public-private partnership for on-farm data recording and timely, actionable cow and herd management feedback to farmers, as well as continuously evaluating, selecting, certifying and promoting the use of appropriate breeding bulls and heifers, thus leading to more efficient dairy production and upgraded dairy value chains. ILRI will also be supporting the Department of Livestock to develop a Livestock Master Plan in 2016. The plan will define pathways where investments for commercialisation would provide the greatest returns for given livestock sub-sectors and thus attract more investments. A newly launched two-year initiative also led by ILRI aims to support the veterinary department, regulators of the delivery of animal health services and the private sector to scale up the delivery of infection and treatment method (ITM), and vaccines for East Coast fever (ECF) through facilitation of the delivery value chain.Birungi:In your view what are the key challenges that you are addressing in the livestock sector?Amos: The key challenges are the lack of the economies of scale in milk marketing because volumes produced by small holder producers are small. Secondly, farmers cannot easily access capital especially those poor often non bankable communities in rural areas. To be more commercial, farmer must have capital to invest in inputs and services. As I said earlier in relation to the recent report by FAO and NBS, the use of improved inputs and services can triple incomes of livestock keepers.There is also no mechanism in place to source milk from small scale pre-commercial producers. Previous interventions have not worked well in Tanzania and this is the reason why we are piloting the dairy markets hubs to address the needs of the commercial producers to access and use more inputs and services. The other main challenge is shortage of feeds and the strong effects of seasonality in feed availability between the dry and wet seasons. The question is how to work with farmers not only to conserve feeds but also to encourage fodder markets to alleviate the big shortages.And a cross cutting area that we are addressing is the threat or marginalization of female value chain actors as the value chain is upgrading. As you may know, this is not unique to the dairy value chain. When agricultural commodities become more commercial, and there is more money being generated, women are normally displaced by men and we want to prevent that because it is only in having equity that we can achieve acceleration in upgrading of the value chain.Birungi: Are there any policy challenges? Yes, there are a number of policy challenges and this is part of the reason why we facilitated the formation of the Dairy Development Forum so that it can be a platform for addressing not only the policy challenges but also others interventions that are needed to improve the smallholder dairy value chains in inclusive ways.A key policy challenge is also one of mindsets that do not support smallholders. For many countries in the region the predominant thinking is that their economies need to grow and that this cannot be effectively done on the back of smallholder agriculture. Inclusivity in economic growth is often a secondary consideration. Increasingly in both developing and even the developed world the income gap continues to widen. So to us, proving this concept that the poor can be targeted successfully and having more investments (both public and private) directed at upgrading the pre-commercial value chain approaches is an important policy issue that we are addressing. So it is more of a mindset change so that next time there is a major investment, such as a loan coming in the Tanzania government, or may be some philanthropic investment, the investment would not necessarily have to go to areas where traditionally we would have the greatest returns in terms of the amount of money that you get but also to have the greatest return in terms of the poor people that it can impact.To address this policy issue, besides the Dairy Development Forum, ILRI co-facilitated a process that culminated in the launching of the Tanzania Livestock Modern Acquisition Initiative on the 20th of July 2015. The aim was to raise the profile of livestock and attract investments in the areas mentioned earlier.Birungi: Lastly on the issue of policy - is pricing a challenge in Tanzania? We found it to be an issue in Kenya and Uganda. When you talk of pricing of fresh milk, you have to look at both the informal and formal sectors. Pricing is an issue in the formal sector because a number of investors in this sector complain about a number of regulations and licenses that they must obtain and some of these must be renewed annually. These end up being factored into the consumer price. But bear in mind that in Tanzania the formal sector currently accounts for only about 2% or 3% of the milk that is marketed. Most of the milk is marketed informally where consumer prices are lower. Birungi: What opportunities are there in the Tanzania livestock sector?Amos: Tanzania has the 3rd largest livestock population in the African continent, so the potential is quite huge. But it is under exploited mainly because there is low public and private sector investment in the sector. As an example, Githunguri dairy cooperative in Kenya is able to collect and process between 180,000 and 200,000 litres per day from farmers within a radius of 50 km compared to the situation here in Tanzania where the largest processor has capacity of only 60,000 litres daily and utilises