Introduction
Coastal sub-humid East Africa: Potential and limitations of a new dairy Hinterland
A tale of two cities: Dairy consumption in Mombasa, Kenya and Dar-es-Salaam, Tanzania
The policy environment: Framework for market development
Kenya and Mombasa
Comparison of Mombasa and Dar-es-Salaam dairy markets
Conclusion: Dairy market development strategies and institutional support
References
G.R. Mullins¹
International Livestock Research Institute2
Nairobi, Kenya
(¹Socio -economist, Dairy Research Program, International Livestock Research Institute, P.O. Box 30709, Nairobi, Kenya. Tel: (254-2) 632066 Fax: (254-2) 632013 Email: [email protected] )
(²On January 1, 1995, the International Livestock Research Institute was established within the Consultative Group for International Agricultural Research. It absorbed the programmes and resources of its predecessors, the International Livestock Centre for Africa (Addis Ababa), and the International Laboratory for Research on Animal Diseases (Nairobi, Kenya). ILRI is now headquartered at Nairobi.)
Abstract
Past research on smallholder dairy production in Sub-Saharan Africa has generally focused on the technical challenges farmers face in producing, processing and marketing their milk. An area which has been under-emphasized is the role that the policy environment plays in stimulating and facilitating sustainable dairy market development. In this paper, the author highlights how policy can influence market development by contrasting the dairy markets of Mombasa, Kenya and Dar-es-Salaam, Tanzania, two East African coastal cities with nearly identical ecological conditions, farming systems, cultural heritages and ethnic populations. What the two cities have not shared in common, however, has been their economic and agricultural policy environments, which the author argues here has lead to the dissimilar structures of their present day dairy markets. Comparisons of household dairy product consumption, product preferences, prices, sources, constraints and other primary data are used to establish the argument.
By the year 2025, the human population of Sub-Saharan Africa is projected to reach 1294 million (Winrock, 1992). More daunting, perhaps, is the estimation that half of these people will be living in urban areas. Such increases in urban populations will greatly increase pressures on rural populations to produce more food. Although this increased demand for food represents new market opportunities for smallholder farmers, to meet this demand will require significant increases in the productivity of present farming systems. For most smallholders, this increase in production will only come about through intensification. Livestock production, and in particular, dairying can make a significant contribution to increasing productivity of smallholder farms by taking advantage of under-exploited crop-livestock-soil interactions, increasing household income and food consumption, and generating rural employment.
Considerable technology already exists "on the shelf to achieve rapid increases in milk production, greater efficiency in dairy processing and reduced labour requirements. But new technology, while necessary, will not be sufficient to achieve the levels of production required. Experience has shown that a supply-driven approach to agricultural development will not succeed when it is divorced from the market place. At the centre of the market place is consumer demand. A well functioning and sustainable market ensures a continuous flow of information regarding the demands of consumers and the requirements of processors and producers, thereby facilitating price formation that results in incentives to producers and acceptable prices to consumers. Thus, to stimulate market development, an enabling policy environment is essential.
At the International Livestock Research Institute, ILRI, the importance of well-functioning marketing systems and appropriate marketing policy have long been acknowledged as crucial elements for sustainable dairy development. In recognition of their importance, ILRI has a major research programme devoted to market-oriented dairy development, and it has committed considerable resources to developing a conceptual framework for research on market-oriented dairying (Rey et al., 1993).
In this paper, the conceptual framework characterisation methodology (Mullins, et al., 1994) is applied to the dairy markets of Mombasa, Kenya and Dar-es-Salaam, Tanzania, two large consumer centers whose ecologies, cultural heritages and ethnic compositions are highly similar, but whose post-independence economic and agricultural policy environments have differed dramatically. By comparing and contrasting key features of the dairy markets of these two cities, the critical role of marketing policy in stimulating and guiding market, and indeed farming system, development is made clear.
