1. Activities and actors
2. Primary livestock societies versus individual entrepreneurs:
3. Primary livestock societies versus primary crop societies:
4. Activities covering the whole region
5. Kagera experiences with livestock primary societies:
6. Economic activities:
De Wolf J.
KALIDEP, Kagera, Tanzania
Abstract
In the dairy production system various activities and actors can be recognised. Depending on the activity the right actor should be identified. With the stimulation of primary livestock societies the role of the individual business men should not be omitted.
Primary livestock societies are considerable different compared with most crop oriented societies.
Kagera experiences shows that during the stimulation process too many unrealistic expectations are created at the farmers side. Training in good bookkeeping is one of the most essential administrative skills to be taught.
Livestock development is characterized by a wide range of activities. Most primary livestock societies in Kagera are implementing more then 3 or 4 activities.
Primary societies in Kagera are at present not yet competent to implement activities which are carried out on a regional level e.g. supply of drugs and liquid nitrogen.
During the last two years Kagera Livestock Development Programme (KALIDEP) has tried in several ways to institutionalise most of the various economic activities. Success has not yet been great but some promising processes have started eg. small scale cheese production by private individuals and farmers organisations.
Activities of the livestock sector in general can be subdivided into the following groups. They are:
a) Production of meat, milk and dairy heifers by the small holder sector (+ parastatal ranching).
b) Extension service and applied research, which will remain the area of the Ministry of Agriculture.
c) Input supply. This can be divided into two levels:3A on regional level
3B on village/divisional leveld) Market infrastructure. Distinction has to be made "between production processes, products and scale of operation. In Kagera we can distinguish the following activities.
i) small scale milk processing (up to 300 litres of milk per day).
ii) milk trade to other regions by steamer
iii) slaughter house activities
iv) trade in dairy cattle
v) trade and auction of slaughter cattle.
vi) trade in hides and skinse) Special services for the livestock sector. In Kagera the following services can be mentioned. They are:
i) Development of appropriate processing techniques and organisation
ii) Credit to small holders
iii) Credit to institution and private entrepreneurs
iv) AI field service
v) Production of one day old chicks
vi) production of poultry feed.
viii) dipping
ix) Veterinary services
In the past KALIDEP as a project attempted to implement a very wide range of activities. At present the project stimulates various actors. The above mentioned activities can be implemented by a wide range of actors.
Level of involvement of the individual can vary from situation to situation. Listening and stimulating a dialogue with the beneficiaries is the first step in this process. Which actor takes the lead in the process will vary according to local conditions. In Kagera region the start with dairy farming was initiated by the regional government.
Various actors in the dairy development sector can be distinguished. A description of the major ones is presented below:
i) Individual small holders. At present they are mainly involved in the small scale production of milk and meat.ii) Individual business men and women. Their major involvement at present is trade of slaughter stock hides and skins and milk trade + processing. Retail and whole sale trade of some inputs are carried out by this group.
iii) Farmers organisations. Various community activities and activities mentioned under 2 (page 1) are possible
iv) District councils. At present their major involvement is the auctioning of cattle and dipping. The last activity is at present not carried out by the councils.
v) Central government (MOA) Extension services, veterinary services, research and regulatory are remaining the core functions of the ministry
vi) Unions, Federations, Trusts could involve themselves in activities which cover larger areas, like large scale milk marketing or the wholesale trade of drugs.
vii) Private large scale sector. Large scale processing or whole sale could be carried out by this type of actor. At present this actor is not present in the region and it is doubtful if this actor should be stimulated at present.
viii) Parastatal sector. In the livestock sector they deal mainly with producing beef and F1 dairy heifers.
Distribution of the activities over the various actors will depend on various conditions. The most ideal situation would be that individual farmers and primary societies with their union should implement all the activities. Unfortunately level of awareness of the possibilities and needs are not always sufficiently known by the beneficiaries. (eg start of the dairy fanning industry in the early eighties in Kagera).
The actor Kalidep project should ideally be a part of the above mentioned actors. Which activity to which actor depends on several factors. Some are: capital intensive, area of operation, high or low demand on skills, high or low demand on management and organisation.
Both actors have their pro and cons. Kalidep should stimulate both groups. Below follows a list of the weak and strong points of the two actors:
a) Community based activities are not likely to be taken up by the individual businessman. Some communal activities have only a minimum profit margin, but are required to be implemented by either one of the actors. Examples are:1a Dipping
1b AI field service
1c management of the rural credit scheme (HIT).Primary societies are supposed to represent the members at the grass root level. These community type of activities are supposed to have a great awareness in the society in case they will be a success. Real farmers representation will encourage this. b) Trading of inputs. Both actors are more or less equally equipped for this activity. In general a private business man will have an advantage of avoiding losses due to poor bookkeeping, there he himself is the beneficiary of these 'lost' funds. Cooperative societies have a big need for excellent bookkeeping and are not able to make fast business decisions.
