Eadd mid term report 2008 2010

Milking for
Profit
Midterm Report

© East Africa Dairy Development 2011
www.eadairy.org

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Tel: 250 252 565 432

Writer and Editor
Mary Anne Fitzgerald
mafitzgerald@iconnect.co.ke

Design and Layout
George Okello
g_okello@yahoo.com

Photography
East Africa Dairy Development photo library

Communications
Ann Mbiruru
ann.mbiruru@eadairy.org

Printing
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info@officeandbeyond.com

This report is funded by the Bill & Melinda Gates Foundation. The
findings and conclusions contained within are those of the authors and
do not necessarily reflect positions or policies of the Bill & Melinda Gates
Foundation.

Table of Contents

EADD Partners 1

Introduction 2

Adopting Business Principles 4

Kenya 5

Uganda 7

Rwanda 9

More Is Better 12

The Village Bull 13

Field Studies 15

Home at Last 15

Kenya Banks Pioneer Small Loans to Farmers 17

Good Feeding Makes Healthy Cows 18

Bubusi Feed Mill 21

Reversing the Urban Drift 22

Corporates Help Expand Dairy Markets 23

Much in Common 24

A Town Called Lusozi 25

Women and Youth to the Fore 26

Communicating 28

Keeping Track 28

Acronyms

ABS TCM African Breeders Service Total Cattle Management Ltd.

AHW Animal health worker

AI Artificial insemination

CAHP Community animal health practitioner

EADD East Africa Dairy Development

FSA Financial services association

ICRAF World Agroforestry Center

ILRI International Livestock Research Institute

M&E Monitoring and evaluation

SACCO Savings and credit cooperative organization

UDAMACO Umatara Dairy Marketing Cooperative Union

UN United Nations

UHT Ultra-high temperature processing

Foreword

Africa is a continent of economic promise. This 68 farmer-owned cooperatives and companies have
certainly holds true for the agriculture sector where either been formed or resuscitated. Nearly 20 SACCOs
investment in small-scale and medium-sized and Village Banks have been established as well.
enterprise is driving rapid economic growth. The Today, halfway through EADD’s Phase 1 (2008-
beauty of agriculture is that it is resistant to external 2012), rural families in Central Uganda, Eastern
shocks while its benefits reach down to those who are Rwanda and selected districts in Kenya can afford
living on less than $1 a day. And, of course, it feeds to educate their children, enjoy basic banking
the rest of us. services, and buy farm inputs and services with
As Secretary General of the United Nations, Kofi credit or cash. The continued success of about 70
Annan called for a green revolution in Africa to meet producer enterprises subscribed to by thousands of
the Millennium Development Goal of halving hunger farming families will depend on sound governance and
by 2015. The livestock sector, which involves half management, modern technology, market expansion
the rural population and contributes over 30% of the and the continued availability of support services and
continent’s agricultural Gross Domestic Product, is a inputs. These vital ingredients need time to take root in
major player in this revolution. The dairy sub-sector rural Africa.
is particularly vibrant. In Eastern Africa 15 million The EADD consortium is in the process of putting
pastoralist and smallholder farmers produce more together a proposal for Phase 2 of EADD running from
than 15 billion liters of milk a year. With the appropriate 2012 – 2017. This will see EADD expand its reach to
policies and healthy investment, its highlands and over 650,000 farming families in five countries - Kenya,
savannas have the potential to rival India’s 100 billion Rwanda, Uganda, Tanzania and Ethiopia - through an
liter annual production. This would make the continent ambitious public-private partnership. We hope you will
self-sufficient in milk, save foreign exchange and shift join us in helping our vision come to fruition.
wealth to the rural areas. It is possible.
Inspired and funded by the Bill & Melinda Gates
Foundation, a consortium of five partners with a long Moses Nyabila
history of supporting dairy production and marketing EADD Regional Director
in Africa joined together in 2008 to form the East
Africa Dairy Development Project (EADD). The idea
was to add value to farmers’ milk production through
producer-driven collective marketing and production
based on efficient, farmer-friendly technology. Three
years on, EADD has become one of the leading
market-oriented agro-livestock development initiatives
in Africa. Its 140,000 farming-family beneficiaries have
invested $3 million and receive some US$ 24 million
a year in incremental payments. Thanks to EADD,

to inform the implementation of EADD project activities.
EADD Partners ILRI involvement in EADD focuses on the documentation
of innovation and research related to dairy production;
knowledge sharing among partners; and informing project
design.

Heifer International

As the lead agency in the EADD consortium, Heifer
International holds primary responsibility for improving dairy
productivity and efficiency. It draws on experience in East
Africa dating back to the early 1980s when the organization
African Breeders Service Total Cattle Management Ltd.
first provided support to rural farmers in Kenya and Uganda.
(ABS TCM)
Heifer International manages the project as part of its Africa
ABS TCM is a private, for-profit supplier of technical
Area Program and provides financial and programmatic
assistance related to livestock breeding. It supports Heifer
guidance as needed for overall coordination of the
International through the promotion of enhanced animal
implementing partners.
breeding for increased dairy productivity within EADD project
areas. ABS TCM brings to the consortium a range of facilities
and expertise including livestock genetic delivery service,
liquid nitrogen production, capacity building related to milk
quality and livestock reproductive health and nutrition. As
a private partner, ABS TCM is committed to the promotion
TechnoServe
of productivity-enhancing technologies and the creation of
TechnoServe leads the EADD consortium on market access
viable business linkages in dairy value chains.
activities which include the procurement and financing of
chilling plants as well as technical support to traditional
market hubs and business development service providers.
It is considered a pioneer in private-enterprise approaches
to poverty alleviation in the developing world. In Africa,
TechnoServe maintains country offices in Kenya, Uganda,
Rwanda, Tanzania, Swaziland, Mozambique, South Africa
and Ghana.
World Agroforestry Center (ICRAF)
ICRAF supports Heifer International by promoting the
production and distribution of improved animal feed and
fodder through farmer training on the production and
processing of improved feeds and the establishment of feed
demonstration plots. ICRAF ialso carries out research related
to feeds and promotes improved feed conservation such as
crop residue and storage.

