Date post: | 19-Jun-2015 |
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Agribusiness team
ESADA conference 24 Sep 2014 in Nairobi
Rien Geuze© Agriterra 2014
Rien Geuze
Agricultural Economist
Born 1956 on dairy + crop farm in NETHERLANDS
Since 2011 in KENYA + UGANDA
Today: Share my views with you on Dairy Sector Development
+ Farmers Organizations
Is there a future in Dairy Farming?
Normally I say YES
But today I say NO
Why: Farming = growing• Crops• Animals• Enterprise • Income
And what do we see ?
• Fertile soil, but little Feed Crops • Good climate, but weak calves & cows• Educated people, but preaching
Is there money in dairy?
Normally I say YES
But today I say NO
Why:• Zero grazing, but zero results• Free range grazing, but no yields• Business people starting large scale, but they
cannot farm
‘Farming does not just happen, whether it is ancient, historic or modern. It is an extremely complex process requiring great skill in balancing the different component elements, inputs and outputs, gambling against the greatest uncertainty of all, the climate, and managing to have sufficient reserves to survive the worst possible outcome’
Peter J. Reynolds, Ancient Farming, 1987
So what is needed?
WHO LIKES COWS?WHO LOVES COWS?WHO FEEDS COWS?
A real Dairy Farmer #1-living on the farm -feeding 24 hours/day
It’s a full time job
Not a telephone farmer
Price stability # 2
Volatile farm gate prices kill farmer’s incentive
Jan Feb Mrt Apr Mei Jun Jul Aug Sep Okt Nov Dec0
2
4
6
8
10
12
Monthly milk prices KE
Price stability # 2
Higher prices are always welcome to farmers, but stable prices are key driver for growth, before all other things.
If something needs to be improved: pay a premium; otherwise change takes forever.
1. Go up or down with max. 1 currency unit (1-3%)2. Quality standards: Use bonus/malus system3. Coolers: Many stand idle; if to be operational pay not
equal but above operational costs.
No more ‘Preaching’ # 3
100+ farmer trainings are:- fun- NOT effective
→ Only spreads information
→ Implementation = hard work
+ at farm level + in small groups
X
Modern dairying: it’s all about
- Efficiency: # 4
how many cows …how many workers …
Modern dairying: it’s all about
- Efficiency:
how many cows 6how many workers 2 farmer included
= only 3 cows per worker!
It’s not a hobby, it’s business
Modern dairying: it’s all about
- Efficiency: another farm
how many cows 24how many workers 6 farmer included
→ still only 4 cows per worker
Target: 8 cows per worker !
Land use: time for change #5
Silage: Maize–Sorghum–Napier, year around
Rhodes grass: cut hay early→ fertize → need protein: 2 → 3 → 4 cuts/year
NEW: Brazilian (= KE/TA) grass for paddocking → 31
paddocks
31 paddocks, 1 day per paddock, 30 m², electric fence, irrigate
New pasture, for paddocking / grazing
Study groups: grow together #6
Research ≠ Practical
Need: - Extension- Study groups - Grow together
1 → 2 → 3 → 5 → 8 cows
And on and on and on
16 → 32 → 64 → 128 cows
Never be satisfied
Structural change dairy sector #7
# 1 # 2 # 3 # 40
10
20
30
40
50
60
Market share processors Kenya
2010 2013
Future
-Milk sales = 24 hour economy so milk processing………..?-Mergers and Acquisitions
→ Coops: mergers→ Private enterprise: acquisitions
-Involve Farmers Organisations-Less Copy & Paste → real new products
7 conclusions for Dairy SSA
1. Need real dairy farmers2. Price stability farm gate3. No more ‘preaching’4. Efficiency: farm & processing5. Change land use: feed crops, new
grassland, paddocking?6. Study groups: grow together7. Sector: more Mergers and Acquisitions
Thanks for your attention
Feed for thought