Beginning at Somalia's southern border, the sub-humid zone of coastal East Africa stretches southward covering the lengths of Kenya and Tanzania, penetrating well into Mozambique, a distance of over 1800 kms. The zone widens as it passes through Kenya and into Tanzania, where in the southernmost part of the country, it extends almost 200 kms inland. Thus, the coastal sub-humid eco-zone comprises a substantial land mass. Although the coastal soils are generally sandy, free-draining and of low fertility, annual rainfall of 1000-1200 mm results in 180-269 plant growing days per year. Because the rainfall is distributed bi-modally throughout much of the zone, both crop and livestock production systems have evolved to accommodate extended dry periods which last between four and eight months. Consequently, tree crops, primarily coconut and cashew, form an important component of most smallholder farming systems along the coast, together with the staple food grain, maize, and drought tolerant tubers such us cassava and sweet potato. For livestock producers especially, the uneven rainfall pattern poses severe difficulties in finding sufficient dry season fodder for their animals. In conjunction with limited dry season feed resources, tick-borne diseases, in particular Theileria parva (East Coast Fever), and tsetse-transmitted Trypanosomiasis have restricted the expansion of cattle numbers and have slowed the incorporation of more highly productive cattle breeds into smallholder farming systems.
In spite of its seemingly inhospitable physical environment, because of maritime trade the East African coast has major population centres and numerous cities and towns of notable size situated within it. The populations of Mombasa, Malindi, Dar-es-Salaam and Tanga alone total more than two and three-quarters million people. These coastal, urban settlements, whose population growth rates often exceed national averages, constitute major market opportunities for the surrounding farming communities. However, given the rapid rates of urban population growth, as high as seven percent in some cases (World Bank, 1992), agricultural production, primarily in the hands of resource-poor smallholders, will be required to greatly improve over its current performance levels in order to meet urban demand. Smallholder constraints on land, labour and capital necessarily imply that such production increases must come from intensifying production on the existing resource base.
Dairy production can significantly contribute to the productivity and sustainability of crop-based smallholder farming systems. Substantial strides have been made in the last two decades towards eliminating the constraints that prevent widespread adoption of dairying by smallholder farmers in the coastal sub-humid zone. Technological developments in the areas of disease and disease vector control, dairy cattle breeding and breed management systems, feed production systems, dairy cattle nutrition and milk processing, have made dairying a viable option for smallholder farmers (Thorpe et al., 1995, 1994). Moreover, recent research on dairy consumption and demand has confirmed the large markets and equally large milk deficits which exist in the urban centres of coastal East Africa (Mullins, 1992; 1994). Market research has also indicated that smallholders have been discouraged from or thwarted in accessing these potential urban markets, by inappropriate government policies.
Mombasa, Kenya and Dar-es-Salaam, Tanzania are two of the largest cities in the East African coastal sub-humid zone. With populations of .75 and 2 million, respectively, Mombasa and Dar-es-Salaam constitute major, and rapidly growing (3.5 and 7 percent per annum, respectively) food consumption centers. In the past, most of the food marketed in the two cities originated from farms in the central highlands. More and more, however, food is being produced on farms in the peri-urban areas surrounding the cities. In addition to their nearly identical ecological environments and farming systems, Mombasa and Dar-es-Salaam are also similar in their ethnic and religious compositions, sharing a common history of foreign colonization and settlement, evolution of the Swahili culture and use of the Kiswahili language as the lingua franca in both cities. Beyond their environmental and cultural similarities, however, Mombasa and Dar-es-Salaam have experienced very different economic policies in their post-independence periods. Kenya's western, essentially free market approach stands in stark contrast to the state planned socialism of Tanzania, which it abandoned in the mid-1980's. Thus, the two cities offer social scientists the unique opportunity to study the effects of policy on market development in as near to a "controlled environment" as might naturally occur.
Study Backgrounds and Methodologies
Between 1988 and 1994, the International Livestock Centre for Africa (ILCA) and the Kenya Agricultural Research Institute (KARI) collaborated in a research programme to identify and address the constraints to smallholder dairy production in the coastal sub-humid zone of Kenya. The programme was based at the KARI Regional Research Centre near Mombasa. As part of the multi-disciplinary approach to identifying smallholder dairy constraints, a socio-economic study of the coast dairy market was conducted. Household and institutional surveys were conducted at randomly selected sites in urban, peri-urban and rural coastal Kenya, including Mombasa city. One hundred and seventy-nine representative households were surveyed, once at peak rainy season and again during mid-dry season, to obtain information on household dairy consumption and the effects of seasonal variation in dairy production and marketing. The data used in this comparison are from the 1992 dry season (January-March 1992). To improve comparability of data from the two sites, dairy product prices for Mombasa have been up-dated to February 1995.