There is a difference in the type of inputs eg cottonseed cake or veterinary drugs. The last requires a big capital outlay and several legal requirements.
It is assumed that delivery of inputs starts from the retail side. After some period it will be possible to enter for both of them whole sale trade.
c) Milk trade and processing. Both actors can do this activity but it is assumed that cooperatives are the best model. Delivery of good milk needs farmers awareness.
Secondly the farmer sells only the surplus milk to the society. A good society will make a contract with their members. A private individual will be quite often not be bound by solving farmers problem of excess production during the rain season.
d) Slaughtering and trade of slaughter stock. This is a special activity. Due to the large variation of slaughter stock and the requirement of a good practical skills it is very doubtful if a cooperative society will out perform the individual butcher.
e) Trade in hides and skins. Both actors are more or less equally equipped for this trade
f) Cooperative societies are getting quite often a better assistance in the form of advises, interest free loans than private individuals (at least from Kalidep)
g) Collection of taxes and cess is easier from the cooperative societies than from individual persons. Records of coop societies are in general more detailed and open due to government inspection.
Crop societies are in the region quite numerous and have already a long history. They are mainly dealing with only one crop. That is either coffee or cotton. In some cases they are dealing with more produce like beans.
In the past there has been considerable changes, during the villagisation process. In general farmers interest and trust in their primary crop society is limited.
The livestock primary societies are quite different. They are a recent phenomena. Quite some leaders and groups started with having an impression that KALIDEP project would hand out quite easy soft loans, gifts, subsidies etc.etc.
Financial administration of the livestock primary societies is much more complex compared with the crop societies. Livestock primary societies are involved in a wide range of activities. This has as a result that quite a number of ledger accounts have to be opened and that the bookkeeping system is on accrual basis.
According to my knowledge all primary crop societies are member of their union. It seems that the union has a considerable influence on the primary societies.
Some commercial activities are carried out on behalf of the regional level. Some examples are:
Procurement of liquid nitrogen from Uganda
Procurement of veterinary drugs from Mwanza, Dar es Salaam or from abroad.
Distribution of molasses. (recently stopped due to high prices at the factory).
Development and feasibility studies of various economic activities of primary societies.
Development and procurement of processing machinery (milk and meat) and processing consumables (e.g rennet).
Monitoring credit heifers, production of dairy bucks etc
Individual primary societies could carry out the above mentioned activities, but for the time being this is not yet realistic. KALIDEP will hand over the above mentioned activities to a relevant institution in the next phase. In the near future a study will be conducted in which the proper handing over to the right institution will be carried out.
The following options exist, they are:
Company with shares Association
Union of several primary societies
Trust
etc.
Farmers prefer that all assets of the present KALIDEP COMMERCIAL department are handed over to the UNION. Project staff consider a trust better. Kalidep staff consider a union based on still weak (but some promising societies) not the right institution for taking over all the assets.
During 1993 and 1994 KALIDEP has assisted the formation of primary societies. In general they are arranged around the FARMERS EXTENSION CENTRES. This is not necessary and · depends on local wishes and conditions. Before the formation of these coop societies KALIDEP worked mainly through informal farmers groups, which were arranged around particular activity. Some examples are: dipping committee, heifer distribution committee, committee for selling molasses etc.
During 1993 together with the regional and district cooperative department various primary societies were registered. Formulation took quite some time due to the estimation of the economic viability. After the registration all the informal groups in that particular area were included in the registered society.
Areas which are not yet covered with a registered society or with a poor functioning society the informal groups are still present. In these informal groups the livestock department has still a big say.
The ideal situation will be that all areas are covered with proper functioning livestock primary societies.
In the year 1994 more emphasis was put on. teaching and coaching. One manual for the livestock primary societies was prepared. This manual is used during a one week course for the committee members.
The content consists of cooperative principles and the legal conditions, bookkeeping and description of various economic activities.
A lot of attention was put on bookkeeping and reporting. A one week period is not enough and quite a number of farmers followed this course for a second time. The course is organised by the Kikulula farmers training centre together with personnel of the regional cooperative department.
During 1995 training mainly in bookkeeping will continue. A second course will be prepared in which cost benefit and cost price calculations will be offered.
