Dairy Stake holder’s Platform Held on 28th April 2009 at Imperial Royal Kampala

Introduction
The Dairy Industry has grown and attracted a wide range of stakeholders. The stakeholders are either direct or indirect beneficiaries. To ensure synergy in the delivery of services to the beneficiaries, the key stakeholders agreed to form a platform under which they can freely express themselves articulate issues affecting their performance but come up with relevant way forward.

The following papers were presented to stimulate discussions:

Key note address, Draft MoU (Structure and Financing mechanism), Consumer concerns, Lessons from Financing the Dairy Value Chain, Lessons  from the Dairy Hub Development Model, Lessons from farmers in milk Deficit area-Northern Uganda (Gulu), Concerns of dairy value chain nodes (farmers, transporters, traders, processors, Consensus) and Way forward. Detailed presentations are attached.

This Platform was sponsored by East African Dairy Development Project (EADDP) and organized by DDA (secretariat).
 
1. Key Note Address: Executive Director, DDA

The Dairy Industry in Uganda has grown over time and attracted many stakeholders in areas of investment, service delivery, and social development.  All these parties feel that its time to work together as partners therefore forming the platform. So far there are 45 active partners to the platform (government, private sector /NGOs) all sharing the view of enhancing effective responsiveness to sector needs.

We note that working in partnership with another organization may not need you to have the expertise and resources in-house but working together creates the opportunity of sharing lessons learned from other successful partnerships.

Our partnership is not cost-free. It will always require financial and human resources to make it successful. Therefore we need to reflect on putting in place a funding mechanism to support the partnership activities.

2. Memorandum of Understanding

The sector players agreed to form a platform bringing them together so as to articulate issues affecting their effective participation in the development of the sector. It was observed that by coming together, resources will be shared including time for meetings. It was therefore important to prepare a framework for collaboration among institutions particularly spelling out; structure of the platform, selection of the leaders and financing mechanism. The draft Memorandum of Understanding (MOU) between DDA and private sector (attached) was presented to stakeholders for comments.

Issues Arising

It was noted that some organizations have no resources while others had so much but if there is collaboration, then sustainable Dairy sector development should be possible.

Commissioner Animal Production and Marketing (MAAIF) wondered why while constituting such a very important gathering, the membership is concentrated in a few regions, yet livestock is spread through out in all parts of Uganda. Using this opportunity, he informed participants that the future of Agriculture (Dairy farming) lies in the Eastern and the Northern parts of Uganda, therefore advising DDA to immediately move and spread its roles and functions out there to cover the whole country. This was clarified by show of hands and a number of participants confirmed to have come from Gulu, Mbale and Busia. The commissioner was later visibly satisfied by the representation at the Dairy platform.

One participant observed that there was a need to have points of reference for the MOU, and that the organizers should have clearly sorted out pertinent issues to be presented for discussion. Further to that, the outcome of the previous meetings should have been read to this meeting to create the basis of discussion.

Concurring with the previous comment, one other participant indicated that that he did not have enough information about the Dairy platform as basis for signing the document, because he did not attend the previous meeting.

One participant wondered why the list the of 45 members of the platform was not attached on the invitation letter, however, he asked that it was better for the list to be updated all the time and shared to ease networking.

3. Consumer Concern, Lessons from Consumer Education Trust (CONSENT)

This presentation was aimed at bringing out key issues that are of concern to consumers of milk and dairy products in Uganda. At this gathering, consumers’ representative freely raised matters of concern especially that affect the happiness of all consumers. Below is what was raised:

• Consumers are the foundation of the Dairy sector so protecting them against unscrupulous players is very paramount.
• Adulterated milk has no value and this should be addressed by all the players
• Quantities of milk and dairy products are not real, some processors pack less, some packaging materials are not food grade hence expose consumers to diseases, and other contaminants
• Hygiene is poor in milk processing premises
• Littering the environment by packaging materials is very common
• There is limited awareness on consuming unprocessed  milk and the dangers associated by such behaviors are less known  to consumers
• Limited awareness on the benefits of milk to the human life

Issues Arising
Uganda Dairy Processors Association (UDPA) has been conducting media campaigns to promote the benefits of consuming processed milk in the areas central region and Kampala schools but this has been seen negatively by raw milk traders. The traders argued that by promoting only processed milk, the processors were biased and indirectly de-campaigning raw milk trade.

