In 2010, Francis faced a difficult milk production and marketing dilemma. He had two cross-bred freshian cows, but their milk production was low. He used a traditional grazing system, and each cow gave an average of 5 liters of milk in a good day. A friesian cow can produce up to 40 litres per day. He let the cows graze around the family compound, and unknown to him this method of grazing meant that the cows expended a lot of energy. They were not healthy and required regular treatment for ticks. His turning point however was when milk vendors  “took off” with his money and as a result he joined Mweiga cooperative, a partner of EADD, even though he was “skeptical of cooperatives.”  It was the additional services offered by the cooperative hub model that delighted Francis the most. He accessed dairy extension information hitherto unknown to him, market for his produce, and an expansive social network of other farmers like himself.These, he says, has enriched his enterprising small dairy business which lies on a 5 acre piece of land located in Nyeri County, Kenya’s Central province. He keeps two cows, ideally his farm can keep 5 (one acre for each cow), but two is his magic number because, “I want to farm other crops and there is money in milk, if you do it right.”
With advice from the cooperative extension officer, Francis put up modern cattle paddock and learned to mix cost effective feeds on the farm. The change was soon visible; his cows were healthier and produced more milk. “I now milk an average of 32 litres of milk a day from the two cows. They are healthier too…”  he says animatedly pointing to the shiny black and white cows mouthing off shredded hay. Planting and conserving his own fodder like calliandra, lucern and napier reduced his production cost as, “dairy meal is expensive, but I learned to make my own rich feed on farm cutting down on costs. I only feed them on dairy meal occasionally and for additional nutrients.”  Francis informs us that he has no intention of increasing his herd, and instead wants to apply lessons learned in feeding so that his cows increase milk production to at least “25 litres each. I trust Mweiga will market the milk so I don’t have to worry.” His decision is backed by EADD feed specialist Josephine Kirui who advises, “one dairy cow should have an equivalent of one acre of land for feeds and fodder in an year.” This ensures that the environment is well taken care of and that the dairy cows, which are heavy feeders, produce to their maximum.

Cooperatives as marketing avenues
“The cooperative sells the milk on my behalf and I  access feeds and drugs from the cooperative agro-vet on credit. I also didn’t have to worry about days when milk was not collected as the cooperative had a collection point near my home; all that is required of me is to deliver the milk by 5.00am. To ensure the farmers deliver quality milk that fetch competitive rates, the Mweiga Cooperative trained farmers on basics of milk hygiene, handling, and milking techniques to reduce contamination. Francis shares that he invested in metal cans and a good salve and as a result, “my milk has never been rejected at the collection center.”  The return on investment on social capital is the ability of farmer that EADD works with to access other social benefits. For Francis, increased income has enabled him see his two children through high school. “I also built a new house,” he says proudly. 

Francis is one of the 2275 members of the Mweiga Cooperative Society in Kenya’s Central province through which they supply their milk to the market.  Mweiga Cooperative Society is one of EADD’s 21 partner cooperatives in Kenya, and part of Kieni Dairy Products Limited. The members of the cooperative have been trained on feeding and feed preservation and also on breeding by the East Africa Dairy Development project extension officials.

In the roll out, 32 pioneer EADD farmers hedged their dairy business against risk with the newly introduced Kilimo Salama livestock insurance scheme. With as little as USD 1.4 (117 KES) per month, they can insure their best cows from loss.  The innovative low-cost livestock insurance aims at protecting small dairy farmers against losses resulting from death of their cows. The unique package combines insurance with cow care ensuring that dairy cows are protected from ticks, worms, and malnutrition. Farmers can buy a one-year cover for 3.5% of the value of each animal. Importantly, they are also required to purchase an animal care package consisting of tick control, deworming, vaccines, and minerals. This is intended to ensure that farmers do not lose their cattle to common and preventable diseases.

In this case, Tanykina Dairy Cooperative will pre-finance the premiums and then deduct the amount owed from farmers’ milk deliveries through their existing internal credit structure. The yearly cost of the premium for an average high-yielding cow valued at Ksh. 40,000 (460 USD) is Ksh. 1,400 (16 USD). A care package costs an average of Ksh. 4,200 (48 USD), which is paid for in quarterly installments of about Ksh.1,050 (12 USD). If an insured cow dies, the farmer calls the Kilimo Salama helpline and a call center agent dispatches a veterinarian to verify the cause of death. The insurance payout is sent by UAP Insurance Company to the cooperative Financial Services Bank, which then deposits it into the farmer’s bank account. The farmer can then buy another productive cow, this ensures he continues making income from milk.

