We seek to transform the Ethiopian dairy sector by decentralized dairy processing through development community owned micro-dairies
Describe your relationship to the place you’ve selected.
MSM has been working in this region as part of a larger initiative to build the innovative capacity of region using the Triple Helix Model of University-industry-Government collaboration. We are particularly focused on upgrading technical institutions to respond to local challenges and produce graduates with relevant market skills
Describe the People and Place: Provide information that would be helpful for an outsider who has never been there and may have no context about this Place to better understand the area.
Blue Niles fall
The Amhara the most fertile region in Ethiopiaand supports a population of about 17 million. It has a lake Tana which is animportant cultural site as it has many islands with rich history as house manychurches that date to early history of the Ethiopian Orthodox church and stillhouses many treasures of the church. The islands were also homes of manyancient Ethiopia emperors. The lake is also the source of Blue Nile from whichthe Great river Nile draws its water.
Challenges: Describe the current (2020) and the future (2050) challenges that your food system faces.
From a nutrition perspective, Ethiopia does verypoorly on milk as consumption is only 10% of what is recommended by theFood and Agriculture Organisation underscoring the production gap. The dairysector in Ethiopia is very under-developed. Yet there is good demand for milkand milk products. The production however does not meet the demand formilk in Ethiopia and part of the demand is met through imports of powderedmilk. As country urbanizes and also income rise, the shortage will beexacerbated. Indeed as urbanization and incomes have risen demand for milk hasgone up in urban areas. So while consumption is 20 litres per capita inthe country side, it is 40 litres per capita in the capital, Addis Ababa.
There is thus a huge need to increase milkproduction. However this is hampered by a number of challenges, the key beinglow productivity of the dairy cattle. The breeds are of poor quality and supportingservices, especially animal health are weak. Feeds are also a problem withsupplementary feeds, like cereal bran and oilcakes, are either too expensive orin short supply. But perhaps the bigger challenge is logistics which means milkcannot be delivered to the market efficiently. So while there are few dairy cooperatives that collect milk from their members and supply processing plants, due to a lack of chilling plants in rural areas, the cooperatives only collect morning milking. Also small volumes produced means the sector is hard-pressed to attract investments needed to develop processing capacity. Existing plants already work at less than 60% capacity. Market also suffers from significant fluctuations in demand as during some of the Ethiopian Orthodox church fasting periods ( which are many) milk products are not consumed as per church doctrine (A majority of Amhara people belong to the Ethiopian Orthodox church). Since milk irrespective of fasting periods, farmers have nowhere to sell the milk.
Further, while many Ethiopians make butter andcheese from milk at home (especially during fasting period when demandfor milk goes down), there is little commercialization of these products. So sspeople have moved to cities this cultural food has been abandoned. Upgradingthis artisanal production to raise quality, health and package can fill a hugeunmet demand for these traditional products
Address the Challenges: Describe how your Vision will address the challenges described in the previous question.
While producers can increase production byinvesting in better breeds, feed and animal health, poorly function marketcannot induce producer to increase production capacity. For example yields arefive times higher for dairy farms close to the city of Addis Ababa, compared tothose far out underscoring the power of market to stimulate productivity(Minten et al ). For rural farmers, market tend to be milk processors whoprocess milk and then transport it to markets. However for processor to put upa plant (which is costly), they need to be guaranteed of supply. This brings usto the classic chicken and egg problem. Thus the conventional processing model of a centralized processors served by many highly productivefarmers will take time to develop and a new model is required. A rethink isneeded. There is now a trend towards developing micro-dairies and now adairy processing plant can be squeezed into container and can effectivelyprocess small quantities of milk economically.
This is essentially decentralizing milk processingto source of production rather than building an expensive logistic systems ofchillers and tankers to transport milk to a large central plant. So rather thantransporting raw milk to urban based processors farmer can transport dairyproducts including milk, butter and cheese.
Processing at local level and cutting off thecentralize processor model also ensures farmers a get a big share of valuecreated. In the UK the milk provided by an average dairy cow annually is worthbetween £6,000 and £14,000 when sold retail —as opposed to barely £2000 if sold to a processor. This has seen a renaissance of micro-dairies across thedeveloped world as small farmers seek to stay afloat amid a squeeze by supermarketsand actors across the value chain who have greater power than the farmer. Thedesire for people to consume products that are produced sustainably has alsocreated demand for products that are locally produce and can be traced toowners giving micr0-dairies trend an added boost.
