Editor’s Note: Elizabeth Bintliff, Vice President for Heifer’s Africa Program, presented a keynote address at the April 2012 8th African Dairy Conference and Exhibition held by the East and Southern Africa Dairy Association last week. Elizabeth also spoke at a second event, which was attended the president of Kenya. Below is the first of her speeches; I’ll share her second tomorrow. Though they are long, they illuminate the work that has been done and that is still to be done to grow the dairy industry in East Africa.

I’m delighted and honored to be here today to address the East and Southern Africa Dairy Association.

I want to begin my remarks by telling you about my own history with dairy. In order for you to understand this history, I must tell you that I am West African. I was born and raised in Cameroon. You all know, I’m sure, that there is virtually no dairy industry in West Africa. If there were, this forum is likely to have been called the East, Southern and West Africa Dairy Association. So I grew up in Cameroon where few people have access to fresh milk. I grew up drinking powdered milk, most of it imported in tins from Europe. We would mix it up with room temperature water in a bowl and then pour our cereal into it and that over twenty years, I still pour my milk in a bowl and warm it up slightly in the microwave before adding my cereal to it and eating. It drives my American husband crazy. He likes his milk ice cold, because that is how he grew up with it. In the US, milk is not something that is necessarily associated with cows. Rather, it is associated with supermarkets. On the other hand, in West Africa, milk is associated with tin cans. But in East and Southern Africa, thankfully, milk is still associated with cows.

I tell you this story today because I think it serves as a great preamble- a great preface- for the scope of maturity of the dairy industry in different parts of the world. It defines, in a small anecdote, what progress the dairy industry in this region has made, and what opportunities lay ahead for it.

The theme of this years’ event is “Driving Competitiveness through Technology.” In thinking about this theme, I realized that I would need to look to the past, the present and then the future, in order to frame this talk – the past for lessons learned, the present to analyze the current situation, and the future to envision what we need to get to our goal of a healthy, productive, and thriving African dairy industry. When we talk about driving competitiveness through technology it is not about any technology. It’s about having the appropriate technology – proper hygiene, aluminum pails versus plastic containers, the right size of chilling plants for the different milk sheds, liquid nitrogen to make artificial insemination more viable, veterinarians with access to a reliable cold chain for veterinary medicines, research on cattle breeds, diseases and treatments.

Photo by Russell Powell, courtesy of Heifer International

Essentially, we are looking at avenues for improving productivity and efficiency within the dairy sector. It is a challenge that we at Heifer International have grappled with for many years of our existence. It is a challenge that we have paid particular attention to during the four year-old life of the East Africa Dairy Development project, or EADD. EADD is a $42 million project funded by the Bill and Melinda Gates Foundation and implemented by Heifer International in Kenya, Rwanda and Uganda. Within this project, the goal was to double the incomes of 179,000 families, the equivalent of one million people, through investments in smallholder dairy farming. The theory we had in the design of this project, is that Dairy Farmer Business Associations (DFBAs) can benefit farmer incomes and livelihoods through the establishment of chilling plants as aggregating channels from which farmers can access the benefits of economies of scale. DFBA benefits are two-fold: 1) it is a cooperative bulking and selling point for milk; 2) and a platform for farmers to access services, and inputs including advisory and extension, information, artificial insemination for their animals and financing. We believe that these farmer-owned dairy cooling plants, and 68 active sites in East Africa, have evolved to not only transform individual farmers’ lives through income, but also transform whole communities in rural areas as centres of development.

Among the things that the East Africa Dairy Development grant has allowed Heifer to do is to test a theory on scale and its relationship with impact, to test the viability of public/private partnerships as a strategy to benefit the poor, to assess whether the profitability of the profit pillar in the dairy value chain is zero-sum. What we have learned is significant. We’ve learned that higher aggregated income for farmers plus regular supply and sale of productive services and inputs soon spirals into ever-growing demand and supply of quality goods and services – education, better healthcare, nutrition and gradual unlocking of value for factor assets such as land, housing, livestock and labor. The DFBA model also spurs grassroot business and community leadership that builds social capital enhancing cohesion, goodwill, fellowship, mutual sympathy and social interaction, creating a virtuous cycle that in turn generate wealth and enhances well-being for all.