International Livestock Research Institute (ILRI)
ILRI is charged with leading the consortium on knowledge-
based learning activities and provides action research

EADD MIDTERM REPORT 2008 – 2010
1

the fields, gender disparity persists thus preventing
Introduction their advancement. Hopelessness propels young
people to join the ranks of the unemployed in the
cities.
On a verdant hillside in Rwanda an illiterate genocide It is against this background that the East Africa
survivor has leveraged the gift of a cow into three Dairy Development Project (EADD) has introduced a
micro-enterprises that bring in $635 a month. At a dairy model on a rare scale. It is an innovative mix of
bustling milk collection center a 27-year-old school training, technology, access to markets and supply-
leaver loads metal canisters of milk onto the back side economics that puts the farmer in control of the
of a motorbike. Through an initial bank loan, he dairy-value chain from production to processor.
has acquired three shop sites, his motorbike and a EADD takes farmers and their ambition to improve
crossbreed Friesian cow. His long-term vision is to their quality of life very seriously indeed. It intends to
build his own milk-chilling plant. A headmistress in double the income of more than 600,000 dairy-farming
Uganda, who is also chair of the board for the local families (nearly 4 million people) over the course of 10
chilling plant, reports that student intake has swelled years. Phase 1 (2008 – 2012) is a pilot project covering
and parents no longer default on fees. 179,000 subsistence farmers in selected districts of
Subsidized loans and micro-credit linked to Kenya, Rwanda and Uganda. The methodologies that
donor funding have been cited as cornerstones for are being tested will inform the second part of the
transforming Africa’s impoverished smallholders project.
into prosperous commercial farmers. In fact, some Phase 2 (2012 – 2017) will extend the best practices
agriculture experts say that every dollar lent leverages learned to another 500,000 farmers in Ethiopia and
twenty more in private capital. Obvious as it may seem Tanzania as well as the existing countries of operation.
as an exit from poverty, access to credit has eluded After that, the assumption is that EADD’s technically
Africa’s farmers for generations. Similarly, smallholder competent and business savvy farmers will be on
farmers are seldom taken seriously as budding a financially sound footing and able to look after
entrepreneurs. themselves.
As a result, the majority of rural households in East The EADD project has been designed and is being
Africa continue to scratch a living from subsistence run by a consortium of five internationally known
agriculture. Many keep local cows which typically partners with a unique selling point. They have
produce less than two liters of milk a day. Parents find pooled their technical, business and research skills
it hard to put enough food on the table, send their to lay the foundations for a sustainable and profitable
children to school or pay for medicine when they get regional dairy sector driven by millions of farmers
sick. Although women do about 70% of the work in who once lived below the poverty line. In addition,

EADD will double the dairy income of 179,000 farming families by 2012
Kenya Rwanda Uganda
110,000 24,000 45,000
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EADD Operational Areas Phase 1 (2008 – 2012) EADD specifically targets women and youth. More
than 90% of adults in the households of EADD project
participants earn less than $2 a day. It is funded by
a $42.85 million grant from the Bill & Melinda Gates
Foundation. Part of the Foundation grant is a $2.5
million investment fund for Dairy Farmers’ Business
Associations, which was increased to $5 million in
2008 thanks to a Heifer International fundraising
campaign.
To date EADD has mobilized $3 million of
investment to build 22 new chilling plants, revitalize 13
existing ones and create 12 milk-collection centers for
the traditional market. Combined with the processor-
owned chilling plants used by some of EADD’s
farmers, EADD has 54 dairy hubs across the region.

Milk intake at dairy hubs has grown significantly
in Kenya (65%), Uganda (30%) and Rwanda (10%).
Microfinance associations, village banks, commercial
banks and the chilling plants’ check-off system of
credit against milk deliveries has given farmers,
youthful entrepreneurs and business men and women
Farmers will be a major voice in what affects the
the opportunity to engage in a range of enterprises
industry. The EADD experience has stabilized
that extend well beyond the dairy sector. This has
prices in the marketplace to shift the balance of
in turn stimulated the local economies of hamlets,
power dramatically from the processor to the
trading centers and towns all over East Africa.
farmer. Within the next five years farmers will be
The project is coordinated by a regional team,
processing their own milk or at least going into
three country project teams, a Regional Advisory
partnership. Free enterprise in agriculture works.
Committee and a Project Steering Committee, each of
which maintains multi-partner representation. EADD
Moses Nyabila
Regional Director, EADD has also created direct roles for private dairy interests
and relevant government agencies in oversight of the
project. It works closely with government officials from
local to national level and ensures that all its activities
are aligned with government policy.

141,000 3,578 $3,000,000
Farmers registered and organized Dairy Management Groups and Invested in chilling plants and
into associations and groups Dairy Investment Groups milk-collection centers

3

at dairy hubs is popular with farmers. The fact that
Adopting Business Principles they can buy on credit against a check-off system
stimulates consumer demand. And it gives farmers the
latitude to buy products and services when they need
them rather than when they can afford them. Chilling
An expanding dairy industry requires access to
plants also offer organoleptic and milk-density tests so
markets, extension services, farmer training and credit
that milk quality meets the processors’ benchmark.
for business start-ups. But the operating environments
EADD uses a stage-gating system to chart the
in East Africa are exceptionally diverse. It is not a case
progress of each chilling plant from inception at
of one size fits all. One of EADD’s great strengths
Stage 1 to disengagement from EADD at Stage 5. By
is its flexibility in adapting the paradigm to suit the
Stage 4 chilling plants and Dairy Farmers’ Business
situation. Kenya, where the dairy industry is well
Associations are profitable, offer a range of extension
established, operates on volume. Twenty-one chilling
services and pay regularly to ensure their members will
plants have been constructed so far with a minimum
continue to supply large quantities of milk. And chilling
of 2,000 members registered at each plant. Return on
plants offer value to buyers as they can guarantee
investment is one year.
quality and quantity.
In Uganda, where sites are predominantly in
Governance is a key aspect that is weighted at
pastoralist areas, the return can take up to two years
about 40% in the stage-gating. With training facilitated
and the volumes per chilling plant are lower. With
by EADD advisers, corporate governance respects the
per capita income lower too and a slow response
separation of board and management, holds regular
to turnkey financing from commercial banks, EADD
elections and returns clean audits.
has pre-financed the procurement of equipment in
‘The philosophy is that you can only support
some of the chilling plants so that construction can
to a certain point. Then we shift our resources to
begin. Rwanda has a significantly smaller market and
other farmers. It’s about exit and sustainability and
no culture of milk consumption. EADD works closely
empowerment. This year a number of Dairy Farmers’
with the government’s dairy industry and is looking at
Business Associations will have moved to Stage 4,’
cultivating the traditional market which means a new
explains Moses Nyabila.
focus on milk-collection and bulking centers.
EADD also fosters relationships with training
The axis of the EADD project design is the dairy
institutions to create a body of graduates that
hub which is used to deliver a comprehensive
will form the critical mass of skills required for the
package of services including artificial insemination
implementation of Phase 2. Canada’s Coady Institute,
(AI), veterinary care and animal husbandry. The hub
a center of excellence for community development
is managed by Dairy Farmers’ Business Associations
established by St. Francis Xavier University, offers
and promotes Business Development Services
scholarships to management, board members and
such as transporting milk, agrovet stores and the
EADD staff. EADD is currently developing curricula
commercial growing of fodder. Training, exchange
with African universities.
visits, demonstration plots and manuals reinforce the
farmers’ understanding of how to improve milk quality
and quantity.
The centralization of AI service providers,
Community Animal Health Practitioners and agrovets