less than 60% of the installed capacity depending on the season, with some of the milk collected as far as 400km away. So there is a huge opportunity here for one to invest in getting small scale producers and value chain actors to come together so that they can engage with big processors. It is the same thing you can say about back yard chicken producers. Very few private investors will want to invest in organizing small scale producers. If there could be a public-private partnerships where public funds are spent in organizing small producers so that they are better able to engage with the private sector then the big players would be quite happy to collect the milk, eggs and chickens from small scale producers.So a key intervention area is strengthening public - private sector collaboration so that the private sector has got a better enabling environment for them to engage in doing what they do best, with the public sector funding targeting areas such as creation of farmer groups and encouraging collective action. I think supporting growth of small businesses that operate in these areas is the most effective way we can achieve the kind of pro poor transformation of the value chain that the stakeholders here seek.Birungi: Would that be the same answer you would give in terms of the future prospects of the sector?Amos: Yes, that is exactly what I would say about the future prospects of the sector. It can’t be done by the private sector alone; there must be public sector support for an enabling environment for the private sector to grow. The private sector prefer the urban and peri-urban areas where they can easily make profits, but if you want to have these broad based development, then you need to have public and private sector partners co-operating to spur growth in the more marginalized extensive areas and get pre commercial producers in those areas to become more commercial.Birungi: You did mention that the formal daily milk sector constitutes only about 2 to 3%, the rest is informal. Have you found this to be attractive to foreign investors? There are a number of European investors coming into the Uganda and Kenya dairy sectors. Amos: It is happening in a different way because people see the potential. For example, we will from 2016 start partnering in a research project with Wageningen University that involves a large dairy company in Europe and a South East Asian company known as Royal Friesland Campina that will use their CSR funds to collaborate in piloting inclusive business models. It could be said that this is in anticipation that when the value chain grows and is upgraded the small producers will be better able to engage with such large European private sector firms. As it is, I don’t see much opportunity of having external players the way you have in Kenya.Finally, I need to highlight that we would not be able to engage in the R&D work above without the generous support of a number of development partners including the CGIAR Consortium, International Fund for Agricultural Development, the governments of Australia, Ireland, the United States, United Kingdom, the European Union, the International Development Research Centre and the Bill and Melinda Gates Foundation.
http://agritrade.cta.int/en/Agriculture/Commodities/Dairy/An-interview-with-Manu-Schaerer-Supplier-development-manager-at-Nestle-Equatorial-Africa-Region-LtdAn interview with Manu Schärer - Supplier development manager at Nestlé Equatorial Africa Region Ltd2016-03-25T11:38:40Z
Birungi:How is Nestlé involved in the dairy business?Schärer: One of Nestlé’s core businesses is Dairy which involves procuring and processing of milk. Globally, our largest dairy operations are in India, China, Pakistan and Indonesia. In Africa, we have milk processing plants in Kinshasa (DR Congo), Luanda (Angola) and Zimbabwe. Africa has a significantly high milk production capacity. In Kenya for instance, the milk output is estimated at 4 – 6 billion litres per year. However, very little of this milk is processed with most of it traded and consumed through informal channels. More has to be done to structure the industry since it remains dominated by small scale farmers. Priority should be put into measures to ensure development and commercialisation. It is worth noting that the East Africa region is the milk reservoir of the African continent.However, this sizeable milk production in the region is not matched with equally sizeable processing companies. In addition, there are few international players in the region.Birungi:What models do you think would be appropriate for big processors like Nestlé to succeed in the EAC region?Schärer: Any strategies to enable big processors thrive should ease the access to local, regional and international markets. Linking to these big markets would then make value addition viable. A case in point is Fonterra Ltd in New Zealand that opted to export its milk products on realizing that the population in New Zealand was limited. It is an option for Kenya and the region too if we ensured that the processed products can compete internationally in terms of quality and price.Birungi: What are the challenges facing the sector in the EAC region? Schärer: Although the opportunities in the region are rather similar, the challenges differ between countries. Seasonality is a challenge. It makes milk supply fluctuate over time hence processing plants are forced to operate below capacity. Seasonality can be addressed through dairy development programmes concentrating on dairy belts.As a result of