Ugandan dairy farmers are producing 2.4 billion litres of milk annually instead of 10 billion due to livestock diseases, low uptake of high grade exotic cattle, a high rate of failure for artificial insemination, limited access to extension services and limited investments in feed resources.
A report by the Economic Policy Research Centre, based on investigations into livestock production practices and milk productivity, reveals that farmers could be making $300 million more.
The report shows that most farmers in western Uganda who initially embraced exotic breeds are reverting to local Ankole cattle.
An exotic breed can produce up to 40 litres of milk per day compared with just three litres from local breeds.
"It is largely on account of acaricide failure, which had not only resulted in high death rates in exotic cattle to tick-borne diseases, but has also increased the farmers' total disease control budget," the EPRC report stated.
Uganda's Dairy Development Authority (DDA) concurs. "If we can address all these problems, we should reach our maximum capacity. At the moment we are producing far below our country's potential of 10 billion litres per year," said Herbert Mutumba, an official at DDA.
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Statistics from the DDA show that in 2017, the country earned $100 million from exports of dairy products. Uganda exports milk and its products to the US, Japan, the Middle East, and Comesa countries. In East Africa, Kenya is the main importer of the country's dairy products.
The government has licensed more milk processors even though they are operating below their installed capacity. Between 2002 and 2016, the diary sector's output grew from 0.75 billion litres to 1.6 billion litres. The EPRC investigation however notes that the increase is in the number of cows rather than yield improvements.
While the number increased more than two folds from 1,653,333 cows in 2002 to 3,749,038 in 2016, general milk yield per cow declined by eight per cent, from 450 litres in 2002 per animal to 415 litres per animal in 2016.
"There is a need for mass cross breeding using artificial insemination," said Francis Mwesigye, a researcher at EPRC.
Farmers have decried the low prices offered by milk processing companies. "For the farmers, cash flow is what makes a business survive. But how can that happen when processors are buying a litre of milk at USh500 ($0.13)? The cash does not support nutritional regimes that allow an animal to produce more milk," said Fred Luzinda, a medium scale farmer in Masaka.