Besides these administratively oriented courses the farmers training centre offers three technical courses to the farmers. They are:
a) Course in dipping. This is a practical course in which the HBU dip is used as a teaching aid (mixing, calculation etc).b) Dairy processing. In this course participants learn the practical skills of making cheese, cultured milk and butter. The model dairy processing unit at the training centre is used for the training.
c) Training of artificial insemination. Farmers are selecting the right candidate for this activity. The training is done by the HBU staff at the HBU.
Possibly a fourth course might be offered in the field of food processing like making jam and juices of excess fruits in the villages.
Besides these training a follow up visit and assistance at the site was offered for each society of two days by the staff of the regional cooperative department.
During 1994 one representative was invited for a farmers meeting. During the first session farmers are meeting without Kalidep staff. In the second session Kalidep staff members are invited.
During this dialogue agreements can be made and the point of view of Kalidep can be presented. As well during this meeting farmers are having an opportunity of selecting one representative of each district for the steering committee
During 1995 two meetings with farmers representatives have been planned.
In general it can be said that business orientation and management of these societies is still weak, although some promising starts have been made. The willingness is in most situation present. Business and financial competence is lacking. Appropriate training programmes can solve this short coming.
In table 8.1 some data of the existing primary coops is presented of the year 1994. Figures are based on the trial balance. Final accounts were not prepared, therefore profit or loss figures could not be calculated. The table presents a reasonable impression concerning the financial position of the societies. The case of Bugufi is quite illustrative, how with poor financial competence farmers money is lost.
Some societies were not cooperative possibly due to fear that errors in the financial administration would be discovered.
8.1: - DATA ON PRIMARY SOCIETIES
|
Name |
No. of Members |
Regist. |
Share capital |
Entry fee |
Income/T urnover |
Coat of Sales |
Running costs |
Remarks |
|
Nkwenda |
39 |
yes |
128.000 |
18,000 |
0 |
0 |
0 |
43,800 is missing |
|
Kaisho |
79 |
yes |
? |
? |
? |
? |
? |
No books at the society |
|
Mabira |
64 |
Yes |
40,950 |
22,500 |
0 |
0 |
46,550 |
Foundation capital is eaten away |
|
Kayanga Kar. |
72 |
Yes |
92,900 |
26,000 |
3.332,-485 |
2,432,-312 |
655,148 |
End stock not included |
|
Kikukula |
26 |
Yes |
149.000 |
12.500 |
147.383 |
175,175 |
50.680 |
- do- |
|
Nyaishozi |
40 |
Yes |
? |
? |
? |
? |
? |
23,950/= is missing |
|
Kabirizi |
25 |
Yes |
50,500 |
11,500 |
7,500 |
0 |
38,310 |
High travelling costs |
|
Bwabuki |
? |
Yes |
169,000 |
17,000 |
15.050 |
150,000 |
15.050 |
Most molasses is still present |
|
Mushozi |
? |
No |
53,000 |
13,500 |
0 |
0 |
7,150 |
|
|
Budaco |
? |
Yes |
? |
? |
? |
? |
? |
No books seen |
|
Maruku |
? |
No |
48,000 |
37,000 |
0 |
0 |
29.030 |
Very recently established |
|
Kyamutwara |
46 |
Yes |
216.500 |
36,000 |
173,100 |
337.950 |
? |
Considerable amount of molasses remaining |
|
Nyabionza |
44 |
NO |
? |
? |
? |
? |
? |
Not visited |
|
Kamachumu |
20 |
No |
25,000 |
12.500 |
0 |
0 |
500 |
|
|
Kaigara |
45 |
Yes |
107,500 |
25,000 |
211,190 |
100,000 |
50,900 |
Most funds invested into construction of dairy plant |
|
Mubunda |
15 |
No |
= |
8,000 |
0 |
0 |
110 |
|
|
Nyarubundo |
? |
Yes |
94.000 |
27,000 |
22,416 |
0 |
16,310 |
|
|
Chato |
? |
No |
? |
? |
? |
? |
? |
No books seen |
|
Bwanga |
?5 |
No |
0 |
8,000 |
0 |
0 |
0 |
|
|
Bugubi |
? |
No |
84.000 |
47.000 |
0 |
0 |
28.360 |
Short of 3,640/= |
The present advised and possible economic activities of farmers cooperatives in Kagera region are:
a) Management of the HEIFER IN TRUST SCHEME:Distribution of the pass on heifers of the credit scheme is an activity of the society. In all societies the committee is aware that with each distribution they can present to Kalidep an invoice for claiming 2500 t.sh. for the administrative fee. The committee is responsible for the management of this credit scheme. This means as well that the committee has the authority to remove the animals from a poor performing farmer. Before the payment of the credit all female animals in the shed are the property of Mifugo.