4

companies that could operate on cooperative
Kenya principles. In its first three years of operation, EADD
established or revitalized 19 chilling plants. In 2010
they sold 49 million liters of milk, earning farmers
$13.7 million with net profits for the chilling plants
of more than $0.5 million. A further three plants are
When EADD started its project in Kenya in 2008, scheduled to come on stream in 2011.
it was clear to the country team that farmers were The EADD goal for its Kenya program is to double
not accruing any substantial benefits from the dairy the income of 110,000 impoverished dairy farming
value chain. The collapse in 1999 of the state-owned families in the Rift Valley and Central Provinces where
processor, Kenya Cooperative Creameries, had dairy production is concentrated. Kenyan smallholders
opened up the sector to competition but industry sold an average of 3 to 5 liters of milk a day. Low
capacity utilization was a low 40%. Despite this, the production meant low income which prevented
farm-gate price was weak and varied little between the investment in feeds and breeds to boost yields. It
formal and informal markets. Farmers were not being would need a minimum of 15 liters a day for families to
paid on time in the informal market and sometimes not break out of the poverty that encircled them.
at all. The formal market, dominated by three major The same thinking applied to the chilling plants.
processors, was more regular in its business dealings. They had to run at capacity to cover debt obligations
However, 80% of farmers favored the traders’ and and operating costs so volume was essential. The
hawkers’ cash-based system that catered to their daily challenge was to keep the chilling plants functioning
financial needs. The delivery of extension services no with an eye to the bottom line without sacrificing
longer functioned properly. Neither were farmers able benefits to farmers. Services to farmers instilled loyalty
to access information on husbandry, markets and which, in turn, created volume at the chilling plant.
prices. The team concluded that in order to lift smallholders
To ensure sustainability and profitability, the out of subsistence farming, they had to design a
Kenya team mobilized farmers to form public liability program based on business principles with profitability
driven by volume. The target was to sign up 2,000
farmers at every Dairy Farmers’ Business Association
to feed milk into each chilling plant’s 10,000-liter tank.
A feasibility study showed that both farmers and
processors suffered from the consequences of a poor
cold chain. Milk needs to be cooled within two to
four hours of being poured into the can or the quality
drops. It also revealed that Kenyan smallholders did
not adhere to best practices. They did not use AI or
fodder while preventive health care was minimal. And
farmers did not know the cost of their production or
if additional feed or a change in diet would boost a
cow’s milk yield.
By 2010 this had been dramatically turned around
Model farmer from Ol Kalou, Kenya. with 68,000 farmers trained in better husbandry. At the

5

By the close of 2010, the average monthly profit
for chilling plants was $1,300 while just under $2
million was paid out to farmers. All the loss-making
chilling plants that had been taken up by EADD at
the time of its entry were now profitable.

same time, the Kenya project had registered more than
90,000 farmers, reaching 80% of the Phase 1 target.
Households were producing an average of 15 liters of
milk a day. And farmers were earning $4,500 a year
from the sale of milk and heifers.
EADD uses a financing model for raising plant
capital that is suited to Kenya’s well established dairy
industry. Farmers raise 10% of the $125,000 start-up
capital to create ownership and accountability. EADD
extends a 30% interest-free bridging loan redeemed
Nyala Dairy in Kenya
over five years by the chilling plant shareholders
through a minimal levy on every liter of milk sold. The
balance is covered by commercial debt. Fina Bank, K-Rep Development Agency and Kenya
Farmers exceeded their minimum equity targets. Commercial Bank – are in various stages of financing
However the operating environment in Kenya’s or refinancing chilling plants and equipment such as
banking sector did not lend itself to backing unproven motorbikes. The plants at Kabiyet, Lelan and Metkei
agriculture ventures. Calling on the flexibility and have secured commercial loans exceeding $335,000
innovative thinking that untried paradigms require, at an average interest rate of 12%.
EADD assumed responsibility for the outstanding This year EADD is partnering with the Kenya
60% of the financing. It extended loans through its Institute of Management to develop an operational
investment fund on the premise that once chilling performance award for hub management sustainability
plants demonstrated their profitability, commercial and to rank chilling plant companies in terms of
banks would take over. profitability and corporate governance. This will
This assumption proved to be correct. Chilling provide banks with a yardstick against which they can
plants have been seeing an exceptionally rapid assess a plant’s credit rating. The concept is being
return on investment. In April 2010, Kabiyet Dairies replicated in Rwanda and Uganda.
Co. Ltd. was granted a commercial bank loan on In 2010 the Kenya team strengthened its data
the basis of an $8,750 monthly turnover one year system for tracking progress measured against project
after being commissioned. Now banks are vying for milestones. Seventeen databases were installed at
chilling plant business at competitive interest rates in chilling plants and connected to a master database at
acknowledgment of the potential demonstrated by the country office in Eldoret. Stored data include the
their start-up track record. Currently six commercial training records of farmers and statistics on registered
banks – CFC-Stanbic, Cooperative Bank, Family Bank, cows and all crossbred calves.

6

Uganda

In Uganda, EADD is doubling the income of 45,000
families by applying integrated interventions in dairy
production, market access and knowledge application.
The project area is in central Uganda, a region that
accounts for nearly 25% of national milk production.
Many of the selected sites are comparatively arid and
are inhabited by pastoralists.
Uganda’s nascent dairy sector presented challenges
that had not been encountered by Kenya’s longer
established dairy industry. Smallholders owned more
than 90% of the national herd. This consisted almost
entirely of native Zebu and Ankole which had been
bred with an emphasis on beef. Their milk yields
averaged a liter a day. Further complicating matters,
the areas initially chosen for the construction of chilling
plants tended to have a low population density and
were not well served with feeder roads.
Farmers were carrying their milk by foot and on
Girl carrying fodder
bicycle for distances of up to 30 kilometers. Because
volumes were low, especially in the dry season, the
milk could sit for three or four days at a collection doubled the number of sites from 15 to 31 to widen
center before being trucked to a chilling plant. the net of farmer involvement. Today EADD works
While the market potential existed, it had not been with 10 chilling plants that are owned and managed
developed. About 90% of Uganda’s milk production by farmers. The milk is bulked and chilled before
was sold informally to hotels, shops and independent collection by commercial processors. Another seven
traders because the formal market, dominated by a chilling plants are owned by processors and rented out
virtual monopoly, fetched lower prices. to farmers.
EADD’s success was premised on high volumes in a In Uganda traders handle 80% of all marketed
competitive marketplace. However, the Uganda team unprocessed milk. EADD has penetrated this vibrant
soon realized that they would have to recalibrate the market by working with 14 traditional hubs that collect
EADD program design that had been so successfully milk for sale in the informal market. The majority of
applied in Kenya if they were to achieve results. farmers assisted by EADD are connected to these
The team halved the size of the chilling tanks to traditional hubs. EADD helps to leverage their position
5,000 liters to reflect the lower site volumes and with raw-milk traders through collective bargaining and