Farmers are delighted. Tall, energetic and athletic 50 year old Lenah Jecpkoech Rop is one of the 32 farmers. As she heartily serves us a mug of soar milk, she asserts that all visitors to her home must have a mug of soar milk before they depart. This act of generosity is not done grudgingly but heartily, because she can afford it. She knows she is covered, even if East Coast Fever strikes the region again,   “If this happens again (God forbid) and my cow is affected, I will just dial UAP help line for a replacement.” An upbeat Tanykina Dairy Plant manager, Mr. Jeremiah Ruto summarized the feelings and vision of the member farmers; “This insurance product is a game changer in the dairy industry. It will ensure that we sustain our milk collection at more than 30,000 kilos per day, because farmers will no longer be drawn back for losing their best producing cows to accidental death.” Underscoring the importance of the insurance, Ruto said that the North Rift region was prone to many but preventable diseases such as East Coast Fever, Foot and Mouth Disease and Milk Fever.  Mr. Ruto confirmed that the scheme had rolled out to farmers in Kipkaren and Surungai areas, but would be expanded by the end of 2013, to serve all qualifying farmers who have been supplying milk to Tanykina Dairy Plant Limited for at least three months.

 Heifer International, Kenya, Country Director, Mr. Alex Kirui hailed the initiative, saying “Creating sustainable linkages with service providers such as insurance firms and other financial institutions is one of our major goals.  The dairy cow insurance therefore is an exciting development because it will help farmers protect their business against risks that threaten their livelihoods. We see tremendous potential for the cover to reach over 125,000 farmers in 21 partner cooperatives in Kenya.”

According to Kirui, farmers within EADD partnership own nearly 700,000 cows, with an estimated worth of USD 50 million.

 In a recent study in Zambia, the implementation of a similar animal care insurance package reduced annual mortality rates dramatically, from 22% to 1.6%, as a result of a drop in preventable diseases and overall improved animal health.

 Reported by Tom Ngare (for East Africa Dairy Development Project)

In summary: In partnership with EADD, the farmers turned Lelan from battle field of bandits and cattle rustlers to peaceful farmland where everyone has a stake in the successful Lelan dairy company. By abandoning indigenous cattle for cross bred breeds, populalized by EADD, Pokot and Marakwet farmers took away the biggest incentive for cattle rustlers and ensured peace between the tribes. Read the inspiring story of one of EADD-Heifer International successes here

(The Nation is a newspaper of regional Nation Media Group the leading and largest media organization South of Sahara and North of Limpopo)

Sirikwa dairy chilling plant was launched on December 18th 2012.It makes the 19th cooling plant established in partnership with H.I in Kenya. In the picture from left: Kenya's Ministry of Livestock Director General, Dr. Kiptarus, Sirikwa dairy Chairman Philip Kibusie, and Heifer International Kenya, Country Director, Alex Kirui

A carnivore mood engulfs the quite village from as early as 6 am as a pickup vehicle drives through the dusty paths announcing the launch of Sirikwa Dairy limited. Children chant while running behind the pickup. Farmers and transporters riding their bicycles and motorcycles deliver milk to the chilling plant.  Banks, processors and other input suppliers set up makeshift shelters in the Sirikwa dairy compound, to capitalize on the opportunity to meet the thriving community. The dairy quality specialist remains almost oblivious to the noise and music around him as he dutifully continues testing delivered milk for quality, to ensure there is no overload in bacteria, before pouring it into the 5000 litre cooler. Brookeside Dairy, a leading processor, who has a marketing contract with Sirikwa will later in the day collect the milk. One kilometer from the dairy, 34 year old Cornelius Cheruiyot, a supplier at the dairy and a model farmer takes guests around his dairy farm. His fortunes changed for the better once Sirikwa dairy begun bulking and marketing of milk. “I had one local cow and milked only 3 litres per day. Once Sirikwa started, I joined and adopted AI services, to improve my breeds. The result is two cross bred cows and 19 litres of milk per day. My income has increased, and I received training from cooperative field officers on how to manage my cows and my farm better for higher returns.”