As a component of its global initiative on meeting the demand for livestock products from rapidly expanding urban populations, the Food and Agriculture Organization (FAO) of the United Nations proposes to conduct a series of case studies in selected urban consumer centers to document the growth and nature of livestock product demand. One of the six case study cities selected by the FAO was Dar-es-Salaam. Because of its mutual interest in market-oriented dairy development and its recent research experience in the area, ILCA was invited by the FAO to participate in its assessment of the Dar-es-Salaam dairy market. The agricultural economist from the KARI/ILCA collaborative programme in Mombasa participated in the assessment as the dairy demand specialist. Unlike the extensive study conducted in Mombasa, however, the Dar-es-Salaam dairy study was conducted over a period of two weeks and was restricted to the urban areas of the city. Dairy consumption data was collected from 79 volunteer households located in all three districts of the metropolitan area. Sampling was stratified in such a manner as to maximize probability of obtaining a thorough cross-sectional sample of households from all income, ethnic and religious groups. It is, however, important to bear in mind that the households surveyed in Dar-es-Salaam were not strictly randomly selected, although household selection procedures were specified so as to reduce sample bias. The data used in this analysis is fur "consuming" households only, ie. households which reported having consumed some dairy product within the previous seven days. It is furthermore important to note, that a reduced version of the Mombasa household consumption survey instrument was also used for the Dar-es-Salaam survey. Thus, identical questions were posed to the households in both samples, thereby permitting comparison of results. The Dar-es-Salaam household surveys were conducted from early to mid-December 1994.
Tanzania and Dar-es-Salaam
Official policy has supported smallholder dairy production in the high potential, cool sub-tropical areas in the north and south central highlands. Farmers have been encouraged to form dairy cooperative societies which would then market their milk through the Tanzania Dairies Limited (TDL). In tandem, the Government of Tanzania in the mid-70's established a number of large scale state-owned and managed dairy farms utilizing imported technology and exotic cattle breeds. These measures proved insufficient to meet Tanzania's dairy needs. A 90,000 l/day reconstitution plant was constructed by TDL in Dar-es-Salaam in the early 1970's to meet the demand of the city's consumers. Using skim milk powder and butter oil imported by the U.N. World Food Programme (WFP), the plant at one time managed to produce 35,000 to 40,000 kg of reconstituted milk per day. At the time of the study, due to technical and financial problems, it was producing only 14,000-15,000 kg per day. The decision has however, recently been taken by the WFP to phase out TDL milk and butter oil imports which in light of TDL Dar-es-Salaam's daily intake of only 6000 litres of fresh milk, will reduce production even further. Currently, several joint private investor-parastatal mergers arc being considered. In future, the dairy industry in Dar-es-Salaam is certain to be more private sector-oriented than in previous years.
In spite of government efforts to supply the city's milk needs, and official policy of the Dar-es-Salaam city council, 11,800 dairy animals are privately kept within the municipal city limits (MoALDC, 1993). These animals produce an estimated 80,000 litres of milk per day, the bulk of which is marketed privately. Existing health and marketing regulations are for all practical purposes unenforced, and in essence a free market for fresh milk operates in Dar-es-Salaam.
Since independence, the Government of Kenya has actively pursued a policy of encouraging smallholder dairy development, focusing its efforts on harvesting surplus milk from the high potential areas of the cool, sub-tropical highlands in central Kenya. Milk marketing has been organized and heavily subsidized by the GOK through its parastatal agent, the Kenya Cooperative Creameries (KCC). Overall management and regulation of the dairy sector is vested in the Kenya Dairy Board (KDB), whose board of directors and operations are funded by a levy on milk marketed through the KCC. Originally intended to function as a buyer of last resort, the KCC today dominates the national milk market, handling an estimated 90 percent of all milk passing through the formal milk market (MoALD, 1993). For all practical purposes, the KDB has been rendered ineffective in its role as dairy policy formulator by its dependence on KCC funding, and national dairy policy is now heavily influenced by the KCC which is linked to GOK policy-makers through the Ministry of Cooperative Development.