7

by stimulating the demand for quality milk. Although that investing in dairy improvements was worthwhile.
they do not utilize EADD-procured chilling plants, This was the tipping point needed to persuade
traditional market hubs are similar to chilling plant farmers to replace their locally bred Ankole and Zebu
hubs in that they are managed by Dairy Farmers’ cows with crossbred or purebred cows. The midterm
Business Associations and provide dairy-related evaluation showed that the most striking difference
Business Development Services. between EADD farmers and the farmers outside the
By midterm, despite a slower than anticipated start- catchment area was the adoption of AI practice. One
up, the project’s key milestones had been achieved out of two EADD farmers have herds where at least
ahead of schedule. More than 30,000 farmers (68% half the cows are exotics compared to one out of five
of the end-project total) had signed up as members farmers living outside the catchment area.
of dairy hub cooperatives while 41,000 farmers were Farmers cite training in farming and business
already accessing EADD’s Business Development skills, exchange visits with other farmers, and
Services. They reported improved milk yields and timely and convenient payments for milk delivered
attributed it to better bred and fed cows that were as the primary attraction for being a member of a
healthy as a result of good husbandry. chilling plant cooperative. Already 4,250 farmers
Several achievements were highlighted as have been on learning trips and have introduced
exceptional in an independent evaluation conducted best practices on their farms. The other incentives
mid-2010. EADD was instrumental in creating a for cooperative membership are the Dairy Farmers’
substantial growth in milk production and milk intake Business Associations that link farmers to stable
at the chilling plants. The technical advice of EADD’s markets, SACCOs (savings and credit cooperative
business managers also helped to raise farm-gate organizations), and dairy-related goods and services.
prices by creating competition in the formal and Farmers say they like the products on offer such as
informal markets. high quality feeds, veterinary products and genetically
By stimulating the industry and expanding farmer improved semen.
profit margins, EADD had demonstrated to farmers Farmers were reluctant to form companies so EADD
chose to work through cooperatives instead. It was
a way of organizing that was familiar to Ugandans.
EADD then formed about a dozen 30-member Dairy
Interest Groups at each site to enable farmers to
collectively access dairy-related services and to
market milk. Uganda pioneered a decentralized
structure that has been replicated across the region.
It is based on a devolved cluster concept that has
improved the efficiency of project implementation.
The extension-service system has been revitalized
by centralizing the extension workers at the hub sites
from where they can adapt feeding and breeding
strategies to each cluster’s unique needs.
An EADD business adviser is attached to each hub
to help formulate and implement a business plan.
Farmers in Wakiso being trained in milk testing and grading Advisers, who serve as ex-officio board members,

8

also facilitate the training of board members and
management staff in sound corporate and financial Rwanda
practice. Operational plans and budgets, facilitated
by Deloitte, are participatory and informed from the
bottom up by the cluster teams. Generic business
plans for the Dairy Farmers’ Business Associations
have been revised into site-specific, concise
documents pitched to farmers and funders using Rwanda’s hilly topography and good rainfall have
annual implementation plans and EADD action plans. earned it the sobriquet, the Switzerland of Africa. It
In March 2011, EADD entered into an agreement is also one of the most densely populated countries
with the Microfinance Support Center to extend on the continent with more than half the population
loans for the construction of chilling plants at the living below the poverty line. The EADD target is
concessionary rate of 9%, which compares favorably to transform the lives of 24,000 families by helping
to the commercial rate of 25%. them to exit poverty. EADD works closely with the
EADD also works closely with the government Government of Rwanda to achieve its goals for the
through the Dairy Development Authority to align its growth of the dairy industry.
dairy hub model with national policy and strategies. The EADD Rwanda country office was opened in
EADD is helping to upgrade the Entebbe Dairy Training Nyagatare District in May 2008, prior to a feasibility
School to ensure the long-term continuation of study conducted in September and October of that
vocational and outreach training. year. As a result, site selection and the formulation of
EADD’s future strategy for Uganda is to continue a business plan were carried out simultaneously with
to think small. Government policy prohibits the bulk farmer sensitization and mobilization. In 2009, EADD
transportation of warm milk for distances greater than expanded its presence to two more districts, Gatsibo
50 kilometers. As the market expands, EADD will and Rwamagana.
assist with the construction of chilling plants, many The program design for Phase 1 was to establish
of them satellites to established chilling plants, with a 10 new chilling plants. Initially, however, EADD took
tank capacity of 1,000 to 2,000 liters. on six existing chilling plants. During the first half
of the project, until it was disbanded, access to the
cooperatives that owned the chilling plants was
through UDAMACO, an umbrella organization for 23
local cooperatives. Early on in its engagement EADD
seconded a consultant to UDAMACO to assist it in
writing a 10-year strategic plan.
When you talk to a farmer, he doesn’t want to know
At the time of EADD’s entry, the dairy industry
your institutional affiliation. He wants to know how
was still in its early stages but had been given a
you can help him. Before EADD came along, milk
boost through a government program initiated in
was being wasted. Now chilling plants receive over
2006 to give a cow to every smallholder homestead.
1,000,000 liters a month. It’s changing the face of
About half the milk produced was either consumed
the villages.
domestically or lost along the production chain.
William Matovu Almost all the rest was sold in the informal market as
Uganda Country Program Manager few Rwandans could afford packaged milk.

9

In addition, they were difficult to find in stores outside
Kigali, and farmers had little knowledge of their
application.
Weak consumer demand was a key challenge. The
dairy hub model is based on the premise that incomes
double when farmers use their credit to access
services that improve their lives. But if farmers have
limited milk sales, this does not happen.
Penetration into the formal market was very limited
as Rwanda’s two processors were operating on low
capacity. So EADD’s Rwanda team changed tack. It
took a serious look at the traditional market, which
is led by milk bars where local fast food is served
alongside one-liter mugs of milk. Other outlets
included hotels and a government school feeding
scheme that is facilitated by the UN’s World Food
Program. In the absence of reliable data on retail
outlets and consumer habits, Tetra Pak agreed to
co-sponsor consumer research to ascertain consumer
segments, household milk-buying patterns and milk’s
penetration and distribution in the cold chain.
The recalibrated marketing approach placed a new
emphasis on the importance of collection centers
where milk is bulked but not necessarily chilled. The
lessons learned were twofold. First, during the start-
The daily trip to chilling plants can be up to 2o kms
up phase in countries where the dairy industry is not
yet entrenched, consumer demand may have to be
Where milk collection centers existed, they operated ramped up in order to stimulate farm supply. Second,
on a slim margin that was vulnerable to rainy season chilling plants are not essential to the dairy hub model.
milk gluts. The centers either owned milk shops or Dairy hubs are a channel for accessing credit and
relied on transporters who sold to their own buyers. associated services regardless of how and where the
Annual per capita milk consumption was 12 liters bulked milk is sold.
compared to 100 liters for Kenya and 22 liters for EADD also had to conform its financing package
Uganda. to the government model for turnkey chilling
Milk yields were very low as more than half the plants. At a uniform cost of about $55,000, farmers
milking cattle were local breeds and nutrition was contribute 18% of the equity. The Government of
inadequate. Cows fed almost exclusively on grass, Rwanda contributes 40% in the form of land and
a fodder source that was entirely dependent on the funding. EADD extends an interest-free loan of 21%
weather. As a result, prices fluctuated considerably which is matched by a low-interest loan from the
between the rainy and dry seasons making it Rwanda Development Bank, the state investment
impossible for a farmer to budget on an annual basis. arm for development financing. In another divergence

