Some of the countries where the dairy sector performs well are Kenya, Rwanda, Uganda and the Netherlands which had approximately 1.8 million dairy cows by 2016.
However, data from the National Bureau of Statistics (NBS) shows, Tanzania, which is the second largest in livestock population in Africa after Ethiopia, the sector grows at 2.6 percent per year and has 28 million cattle with 782,995 dairy cattle, the number which is small compared to the number of dairy herds in other African countries.
According to Dr Aichi Kitalyi, an expert in the dairy industry, the growth of Tanzania’s dairy industry has been below expectation given the national resource endowment and market potential compared to other countries in the East African region.
She said that milk is number one agriculture commodity in poverty alleviation but also in food and nutrition security since it is a complete food which represents important vitamins and minerals such as protein, calcium and vitamin D.
Dr Kitalyi attributed the poor performance of the sector to a small number of herds (782,995) compared to Kenya national dairy herd which is 4.2 million, according to data from the Kenya Dairy Board (KDB).
Similarly, she said that in Rwanda the government invested in ‘one-cow per family’ programme in 2007 and has made major leap in its national dairy industry.
“We have good policy and legal framework such as the Dairy Industry Act, no 8 (2004) which established the Tanzania Dairy Board (TDB) and pushed for increased private sector engagement in the industry and construction of processing factories.
“Growing dairy competitiveness call for more policy intervention”, she said.
A report by the Inter-Governmental Authority on Development's (IGAD) Livestock Policy Initiative, shows that the dairy policy development in Uganda has helped to increase the nation milk production rate from 460 million litres in 1990’s to 1.6 billion litres in 2011. However milk production in Uganda has been increasing annually.
“There are more than 1.5 smallholder dairy farmers in Kenya compared to about 300,000 in Tanzania. Kenya invested heavily in the national artificial insemination (AI) service in the 1980s and provided direct subsidy to farmers which made its national dairy herd grow from 250,000 in 1960s to 3.2 million in 2001”, said Dr Kitalyi.
Artificial insemination is a superior technology in disseminating dairy genes within a population. The technology helps to produce crossbreed dairy that generates between 1,700 and 2,500 litres per year compared to traditional cows which are dual purpose for beef and produce little milk (less than 2,000 litres per cow in a year.
Performance of the dairy industry in Tanzania
“The dairy sector is not properly managed, the government has not done enough to promote dairy farming and milk drinking culture,” says Yohana Kubini, the Executive Secretary of the Tanzania Milk Processors Association (TAMPA).
Kubini noted that annual milk consumption per capita in Tanzania is low (47 litres) compared to Uganda (65 litres) and Kenya (100 litres). The Food and Agriculture Organization (FAO) recommends for 200 litres of milk consumption per capital.
He also cited lack of proper mapping of livestock whereby the country lacks accurate information of animals which could assist in keeping milk records.
Kubini noted that the dairy sector is over regulated with multiple taxes that have impact on milk production whereby similar bodies such as Tanzania Food and Drug Authority (TFDA), Veterinary Services Department, Tanzania Bureau of Standards (TBS), Occupational Safety and Health Administration (OSHA), Fire and Rescue Department and Local Government Authorities (LGAS) charge separate levies.
He said Tanzania has over 80 small, medium and large scale registered milk processors, but only 67 among them are active. He said the sectors contribution to the economy is relatively low due to the small amount of raw milk processed. He said only 3 percent of the milk produced in the country reach processors while in Kenya 90 percent of produced milk is processed.
Both, Rwanda and Uganda process about 10 percent of the produced milk, he noted.
Livestock expert, Dr Stephen Ngwale attributed low milk production with underfeeding problems and animal diseases. He said when a cow is sick or underfed it produces less milk.
Dr Ngwale who doubles as the Njombe District Livestock and Fisheries Development Officer, gave an example of Njombe district which has a total land area measuring 313,400 hectares but has 59,872 hectares of traditional cattle pasture and another 1,153.6 hectares of improved grass pastures.
According to him, initiation of school milk feeding programs would increase milk consumption, address the problem of malnutrition and boost production at local processing factories.
Dairy farmers, he said, spend between 65 and 70 percent of their total generated income to feed the cows.