In spite of the KCC's political power and vast capital endowment, large quantities of milk are marketed through unregulated, or informal, channels. Market shares vary considerably by region, depending upon KCC collection and distribution infrastructure, but in Mombasa and the rest of the Coast Province, where the KCC does not collect milk, an estimated 99 percent of all locally-produced milk is marketed through unregulated channels (Mullins, 1992). Tight restrictions on milk marketing enforced through KDB licensing procedures have resulted in only small quantities of fresh milk entering the Mombasa urban market from the surrounding peri-urban milk shed. Thus protected, KCC products dominate the Mombasa dairy market.
Until May 1992, when the milk market was liberalized, producer and consumer prices for milk were fixed by the Kenya government. Now, consumers and producers buy and sell their milk at market-determined prices, in theory at least. KCC prices, which are indirectly subsidized by the government, are widely perceived as guideline prices, and hence influence milk and other dairy product prices. Only in the last few years, as more dairy imports have been permitted, has outside competition become a leveling factor in the Mombasa dairy market.
Table 1 indicates the structure and frequency of dairy product consumption in Mombasa and Dar-es-Salaam during the survey period.
Table 1. Dairy products consumed and frequency of consumption for sample households, Dar-es-Salaam, Tanzania, and Mombasa, Kenya
|
Product |
Consuming Households (%) |
HH consumption frequency (%) |
||||
|
3-6 times/wk or more |
1-2 times/wk |
|||||
|
DSM |
MSA |
DSM |
MSA |
DSM |
MSA |
|
|
Raw milk |
51 |
1.5 |
36 |
9 |
8 |
16 |
|
Pasteurized milk |
36 |
37 |
22 |
90 |
11 |
8 |
|
UHT milk |
3 |
23 |
3 |
32 |
- |
58 |
|
Powdered milk |
19 |
.5 |
17 |
4 |
2 |
12 |
|
Goat's milk |
3 |
- |
- |
- |
3 |
7 |
|
Fermented milk (mtindi/mala) |
26 |
23 |
13 |
27 |
13 |
51 |
|
Yoghurt |
7 |
1 |
5 |
9 |
2 |
18 |
|
Butter |
11 |
7 |
1 |
21 |
- |
20 |
|
Ghee |
8 |
4 |
4 |
- |
4 |
- |
|
Cheese |
7 |
1 |
4 |
6 |
3 |
21 |
|
Cream |
2 |
- |
- |
10 |
- |
42 |
|
Ice cream |
4 |
1 |
- |
- |
4 |
- |
(DSM: N=79)
(MSA: N=179)
Examining the structures of consumption for the two populations, the most conspicuous difference is the large disparity in household consumption of fresh milk, 51 percent for Dar-es-Salaam but only 1.5 percent for Mombasa. This difference recalls two facts mentioned earlier; one, that there are 12,000 dairy cattle within the Dar-es-Salaam city limits, and two, that access to the Mombasa urban market is tightly controlled by the KDB through its licensing of milk marketing agents. Other intercity differences arc noted in the consumption of UHT and powdered milk, but arc not noticeable with respect to pasteurized and fermented milk. It is suggested here that the importance of UHT and powdered milk in the Mombasa and Dar-es-Salaam markets, respectively, reflects the deficit of fresh milk and the consumption of these two products as fresh milk substitutes. Examination of the data reveals that the highest frequency of consumption takes place in Mombasa, consisting of pasteurized (98 percent weekly) and UHT milk (90 percent weekly). Among consuming households in Dar-es-Salaam, fresh milk is consumed most frequently with 44 percent of households reporting they consume it at least once a week.
Frequency of consumption, while a factor in total consumption, is only a partial indicator of the importance of a food item in the diet. Table 2 indicates the quantities of dairy products consumed per capita on a liquid milk equivalents (LME) basis by household income group. Income groups have been specified in order to reduce within class variation.
