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Dairy Sector Development in CAADP and Country Investment Plans
Presentation made at the Dairy Development Learning Event
co‐sponsored by ESADA, Land O’Lakes, Heifer International and USAID April23rd, 2012
Joseph Karugia Coordinator, ReSAKSS‐ECA
Outline
• Introduction
• CAADP Principles
• Dairy Sector in NAFSIPs and Regional Agric Programs
• Role of Development Partners
• Role of Private Sector in NAFSIPS and Regional Investment Plans
• Conclusions and Some Food for Thought…
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Contribution of the dairy sector to the economy
• Livelihoods and income generation for smallholder farmers through production of high value products
• Contribution to household asset base for finance and insurance
• Contribution to household nutrition security especially for vulnerable members (children, the sick, and the elderly)
• Direct contribution to the soil fertility through manure and organic matter
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Value of production and growth rates in the dairy sector by region
Region % of total value of production
Average Annual Growth Rates (%)
1961‐1970
1971‐1980
1981‐1990
1991‐2000
1961‐2000
Sub‐Saharan Africa
4.8 2.3 1.6 2.9 2.1 2.1
Eastern Africa 8.6 2.5 3.2 5.0 2.5 3.4
Southern Africa
6.6 1.9 ‐0.3 ‐0.1 1.2 0.3
Western Africa
1.2 3.3 2.4 1.4 2.1 2.1
Source: ReSAKSS, 2008 based on FAOStat, 2002 4
Contribution of the dairy sector to annual household income (USD) by production system
Production System
Income Category Intensive Semi‐Intensive Extensive
Annual income
% of total income
Annual income
% of total income
Annual income
% of total income
Net recurrent cash income
234.9 34.3 190.4 32.0 7.3 10.0
Income from sale of animals
137.8 20.1 97.9 16.4 75.3 13.2
Recurrent income in kind
205.0 29.9 205.5 34.5 316.3 55.4
Non‐market socio‐economic benefits
107.4 15.7 101.9 17.1 121.7 21.3
Total net annual income
685.1 100 595.7 100 570.6 100
Source: Small Holder Dairy Project, Policy Brief no. 7 5
Example from Kenya
Some constraints facing the dairy sector (1) 1. Degradation of Natural Resources (limited arable land,
depletion of water and feed resources)
2. Poor infrastructure‐ affecting trade and service delivery / access to markets‐‐‐key because dairy products are highly perishable
3. Frequent droughts which affect availability of water and feed for livestock causing increased livestock mortalities
4. Standards: Investments are needed to improve standards • Need to improve milk quality so as to be able to produce high quality
milk powder, which is the main export product • Good quality to enhance milk marketability and price.
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Some constraints facing the dairy sector (2)
5. Limited capacity in quality milk handling (technical know how and facilities) especially in the informal dairy subsector
6. Inadequate political will to support the dairy sector, low public investment, poor access to agriculture extension
7. Livestock diseases: • affect milk productivity and profitability of dairy farming • pose public health concerns
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What is CAADP? • Continent‐wide framework for the development of African
agriculture
• A set of pledges made by African leaders to take explicit responsibility for the development of the continent ‐ endorsed at a summit meeting of the AU in Maputo in July 2003.
• Emphasis ‐ Africa’s ownership and country leadership in programme implementation
• CAADP seeks to add value to country efforts aimed at enhancing agricultural development programmes • (e.g. ASDS‐Kenya, ASDP‐Tanzania)
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CAADP Principles…
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“Implementing the CAADP agenda is about embracing CAADP principles and
applying the CAADP framework in the development and design, implementing and evaluating agriculture investment programmes; it is more than just more financing and more investment programmes”
Photo credit: EADD 10
CAADP principles (1)
• Employ agriculture‐led growth to achieve MDG1 of halving poverty and hunger by 2015
• Pursuit of 6% average annual sector growth at national level
• Allocation of 10% of national budgets to agriculture sector
• Exploitation of regional complementarities and cooperation to boost growth
• Policy efficiency, dialogue, review and accountability (evidence‐based policymaking)
• Partnerships and alliances to include farmers, agribusiness, civil society – e.g. Kenya Agribusiness and Agro‐industry Alliance
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CAADP principles (2) • Enhancing peer‐review and sound analytical work across
countries
• Enforcing mutual accountability to ensure sustainable resource utilization
• The principles are achieved through: the strategic functions of CAADP, the guidance and involvement of the Regional Economic Communities (RECs), and the national roundtable process
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1. Focal Point appointed by government
2. Process launched by Government & REC
3. Steering and Technical Committee instituted
4. Endorsement by Cabinet
5. Stocktaking, Growth,
Investment Analysis
6. Compact drafted
7. Compact signed
8. investment plan prepared
9. Investment plan reviewed and validated
10. financing plan & instruments, & review mechanism
agreed on
11. assessment of program execution
12. Execution of new investment
programs
13. 1st annual review meeting
14. 2nd annual review meeting
CAADP implementation steps and status in ESA
Egypt, Eritrea, Mauritius,
COMESA, Zimbabwe
DRC, Zambia Seychelles
Kenya, Malawi, Tanzania, Uganda
Comoros, Djibouti, Madagascar, Sudan
Ethiopia†, Rwanda†
Burundi, Swaziland
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The Dairy Sector in NAFSIPs….