Frugal and open innovation principles will be leveraged to develop the micro-dairy processing plant. The localuniversity and local TVET will be tasked and capacitated to design and developthe micro-processing plant hosted inside a container leveraging availabledesigns.
Micro-dairies can spur increased milk productivityas farmers have a more stable market for both milk and milk products. Howeverthis is not enough. Farmers need information and links to suppliers of variousinputs including animal health and improved breeds. The role of agriculturalresearch agencies is crucial to ensuring this vision as breeding takes time andrequires very high levels of skills. Thus to support the farmers increaseproduction a dairy innovation hub will be developed that will give neededsupport to boost productivity.
High Level Vision: With these challenges addressed, now provide a high level description of how the Place and the lives of its People will be different than they are now.
Amhara region will become a vibrant region withmany micro-dairies serving local people and emerging urban markets with highquality and nutritious dairy products. Increase incomes will also see increasedemand and spur other sectors of the regional economy further increasingincomes
Universities and TVETs in the region will also be upgradedwith new skills and be able to produce more marketable students who cango out solve society challenges. Indeed experience gained from developing amicro-dairy sector will be leveraged to solve other processing challenges. Forexample make fruit dryers and juicers. Micro-dairy sector will be the spur fora larger economic transformation.
Full Vision: How do you describe your Vision for a regenerative and nourishing food future for your Place and People for 2050?
Ethiopia needs a dairy revolution. From a nutritionperspective, Ethiopia does very poorly on milk. The consumption per capita isone tenth of FAO recommendation. At the same time the country is stillimporting milk. The value of powdered milk imports increased rapidly,amounting to almost 20 million USD in 2015 from just over 5million USD in 2005.Ascountry urbanizes and also income rise, the milk shortage will beexacerbated. The paradox is that Ethiopia has one ofthe highestcattle populations in Africa, estimated at 60 million heads. However the herdis very unproductive. Local breeds provide about 1.5 litres per cow per daycompared to about 25 - 30 litres in countries where dairy sector is welldeveloped. Indeed only 1% of the cows in Ethiopia can be considered dairy cows.The large herd is large unproductive herd need upgrading to increase incomes and more crucially depending on such low productivity herd hassignificant impact on environment especially if farmers respond to rising demandby expanding the herd size rather than upgrading the cattle to more productivebreeds. Huge herds can cause serious land degradation and also climate changethrough GHG emissions (methane). Large herds can also be a source of conflictsover grazing land. Indeed in 2007, 53 percent of the dairy households relied only on grazing area butthis declined to 32 percent by 2017 underscoring the increasing lack of bothprivate and communal grazing areas(Minten et. Al. 2018). Demand for milk willneed to be met by upgrading the heard and developing a strong dairy sector. Adairy revolution is needed in Ethiopia. The traditional model for a dairysector transformation is dairy farms (many of them medium and large scale)supplying a centralized processing plant and with significant logistics oftransport tankers and chillers to ensure milk reaches the processing plant ingood time and in good condition.
With functioning markets farmers can beincentivized to upgrade herds. Indeed yields are five times higher for dairyfarms close to the city of Addis Ababa, compared to those far out underscoringthe power of market to stimulate productivity (Minten et al 2018). Forrural farmers, market tend to be milk processors who process milk and thentransport it to markets (mainly urban). However for processor to put up a plant(which is costly), they need to be guaranteed of supply. However, poorinfrastructure means that farmers lack access to services, for example40percent of rural dairy farming households report not having access toArtificial Insemination(A.I.) services (Minten et al 2018) and thus productivityremains low. The roads are very poor, the electricity grid is very thinto support the need cold chain of chillers and the people are alsotoo poor to invest in milk tankers needed to move milk from chillers to processors.Developing a modern dairy sector modelled on developed country model will taketoo long and may never be able to stimulate the sector to compete withimports. Yet currently this seems to be the strategy being pursued to upgradeEthiopia’s dairy sector. Development partners have been supportingcooperatives to develop chillers for famers to supply themilk for bulking andonward transportation to processors located in large cities. Many of the chillerstend to go out of service as technologies are foreign and local expertise toservice them lacks. Currently the existing dairy plants are operating at lessthan 60% capacity underscoring the challenge of building the supply chain tosupport a convenetional dairy sector model.