10

was evidenced by a significant improvement in milk
production and milk quality. The best performing
business indicator for 2010 was the value of milk sales
from farmers at $1.38 million, a jump of 70% over the
previous year.
Other indicators also reflected an enthusiastic
response on the part of farmers to EADD interventions
such as AI. EADD’s farmer-to-farmer approach to
training and information dissemination proved to
be extremely popular. More than 90% of registered
farmers undertook some form of training, a
considerably higher uptake than in Uganda (75%) and
Kenya (55%). Veterinary inputs and AI ranked second
and third respectively in farmer demand for services
and inputs.
By the start of calendar year 2011, 10 existing
Pouring milk into a cooling tank chilling plants had been rehabilitated and were making
a modest profit. More than 20,000 farmers had
registered at 16 sites which was more than 85% of the
from EADD’s investment blueprint, the Rwanda four-year project target. EADD had also established
Development Bank is responsible for the tendering, 13 satellite centers to accommodate the farmers who
procurement and installation of equipment. Despite lived long distances from chilling plants. These centers
the concessionary terms, farmers struggle to raise the are equipped with pulverizers to convert crop residue
equity. After three years, only two sites have achieved into improved feed. Seven sites have become properly
fully paid-up farmers’ equity. functioning hubs that offer three or more services to
Initially, farmers were slow to buy in to the EADD nearly 17,000 members. They range from AI, agrovets,
concept of commercializing the dairy sector. They tractor hire and plowing services to pulverizers for rent
were accustomed to organizing in cooperatives and mobile phone charging.
and receiving equipment and services from the Since the intervention of EADD, all chilling plants
government. Even so, by the end of 2010, the third have seen a modest increase in their profits. And
year of operation, farmers had responded to the business indicators have all exceeded their annual
new technology with the result that productivity had targets. In 2010 7,400 farmers were trained in
increased significantly. governance and group dynamics to enable them to be
The Government of Rwanda continued to give knowledgeably involved members of Dairy Farmers’
EADD its full support and contributed AI equipment, Business Associations. About 70% were women and
seed, biogas digesters and financing to the project. It young people. Nineteen farming families pioneered a
also acknowledged that the project’s training, technical pilot domestic biogas project initiated in conjunction
support and services had already transformed milk with the Ministry of Infrastructure. Three chilling plants
production from a household sideline to a profitable won tenders to supply schools with milk as part of the
business that had raised the living standards of school feeding scheme.
smallholders over a very short period of time. This

11

More Is Better

They arrive amid shouts and the groan and wheeze
of revving engines. It is 8 a.m. and Kabiyet town, set
at 2,000 meters atop a grassland plateau in Kenya’s
Rift Valley Province, is alive with noise and movement.
Donkey carts, bicycles, motorbikes, minivans and
pickups vie for space on the dirt forecourt of Kabiyet
Dairies as gum-booted transporters unload a
seemingly endless stream of metal churns brimming
with milk.
North Keiyo District has long been in the heartland
of Kenyan dairy production. But when Kenya
Farmers attend a meeting
Cooperative Creameries, a state-owned processing
monopoly, was declared bankrupt in 1999, the local
dairy industry virtually collapsed. Farmers turned liters and by the end of the month more than 7,000
elsewhere to sell their milk but lacked bargaining liters. The momentum was unstoppable.
power and were hostage to discriminatory prices. By January 2010, a year after company registration,
Many switched to maize growing and saw their the plant was receiving 37,000 liters a day and farmers
lifestyle deteriorate. School fees went unpaid. People were subscribing to AI services to switch from their
walked barefoot or in sandals made from discarded traditional longhorns to high-yielding Holsteins. It
car tires. Cattle dips closed and East Coast Fever was had taken just a year and a half for the dairy hub to
rampant. The building where milk was collected and become a successful, farmer-owned chilling plant
bulked was boarded up and fell into disrepair. poised to exit the EADD project and operate as a
Then EADD agreed to assist with the renovation of profitable stand-alone business.
the abandoned collection center. Five months after The Kabiyet experience is not only a success
Kabiyet Dairies Co. Ltd. was registered in January story, it underscores the impact the EADD volume-
2009, the plant was commissioned. The first day it driven program design has on communities. The
cooled 1,623 liters of milk. The next day it was 2,223 number of shops has more than doubled. There are

Kabiyet Dairies Co Ltd performance in 2010

8% $2,800,000 $368,000
Net profit margin Sales revenue generated by Monthly turnover
3,500 farmers

12

three petrol stations (compared to the previous one)
to cater for all the newly acquired vehicles. Monthly The Village Bull
turnover at Kabiyet Dairies’ agrovet store is $7,500.
General trading stores are selling 200 kilos of sugar
a day instead 25 kilos. School intake has grown by The first step in attaining high-yielding milk production
more than 35%. Fee arrears have dropped 80% is to own the right breed of cow. East Africa’s
thanks to the Kabiyet Financial Services Association indigenous cattle are hardy and resistant to local
which uses the check-off system to advance parents diseases, adapted to survival even without good
school fees against milk deliveries. Cases of theft and husbandry. But they have never been prodigious
disturbances dropped from 116 to 49 over the course milk producers. EADD’s country feasibility studies
of a year. showed that the milk output was almost universally
In Kenya volume has been attainable even in poorer low. Typically a cow produced less than two liters a
communities with a per capita income of less than day. Based on existing herds, farmers would need
$1 a day. At Metkei, one of EADD’s first site choices, to own more than 100 cows to increase their income
four cooperatives joined together to form a limited through the sale of surplus milk. Yet large herds require
company which attracted 2,000 shareholders. Paying extensive pasture and lots of water. Neither resource
the $8.75 share price was challenging, but it was was easily available. There had to be another solution.
achieved in installments. At the time of EADD’s entry, The starting point for EADD’s program in the first
the local cows were typically yielding three cups of year of implementation was to talk to farmers about
milk a day. Now daily yields average seven liters. The why they should consider changing the profile of
plant has 3,500 regular suppliers who generated a their herds. Small was better. Genetically improved
revenue of $1.85 million in 2010. was better still. Crossbreeding with exotics such as
Friesians, Holsteins, Ayrshires and Jerseys allows
farmers to reduce the size of their herds dramatically
while improving the output of milk.
The way to do this efficiently and on a large scale is
through AI. Traditionally farmers used natural breeding
through the services of a few local bulls. It did little
to improve the quality of the animals. AI, on the other
hand, is a technology that allows farmers to meet their
breeding goals by introducing quality genetics from
The root of our success is that we demystify performance-tested bulls.
innovations. We involve the farmers in whatever In the first two years of project implementation,
we do, and they give us feedback. We are a single, AI service providers had performed nearly 120,000
holistic entity. inseminations, about half of them through EADD-
funded chilling plants. While past records show that
Ken Biwott breeds are improved by crossing local cows with
Manager, Metkei Multipurpose Co Ltd exotic quality bulls, It takes five to 10 years for AI
to make its full impact on household incomes. By
midterm of the project’s Phase 1, crossbred cows
constituted at least half of the herds belonging to