Some observations…
• Role of the livestock sector (including the dairy sector) – not fully appreciated in the original four CAADP pillars (land and water;
markets and infrastructure; food security; and research and technology adoption)
• Later articulated in the CAADP Companion Document
• Generally, contribution of the livestock sector is downplayed – partly due to lack of empirical evidence to counter the prevailing
perception
• Emerging empirical evidence ==> potential contribution of livestock sector much larger than is currently believed
• It has big potential to contribute to economic growth, poverty reduction and food security.
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Dairy sector in country compacts and NAFSIPs Country Is the Dairy Sector explicitly
addressed In NAFSIP? Broad objectives
Kenya Yes Continued support of market development and private sector investments
Uganda Yes Increase milk production from 1.5 to 2.0 billion litres annually by 2014
Rwanda No; but role of livestock is clearly articulated
Increase livestock ownership and intensification of animal husbandry practices
Ethiopia No; little elaboration of livestock issues
Tanzania No; but livestock sector is mentioned
Increase livestock sector growth from 2.7% to 9% by 2021
Malawi Yes; the sector is just being developed
Enhancing herd acquisition, improving farm management, modernizing processing facilities
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The dairy sector in CAADP investment plans… • Importance attached to the dairy sector is reflective of its
relative contribution to the economy
• Planned expenditures are aggregated at programme level ‐not easy to isolate budget allocation to dairy
• Technical reviews ‐ countries to identify priority value chains
• Some of the programmes have direct or indirect effects on the dairy sector (extension services, animal health, R&D, etc)
• Planned budgets are substantial in most of the countries…will they be financed?
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Trends in public expenditures in support of the agricultural sector…
• Planned expenditures:‐ – PIF (Ethiopia) has a budget of USD 18.0 billion for 2010‐2020 out of which the government will fund USD 15 billion
– TAFSIP (Tanzania) is set at USD 5.3 billion; bulk of it financed by government
– Medium‐Term Investment Plan (Kenya) for 2010‐2015 is set at USD 3.09 billion with government funding at 66%
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Public agricultural spending and commitments: agriculture spending as a share of total spending
5%
10%
Ethiopia
& Malawi
Burundi, DRC, Egypt, Kenya, Mauritius &Rwanda
Madagascar, Swaziland, Sudan, Tanzania, Uganda, Zambia & Zimbabwe
• CAADP Target = 10% of total expenditures allocated to agriculture sector
• Africa as a whole has not met 10% target – Since 1980, the annual
average has been between 4 and 6%
Sources: Based on ReSAKSS data collected from various national government sources and IMF 2009.
Public sector support to agriculture sector… • Will the public sector meet its commitments?
• Furthermore, even when budget is allocated, often absorptive
capacity is problematic – absorptive capacity of development expenditure by agriculture sector ministries in Kenya is about 88%
• Not clear whether some critical areas for dairy sector are adequately funded; extension services, disease and vector control, among others
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Dairy in COMESA and EAC
• No regional CAADP compacts in RECs (COMESA, EAC, SADC, IGAD) … but some progress
• All RECs have agricultural programmes/initiatives that are relevant for dairy – Trans‐boundary animal diseases – Livestock trade and marketing – various NTBs, MIS – policies, product standards, SPS standards
• Need for programme and interdepartmental coordination indicated ‐ through Regional CAADP compacts
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Role of Donors and Private Sector in CAADP…
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Role of donors articulated; that of the private sector is recognized but private goods are not clearly identified nor is financing strategy clear
Development partners and implementation of NAFSIPs… (1)
• Compacts and NAFSIPs: agreed national targets and goals
• DPs supporting agriculture and rural development in the countries have committed to support implementation of NAFSIPS
• Donors are expected to: – Design practical actions for funding priority areas as identified in the
NAFSIPs, in line with their priorities – Insure resource alignment and harmonization of efforts – Assume more responsibility in intervention design, implementation – M&E is key at all levels
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Development partners and implementation of NAFSIPs… (2)
• Donors Commitments: – Enhanced alignment efforts
– Increased support to NAFSIPs
– Global Donor Platform for Rural Development has set up a CAADP DP Task Force – key technical and financial partner agencies working on ARD
– MDTF at WB to support the CAADP processes
– L’Aquila Food Security Initiative
– Global Agriculture and Food Security Programme (Ethiopia, Rwanda have benefited)
– Feed the Future Initiative (FtT) 24
Need to invest in M&E and knowledge systems • Difficult to quantify progress in the performance of the country’s
agricultural sector without a coordinated and well designed approach to monitor progress
• M&E at all levels: Intervention (project/ programmes), sector/ national, continental (CADDP Africawide M&E Framework)
• Mutual accountability framework: accountability on commitments by the CAADP partners – on finance, actions, and results.