Uganda National Dairy Traders Association (UNDATA) members were, however, swift to say that they care so much for their consumers health. UNDATA ensures that all coolers selling raw milk display stickers that advice consumers to always “boil” milk before consumption. Their challenge is that some consumers ignore the advice especially those who want cold-milk immediately.

Participants were informed that it is not a question of only boiling. What about chemicals added to milk by some people and affect consumers’ lives?  Boiling was also discouraged because excessive boiling destroys all proteins in milk, making it difficult to digest.

As much as consumers want to be sensitized, it has not been possible to reach out to every one due to financial constraints. Participants felt that generic awareness be conducted by DDA sensitizing consumers on milk quality and safety.

On milk adulteration, key parties tried to distance themselves saying that milk is adulterated by second and third parties, usually farmers do not adulterate milk, it is the vendors and other traders who adulterate the milk. Participants remained wondering whether Uganda has the capacity to test the quality of all raw milk, locally processed milk and imported milk given the countrywide coverage. It was clarified that imported milk and dairy products quality is tested and certified by DDA in conjunction with UNBS.

One participant from the North asked why consumer CONSENT has not moved to the northern region which is currently the damping ground.

Issues on animal drugs, and feeds quality were raised as indirect sources of threat to consumer health but are not highlighted by the consumer organizations.

The Commissioner animal production and marketing Ministry of Agriculture Animal Industry and Fisheries (MAAIF) advised that consumers should not take raw milk due to possibilities of taking in pathogens associated with the raw milk, however, advised that to be sure of safety, people should consume only processed milk.

We should develop and have school milk programs as the foundation for quality milk consumption, but this is a huge program that requires to pattern with others to generate support in terms of resources.
Response to Issues
It was clarified that imported milk and dairy products quality is tested and certified by DDA in conjunction with UNBS.

The presenter emphasized that consumers should be sensitized to know that milk from cooler outlets is not boiled and it can only be safe if heat treated at the recommended temperatures.

Dairy Farmer’s inputs quality should have been addressed longer ago but we are just behind schedule and this is the time.
We should develop and have school milk programs but this is a huge program that requires to pattern with others to generate support in terms of resources.

4.        Lessons from Financing the Dairy Value Chain (Centenary Bank)
Financing the dairy sector has been going on but silently. Financing is one of the major needs for dairying and has always popped up at every dairy meeting.  This presentation highlights the lessons the bank has had is lending to the dairy sector.

Areas of Agricultural financing- (Centenary Bank)
• The Bank started Agriculture –Finance including Dairy sector 10 years ago
• They put aside 40 billion shillings to support over18,000 value chain actors
• They Target farmers practicing Dairy farming especially those in high production zero grazing systems
• Support Agricultural marketing, and processing enterprises
• Also support Animal production involved in animal fattening for beef
• They provide loans to individuals- not group lending because Centenary  is a commercial Bank and the loans they lend must be secured by tangible properties
• There is provision for Value chain financing to well established Agricultural products buyers and cooperatives
• It is possible to acquire Loans for additional animal purchasing
• Loans for Agribusiness value addition Equipments and machinery
• Loans for animal Drugs and other farm inputs
• Loans for the Veterinary officers
• Support in the construction of housing units at farms, but this depends on size of the farm
• The bank is not yet in Gulu District because they are limited by the insecurity/ insurgencies but they are in the final discussions to decide to reach out there. The presenter noted that the presence of many NGOs which are relief oriented can easily inhibit the operations of the commercial institutions, which give repayable loans.
• About the  loans given by centenary  Bank ,70 people have benefited  in Lira, Karamoja, East and West Uganda, These  loans can be given depending on the  character of the farmer, as some may not have securities to attach

Issues Arising
Land-O Lakes informed the Bank representative that it organizes Dairy farmers Cooperatives and urged the bank to link-up with these farmers to access loans.

One of the participants requested the Uganda Veterinary Association for an explanation on how the have used the loans coming from the centenary Bank. The platform was informed that the loans were used to buy veterinary kits, motorcycles and drugs.
Participants wanted to know if farmers cooperative with no assets for security can access short and long term loans from financial institutions.

Compliments from Uganda Veterinary Association highlighted the benefits from the partnership they have with the Centenary Bank. Veterinarians have received professional loans to enhance service delivery to farmers in the country side.