Fuad Abri, Director of Asas Group of Companies said: “The sector is not prioritized and mobilized. There is a need to push for milk demand to boost production. If properly managed, dairy sector can improve livelihood of dairy farmers and have enormous contribution to the economy”.
He said poor infrastructures especially roads in rural areas makes it difficult for processors to collect all the milk produced by farmers. Transport challenges, he said limits the amount of milk, which go through the formal markets or rather which go to processing industries.
He added: “Milk is a perishable product, it requires reliable electricity services to be able to put in place milk collection centers and cooling facilities near dairy farmers.”
There are less than 100 milk cooling centers in Tanzania compared to more than 300 in neighbouring Kenya. The capacity of milk cooling/collection centers in Tanzania is between 500 and 9,000 litres per day compared to Kenya which its collection/cooling facilities have the capacity to handle more than 100,000 litres per day.
Fuad also mentioned milk importation among the factors contributing to poor performance of the dairy industry in Tanzania. He said Kenya alone, imports almost 1.8 million litres of milk per year.
Dr Mayasa Simba, Tanzania Dairy Board (TDB) Manager in charge of Marketing Service Department, noted that almost half of milk processed commodities in the country are imported as the current processing capacity is 40 million litres.
She underscored the need for more investment since local factories manufacture a few commodities ie, pasteurized milk, yoghurt and cheese.
“We produce a limited number of milk processed commodities; there is no local factory which produces powder milk. Two factories—‘Tanga Fresh’ and ‘Dar Fresh’ have started to produce Ultra High Temperature (UHT) milk” said Dr Simba insisting on people to drink processed milk as they are healthier.
Dr Simba said the livestock sector contributes 7.4 percent to the Gross Domestic Product (GDP) whereby 30 percent of it is from the dairy industry.
“Contribution of the dairy sector to the economy is still small compared to its potentialities in terms of size, livestock number and milk production”, she noted.
According to her, imposing total ban on imported milk is difficult because Tanzania has ratified a number of trade agreements and is a member of the World Trade Organization (WTO) which restricts ban on imports except on grounds of poor quality of the products.
Milk importation is also fuelled by East African Community (EAC) Customs Union, which came into force in 2005 as partner states agreed to support trade liberalization and enhance intraregional trade, she noted.
She said imported milk and milk products from Southern African Development Community (SADC) only pay a 25 percent Common External Tariff (CET).
The Permanent Secretary in the Ministry of Livestock and Fisheries, Dr Mary Mashingo, said the country spends between US$17 and US$23 million to import dairy products annually. The amount according to her is too big hence the need to improve the country’s dairy industry in order to save the monies.
Statistics from the TDB show an average of 70 million litres of dairy products (worth US$20 million) were imported in 2013. Milk powder makes up about 80 percent of imports, followed by (UHT) milk, cheese and butter.
In its report to the National Assembly in February this year, the Parliamentary Committee on Agriculture, Livestock and Fisheries Chairperson, Dr Mary Nagu, noted that cheap dairy imports have created unfair market competition thus affecting performance of local factories.
Tanzania imports milk from Uganda, Kenya, the United Arab Emirates (UAE), the Netherlands, France, Oman, Ireland, Saudi Arabia and Mauritius, according to TAMPA.
Monica Magehema from Uwemba ward in Njombe region complained over lack of subsidy and high cost of keeping cattle. She said dairy farmers do not get subsidy unlike other countries such as the Netherlands and Kenya where dairy farmers get direct subsidy and are assured of the market.
Tanzania was previously having a subsidy regime for dairy farmers whereby farmers were provided with drugs used to treat and wash cattle to prevent bacterial infection. The subsidy system, according to TDB is no longer active.
Poor extension services and lack of best cattle breeds (Heifer) affects performance of the industry, said Acting Livestock and Fisheries Officer for Iringa region, Mathew Sanga.
He said that estimated price for the best heifer which can produce more than 20 litres of milk per day is not less than 2m/-. He said the National Agriculture Policy of 2013 directs that each village should have at least one agricultural officer, but currently one extension officer serves more than five villages.
“Provision of extension services to farmers in Iringa region becomes a difficult task to the officers as only six out of 37 have transport,” he noted.