• Need for coordination and harmonization of efforts in M&E: Joint reviews, joint data collection efforts, etc
• Collaboration between national, regional and continental actors • Support countries to build and enhance national capacity in data
collection, analysis and reporting which are crucial to developing strong M&E systems 25
How can the Private Sector Engage?
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Dialogue…
• Early (but also continuous) dialogue with the government in the CAADP processes, advocate for dairy constraints to be included in the priority list
• Articulate clearly the value addition by the private sector in the process
• To do the above, the private sector needs to have dedicated liaison people that are capable of managing / coordinating multiple partners
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What does private sector bring to the table?..(1)
Role Comments
• Problem identification, priority setting, planning
Partnership between public and private sector
• Implementation of plans and monitoring and evaluation
Investments; key beneficiaries of programmes, progress review
• Advocating for policy and institutional reforms and alignment
Private sector has a key role to play in advocacy
• Agricultural research, including technology development
The private sector is increasingly becoming important
• Agricultural extension (better production techniques, animal health, other technical support services)
Various success stories of private sector involvement in extension
Some of the areas where the private sector has comparative advantage:
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What does private sector bring to the table?..(2)
Role Comments • Advocacy for elimination or streamlining
dairy regulations and procedures (both tariff and non‐tariff)
Key role of the private sector and other non state actors
• Develop inputs • Seeds, fertilizer, pharmaceuticals
Key role of the private sector
• Manufacture farm equipment including less expensive machinery
Key role of the private sector
• Distribution of inputs and machinery Partnership between government and private sector (Agro dealers)
• Processing, packaging, marketing (agribusiness)
Key role of the private sector
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Examples of PPP in livestock/ dairy subsector??? (1)
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Example Objective/ Area Public and Private Partners The Global Alliance for Livestock Veterinary Medicines (GALVMED)
Making livestock vaccines, diagnostics and medicines accessible and affordable to the poor commercial means for the registration, commercial distribution and delivery of vaccines.
Agricultural NGOs, health, development agencies investors and donors, AU/IBAR, European Union, Governments, Regulatory authorities, Pharmaceutical companies, Civil society organisations
ECF vaccine by ILRI and partners
Develop and disseminate the East Coast Fever vaccine in Eastern Africa
ILRI, The Institute for Genomic Research, The University of Victoria, Canada, the Ludwig Institute of Cancer Research, Belgium, the Kenya Agricultural Research Institute, the University of Oxford, UK, donors
Farm Africa Dairy Goat (Ethiopia, Kenya, Tanzania and Uganda)
Crossing local breeds with improved goat breed for higher milk production,
training in fodder production and animal health
Facilitate access to market
Farmers, animal health workers, banks and agro dealers/veterinary stores.
East Africa Dairy Development Programme
Promote more profitable production and marketing of milk.
Heifer International, TechnoServe, ILRI and The World Agroforestry Center (ICRAF), donors, farmers, processors, traders, government, banks
Examples of PPP in livestock/dairy subsector?? (2)
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Example Objective/ Area Public and Private Partners Milk for Schools (Zambia)
Provide a market for the smallholder dairy sector, diversify the agricultural sector and create a demand for high quality locally produced milk.
Government (Livestock, Health, National Food and Nutrition Commission), WFP, SIDA, USAID PROFIT, Tetra Pak, Parmalat, Dairy Association of Zambia
One cow per household (Rwanda)
Enabling every poor household to own and manage an improved dairy cow for milk, meat and manure
Government, financial institutions, local communities
Malawi Dairy Development Alliance
Build the capacity of small dairy farmers, local milk processing plants, and farmer‐owned milk bulking programs in order to improve production and profitability.
Government, Land O'Lakes , USAID , Local milk producers/dairies, financial institution, Monsanto
Conclusions…
• CAADP, for the first time, offers an opportunity for all stakeholders to contribute to Africa’s agriculture development and achieve shared objectives and goals
• Governments, DPs, private sector, and civil society need to adopt policies and programmes and raise investments to achieve agricultural targets and objectives set out in NAFSIPs
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Some food for thought… (1)
• Private sector is key to implementation of CAADP and achievement of objectives – How do we ensure that the appropriate role of the private sector is properly clarified in NAIPs and Regional CAADP Compacts?
• How do we ensure that small‐scale farmers and business entities are represented and have a voice in CAADP processes? – Legitimacy and representation are problematic
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Some food for thought… (2) • What structures for effective engagement at the regional level?
• What models of PPPs will work in agriculture? So far, successful cases of PPPs seem to be in infrastructure – Need to overcome perceptions of long‐term low returns on investments and high risk in agriculture.
• What are the appropriate models for linking small‐scale farmers to markets? – Selling to large processors? – Farmer organizations as processors?
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THANK YOU
www.ilri.org / www.resakss.org Photos credit: EADD
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