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. You can read her keynote address here. Elizabeth also spoke at a second event, which was attended by the president of Kenya. Below is this speech.
His Excellency the President of the Republic of Kenya
Fellow participants at ESADA
Ladies and gentlemen,
In my remarks this morning I spoke about the dairy industry in this region by examining the past, understanding the present and envisioning the future.
In my brief remarks now, Id like to propose a comparative review of the dairy industry by looking at what is possible within Africa and what untapped potential exists for us to learn from the experiences of others.
Yesterday and the day before, several people in this room attended a two day learning event on the status of the dairy industry in east and southern Africa. For me, in the short time I was able to participate, the event was very eye-opening. It was an opportunity to learn about the different stages of the industry as represented by some of the countries that were present, including Malawi, Zimbabwe, South Africa and Kenya, to name a few.
Clearly, South Africa is leading the industry when it comes to sheer value of dairy production in east and southern Africa. With approximately 500,000 heads of dairy cattle, South Africa produces an estimated 3 billion metric tons of milk. But with more than ten times the cattle population of South Africa, East Africa is producing three times the volume of milk, estimated at $3 billion and has some way to go in efficiency and value addition. East Africa has embarked on a journey that will see greater value captured for millions of producers and nourishment for a growing youthful population. South Africas example defines what is possible for East Africa. It charts a path for growth. There are lessons to be learned.
These facts highlight the element of competitiveness in the theme for this years event: how to drive competition through technology.
In searching for the answers to this question we need not necessarily look outside the continent. In fact, most of the answers lie within. Again, as I mentioned earlier, the value of technology is in its appropriateness and we have no shortage of examples of appropriate technologies being applied across this continent that are benefiting the dairy sector.
Often times, in todays context, too much credit is given to innovation and not enough to imitation. But when we look at some of the greatest successes in the global business, we find that they were imitations of originals. You may be surprised to learn, for example, that when it comes to credit cards Diners Card was the innovation while Visa Card was the imitation. And Visa became more successful. Likewise, when it comes to fast food restaurants White Castle Burger was the innovation but McDonalds was the imitation and it became the global phenomenon.
The argument for innovation seems well established. New products do three things: They lead to higher sales and growth, for instance by targeting higher margin segments; they lower costs, by marketing new and improved products to existing customers and saving the expense of attracting new ones; and they transform a firms capabilities so profits are sustained over a long period.
Though this seems impressive, a close look will reveal that imitators enjoy many of the same benefits, and perhaps others as well. Having observed market reaction, the imitator can better calibrate a product and is not hindered by an investment in obsolete technology and infrastructure. Imitators are often better positioned to offer the customer something better/cheaper, often both. (Source: Oded Shenkar, Ivey Business Journal- March 2011). These realities are also applicable to the dairy industry.
At Heifer International, some of our greatest successes are built on the experiences of others, by replicating their innovations and not necessarily creating them ourselves. Here in Kenya, we have linked rural milk marketing enterprises to new appropriate technologies by installing solar ice makers to help farmers chill milk for processing. This was built on the innovation of others.
We have used biogas from the waste of cattle to power cold houses for meat storage. This too was built on the innovation of others. Elsewhere in the world, biogas is being used to power chilling plants for milk where fluctuations in power threaten to compromise the quality of the chilled product. If that is not already being applied in East Africa, then we are missing a great opportunity.
But just as we at Heifer International have replicated the innovations of others we too encourage others to build on ours as well. Over the last four and a half years, the East Africa Dairy Development has piloted a hub model that aggregates service provision to farmers by making the hubs a one stop shop for all the inputs and services they need, including feeds, drugs, AI services, fertilizers, seeds, acaricides, pesticides, etc. This is an innovation we have found to be successful but one of our biggest measures of success lies in the scalability and replicability of this program. And therefore we encourage others to replicate that example. So, ladies and gentlemen, if there are three lessons Id like you to take away from this event this week its this: copy, copy, copy.
In the end, we all share one of two interests: poverty alleviation and economic growth.
Across Africa there is often a pervasive tension between poverty alleviation and economic development that exists among donors. Some find the two to be contradictory, but in fact, they are complementary. The demand for various inputs and services in the dairy sector presents opportunity for enterprise among some key demographics. For youth, there are opportunities for employment in various activities including transportation of building materials, farm products, AI services and others. Similarly, for women the interventions of poverty alleviation and economic development often present women with three key elements for their empowerment: a voice, a choice and an opportunity. In our projects here in Kenya and around the world, we have found that these things are among the building blocks of social capital, sustainable community development, poverty alleviation and economic development.
Id like to tell you a story I heard just yesterday. One of the participants of the event I mentioned earlier, a gentleman from Italy, shared an intriguing story on the extension of the dairy industry in his country, which Id like to share with you. He mentioned that the dairy industry in Italy after the Second World War was well behind where East Africas is today. Today, almost 70 years later, the small community of Parma, Italy has successfully quality branded its cheese, so that it is the only cheese in the world that can rightfully qualify to be called Parmesan Cheese. I found this to be fascinating and worthy of replication.
Imagine that for East Africa. Imagine that for Kenya. In the same way that Kenyan tea and Kenyan Coffee has successfully established a global brand so too can the dairy industry.
The potential for growth in the dairy industry stretches well beyond the consumables. For example, Industrial casein, which is a product of milk, is a key ingredient used in manufacturing pharmaceutical products, paints, glues, pigments, safety matches and leather chemicals. In the future we can envision, our milk farmers from this region are supplying the raw materials for its production. The leather industry in neighboring Ethiopia was worth US$206M last year. Regrettably, all the industrial-grade casein used for polishing, dyeing and coloring was imported from outside Africa. None of that value was transferred to income for small-scale dairy farmers in the region.
Ladies and gentlemen, the opportunities for dairy are almost boundless. The limitations of the industry correlate to our abilities to replicate or imitate. I challenge you today, to find the solutions to the challenges that the industry faces. Whether by innovation or whether by replication, we can awake the sleeping giant that it East and Southern Africas dairy industry.
Heifer International appreciates the hand in glove partnership with relevant agencies of the Government of the Republic of Kenya that have enabled our project contribute to this countrys prosperity through piloting innovative approaches that have been replicated across the dairy industry with the support of development partners like USAID, Bill & Melinda Gates Foundation and Kenyas constituency Development Funds.
I bring our gratitude to you on behalf of the organizations leadership.
Thank you again and Karibuni Kenya.