The government is implementing a mega project to increase the number of best cattle breeds through artificial insemination (AI), said the PS in the Ministry of Livestock and Fisheries, Dr Mashingo.
Dr Mashingo noted that the government through Arusha insemination center has purchased 11 purebred bulls for crossbreeding through AI. She said the aim is to have 1 million crossbreed milk cattle every year.
“More milk production will stimulate performance of local factories and boost revenues. We are determined to improve the dairy industry to make it contribute more to the national income,” she noted, insisting the dairy sector contribution to the economy should at least be equivalent to that of meat sub-sector which is 40 percent of the livestock sector contribution to GDP.
The livestock sector in Tanzania contributes 7.4 percent to the GDP whereby 30 percent of it is from the dairy industry and 40 percent from meat sub-sector, she said.
Dr Mashingo said to boost milk production, the government is working to attract more investors in milk processing as well as to put in place good infrastructures (milk collection/cooling centers) and ensure reliable water services.
Low milk production results into local factories running below its capacity. Njombe Milk factory has the capacity to process 6,000 litres per day but it is now processing 4,500 litres per day, said Kamtande Sikaluanda, the factory’s production manager. He added, during drought, the amount of milk they receive from dairy farmers drop to 3,500 litres.
“More production means more revenue to the government…efforts should be made to increase the number of best dairy cattle breeds to boost milk production,” he noted.
According to a 2011 report by FAO, the Kenya dairy sector contributes over 30 percent of the country’s GDP and over 50 percent of foreign currency earnings.
In Uganda, the dairy sector contributes more than 50 percent of the total output of the country's GDP from agriculture, according to a 2015 study by the Department of Dairy Technology, Ankara University, Turkey.
Executive Secretary, Njombe Livestock Cooperation (NJOLIFA), Benedict Mdetele said; “The best way to fight poverty is through dairy farming. Framers keeping between one and three dairy cattle can get a maximum profit of up to 500,000/- per month.”
He said dairy farming is a permanent source of income to farmers in Njombe whereby those with one dairy cattle get a minimum profit of between 100,000/- and 150,000/- per month.
Improvement of the sector
According to TDB, EAC partner states have jointly agreed to protect their locally made products by imposing a 65 percent Common External Tariff (CET) and 18 percent Value Added Tax (VAT) on imported goods.
“We can only control imports by introducing taxes since we cannot impose a total ban,” said Dr Mayasa Simba, TDB Manager (Marketing Service Department), noting the board has been implementing a number of programmes to promote milk drinking culture such as exhibition and generic promotions through milk drinking week.
Initiation of school milk feeding programs would increase milk consumption, address the problem of malnutrition and boost production at local processing factories said Fuad Abri, Director of Asasi Group of Companies.
Dr Mashingo said: “We are creating demand of the product…we have directed district authorities to start offering pasteurized milk to pupils from Standard One to Three. This will help to boost production at our factories.”
Southern Agricultural Growth Corridor of Tanzania (SAGCOT) Communications Manager, Austin Makani, says although the center does not work directly with farmers or offer any handout/subsidy, it has established a joint dairy partnership of stakeholders in order to collaboratively unlock the challenges and harness the potential opportunities for development of the sector.
According to him, SAGCOT works with Asas Dairies Company Limited in supporting farmers to improve dairy husbandry practices. The company outsources most of its milk from Iringa, Njombe, Rungwe, and Busokelo districts.
He says about 70 percent of the milk produced in the country comes from indigenous cattle kept in rural areas with only 30 percent coming from improved cattle that are mainly kept by smallholder producers.
To improve the sector, Makani suggested for improvement of animal feeds, saying it is high time for individuals and the government to start investing in the area so as to come up with certified pasture seeds.
“The government needs to come up with favorable policy environment for dairy processors, build milk collection centres in potential areas and ensure rural electrification, promote consumption of raw milk and to remove Value Added Tax (VAT) on milk products,” he said, underscoring the need for the government to discourage importation of cheap milk and milk products.
Tanzania has the second largest (after Ethiopia) cattle population in Africa. The huge cattle population is kept by 1.7 million rural households, of the number, 71 percent keep between 1 and 10 heads of cattle.