The turning point started like this: three years ago, around 6 men and women bore the dream of adopting modern dairy technologies to increase their cattle milk production, leverage their access to market and consequently increase household income. Forming a milk farmer group was the answer to building volumes as the more the milk, the better the bargaining power, they figured. The benefits of such a group seem obvious and its objective easy to achieve, but no, not for this group. Other farmers shied away from partnering. Farmer mobilization proved harder than anticipated, “it took three months to register the first member,” recalls the chairman Mr. Phillip Kibusie. On the first day, the group collected “only 300 litres of milk”(a poor collection by the standards of the dairy rich community). The milk bulking center was under a tree, which stood on land donated by local church. Today, Sirikwa dairy collects 7000 litres per day and has established 9 other collection centers spread across Soy Division.

According to the chairman, the need for knowledge and sharing of experiences to believe and build faith in the dream was apparent. EADD’s experience in building successful farmer businesses thus, came in handy. As, “EADD, organized our visits to similar projects in the country like Siongiroi in North Rift and Kieni in Central Province of Kenya. Once we saw what other farmers had achieved, we believed that our dream could come true. The onus was on us to sell the idea of wealth creation to our neighbors,” Mr. Kibusie says. Farmer challenges like poor breeds, lack of or expensive services in animal health, access to markets and inadequate animal feeds; marked the selling point of a farmer owned company based on EADD model, which is designed to address such challenges. The officials took to the villages sensitizing farmers on the benefits. “This paid off and more and more farmers registered” offers Kibusie as he remarks, “Today as we launch, we are proud to report that we now own a modern facility (stone and brick) and a cooler and collect 7000 litres of milk per day. An year ago we invested KES 600 000 (USD 7 142) in an agrovet shop which is today valued at KES 900 000 (USD10 714). Intensive training has helped farmers understand basic business principles and slowly but surely more are practicing farming as a busines.” Today, the dairy boasts 400 cross bred heifers in its stable as compared to “less than ten” three years ago. Last year, over 1 million litres of milk was sold by the cooler to Brookeside dairy.  Dr. Kiptarus, Director General in Kenya’s Ministry of Livestock Development, in underscored the importance of the dairy. He noted that it will “boost  the  marketing  of  milk  on  behalf  of  farmer cooperatives in  this  area  which  is  endowed  with  over  100,  000 dairy  cattle  with  a potential to produce 70 million litres annually worth Kshs. 1.5 billion.”

Sirikwa Dairies is the 19^th dairy cooperative with a cooler partnering with EADD-Heifer International project, remarked Mr. Alex Kirui, Heifer International Country Director in Kenya. The company has  new  businesses  to  her growing  portfolio  alongside  dairy  on  a  check  off  system.  These include solar kitting, A.I services, Agro vet services, Agent Banking (KCB) and Advances. “The company is on the way towards fulfillment of her mission statement of improving the welfare of their members by bulking, chilling and marketing high quality dairy products and provision of related services to their customers,” noted the Director General.

An extension officer based in a cooperative in Uganda attends to a cow belonging to one of the cooperative members. Cooperative driven extension based services will provide farmers with learning opportunities that will allow them to benefit from research based learning and timely, quality extension services that will help them achieve economic prosperity and improved quality of life.

Since the decline of government-sponsored extension systems, little attention has been given to rural agricultural advisory services.

This is a challenge for small holder farmers because productive dairying requires skills that most farmers lack such as application of feed technology, diagnosis of diseases, milk handling and quality etc.

To meet this need, EADD project has already mobilized innovative extension service structures embedded in cooperatives/ farmer organizations. The aptly named hub based extension services consisted of over 750 extension advisors, 535 animal health workers, 320 AI technicians and 109 agrovet shops by close of 2011. Thus the grant shall build on already existing efforts and towards building the capacity of cooperatives in business development services, setting up extension services and agrovet shops across the districts and setting up new chilling satellite centres to collect milk and linking them to markets and processors.

It is envisioned that this will build an efficient value chain, thereby transforming the lives of farmers to create a vibrant dairy industry that contributes to the economic transformation of the countries in the region.