Table 2. Per capita daily consumption of dairy products (LMEs) for sample households, Dar-es-Salaam, Tanzania, and Mombasa, Kenya
|
HH incomes class |
Per capita daily consumption (kg\lme\day) |
|||||
|
DSM |
MSA |
|||||
|
Mean |
SD |
N= |
Mean |
SD |
N= |
|
|
Low income (< US $95/month) |
27 |
27 |
13 |
36 |
29 |
122 |
|
Middle income (US $95-$380/month) |
27* |
28 |
39 |
46* |
31 |
47 |
|
High income (>US $380) |
47 |
66 |
20 |
70 |
50 |
10 |
|
Overall |
32** |
42 |
72 |
40** |
32 |
179 |
* significantly different, P>.005
** significantly different, P>.10
Comparison of consumption levels between cities reveals per capita dairy consumption for Mombasa to be significantly higher than that of Dar-es-Salaam, although at this level of aggregation statistical results are not overwhelmingly' conclusive (P>.10). Similarly, within income class consumption levels are also higher for Mombasa than for Dar-es-Salaam, although small sample sizes preclude statistical testing for the low and high income classes. The mean per capita consumption level for the Mombasa middle income class is, however, significantly higher (P=.003) than that of the Dar-es-Salaam middle income class. Dairy consumption levels exhibit a positive relationship with income, with average quantities doubling from the low to high income class.
Research carried out by the KARI/ILCA team in Mombasa indicated, however, that income was not the sole determinant of consumption structure, frequency or levels. Availability of dairy products also played a major role in deciding household consumption patterns, with other constraints contributing. Table 3 examines interviewee response to the question: "What prevents you from consuming more dairy products?"
Table 3 . Constraints to increased consumption of dairy products, Dar-es-Salaam, Tanzania, and Mombasa, Kenya
|
Constraint |
Dar-es-SaIaam |
Mombasa |
||||||
|
Low Income n=13 |
Income n=39 |
High Income n=20 |
Overall N=72 |
Low Income n=122 |
Middle Income n=47 |
High Income n=10 |
Overall N=179 |
|
|
Percent |
Percent |
|||||||
|
Insufficient hh income/high price |
54 |
46 |
45 |
47 |
66 |
47 |
20 |
59 |
|
Product unavailability |
8 |
23 |
10 |
17 |
17 |
30 |
60 |
23 |
|
Fear of disease\contamination |
- |
5 |
- |
3 |
2 |
6 |
- |
3 |
|
Do not like taste |
8 |
5 |
- |
4 |
- |
- |
- |
- |
|
Do not need\require more |
15 |
15 |
45 |
24 |
15 |
17 |
20 |
15 |
|
Spoilage |
- |
3 |
- |
1 |
- |
- |
- |
- |
|
Other |
15 |
3 |
- |
4 |
- |
- |
- |
- |
Results of the surveys in both cities clearly indicate that low household income is the leading constraint to increased consumption of dairy products. Understandably, income becomes less binding as the financial status of the household improves. The second most frequently cited impediment, however, was product unavailability. Notably, the issue of product supply was of substantially greater concern to the high income households in Mombasa (60 'percent) than for their Dar-es-Salaam cohorts (10 percent), 45 percent of whom indicated they did not require more dairy products. It is suggested here that the problem of product unavailability has been alleviated in Dar-es-Salaam through the government's relatively liberal policy with respect to dairy imports, a situation which does not hold true for Kenya, or an option at least which has yet to be extensively utilized.
The issue of product unavailability in turn begs the question whether the marketis providing consumers with the products of their choice. Indeed, the degree to which consumer behaviour reflects consumer preferences is perhaps one of the better measures of market performance. The top graph in Figure 1 depicts consumer response when asked their preference given pairs of substitute dairy products. Respondents were informed that this was a hypothetical situation in which price should not be a consideration. The paired choices involved fresh milk, pasteurized milk, powdered milk (the Dar-es-Salaam only) and UHT milk. From the top graph it can easily be seen that in both markets the consumers interviewed overwhelmingly preferred fresh milk to any of the alternatives.
It is particularly informative to compare these indications of what consumers would like to do, with their actual consumption behaviour, as depicted in the graph at the bottom of Figure 1. It can immediately be seen that there is relatively little correspondence between the hypothetical, desired consumption wishes of the respondents and their actual consumption. Dar-es-Salaam consumers, 82 percent or more of whom preferred fresh milk over the alternatives offered, achieved the closest match in terms of their reported consumption, with 51 percent of households indicating they purchased fresh milk. On the other hand, only 1.5 percent of Mombasa consumers stated they were consuming fresh milk, although 80 percent of the respondents indicated their preference for it.