13

If you sample from the same bull, you can’t In Uganda, where 95% of cattle were local breeds,
improve more than 2% in a generation. If you EADD persuaded the government to change its policy
choose from the global pool of elite genetics, on breeding and promote AI. Because farmers found
the improvement is 200% in a generation. You’re the cost of insemination high, the EADD team reduced
leveraging with scientific knowledge to rapidly the price for a straw of semen by 15-20% and added
change an indigenous animal into a viable dairy a further 10% discount on every 30 straws purchased.
unit. EADD also created 22 AI satellite centers in remote
areas to cater for pastoralist farmers who found it
Nathaniel Makoni difficult to access services. The centers offer breeding
Team leader, EADD breeding section and veterinary services as well as semen and breeding
supplies. They are staffed by AI technicians and
Community Animal Health Practitioners. Largely as a
result of these initiatives, AI uptake increased by 25%
in 2010.
The success of AI uptake lies in efficiency and
affordability. By midterm of Phase 1, more than 400
more than 95% of beneficiary farmers, according to Community Animal Health Practitioners had been
an external evaluation. And farmers had been trained trained as accredited AI service technicians. About
in keeping breeding records for animal passports and 95% of AI technicians are under 35 in line with EADD
traceability. policy to target younger people. For cultural reasons,
At first EADD staff seconded from ABS TCM few women have signed up to be inseminators, but the
encountered resistance among some farmers, who barriers are crumbling. Between 2008 and 2011, the
were reluctant to sell their prized bulls. Farmer proportion of AI providers who are women grew from
education forums, the distribution of educational 3% to 11%.
material and the experience of model farmers who Farmers need proper training too. Keeping a
were already using AI gradually persuaded the record of each cow’s breeding cycle is important for
skeptics to switch methods. With AI now an intrinsic achieving high conception rates. So is understanding
aspect of local dairy culture, the straws of semen how to use the heat-detection system to establish
provided by EADD’s AI technicians are known as ‘the when a cow is in estrus. EADD has trained more than
village bull’. 100,000 farmers to make informed decisions on when
In Rwanda, EADD partners with the government’s and how to breed.
Rwanda Animal and Research Development Authority Even though efficient systems and subsidies have
and the Eastern Region Animal Genetics Improvement greatly reduced the cost of AI ($10 -15) to the farmer,
Cooperative to ensure sustainability of the AI program. affordability remains a major challenge. Hubs offer the
Rwanda’s government-subsidized program imported service on credit, but many farmers are not able to pay
10,000 units of gender-sorted bull semen in 2010, the for AI solely from milk proceeds. EADD is overcoming
largest consignment of its kind ever exported to Africa. this through subsidies. AI service providers are also
In Kenya, AI is moving away from a public-sector facing difficulties in funding their business start-up
extension service to become a highly successful costs to buy equipment and a motorbike. EADD is
commercial enterprise. The rate of successful considering financing mechanisms for new providers.
impregnations is above 80%.

14

Home at Last

Set amidst softly rolling hills and lush pastures,
Urugero Farm in Rwanda’s Nyagatare District is
home to 26 crossbreed Friesian cows. Each one was
bred on site with AI in 2009 and 2010. With the cows
yielding 50 liters a day, the profits from this dairy
business are healthy as the herd’s owner, 50-year-old
Celestin Bwimana, is quick to point out. In 2010 his
net earnings from milk sales were $4,000, an eightfold
increase on his annual income before he went into the
dairy business.
That is not bad for a man who was born a refugee in
Field Studies neighboring Uganda. Celestin came to the land of his
birthright in 1995, the year after Rwanda’s genocide,
A field with a resident herd of Ankole cows is as a beneficiary of a government resettlement scheme
not the average seat of learning, but it is ideally on land excised from the Akagera National Park.
suited for the purposes of Paul Chatikobo, Celestin was allocated 19 hectares of bush which
the AI training coordinator for EADD in his herd of 23 native Ankole cows shared with lion,
Rwanda. Here, in the rain-splashed grass leopard, buffalo, zebra and impala.
and mud, attentive Community Animal Health ‘We didn’t own the land so we didn’t bother to
Practitioners undergo two weeks of practical clear it. The cows didn’t give any milk. We kept them
application in AI having completed a week because that’s what people do,’ he explains, referring
of theory in a conventional classroom. Most to the Rwandan belief that livestock ownership
students are men in their 30s. While AI is not confers social status. Meanwhile Celestin and his wife
yet widely accepted as a woman’s job, several struggled to raise their children on their $500 annual
young women have broken the gender barrier income from a canteen they had built to cater for the
and enrolled in the class. village secondary school.
The school is a public-private partnership Then three years ago two events coincided to
between EADD, the state-run Institute of change Celestin’s life dramatically. The Rwandan
Agricultural Science and Research and the government gave him a title deed. It was the incentive
Eastern Region Animal Genetic Resources he had been waiting for to improve his land. As a
Investment Corporation, a for-profit company refugee, Celestin had not been exposed to agriculture.
owned and run by Rwandan AI experts. It Now he intended to earn a living from it. But how was
was established to lay the foundation for a he going to go about it?
sustainable AI sector in Rwanda. It trained 164 The answer came in the form of EADD’s Joseph
students in the first 22 months of operation. Karake. The two met at a recruitment drive for the
Isangano chilling plant. Celestin’s cows did not
produce surplus milk for sale. He had signed up as

15

Celestin Bwimana’s annual income has increased eightfold.

a member anyway, lured by the prospect of being he now trains others in dairy essentials such as
trained in dairy management, getting access to a breeding, husbandry, feeding, fodder growing and
market and receiving reliable payments. ‘Joseph told record keeping. And in a role switch that brings a smile
us to change our cows so that we could get milk. to his face, he receives farmers on exchange visits
That’s what convinced me – the milk yield,’ he says. from Uganda and Kenya.
Celestin’s enthusiasm caught Joseph’s attention. He ‘EADD showed us how to change the way we live,’
signed him up as one of the 13,000 farmers who have says a beaming Celestin from his recently built office
gone on exchange visits to farms and business hubs in one of the fields. Milk sales paid for its construction
in East Africa to observe best practices in operation. as well as for the purchase of motorbikes to transport
On his return Celestin sold his old herd and began to the milk to the chilling plant and for his daily commute
breed a new one by crossing high-yielding Friesians to and from his house in the village. Milk also funds the
with the hardy local Ankole cattle. A novice in animal schooling for his six children.
husbandry, he was advised every step of the way ‘I have a five-year vision. I’m putting all my profits
by EADD’s breeding specialist, Margaret Mukawera. into improving the farm and building a larger house
EADD’s senior dairy specialist, Betty Rwahumzi, for the family. After that, I’ll start saving my money,’ he
visited regularly to talk about milk quality, hygiene and says.
mastitis.
Celestin proved to be a quick and enthusiastic
learner. For a small facilitation fee provided by EADD,