The intention of EADD is to explore scalable, replicable interventions in the dairy industry in developing countries which can become a model for success elsewhere as a viable alternative for building sustainable livelihoods for smallholder farmers. As an organization, our mission revolves around the wellbeing of all families, but particularly around the wellbeing of farm families. Our singular priority is the ending of poverty and hunger. You see, the history of Heifer is really the history of a cup of milk. Our founder, Dan West, was a volunteer in the Spanish civil war in 1944, where he handed out cups of powdered milk to women and children on both sides of the war. As rations grew smaller, he was instructed to give milk to people who looked like they were most likely to survive, in order not to waste scarce resources. Dan West came back from the war changed by the experience of having to make decisions about the life and death of people, and with the conviction that what made sense – what was more sustainable – was for people to be able to produce their own food. What they needed, was not a cup, but a cow. Out of this idea, Heifer International was born.

We’ve looked to the past, and examined the present. Now I want to look to the future to see where we’re headed together. There are three main elements that we need to consider, in order to be successful: (1) Technology and services (2) Partnerships (in a multitude of sectors) and (3) Inclusion of Women.

The world has changed a lot since 1944. Our way of working has evolved. But our mission and our priorities remain the same. The projection of an increasingly growing middle class indicates that demand for food will stretch to its limits. For dairy, that means that the opportunity for smallholder farmers will grow as well. Yet, the challenges for smallholder dairy farmers remain significant, and therefore, so do the challenges for other actors along the dairy value chain. It is imperative that if we are going to make dairy farming more sophisticated, more efficient and more profitable in this region, we need to address the challenges from the farm level and all the way up the value chain. The farming community needs to be market driven and to meet the needs of the market with investment and professionalism. Their product needs to be of quality, consistent, safe and priced competitively. We know that connecting these communities with FAIR markets is a sustainable and long-term solution to poverty for these communities.

Last year, Kenya’s dairy production totaled more than 546 million liters of milk, up from 2010’s 515 million liters, becoming the fastest growing sector in the country. This growth was driven by small-scale farmers. Organizing them, coordinating them and mobilizing them could have a similar impact on the dairy sectors of other countries in the region.

Heifer is an organization that has deep expertise in mobilizing dairy farmers so that the farming communities prosper and are sustainable and competitive. In EADD as in other projects worldwide, we support and encourage the farming communities to form appropriate institutions such as companies, co-ops and other community based systems to ensure farmers capture a FAIR share of the created values in the dairy supply chain. The goal is to create a FAIR system that allows the farming families to live a life of dignity and security.

When you take a look at the sector today, you see that it is challenged at many levels. We are not yet fully harnessing breed performance to its full potential. Farmers do not have the capacities and the knowledge needed to improve their production levels and to meet the quality standards of the markets. We need to make extension services more accessible and more reliable. We need to improve mechanisms for transporting milk from the farm gate to the chilling plant or the market both for the sake of maintaining quality and as a possible source of income and employment for young people in removed communities. But that is only the first mile. We need governments to create policies that respond to the needs of the sector, opening it up for competitiveness. We need to invest in the infrastructure and technologies – chilling plants, storage facilities, roads to market, information access, water, and electricity. We need the private sector to invest in linking the farm and the market with fewer barriers in between the producer and the consumer. There is opportunity for prosperity in the dairy industry in East and Southern Africa. How we tap this opportunity is up to all of us. Collectively. Fairly.

We need to take a reverse look at the Profit Pillar. If you take the price of a certain dairy product in the market and work backwards along the value chain adjusting for purchasing power parity, you will find that the farmer makes the least amount of profit…and that is who is producing the milk! Unfortunately, this approach of profiteering still exists in some pockets. We have learned through the EADD project that farmers now possess the savvy to circumvent that profiteering. Profiteering in the sector is addressed through collective ownership. By joining cooperatives, farmers gain as producers or as investors. We believe that their role in the sector has to be strengthened.