One may rightfully ask why such a disparity would occur. Table 4 indicates the channels used for marketing dairy products, their respective market shares, and product prices in those channels. In both Mombasa and Dar-es-Salaam, unregulated as well as regulated dairy markets exist. Quickly discernible from the table is the large proportion of fresh milk which is channeled through the unregulated market. In the case of Mombasa, virtually all fresh milk passes through the informal marketing system, implying that it by-passes government regulatory entities. Its price is less than that of its closest dairy substitutes. Moreover, it is unlikely that in a non-producing area of high demand fresh milk prices would be lower than in the surrounding producing area. This was confirmed by a key informant survey conducted in the rural district adjacent to Mombasa which indicated fresh milk prices to be, on average, less than the urban price of Ksh 28/1. Dominance of the regulated market in Mombasa for the other dairy products as well would seem to weigh as further evidence that the fresh milk problem is a supply side issue, and one which is associated with restricted market access.
For Dar-es-Salaam. as well, the bulk of fresh milk supplied to the city is marketed through informal channels. Still, a figure of 17 percent passing through the formal market carries with it far less the sense of evasion, or restriction, that is suggested by the < 1 percent entering the formal market in Mombasa. On the whole, the marketing of dairy products in Dar-es-Salaam appears more balanced, with substantial quantities of products moving through both channels. Signs of market concentration appear only in the markets for fresh and powdered milk, with the regulated market handling 82 percent of powdered milk and the unregulated market 83 percent of fresh milk. Use of unregulated channels to market fresh milk may be attributed to the lack of processing needed. Conversely, powdered milk, being a highly processed, and likely imported, product is understandably handled by the formal, regulated market.
Prices for fresh and pasteurized milk are essentially the same in Mombasa as in Dar-es-Salaam. Prices for fermented and powdered milk are lower in Dar-es-Salaam, phenomena which may be explained by the under-supply of fermented milk to Mombasa, and the limited quantities of milk powder available. UHT milk, which is one of KCC's main product lines and is widely available throughout Kenya, is, however, cheaper in Mombasa.
From a policy standpoint, it is meaningful to compare milk prices in Mombasa and Dar-es-Salaam to those on the world market. Putting aside from the issue of subsidization, attention is drawn to the high prices which obtain in both the Mombasa and Dar-es-Salaam markets. Compared to current world market prices of US $.28/kg for liquid milk and US $2.25/kg for skim milk powder (January 1995), prices for dairy products in Mombasa range from 2.5 times (for pasteurized milk) to 3.5 times (milk powder) the respective world market prices. Pasteurised milk price in Dar-es-Salaam, being the same as that of Mombasa, is therefore equally high relative to world market prices. The price of milk powder in Dar-es-Salaam, however, compares more favourably. This is not to argue for changes in dairy import policy, rather it is to highlight in view of low milk production costs in Kenya and Tanzania (Mullins, 1992), the substantial margin which must be attributed to marketing costs, and returns to producers, processors and marketing agents. That consumers are willing to purchase dairy products at these prices is indicative of the strong demand which exists, notwithstanding that high prices are the number one constraint to increased household dairy consumption.
Table 4. Market channels used for delivery and prices of dairy products consumed by sample households Dar-es-Salaam, Tanzania and Mombasa, Kenya
|
Product |
Dar-es-Salaam |
Mombasa |
||||||
|
Regulated Market |
Unregulated Market |
Regulated Market |
Unregulated Market |
|||||
|
Market Share (%) |
Average Price/kg |
Market Share (%) |
Average Price/kg |
Market Share (%) |
Average Price/kg |
Market Share (%) |
Average Price |
|
|
Fresh (raw) milk |
17 |
350 (70) .67 |
83 |
284 (31) .54 |
<1 |
N.A. |
99 |
28.7 (3.1) .66 |
|
Pasteurised milk |
53 |
394 (111) .75 |
47 |
382 (104) .73 |
99 |
30.8 (.98) .72 |
1 |
N.A. |
|
Fermented milk (mtindi) |
53 |
250 (95) .48 |
47 |
263 (80) .50 |
98 |
32 (0) .74 |
2 |
N.A. |
|
Powdered milk |
82 |
2361 (1594) 4.50 |
18 |
2000 (0) 3.81 |
100 |
350 (0) 8.10 |
- |
N.A. |
|
UHT milk |
40 |
525 (106) 1.00 |
60 |
600 (0) 1.14 |
100 |
38 (2) .88 |
- |
N.A. |
TSh 525 = US$ 1, December 1994.