16

Kenya Banks Pioneer Small
Loans to Farmers

Justus Ndigwa, 33, is an independent AI technician
attached to Kenya’s Ol Kalou chilling plant. He visits
clients in his catchment area on his fully paid-up
motorbike. He often trains Dairy Management Groups
on breeding, feeding, milk quality and good husbandry.
And for a fee, he will organize farmer exchange
visits. Justus, who can count on a minimum monthly
revenue of $1,000, will soon be moving his wife and
two children into a newly constructed, $11,250 three-
bedroom home. In sum, his prospects are bright.
It was not always that way. Four years ago Justus
was earning $125 a month as an extension services
manager at a dairy farmers cooperative. He could not
even afford to rent a room in which to lodge his new
bride. Then he linked up with the Ol Kalou chilling
plant as an accredited professional AI service provider.
Ol Kalou provided progeny-proven semen together
with an AI kit and facilitated an interest-free loan
to cover their cost. Justus still needed $1,560 for a
motorbike so that he could reach his clients’ scattered
farms. He approached a bank for a commercial loan,
knowing that his association with Ol Kalou would
establish his creditworthiness.
Women lead as account holders, savers and borrowers in financial
Before EADD had a presence in Ol Kalou, Justus
services associations.
would not have been able to secure a loan for a
motorbike and, arguably, would not have been able to
start up his business. The agriculture sector has been farmers. Then in 2010 a dialogue was started with
habitually shunned as a poor risk. Now, with advice Family Bank, which was already lending to Kenyan tea
from EADD’s business advisers, the tables have been farmers, most of whom received monthly payments for
turned. their tea leaves of less than $60.
EADD has been able to open up this avenue through Excited by the prospect of expanding into the dairy
its evolving partnerships with commercial banks. While sector and reassured by EADD’s track record, Family
banks showed interest in financing chilling plants, Bank dispatched team members to attend Dairy
they were less inclined to become involved in the Management Group meetings and visit homesteads
time-consuming prospect of small loans to individual and chilling plants to gauge the farmers’ needs. The

17

result of this footwork is a unique financing package
tailored to the input requirements of Kenyan dairy Good Feeding Makes
farmers. Working through the dairy hubs, Family Bank Healthy Cows
intends to build up a portfolio of 5,000 customers by
the end of 2011. The loans are usually for business
start-up and expansion and tend to be less than Fodder makes a big difference to milk production,
$1,250. particularly during the dry season. Sound feeding
‘We serve those who once were considered practices using homemade feed concentrates, hay
unbankable,’ explains David Odongo, who heads and silage sustain steady milk yields. This, in turn,
Family Bank’s agribusiness department, ‘Thanks to stabilizes the year-round milk supply and therefore
EADD and the dairy hubs, we can ascertain a farmer’s farm-gate prices. East Africa has constantly changing
security and assets. The chilling plant verifies average mini ecosystems across the region. It took EADD
monthly earnings which equates to the company pay feed specialists two years to fine tune the feeding
slip. We also collateralize the farmer’s most important requirements for each site. In fact, the process is
asset, which is the cow. Each cow is entered in a ongoing. When farmers upgrade their herds to exotics
database and given a performance rating based on and crossbreeds, the feeding strategy changes again.
its yields. This has a bearing on the value we give it. Feed comprises up to 70% of the cost of milk
Some are worth $1,000.’ production on small holdings and is a key component
Commercial banks are definitely filling a financing of cost-benefit analysis. EADD recommends farmers
gap for transporters and service providers. In the first improve pasture by planting Napier grass and legumes
quarter of 2011 Family Bank disbursed 234 loans for such as Chloris gayana, Mucuna prurien, and Lablab
the purchase of motorbikes. Another 170 applications uncinatum to provide protein. It also recommends
are in the pipeline. Other loan applications are for the that farmers mix their crop residues with molasses to
purchase of fodder seed, veterinary drugs, AI, stocking make silage. Solutions such as these go a long way to
herds and the partial financing of domestic biogas boosting profit margins.
installations. EADD also supports the invention of new
technology. Kenyan George Kinuthia modified a
hammer mill by adding a cutting blade and came up
with a low-cost EADD pulverizer for on-farm silage
making. This model has been replicated in all three
countries where it is made locally for sale and rent
through chilling plants.
EADD emphasizes farmer education on feeding
and growing fodder through training, exchange visits
and demonstration plots belonging to EADD model
farmers. To date some 2,000 farmer trainers have been
trained in improved feed practices. As a result, more
than 125,000 farmers (75% of the Phase 1 target) are
using quality feeds.
In Uganda, more than 38,000 farmers are already
A farmer gets a receipt for milk delivered at Ol Kalou dairy in Kenya. using high-value feed for their milking cattle, partly

18

FARMERs ADOPTING IMPROvED PRACTICEs

Catchment beneficiaries
KENyA
100 Catchment non-beneficiaries

90 Control
Catchment area in percentage

80
70
60
50
40
30
20
10
0
Feed conservation Feed concentrates AI Improved fodder
practices crops

UGANDA
90 Control

80
70
60
50
40
30
20
10
0
practices crops

RWANDA

90 Control

80
70
60
50
40
30
20
10
0
practices crops

source: EADD Midterm Evaluation Report 2010

19

source: EADD Midterm Evaluation Report 2010

thanks to commercial feed companies that supply on EADD also encourages Dairy Farmers’ Business
credit to many of the agrovet stores. The bulk retailing Associations to introduce Dairy Management Groups
comes with a discount which means that farmers can to the idea of growing fodder commercially and to
buy mineral licks, premixes and meal more cheaply link interested farmers to banks that will fund start-
than at other retail outlets. Local seed supply systems up costs. Even so, most farmers do not consider
are also being developed so that farmer groups can growing fodder for sale to be a worthwhile commercial
grow and bulk pasture seeds for sale. In Kenya, where enterprise. But if they knew the story of Pharo
the prolonged dry season can last up to six months, Ngaranbe, a Rwandan smallholder, they might change
three out of four farmers have attributed their high milk their minds.
yields to improved feeding. Pharo, 55 and a primary-school leaver, was barely
George Kariuki lives on the family farm perched making a living growing sorghum, beans, sweet
2,000 meters above Nakuru town on the floor of the potatoes and bananas on his one-hectare farm.
Rift Valley. He is an EADD farmer trainer and model Then he met Bernard Nzigamasabo, the EADD feeds
farmer who grows frost-resistant varieties of Napier specialist, and expressed an interest in starting
grass in his demonstration plots. George, who up fodder demonstration plots. EADD gave Pharo
facilitates exchange visits for local farmers, pioneered improved fodder seeds and helped him negotiate a
his own variation of the pulverizer and uses it to make supply contract with the nearby Umutara Polytechnic
three tons of silage to carry his milking herd through University’s livestock department.
the dry season. As a result, his cows have doubled Three years on, Pharo has bought a second hectare
their production to up to 40 liters a day. ‘I’m very of land from a neighbor and is renting another six
happy with EADD,’ he beams, ‘We see people doing hectares on which he grows commercial quantities
things differently, and it plants ideas in our minds and of Brachiaria grass. He also has his own small herd
makes us ambitious. Without knowledge, you can’t of zero-grazing Jersey crossbreed cows and grows
move.’ improved fodder seeds for sale to other farmers.

