Results

KeymessagesLinking feed producers to dairy farmers providesincome along the dairy value chain.Facilitating alternative options for value addition boostsmilk production.High-level policy support is needed so that smallholderfarmers can help reduce dairy imports in Malawi;farmers are already investing.

Milk consumption in Malawi is very low: per capitaannual consumption <6 kg. 60% of milk consumed isimported. Smallholder farmers supply most of the 40%domestic milk. Dairy farming, therefore, provides aniche business opportunity, and an option fordiversification of agro-income and diets.Milk production, however, is not easy. Mr Right’s storyfrom Thumbwe EPA illustrates this:Mr Right’s two cowsgive an average of 15 liters of milk a day, earning himMK 2,325 (USD 3.20). His major constraint is feed forthe cows. He cycles 10 km thrice daily to cut and carrygrasses from river banks; in dry seasons he buys greenmaize stalks from irrigated fields.

Dairy farmers sell their milk to the large-scaleprocessors in Blantyre via milk bulking at collectioncenters run by farmer cooperatives, currently the onlyformal market. Malfunctioning of processing facilitiesand small quota allocation often results in milk spoilageand losses.To increase incomes, value addition is vital, consideringthe demand for milk and milk products. The extraincome would lead to investments in feeding, housingand management.

.The Bvumbwe dairy group is excited; in future theywould like to process most of the milk, diversifying theirproducts to markets. Already farmers have startedimproving their feed; buying molasses to mix withmaize bran and supplement the grass they feed.

Fixing the dairy value chain requires synchronization ofproduction and marketing. CLIM2 embarked on ajourney with an agribusiness officer:

• The IP identified dairy production as “highpotential” for farmers in Chiradzulu and Thyolo;feed value chain is a major challenge.

• Contacts with and follow-up visits to the local dairycooperative provided insights on support needed tobuild processing capacity.

• Gross margin analyses highlighted the small profitmargins, and therefore, need for reduction inleakages in the business.

The CLIM2 Dairy BusinessModel:

Building local entrepreneurship: Small-scale feedimprovement, building capacity in feed ratioformulation, feed processing, and support tocommercial feed retailers.Business management backstopping: Farmers, thedairy cooperative and feed traders are trained tomanage enterprises profitably; women and youthentrepreneurs are empowered.Financial means: With improved business managementcapacity, farmer groups can access financial services tosupport their operations (e.g. purchase of pasteurizingmachines).Value chain upgrading: Capacity development on dairyprocessing into various products increases the value ofmilk, reduces wastage, increases incomes.

Thisproject isfundedbyTheEuropeanUnion

FixingtheDairyValueChain:FodderandMilkProcessing– Bvumbwe DairyCo-op

CropLivestockIntegrationandMarketinginMalawi(CLIM2)ClaireMwamadi,KenGunsalu,SabineHomann-KeeTui, SikhalazoDube,AndrevanRooyen

ApproachBackground