According to Moses Nyabila, EADD project Regional Director, the 1 year UNDP grant will make part of a consolidated fund which EADD is mobilizing from key development partners including bilateral organizations and governments, and that will support establishment of cooperative driven extension services.  The UNDP-AFIM partnership will pilot in Uganda and Kenya.

By Moses Nyabila and Gerald Mutinda Katothya

The recognition of cooperatives as crucial means for poverty alleviation has been widely acknowledged. This has culminated in the United Nations General Assembly declaring 2012 as the International Year of Cooperatives, highlighting the contribution of cooperatives to socio-economic development, particularly their impact on poverty reduction, employment generation and social integration.

Coop development in Africa
Cooperative development in Africa is phased into two eras, the post independence 1960’s to 1980s and liberalisation era in early 1990’s. The first era was characterised by African government enacting policies and programmes that promoted cooperatives as vehicles for accelerating economic development and modernising the traditional economies. The 90’s were characterised by global economic reforms and liberalization.

In both phases, legal frameworks gave African governments powers to direct and manage the affairs of the cooperatives, which enjoyed monopolies in trade, were rarely truly voluntary, autonomous or independent. They were subsequently engulfed into state politics.

Whereas the first era is well documented, the second era is inadequately researched. What could be noted is that guided by the 1995 International Cooperative Alliance’s cooperative principles, many countries introduced new policies and legislations to liberalize the cooperative sector. Cooperatives have come a long way from an era of mismanagement and loss making to the new age value added organisations. Field experiences indicate that the liberalization trend offers the value added cooperative an opportunity to reinvent their business ideals. Scattered evidence suggests that cooperatives in Africa have survived the market forces and grown in number and membership. Reportedly seven per cent of the African population belongs to a cooperative. Such resilience has been attributed to; structural re-organization of the cooperatives where inefficient cooperatives lost relevance and membership support and diversification of cooperative ventures from the traditional sectors. It seems that liberalization has produced a sieve for sifting the grain from the chaff in the cooperative sector.

Value added coops

The value added cooperatives are a new concept that embraces the hub business model, popularized in East Africa by the East Africa Dairy Development Project. This model is especially successful in revolutionizing the dairy industry. The value added cooperative is exclusively owned by the producers and hires experienced managers to manage it and its facilities. It is designed to generate profits for their farmer investors. Usually based in a village/location setting where it runs its activities, the value added cooperative has become a economic stimuli in areas its located. It has become a hub of innovation. In Kenya for example, 21 such cooperatives collected over 77mio kg’s of milk and generated over USD 27 million in revenues with 23 million paid out to regular farmer suppliers of milk. Such successes are reported in Uganda and Rwanda and the model as a result of its successes will be replicated in Tanzania and Ethiopia from next year.

Benefits of hub model

The beauty of the hub model is its ability to innovate and counter the initial challenges experienced by dairy cooperatives including farmers being unable to access breeding services, animal healthcare, feeds and other production inputs remained a distance and extremely unaffordable to the small scale farmers.
Physical distance, limited infrastructural facilities and lack of relevant information also prevented farmers from attaining most of the key services required to increase their production and to operate as a profitable business. Business supports that are accessible were typically of high cost and poor quality, hence in a way affecting the social fabric that brought these communities together. The hub model approach, has proved that value added cooperatives are “the glue that holds these communities together.” With a core service being bulking of products to increase volumes and thus add the advantage of competitiveness and negotiability, this approach benefits the share holder farmers to not only access services like affordable extension services, transport, agrovet, feeds, and training but also other social services like health, access to loans and credit, profits, competitive prices.

In a value added cooperative, some farmers specialize in provision of services like in dairy fodder production; they already have a ready market in the milk suppliers thus need not worry about disposal. Youths are involved in provision of services like transport of products from farms located further away from the hub, thus freeing the farmer from the hustle of transport to concentrate in production. In the end the cooperatives make profits and pay their farmers handsome dividends, banks seeing the value are willing to lend loans for further development, so long as the cooperative scores highly in leadership and financial integrity. Such partnership with development, public and private sector players is enabling smallholder dairy farmers in East Africa to reap substantial benefits from the increased demand for milk in the region.