Response to issues

• Farmers who are well established and well organized can access the loans, but they experience a problem in loans recovery
• For farmers without assets- the Bank is developing a product to be able help such people but they should be in a cooperative society.
• The bank also supports even zero grazing farmers especially in Kampala area.
• Time to pay back the loan  depends of the customers agreement with the Bank but the individuals cash flow statement  determines how long
• On Women’s accessibility to loans, are given out depending on their/her fixed deposit account noting that the rural women have no capacity to have fixed accounts yet very had for them to access the loans from the Bank

5. Lessons from the Dairy Hub Development Model: East African Dairy Development Project (EADDP)
The EADDP is project implemented by Heifer International, operating in the central region. The project has just launched the first hub in the country but has had vast experienced in Kenya. This presentation aimed at sharing lessons of Dairy Hub Development Model.
 
• EADDP is a  consortium, Managed by Heifer Project  International
• It is operating in Uganda, Kenya and ,Rwanda countries
• In Uganda they are Implementing a pilot study in central Uganda for 4  years
• A video was used to tell the lessons leant, from Nyala Dairy cooperative in   Kenya
• From the video, the participants were shown the milking process, mode of milk transport, milk reception, and extension services offered and the Artificial Insemination process used to upscale Dairy breeds. Milk testing and milk processing, pasture establishment and management, challenges met by farmers were told to the participants
• Participants were told that a similar milk hub has been set up in Kiboga District at Kyankwanzi and doing well.

Issues Arising:
Commissioner- advised that such a pilot study should be carried out in different areas with different ecological conditions to be able to get emerging situations.

Participants wanted to know if newly formed cooperatives can be helped under the EADDP project.

Response to Issues

• Piloting was to be done with small holders farmers concentrated in areas with good infrastructure such as central Uganda then lessons from areas be replicated in a roll out mechanism to other regions with different ecological zones.
• Yes, newly formed cooperatives can be helped, but currently the project assists the already existing and operational cooperatives.

6.  Lessons from farmers in milk Deficit area-Northern Uganda (Gulu)

This presentation was from farmers from Gulu District which is struggling to get out of the milk deficit mode. They are actively restocking and have lessons to share.

• Gulu District is 330 km from Kampala with an estimate of 14,000 heads of cattle.
• Gulu Cooperative union has 15 cooperative societies
• Milk collected is 4,000 litres every day and is consumed locally in Gulu district
• Restocking is under way , partnership had no problem but the beneficiaries (Farmers) have the farmers have no control over the quality of the animals they receive
• There is availability of good clean water for humans and cattle in Gulu District
• Challenges include –inadequate milk supply for the population, milk is of poor quality. The inspectors  DDA trained are up to now inactive, plastic equipments are used to carry milk, there is  inadequate veterinary  services, the union and primary cooperative societies are not poorly organized
• Gulu district has all the potential to go back to cattle rearing, since the people have gone back to their homesteads,
• There is plenty of very good natural pastures and improved pastures can easily be established
•  A historical picture of the grazing range land was shown to the members. This indicated that there is plenty of palatable pastures and hence dairy animals can do better hence increased milk production.
 
Issues Arising
 
• Participants noted that Gulu could be a source for Hay. This area could be a basket for Sim sim (sesame), sun flower, and cotton seed cake which are key ingredients for feeds most needed in Kampala and other areas-so farmers agreed to start a scheme in which their counterparts from Gulu could supply hay in exchange for heifers from Nakibule estates.
• Commissioner appreciated the rangeland in northern Uganda and advised the NGOs and DDA to extend their operation to Northern Uganda, as there is a lot of potential in terms of vast rangeland, pastures. He further advised farmers in Northern Uganda to harvest the leafy green pastures for the dry period feeding.  Feeds and feeding should be collaborated amongst the Dairy stakeholders and Government.
• One participant emphasized the need for exchange visits between farmers so that they can learn from each other.
•  Farmers noted with concern that they were doing a lot of talking, and yet the dairy sector is not moving on well, they appealed to each other for a need to move on faster.
• Out of the presentation, UVA acknowledged that there were existing cooperative societies in Amuru and Gulu Districts but the challenge is that there are only two veterinary officers with one motorcycle. To alleviate this situation, US military Veterinary group based in Djibouti volunteered to treat cows free of charge and now animals in Northern performing better. UVA has a 4 months pilot project funded by the US aimed at giving grants and loans as away of supporting veterinary staff.