seasonality, prices fluctuate following an inverse trend. This makes planning and improving the sector difficult and unpredictable. When farmers have sizeable volumes and prices fall as a result, they reduce their profits because the cost of producing a unit of milk does not fluctuate as much as pricing between and within seasons. On the other hand, when prices are high, farmers do not have milk to sell so they do not benefit. For example, in the current context, in Kenya, prices can go as high as Kshs 40 per litre of milk and as low as below Kshs 30 per litre. It is also the same case in Uganda where prices can go to as high as UGX 1,000 per litre and as low as less than UGX 600 per litre. The price spikes are mirrored by volume fluctuations. For processors, this is not ideal in business terms because their cost of running the plants remains relatively the same whether they are operating at full capacity or otherwise.The state of infrastructure is constraining smallholder farmers from accessing markets. While in Asia it is common to see processors setting-up cooling infrastructure close to the farmers, it is the opposite in the EAC, where the cooling network is mainly centralized in large centers. This challenge has limited the growth of the sector which is largely small scale. The model Nestlé implements is one where the cooling plants are numerous and small, and decentralized in areas where the milk is produced. Currently a lot of milk is produced in the region but not collected. The quality of milk is another challenge. In my view, there is only a single milk standard called ‘good quality’. The East African milk consumer has the same expectations as any other milk consumer in the world. To achieve quality, the value chain should be controlled making the role of a regulator important. The regulator should define standards and enforce compliance. My observation of the dairy sector in the EAC region confirms that although the regulators are in existence, implementation of standards is still difficult e.g. milk hawking is still rampant. With improved road infrastructure in the milk producing areas, farmers would be able to deliver milk in its best quality to the cooling centres – within two hours of milking.Birungi: What opportunities do you see in the dairy sector in the EAC? Schärer: Market availability is the main opportunity and especially if the region can explore markets beyond its borders. This opportunity would even be bigger if the region could explore the global market where demand is estimated to be growing at 5% against a supply growth of 3% per year. Milk production in the EAC is significant compared to other parts of the continent. For instance, Kenya and Uganda are producing about 4-6 billion litres and 2 billion litres of milk per year respectively (estimates). This is a lot of milk if only it was properly handled and processed to enter the commercial market. This means working with farmers can yield even more milk that is of improved quality.Furthermore, the dairy industry is dominated by local investors. There are opportunities of attracting foreign investment through formulation of appropriate policies. It is interesting that there is a larger presence of international dairy companies in West Africa yet the region does not produce as much milk as the EAC. Foreign investors would increase competition by driving dairy development and quality upwards which is a pre-requisite for growth.Birungi: Do you think foreign investors eyeing the region would have to integrate dairy development as part of their strategies? Schärer: Although I may not know how other players approach the same issue, for Nestlé, it is definitely the case. If a company focuses only on collecting volumes, chances are that competitors would perform better if they integrate building relations with the suppliers. Nestlé combines milk procurement and dairy development to ensure efficiency and quality, while securing the long-term sustainability of the dairy farming sector. Procurement ensures collection of volumes that meet quality while dairy development encourages growth of business relations between the company and farmers. In Pakistan for instance, Nestlé deals directly with farmers, limiting as much as possible engaging with middle men and works also with women extension. This arrangement significantly increases returns to farmers. Birungi: What would you say about the financing products and mechanisms available in this region?Schärer: I would categorize the problem of finance availability and accessibility as a threat to the dairy sector. Money is available in the region but the cost of accessing it is prohibitive. Models that ensure financing is readily available and affordable should be encouraged. Some of those models include matching grants as long as all parties involved are willing to meet their part of the obligation. A financing model that Nestlé has used in some Asian Markets is to negotiate with banks to extend credit to dairy farmers at favourable rates and in return, the farmers would open bank accounts in those banks so that re-payments are made from the monthly income they receive from milk sold. This reduces the risk of defaulting.Birungi: Do you think an electronic platform can help in addressing the current challenges of the dairy sector?Schärer: Although I may not have a definite answer to this, I would like to say that some electronic platforms have worked while others have not brought any change. The use of electronic platforms should be pursued on case by case basis.