The local dairy industry has over the years undergone transformation that has seen milk volumes increase compared to 10 years back. However, these volumes are still low to sustain market demand; and the industry also faces problems of quality along the supply chain that is attributed to poor facilities.
Peterson Tumwebaze talked to Frank O’Brien, the Rwanda Dairy Competitiveness programme chief of party, about these issues and how the industry can be boosted to help improve household incomes:
What is Rwanda Dairy Competitiveness Programme all about?
Rwanda Dairy Competitiveness Programme II (RDCP II) is a five-year project that started in 2012 and ends in 2017. It is being implemented by Land O’Lakes International Development.
The project focuses mainly on improving the production and marketing of quality milk among smallholder farmers to reduce rural poverty, improve nutrition and increase employment.
We have so far spent Rwf224m (about $302,000) on infrastructure improvement in the country, especially helping milk collection centres, dairy processors and small-and-medium enterprises to improve quality along the value chain.
The industry has recently been under scrutiny for producing contaminated products; how can this situation be avoided?
Milk is a highly perishable product, whose shelf life is dependent on how it is handled at different levels of the supply chain. For instance, raw milk goes bad within two hours, if not properly chilled, meaning there’s a big probability for most of it to be wasted. This implies farmers and dealers will lose income, which presents stakeholders in the value chain a challenge that must be addressed to make the sector more productive.
Currently, there is a general lack of enforcement of raw milk quality standards. This affects the sector’s growth and makes some potential investors hesitant to put money that could have helped transform the industry.
How can the problem of price fluctuation be addressed?
This challenge can partly be resolved by establishing stable working relationships and creating mutual understanding among farmers and milk buyers. Working through co-operatives and milk collection centres helps farmers to aggregate their milk into sizeable quantities that can be traded more easily. Milk collection centres and co-operatives should aim to secure better contracts with reliable buyers based on mutual trust and integrity.
Co-operatives need to ensure consistent volumes to secure reliable buyers who can pay a premium rate. Farmers should be impressed upon the importance of meeting both the quantity and quality expectations of buyers.
Have you made any progress in addressing these challenges as a platform for dairy farmers?
A lot of progress has been made over the years through implementation of government and donor-funded projects, including Land O’Lakes, which aim at improving milk production at the farm level.
The current project is building on this progress through an increased focus on improving the dairy sector infrastructure at milk collection centres by enhancing the holding and cooling equipment at these centres to ensure quality.
The dairy industry has the potential for improving people’s livelihoods; however, critics say stakeholders are not co-ordinated. How can this issue be solved?
Like many other sectors in Rwanda, the dairy industry is predominantly informal, with the majority of business conducted outside the formal regulatory framework resulting in what you might describe as a disorganised sector.
The government has been working to regularise businesses through a formal registration process to guarantee that the sector comply with set standards and do business in an ethical manner.
The dairy industry is no exception to this effort, and we have already seen substantial progress in this regard.
Efforts are underway to form an industry platform with representation of all players along the value chain, including producers, processors, retailers, consumers and service providers all of whom contribute to the growth of the sector. This will provide the industry with both leadership and an advocacy platform that is currently lacking.
What’s the programmes’ long-term strategy for the sector?
The Rwanda Dairy Competitiveness programme’s vision is to reduce poverty through expanded marketing of quality milk.
This we hope will boost households’ income, create more jobs and improve nutrition of rural households. The project also aims to improve the competiveness of Rwandan dairy products in the region.
The project will continue to support the Rwandan government’s goal of increasing milk consumption from 40 to 80 litres per person a year in support of the National Dairy Strategy and nutrition goals. But this will be subject to improved productivity of the dairy sector, better logistical infrastructure and changes in consumers’ preferences.