Adoption of improved feeding technologies helps Eliud to beat prohibitive cost of feeds, while at the same time increase production of milk from his cows, leading to increased income.

This is his main source of livelihood. However, this has not always been the case as ten years ago, the father of two had one cow that provided milk for household use only – 5 liters. He practiced crop farming on growing maize and vegetables for sale. “The returns were minimal.” But on learning the potential in dairy, Eliud joined a nearby cooperative, where he accessed extension services and increased his stock to four improved breed cows in 2010. The cows milk production has increased to 16 liters each cow on any given day. He attributes this to improved feeding.

The enterprising farmer with only a primary school certificate now earns about Sh80,000 ($900) every month from his engagement in milk production. A lucrative amount from farming by local standards.

He is one of the 2275 members of the Mweiga Cooperative Society in Kieni west district in Kenya’s Central province through which they supply their milk to the market.  Mweiga Cooperative Society is one of EADD’s partners, and part of Kieni Dairy Products Limited. The members of the cooperative have been trained on feeding and feed preservation and also on breeding by the East Africa Dairy Development project extension officials.

Eliud cites understanding of feeding and its relation to increased milk production and eventually income as the main challenge many small holder farmers face. However, he says the training he received from EADD on fodder preservation and feeding technology was an “aha” moment on how to increase his cows milk production, reduce his costs while increasing his income. It enabled him to cut down his costs by preserving 400 bales of hay and planting fodder, which come in handy during the dry season. He now supplies about 110 litres of milk to the cooperative society daily, and sells some to a neighboring school, besides selling bales of hay once in a while.

“I only buy dairy meal for each cow per month, which I mix with the hay, calliandra and lucern using specified measurements. I have never been in formal employment, but I am comfortable with my engagement in the milk production venture,” Eliud said.

He hopes to improve his cows production from 16 litres to an average of 20 litres, by intensifying and applying stricter feeding.  Producers concur with Eliud’s plans saying each Fresian cow should ideally produce an average of 40 litres of milk every day. But, “the farmers do not keenly follow a strict feeding and proper nutritional requirement for their animals at times claiming that the feeds are also very expensive,” says the Mweiga Cooperative Manager Mr. Wanjau. He cites this as a main challenge in expansion plans of the cooperatives whose profits are derived from the volumes of milk collected. “The more the milk, the larger the profit margins,” he explains.

This is the gap EADD fills through support of extension services and intensive training on feed technologies, that enables farmers to learn how to  cut costs on feeding by practicing on-farm feed production, this consequently increases their cows milk production.

Eliud contrasts his life today and five years ago. Today, he is busier, but works less hard and makes more than three times the money he made then. His children attend private school, “The sky is the limit for them. I will give them the opportunities I never had.” he recently bought an additional piece of land where he shall put up commercial buildings, and he hopes to increase his herd.

Written by:Ann Mbiruru

The manual – for farmers and extension workers – is particularly relevant at this time when dairy cattle production in East Africa is increasing due to the high demand for fresh milk for a growing population and demand for value-added milk products for an expanding urban middle class.

Download the manual

Lukuyu, B., Gachuiri, C.K., Lukuyu, M.N., Lusweti, C. and Mwendia, S. 2012. Feeding dairy cattle in East Africa. Nairobi, Kenya: East Africa Dairy Development.

He mentions 5 ways to attract partners to work together:

1. Use an incremental approach. Ask partners to provide one or two things for a project and provide them with full credit for their work. Small successes lead to larger partnerships.
2. Involve partners in the proposal from the start. Invite them to be part of the decision-making process.
3. Scale projects appropriately. You need to show partners that their money goes directly to the program. Offer transparency and be ready to demonstrate good use of the resources.
4. Use media intelligently. If potential partners see that the work you do is getting attention, then they will want to work with you.
5. Maintain credibility. You have to deliver results.

Read the full article

Each time he bought dairy feeds for his cattle; they ended up being poor quality feeds and more often than not, adulterated. Needless to say, his cattle did not increase production despite his investments.

Today, Sabika has solved both problems in one go. He has not only increased his income, but also benefits from accessible extension and agrovet services that have improve quality, production and access to markets through a local dairy farmer cooperative.

Read a news story explaining how EADD helped set up a farmer-owned dairy feed mill …