The dairy sector of Ethiopia needs adifferent kind of revolution. There is now a trend towards developingmicro-dairies, these are processing plants that can be squeezed into a smallroom in the farm or even a container and can process small quantities of millkeconomically. This is essentially decentralizing milk processing to source ofproduction rather than building an expensive logistic systems of chillers andtankers to transport milk to a large central plant. So rather than transportingraw milk to urban based processors farmers can transport dairy productsincluding milk, butter and cheese.
Processing at local level and cutting off thecentralized processor model also ensures farmers a get a big share of valuecreated. In the UK the milk provided by an average dairycow annually is worthbetween £6,000 and £14,000 when sold retail —as opposed to barely £2000 if soldto a processor (Fairlie , 2015). This has seen arenaissance ofmicro-dairies across the developed world as small farmers seek to stay afloatamid a squeeze by supermarkets and actors across the value chain who havegreater power than the farmer. The desire for people to consumeproducts thatare sustainable produce has also created demand for products that are locallyproduce and can be traced to owners.
Micro-dairies solutions are readily avaoilable inthe market for example one compnay can deliver a complete DairyProcessing System for $14,500. As design for micro-dairies are readilyavailable and needed components easily fabricated, micro-dairies can bemanufactured locally. This can stimulate local economies by helping skillsupgrade and expertise that can be leveraged to develop other processing plantsand upgraded agriculture as whole.
Thus we need rethink the dairy sectortransformation model. From centralized to decentralized processing. Fromimported high technology solutions to locally developed and frugal innovationinspired micro-dairies processing centres.
Note that there is also need to focus attention ofdeveloping a vibrant sector of medium scale farmers and develop them as keyuptaker of new technologies and diffuser of these technologies to smallholderfarmers. This is key as in Ethiopia medium scale farms have significantlyhigher yields and that they have shown significant improvements over time whilesmall farms with only one or two cows did not show anyimprovements in milkyields. Bigger farms have greater capacity to absorb technology and also thehave resources to experiment. On the other hand smallholder farmers who alsotend to be poor are very risk averse. Indeed the share of farmers that use A.I.and have cross-bred cows is 27 percent of smallholders (1-2 cows) compared to98-100% for commercial farms (Minten et al. 2018)). The farms that adopt cross-bredcows are the ones that have generally higher risk bearing capacity (Minten etal. 2018). The medium scale commercial farms can also help in buildingspecialization wherethey can focus on raising and supplying high qualitybreeds, AI services, and fodder to smallholder farmers leaving smallholder tospecialize in production of milk. So presence of bigger commercial farms is keyto having a healthy ecosystem of farms.
Our vision of a food future is a landscape ofempowered dairy farmers who are producing competitively and havingcommunityowned micro-dairies that process, pack and retail a variety of dairyproducts ensuring people have access to healthy dairy products but alsocommercializing and preserving the healthy culture of home-made cheese, butterand other products. The development of a micro-diary will be achievedthrough leveraging triple helix platform of University-industry-governmentcollaboration
Our vision is also one of a strong dairy hubs thatseeks to connect farmers with information they need and suppliers ofinputs and services key to supporting strong dairy sector. The hub should alsogather data on herds, perform registration and other record keepingactivities,supplying AI services to farmers. A vision of medium scale farmersdriven hubs/community centre that serves as demonstration farms and alsocrucially serve to teach and incubate new dairy farmers especially drawn fromthe ATVETs and university graduates. This hub is also part of triple helixmodel where all the actors are come together to share information and co-createsolutions and jointly invest. Indeed the envisaged medium scale farm/dairy hubis a public private partnership (PPP) between the commercial farmer, theuniversity and the regional government. The commercial farmer provides thedemonstration centre for diffusing technology, supplies extensionservices to farmers, supplies inputs especially AI services, breeds, improvedfeeds. The university backstops the hub through research, technical staff andalso students working at the hubs to get skills. The government provides neededexperts, routes support to smallholder framers including credit through thehub, works together with othe rmembers to improve develop policies needed tosupport the growth of the sector.
Our ultimate vision is also one actors wherea strong triple helix platform is driving collaboration, innovation andincubating ideas to further upgrade the dairy value chain and increaseproduction. One where entrepreneurship has been unleashed due to asuccessful innovation platform that can delivers frugal innovation inspiredprocessing solutions and also skilled manpower to drive overall economictransformation of the region