Response to Issues

• Gulu farmers agreed to start a scheme in which their counterparts from Gulu Central region could be supplied with hay in exchange for heifers.
• AI was being emphasized to improve on the already poor breeds given to farmers through different programmes
• Inadequate number of Veterinarians in the area would be sorted out by asking training institutions have field work and internships in these areas. But also a special package for those that accept to work in such areas.

Plenary Questions, Discussions & Way Forward

What is the root cause of all the problems in the value chain?

 There is lack of constant sensitization to the farmers in quality assurance
  Lack of information and knowledge of getting farm inputs eg Kenyan farmers get sun flower from the Northern region
  Animal health affecting milk quality, milk production and marketing
 The meeting noted that milk adulteration is due to milk deficient in the country
 UNBS pointed out that - in the EAC markets, for a dairy product to move across, it must be certified by UNBS; however, Kenya is not willing to accept and implement the agreed set standards.
 The cost of vet services eg AI is still very high
 Lack of calibrations for tankers used to transport milk to Sameer
 Inconsistence by Sameer- they pick milk of good quality milk from farmers, transport it after testing then reject it when already in their hands and pass the losses to farmers.
 The cost of getting milk cans, tankers, coolers, generators are very high. Farmers are still using plastic container to carry milk to MCCs so milk quality is lost at the farm gate. Small production from farmers makes transport costs high. There is unreliable markets for milk
 But we need to put more emphasis on quality issues as you talk about milk consumption and milk  trade
 Saying that the machine they use is not well calibrated. Abdu (UNBS) said that farmers are ignorant on what to do, and yet milk quality begins at the farm level, they should contact UNBS or DDA to help them calibrate the testing equipments, but also there is lack of specialization by the farmers, they want to be farmers, transporters and processors and hence they loose the focus
 Complaints came up that the milk tankers are not properly cleaned; they are leaking causing the milk quality to go bad hence milk is rejected by the processing companies. There are tendencies by the traders to exploit the farmers by offering very low raw milk prices.
 Some traders sell skimmed milk to processors, so DDA as a regulatory body should come in to fight this practice and if done, they the traders should clearly label the milk skimmed
 It came out that milk vendors are the highest milk adulterators and if possible they should be stopped vending the milk, more so they do not pay license to DDA and they compete with those paying the incenses
 Some milk Processors have plant with high capacities but the utilization has remained very low which has caused the closer of some plants.
 There is lack of proper regulatory structures in place for quality assurance on the dairy equipments imported in the country, middle men have sold junk dairy equipments to those coming up into processing milk and this coupled with the unavailability of spare parts for the dairy equipments.
 Processors complained that farmer agents take the milk to the MCCs very late and the quality is compromised, in Kayunga for example vendors bring milk up 3:00pm so DDA should come in to help on this issue.
 Why is Sameer not in the whole country? Sameer responded that they are in the business of collecting, processing and marketing milk, so you can not go where raw materials are not available.
 Sameer said that milk from the producers is not enough for their plant but accused some farmers groups who point finger at it that they are stranded with milk. Sammer clarified that they are not buyers of poor quality milk, some of their milk is not good enough for our products, and so we are at times forced to reject their milk. Otherwise, they need 300,000litres per day for milk powder
 Processors observed that there is seasonality of milk supply so dry season feeding must be addressed, to make sure that there is constant milk supply to avoid constraints to the processors in such times of low milk supply by farmers.
 

Way Forward

1. Committee is formed to further study the MOU and came up with a complete document for signing at the next meeting.

2. Stakeholders to review the draft MOU, make input and forward it to  DDA  secretariat with in two weeks

3. To come up with a common communication strategy to inform the public on what the platform has discussed.

4. DDA to link farmers, traders and processors groups to the bank- Create awareness about the financing opportunity available

5. DDA should link the upcoming farmers in the North to those in Central in the Hay- Heifer exchange drive.

6. DDA should inspect all dairy equipment to protect investors from buying junk.

Next Stakeholders Platform

CONSUMER EDUCATION TRUST (CONSENT) has offered to sponsor the next two consecutive platforms.

dates for next stakeholders platform 3/6/2009