Tanzania's Dairy Industry Lagging Behind

Dar es Salaam — While Tanzania ranks number three in cattle populations in Africa after Ethiopia and Sudan, its dairy industry is still lagging behind.

From its cattle population of around 33 million head, Tanzania produces over 2.7 billion litres of milk annually. Out of this amount, only 2.7 percent is processed and the remaining is sold unprocessed.

Given this scenario, some stakeholders in the dairy industry have challenged the government to find ways of formalising the industry so that it would benefit more livestock keepers and the country at large.

Recently, the ministry of Livestock and Fisheries Development launched a report on prices, costs, revenue, profitability and human capital chains in the dairy industry.

Briefing stakeholders at a meeting organised by the Agricultural Non-State Actors (Ansaf) in Morogoro, the head of the private sector desk in the ministry, Mr Steven Michael, revealed that even as Tanzania had a huge number of cattle, over 90 percent of its milk was sold unregulated and unprocessed - with no proper records bein kept.

He added that only ten percent of the milk was collected at centres - with 2.7 percent of that being processing into such products as, yoghurt, butter and cheese.

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Speaking on the costs incurred, Mr Michael said: "Processors spend an average of Sh1,623.5 on a litre of milk that they buy for Sh860."

He clarified that the cost incurred by processors covers labour, water, electricity, rent, packaging, distribution and taxes. "There's a need to improve the industry's environment to benefit the farmers who produce milk at a high cost," he stated.


Some stakeholders urged the government to put in place legal mechanisms to help regulate the industry so that it would benefit all players.

Commenting on the matter, Mr Edmund Mariki from Land O'Lake Inc cited the Uganda experience, saying that country restricts selling of non-pasteurised milk.

"The government has the duty of ensuring a good environment for farmers and processors by restricting random sales of dairy products. It needs to put in place a better investment environment to attract more investors. Farmer organisations need to be empowered as well," said Mr Mariki.

Mr Athuman Mahanyu, Tanga Farmer's Cooperative Union secretary general, urged the government to put in place an environment that would see to livestock keepers getting better prices for their milk.

"For a cow to produce enough milk, it must get enough food, water and minerals. Food supplements are also required - and one must have one's cows vaccinated. There are many other direct and indirect costs like labour and electricity. So, if collection centres were to give better prices, farmers would take their milk there," he pontificated.

Shambani Limited dairy processing factory owner Neema Mmari said even as they incur high costs collecting and processing milk, they nonetheless have to compete with those who buy milk directly from farmers, hence affecting their operations.

"The government must explain why they allow over 90 percent of milk to be sold without being pasteurized," she said.

Ms Mmari - whose factory collects and processes about 300 litres of milk a day - said while they strictly observe quality issues in handling the milk they collect, some traders buy low-quality milk and re-sell it at even lower prices in the market.

"We incur high costs to install facilities to process milk. We pay taxes, salaries and social security contributions for workers, while our competitors don't - hence adversely affecting our business," she lamented.

Similar concerns were aired by Ms Annadomana Nyanga from Tanga Fresh, who said that, after incurring costs in collecting and processing milk, they are further clobbered by black marketers! She urged the government to ban the unpasteurized milk trade.

"We collect milk from over 6,000 farmers in Tanga Region. It's high time that the government established control mechanisms so that milk would be sold through formal channels," she observed.

She also pointed out that importation of powdered milk further weakens their domestic business.

The Iringa-based Asas Dairies representative at the meeting, Mr Ntimila Lipita, gave similar views, saying that most buyers cared more about low prices instead of quality.

"The quality of milk is of utmost importance to us. When we disqualify milk over the issue of quality, the same milk is sold in the black market - thereby denying the government tax revenues. This also impacts negatively on our business.

"We ask the government to protect our business as taxpayers, by ensuring that all milk is sold via recognised centres as a matter of course."

An official of the Tanzania Milk Producers Association (Tamproda), Doreen Maro, urged the government to formalize livestock production by importing quality cattle breeds.

"Local livestock breeds must be improved. The government should encourage importation of new breeds to increase milk production - and attract more invetors into the business.

"A cow takes nine months to give birth. A heifer takes two years to mature. This is a long time. That's why most livestock keepers are retirees and those who have inherited from their oldies. It is not an attractive business for the youth," she said.

Commenting on the matter, Prof Lusato Kulwijira from the Sokoine University of Agriculture said the new study would focus on price differences - and how they impact the producer and the consumer.

"Apart from other costs, taxes impact milk prices. This encourages unpasteurized milk business. Without strengthening the environment, random milk sales would continue to affect the industry, impacting negatively on stakeholders," he noted.

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