At Heifer International our Theory of Change is founded on the idea/belief that smallholder farmers, especially women, can attain sustainable and socio-economically viable livelihoods if their capacity is enhanced to increase income, access adequate food and practice agro-ecologically friendly farming. We have to address the role of women not just from a moral or ethical standpoint. We have to address it from a pragmatic perspective. Women still represent a significant proportion of smallholder farmers on the African continent. We are the curators of family nutrition, the wards of the household, the custodians of community and culture. Our numbers are large and our impact is ever growing. To ignore us is to ignore a substantial amount of labor, of manpower or shall I say womanpower that is critical to the development of this industry and in fact this continent. And speaking particularly of my own gender, I have to say that the role of women in this chain must not, cannot and should not be ignored.

In order for us to reach our vision for a robust, effective, efficient and profitable dairy industry in East and Southern (and maybe one day even West) Africa, it is imperative for all sectors to work together, there is room for everyone to profit. We need the right set of policies, we need a private sector with an inclusive agenda, and we need research. The usefulness of research is in its application. We need technology. The need for appropriate technology to enable increased productivity on limited resources. Again, here I stress the word “appropriate.” The road to development on the African continent is unfortunately strewn with good but often misguided intentions. The question for all sectors – public, private, policy and civil society to answer is how can smallholder dairy meet the demands of a growing population without compromising the well-being of the earth and of rural communities. That is our challenge for the future, and it will make the sector more efficient and effective for all players and help milk meet its ultimate purpose, which is to nourish the hungry.

Technology. Partnerships. Women. All of these are crucial elements for our success down the road. Our success will further be realized by encouraging the farming community (this goes beyond the farmers themselves, it includes vets, transportation, banking, etc.) to diversify their customer base and include the local markets. Next year, Heifer International hopes to launch Phase II of the East Africa Dairy Development project in Kenya, Rwanda, Uganda, Tanzania and Ethiopia. Maybe one day in the future, we can see this same model replicated in places beyond East Africa, maybe to southern Africa. And perhaps even to West Africa. We know from Europe’s experience that there is tremendous value to farmers and to consumers of producing at an artisanal level.

The end game is not necessarily sophisticated supermarkets such as exist in the United States. At Heifer, our mission continues the dream of our founder from seventy years ago…we want families to have access to a cup of milk to feed themselves.

East Africa is changing fast – much faster than we can imagine. From its inauspicious beginnings as a cottage industry, dairy production could play no small part in the transformational changes which lie ahead. The 14 member-states of the COMESA region today consume approximately 20 Million tons of milk, and produce about 21M tons.

What is at stake here is the value proposition to transform the livelihoods of East and Southern Africa’s dairy farmers with each addition liter of milk. The statistics are telling: in 2010 alone Kenya’s 28 Microfinancegranted US $1.2 Billion in loans to 1.2 Million borrowers – an average of US$1,000 per borrower. On the other hand, the value of dairy offtake in 2011 is estimated at US $121 Billion – an average of US 121,000/person for the 179,000 families engaged in small dairy farming project I mentioned earlier.

Imagine an African common market –twenty years from now- stretching from Cape Town to Cairo and teeming with the free flow of goods and services and capital. In that future, milk consumption per capita would increase from 181Kg/person/year as we see in Sudan today and probably reach 240Kg/person/year as we see in many developed countries in the West. The opportunity exists for East and Southern Africa to produce not just for the region, but also to address the growing demand for fresh milk in other parts of the continent. Carrying on the vision of Heifer International’s founder, I dare to dream that it is possible, that one day soon children in West Africa will have options for milk that don’t have to come out of a tin can from Europe like I grew up with, but that they too have access to and can consume a cup of fresh milk.

Ladies and gentlemen, we have plenty of work to do. So let’s get to it. Thank you and enjoy the convention.

Sources:

• http://chartsbin.com/view/1489
• http://www.mixmarket.org/mfi/country/Kenya
• http://www.igad-lpi.org/publication/docs/IGADLPI_WP03_11.pdf
• Ivey Business Journal, Oded Shenkar, March 2011