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and source from other dairy farmers (Kilima et al. 2015). These investments provide
incentives for further growth in urban milk production. Milk marketing by individual smallholder dairy farmers is largely determined by their actual consumption
needs at the household level, consumption by people in the neighbourhood, their
potential to produce surpluses over their household requirements and their ability to
access external markets, particularly urban centres. Research findings in Kenya and
Nigeria reveal that milk demand is higher in urban areas than in rural areas, and
urban dwellers consume more milk products than rural consumers in the same
income bracket (Jansen 1992; Staal and Mullins 1996).
Milk production systems vary greatly within SSA, with a mix of smallholder
dairy farmers and larger dairy farms (small, medium and large scale). Milk is produced by indigenous cows, crossbreeds and improved breeds of cow, with indigenous cattle being the most significant source of milk in the region (Tambi et al.
1997; Kurwijila 2002; Njombe and Msanga 2009). Milk production systems include
grazing systems, mixed farming systems and industrial (or landless) systems.
In general, milk production and marketing systems are classified as either urban,
peri-urban or rural systems (Tsehay 2002). The majority of consumers drink fresh
liquid milk, and its marketing is dominated by a traditional-informal value chain,
with only a small proportion of the total production being marketed through the
formal chain.
1
Most of the rural systems are integrated crop–dairy systems, to
exploit synergies between dairy enterprise, staple food crops and other cash crops
(Kurwijila 2002; Staal 2002). In SSA, there are pastoralist and agropastoralist milk
production systems, which are both considered part of the rural system. Access to
milk markets by producers in these systems depends on the cost of collection and
transportation of milk, which is determined by the distance to processing centres
and consumption areas (Omiti and Staal 1996; Omiti 2002).
The way milk is produced and marketed raises several concerns regarding the
possibility and capacity of ‘ordinary’ smallholder dairy farmers to participate in the
formal value chain. There is evidence suggesting that milk supplied by smallholders
is not consistent in its availability, with more milk produced during the rainy season
and less in the dry season. The informal milk market cannot absorb the surplus milk
during the flush season. This surplus could be channelled to buyers in the formal
channel, who have the capacity to prolong the shelf life of milk and even out the
supply between low and high seasons. However, many farmers have been unable to
market their milk in formal channels because of their inability to differentiate milk
products and identify market niches, communicate product quality and safety to
immediate buyers and reduce costs of production while maintaining quality and
high levels of production.
1 In the context of the milk value chain, a formal value chain is defined as a chain whose actors are
licensed to handle milk after complying with defined minimum standards for competence in
hygienic milk handling and processing to safeguard consumers’ health. This chain is operated as
an organized system of milk collection, using well-established mechanisms of bulking (e.g.
through cooperative societies or agents) and transportation in insulated tankers to factories where
it is processed and packaged before marketing.
Integrating Smallholder Farmers to Commodity Value Chains in Sub-Saharan Africa…
and source from other dairy farmers (Kilima et al. 2015). These investments provide
incentives for further growth in urban milk production. Milk marketing by individual smallholder dairy farmers is largely determined by their actual consumption
needs at the household level, consumption by people in the neighbourhood, their
potential to produce surpluses over their household requirements and their ability to
access external markets, particularly urban centres. Research findings in Kenya and
Nigeria reveal that milk demand is higher in urban areas than in rural areas, and
urban dwellers consume more milk products than rural consumers in the same
income bracket (Jansen 1992; Staal and Mullins 1996).
Milk production systems vary greatly within SSA, with a mix of smallholder
dairy farmers and larger dairy farms (small, medium and large scale). Milk is produced by indigenous cows, crossbreeds and improved breeds of cow, with indigenous cattle being the most significant source of milk in the region (Tambi et al.
1997; Kurwijila 2002; Njombe and Msanga 2009). Milk production systems include
grazing systems, mixed farming systems and industrial (or landless) systems.
In general, milk production and marketing systems are classified as either urban,
peri-urban or rural systems (Tsehay 2002). The majority of consumers drink fresh
liquid milk, and its marketing is dominated by a traditional-informal value chain,
with only a small proportion of the total production being marketed through the
formal chain.
1
Most of the rural systems are integrated crop–dairy systems, to
exploit synergies between dairy enterprise, staple food crops and other cash crops
(Kurwijila 2002; Staal 2002). In SSA, there are pastoralist and agropastoralist milk
production systems, which are both considered part of the rural system. Access to
milk markets by producers in these systems depends on the cost of collection and
transportation of milk, which is determined by the distance to processing centres
and consumption areas (Omiti and Staal 1996; Omiti 2002).
The way milk is produced and marketed raises several concerns regarding the
possibility and capacity of ‘ordinary’ smallholder dairy farmers to participate in the
formal value chain. There is evidence suggesting that milk supplied by smallholders
is not consistent in its availability, with more milk produced during the rainy season
and less in the dry season. The informal milk market cannot absorb the surplus milk
during the flush season. This surplus could be channelled to buyers in the formal
channel, who have the capacity to prolong the shelf life of milk and even out the
supply between low and high seasons. However, many farmers have been unable to
market their milk in formal channels because of their inability to differentiate milk
products and identify market niches, communicate product quality and safety to
immediate buyers and reduce costs of production while maintaining quality and
high levels of production.
1 In the context of the milk value chain, a formal value chain is defined as a chain whose actors are
licensed to handle milk after complying with defined minimum standards for competence in
hygienic milk handling and processing to safeguard consumers’ health. This chain is operated as
an organized system of milk collection, using well-established mechanisms of bulking (e.g.
through cooperative societies or agents) and transportation in insulated tankers to factories where
it is processed and packaged before marketing.
Integrating Smallholder Farmers to Commodity Value Chains in Sub-Saharan Africa…