20

Bubusi Feed Mill

In Uganda it is not unusual to see cows wandering by
the side of the road or on the common land around
villages and towns. This free-grazing method cuts
down on fodder and labor costs, but cows are not
able to find sufficient food. And their diet lacks vital
minerals and proteins. Supplementary feeds can
make up the balance, but they are costly and hard to
find. Even when farmers travel up to 30 kilometers to
the nearest town, there is no guarantee they will find
concentrates in stock or that the sales assistant will be
able to advise on the correct feed amounts.
EADD’s Uganda feeds team considered how best
farmers could access quality supplementary feed at a
reasonable cost and concluded that a localized feed
mill was the answer. They partnered with the Bubusi
Dairy Farmers’ Business Association and the National
Agriculture Advisory Service for the pilot turnkey
A model farmer pulverizes fodder for the dry season. project. Bubusi is a traditional market hub north of
Kampala where farming is intensive, a mix of crops
and two to five cows on plots of land not larger than
He advertises his wares on a local radio station. His
two hectares.
annual income has been sufficient to build a new
EADD came up with a formula for the meal and
house and to send his seven children to private school
concentrates and helped the farmers to source
and university.
ingredients that were relatively cheap but which
To maintain his commercial fodder business Pharo
provided quality. The team also helped the farmers
employees 50 laborers and has taken out medical
to draw up a business plan and linked them to an
cover for each of them. So far he has trained more
equipment supplier that offered flexible repayment
than 350 dairy farmers on fodder and feeds best
terms. The start-up capital was funded by farmers’
practices. Recently his fodder store was blown down
share contributions and a soft loan guaranteed by
in a storm. He intends to raise a loan from the bank to
EADD. The mill came on stream in November 2010. It
rebuild it using his fodder account to demonstrate his
has a production capacity of 1.2 tons a day and does
creditworthiness.
a brisk business.
‘I learned all this through the training I got from
‘We want to put a smile on farmers’ faces. That’s
EADD. It’s a question of maximizing my skills and
our homework,’ says Jane Kugonza, EADD’s team
knowledge. Now I want to help my neighbors escape
leader for feeds in Uganda.
poverty too,’ he says.

21

Reversing the Urban Drift

Young people in their 20s and 30s know only too
well that dairy provides a route out of enduring,
generational poverty. The Silanga Youth Group at
Kabiyet borrowed $600 from the District Youth Fund
to purchase three heifers for members who did not yet
own cows. Now all have seen a substantial rise in their
standards of living. The group also helps to support
the community’s orphans and people living with HIV.
Selly Cherotich, 33, is a Silanga member. She and
her husband own a Friesian and a Jersey and are
Purity Chipchirchir, 28, dropped out of school but now runs her
paid-up shareholders at Kabiyet. Like their fellow own store and milk-trading business.
shareholders, they have learned how to prepare hay
and silage to feed their cows through the dry season. in calf. She has also built a cow barn to store hay. She
Consistent milk yields is one of the reasons why is never behind with school fees and there is always
Kabiyet was able to more than double the farm-gate nutritious food on the table at mealtimes.
price when negotiating a contract with New Kenya Juliana banks at the Tanyikina Financial Services
Cooperative Creameries. Association which is managed by 24-year-old
Selly is the mother of seven children including two Jasper Langat. It pays advances against milk
sets of twins. She supports and schools them on milk delivery for anything customers need. This includes
proceeds. ‘I’m a school graduate, but most of our health insurance through the dairy hub’s Tanyikina
parents couldn’t find the money to let us finish school. Community Health Program. In just over a year the
Anyway, I’ve never been able to find a job. We want it bank’s members have grown tenfold to 2,000.
to be different for our children, and EADD has raised ‘Women make up the highest number of account
our morale,’ she says. holders. They seem to have a better grasp of saving
In neighboring North Nandi District Juliana and borrowing. One of my female clients dropped out
Maiyo is treasurer of the all-women Kemeliet Dairy of secondary school because her parents couldn’t
Management Group. The women formed it in 2008 afford the fees. She bought a share in Tanyikina Dairy
even though none of them owned cows, because they and in the bank too. Now she has 28,000 shares and is
saw the potential in dairy. They began to buy milk from about to build her own store,’ Jasper says.
farmers and to transport it in bulk to the Tanyikina ‘At first it was difficult to persuade people to entrust
Dairy Plant. At the same time, because they were us with their money.’ he continues, ‘They would
already organized, the Kemeliet group was among the deposit it and then withdraw it three days later to see
first to receive EADD training on fodder establishment, if it was still all there. That’s changed now, of course.’
animal health, farming as a business, silage making Jasper, who is native to the district, left a job in Nairobi
and water harvesting. These improved methods have to run the bank. Since his return home a year ago,
paid off for Juliana. She has been able to buy another several brick buildings have been constructed at
crossbreed cow for $375 and her other two cows are Tanyikina, he says.

22

Corporates Help Expand Dairy
Markets

EADD’s business-based approach to development has
attracted multinationals such as Nestlé and Tetra Pak.
When Nestlé established its regional headquarters
in Nairobi, Kenya in 2008, it knew that working
with EADD would dovetail with its own corporate
philosophy of supporting rural development through
stimulating processor demand for chilled milk. The
Tetra Pak seals its agreement with EADD and
company chose Kabiyet Dairies in Kenya’s Rift Valley Metkei Multipurpose Co. Ltd. with a cheque of $31,250.
Province to pilot a blueprint for milk collection and
marketing.
Kabiyet is developing operating procedures One of Nestlé’s strategies is ‘Keep it simple. Keep
for hygiene and quality norms that meet rigorous it small’. New chilling plants and those undergoing
international standards. A technical expert seconded expansion have adopted the multinational’s
to the dairy from Nestlé provides assistance with raw- recommendation for installing low-tech, low-cost,
milk quality and safety management from farm gate to low-capacity (1,500 – 2,500 liters) coolers. Similar
factory. Once established as a model of export-quality partnerships with local processors have been entered
milk production, the dairy will be able to market its into with local processors - New Kenya Cooperative
milk to Nestlé for regional export as powdered milk. Creameries (Kenya), Sameer (Uganda) and Inyange
It will also become a training ground for other chilling (Rwanda) – to establish dairy-hub benchmarks for raw-
plants in the region. milk quality.
Tetra Pak is assisting with the introduction of quality
protocols at Kenya’s Metkei and Kokiche chilling
plants. As a result, some 30,000 farmers have been
able to negotiate competitive prices for supplying
milk to the New Kenya Cooperative Creameries
UHT processing plant. Tetra Pak intends to offer its
package of a value-chain performance, milk-quality
assurance and management training to more chilling
plants.
EADD sees the partnerships with Nestlé and Tetra
Pak, the world’s largest milk buyer and milk packager,
as a marketing incentive for processors to adopt a
quality-based pricing scheme. This in turn would be
an incentive for farmers to invest in good feeding,
Group photo of the Kabiyet-EADD-Nestlé partnership breeding and hygiene practices.

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Eadd mid term report 2008 2010

Eadd mid term report 2008 2010

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Eadd mid term report 2008 2010