Monitoring of the credit scheme will be done at regional level and the societies will receive four times per year a list of farmers with their animals who have not yet paid their credit.
b) Dairy cattle trade:
This is a relatively new activity. Societies can earn a commission of 10.000 T.sh. for each female animal the project buys from present dairy farmers with excess females for waiting farmers in their area. Kalidep pays the seller the required amount according to a schedule. The bought animal is entered as a foundation animal of the credit scheme.
c) Al field service:
A few societies have received the infrastructure from KALIDEP. At this moment the societies are receiving semen for a price of 250 Tsh. per straw and liquid nitrogen free of charge. Societies organise the field service themselves. In case a society can guarantee more than 60 inseminations per month this society will get for their inseminator a motorbike. Payment of the salary and running cost of the motorbike has to be done by the society. (3 societies have received from KALIDEP a motorbike).
d) Milk trade and processing:
In areas with low milk prices, KALIDEP is willing to offer on lease basis the equipments. Any buildings have to be paid for by the farmers them selves although a loan repayable in a specified number of dairy heifers is possible. At this moment only 4 societies have received assistance in this activity from KALIDEP.
The present technology consist of a small scale unit with a capacity of 300 litre of milk per day. Nearly all equipment is made locally. The major products are cheese and packed cultured milk.
e) Molasses trade:
Due to the very high prices ex Kagera Sugar this trade should be terminated. Feeding cheaper alternatives should be advised. Kalidep has constructed about 40 molasses tanks in 3 districts. One lorry is used for the delivery of molasses from the factory
f) Cotton seed cake trade:
Quite a number of societies are involved in this activity. Others are willing but due to the requirement of additional capital they are not able
g) Dipping:
Societies can assist the livestock owners in this activity. In case with good bookkeeping farmers might be willing to start using the dip again. Farmers feel that they have lost several times their contribution in the past to the extensionist or the chairman of the dipping committee. Primary societies with good bookkeeping will be able to show to the members that their funds are not lost.
h) Hide and skin trade:
One society has entered this trade. The DLOs are requested to stimulate the registration of this trade.
i) Trade in minerals and veterinary medicines:
During 1994 a turnover of 216 mln with a commercial profit of 26 mln. Tshs. was realised. Total invested capital is this trade is about 300 mln. Tshs.
In the future arrangements could be worked out in which coops take over the retail sale of these inputs. At present the financial management has to be improved considerably, before coop societies can take this over.
In the future more economic activities can be implemented. For the time being the present number is already quite big.
DISCUSSION
Q. L.L. Ngingwana
How does the Cooperative Department Assist the Livestock Department in the formation of Livestock Cooperative/Association in Kagera Region and make the Cooperative/Association formed be viable.
Response:
Though the two departments are in the Ministry of Agriculture, the Cooperative Department is under the control of the Regional Development Director and the people/staff seem to be idle most of the time. When the staff of the coop Department are hired by KALIDEP to visit farmers they are paid 5,000/= without considering nights out. When they go out for training or when they train on accounts up to trial balance, they are paid sh.10,000/= anywhere and no nights out.
Q. E.C. Kumwembe (question to Kagera Coops - De Wolf)
Under special services for the livestock sector, you mentioned that there has been development of appropriate processing techniques. What are these processing techniques? Can we learn from your experience.
Response: de Wolf
Different technologies have been developed with specific reference to consumer needs in the area and also depending on the available milk in the area. Like cheese production in one area and only milk in other areas.
Q. Jorgen Henriksen
Dairy Coop. in Tanzania tend to embrace many activities to cows all input supply and services to dairy farmers. How do you see this influence, the efficiency, transparency and accountability of the coop-compared to single activity cooperatives.
Response
Single activity societies are most efficient, but because of lack of input supply from private entepreneurs so the Dairy Coop enters into feed supply and cattle marketing etc. etc.
Q. G. Burrell- TechnoServe to De Wolf)
What is the status and experience with the attempts to ship milk across Lake Victoria to Mwanza from Kagera.
Response
There remain some problems in modifying the shipping vesselsto accommodate the 3000 cooling tanks. That is almost solved and then it is expected that private entrepreneurs will take up the business since the cooperatives have failed to demonstrate accountability.
Q. Dr. S. Mbogoh to Mr. De Wolf
Table 8.1 - Explain why Coops doing no business should have operating/running costs at all!
Response:
Due to costs of Committee Meetings & Travelling, especially when going for registration at Bukoba (for new Societies)
