This study shows that the livestock sectors’ contribution to Tanzania’s agricultural GDP is increasing with 30% of livestock’s contribution to GDP coming from the dairy sector. This is despite the fact that the country’s overall food production has struggled to keep pace with the country’s population, which has almost doubled since 1980.
The increasing importance of the dairy sector is the subject of a new ‘Tanzania smallholder dairy value chain development: Situation analysis and trends’ report recently produced by the ‘More Milk in Tanzania (MoreMilkIT) Project’, which is funded by the Irish-Aid and CGIAR. The report suggests ways in which the burgeoning dairy sector can be developed further.
The study, which was carried out in 2014 in Tanzania, examined patterns of production, consumption, trade, inputs and services, value addition and marketing in the dairy sector. It also assessed competitiveness, dairy development strategies and opportunities for pro-poor and gender sensitive dairy value chain development.
According to the study, the sector faces production and consumption challenges such as high incidence of animal diseases, limited access to veterinary services, low proportion of high milk-yielding breeds and insufficient feed quantity and quality. Additional constraints are limited access to credit, high non-tariff barriers to regional trade in livestock products and availability of dairy products.
The report states that milk production has increased, but this increase remains low in proportion to doubling cattle numbers between 1965 and 2012. The report notes that Tanzania’s consumption of milk and other dairy products per year is only half of Kenya’s, for example, illustrating the great potential for growth in the sector in Tanzania. But there are positive signs to this end with consumption of dairy products and other livestock products noted to be increasing and in demand among urban dwellers.
Efforts to promote milk consumption are being put in place in the country through events such as the milk promotion week, which is observed every year in June. Setting up a large-scale public school milk-feeding program could raise milk consumption in Tanzania further.
Most of the milk sold and consumed in Tanzania is sold by smallholder dairy farmers, especially women in informal milk markets, which are responsible for 90% of all milk sold. Milk processing costs in Tanzania are 67% higher than in neighbouring countries and most milk processing plants operate as low as 25-30% of their capacity. Most of the processed milk products in the country are imported and there is, in general, a shortage of value added products. To improve the role that smallholders play in the production and marketing of dairy products, the report suggests that improvements are needed in providing access to credits, drugs and veterinary services, and information and knowledge dissemination and uptake.
In order to reduce poverty and improve livelihoods in Tanzania, the report recommends that a two-pronged approach addressing both productivity improvements and reducing marketing and transactions costs in the dairy value chain is needed.
Opportunities in the Tanzania dairy sector evolve from the presence of a large cattle herd (the third largest in the continent) with potential to improve output to meet the growing demand in livestock and dairy products in urban areas. Smallholders own a large number of livestock, which provides opportunities to reduce rural poverty if these farmers are enabled to access markets for their livestock products. Rising demand for quality feed also creates opportunities for fodder and feed production, therefore for investors in feed manufacturing.
The report concludes that Tanzania’s strong experience and culture in livestock and milk production can be utilized to meet the rising local demand for livestock products, and to engage in interregional trade.
Read the full report here: Tanzania smallholder dairy value chain development: Situation analysis and trends