Ksh 44 = US$ 1, March 1995.
Figures in italics are prevailing US $ prices.
Figures in parentheses are standard deviations about the mean.
Through this comparison of dairy consumption in Mombasa and Dar-es-Salaam, an attempt has been made to illustrate the impacts-of policy on consumption structure, levels, prices and, in general, consumer satisfaction. The ultimate objective, however, was to underscore the importance of a well functioning dairy marketing system in promoting dairy sector growth and development. Marketing strategies, whether for smallholders or others, must begin by formulating policies that enable information regarding product preferences, prices, and other requirements to flow unhindered between consumers, producers and their respective marketing agents. In pursuing its proper role of protecting public welfare, policy must not become so restrictive that either consumer or producer incentives are negated and thereby result in curtailed demand or. .sub-optimal supply. Government must also be committed to furnishing and maintaining the basic infrastructure needed for markets to function.
Once in place, the enabling policy environment will stimulate market development and in turn farmer demand for new dairy production technologies. Research and extension institutions must then be prepared and organized to respond to farmer needs. This will again entail open lines of communication and access. Utilization of a Research-Extension-Farmer approach to constraint identification and resolution is required if technologies are expected to be relevant, adoptable and sustainable.
Mombasa and Dar-es-Salaam are just two examples of the urban growth which is occurring throughout Sub-Saharan Africa and across other continents. Although similar in many respects, their different policy choices have lead to dissimilar market outcomes. Neither marketing system functions very well in terms of satisfying consumer preferences, and the dairy products which are provided are expensive beyond the means of most households. Nevertheless, for those who can afford to pay, the more liberal market environment of Dar-es-Salaam provides a wider range of product choice and availability than that of the Mombasa market. Mombasa, on the other hand, while illustrating how inappropriate policy can lead to entrenchment of a parallel, unregulated market, also demonstrates that, given government commitment to supporting marketing and livestock services, smallholder dairy production has the potential to meet urban consumer demand, and in the process bring benefits to smallholder farmers.
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DISCUSSION
Q. MR. I. Rutamu
Although Mombasa consumers indicated preference of raw milk, actual consumption was higher for Pasteurised milk. Is this not influenced by commercial farmers like Kilifi plantation who find it technically better to sell pasteurised milk?
Response
Pasteurisation is done to meet standard hygienic conditions. However the amount of milk supplied by Kilifi plantation is quite low compared to reconstituted milk supplied by ICCC.
Q. Dr. R.L. Kurwijila
It is not clear to me how you define regulated and unregulated market as I fail to see why pasteurized milk being sold in Dar es Salaam belongs to the unregulated market. Did you use the source or marketing channel in your definition?
Response
That is a tricky aspect of milk market definition where to draw the line between regulated and unregulated, We looked at the source of milk i.e licensed processors vs unlicensed processors right through to licensed and unlicensed retailers. The latter constitute the unregulated market even if they are marketing pasteurised milk from TDL.
Q. A.A. Okwenye
a) Why do consumers prefer raw milk to pasteurized milk according to the study?
b) Would you recommend using of restrictions on sale of raw milk in Mombasa.
Response:
a) They think raw milk has higher fat content, better flavour than pasteurized milk which is reconstituted.
Response
b) Yes, provided the legal requirements are met.
Q. Dr. De Wolf
What is the percentage of house holds in Mombasa consuming milk.
Response
In Dar es salaam about 30% of household consume milk and in Mombasa about 99% house holds consume milk.
Q. G. Burrell
Please clarify on the sample of Dar es Salaam households since Table 2 implies that per capita consumption of 0.27 l/day in a population of 2,000,000 implies daily consumption of litres 500,000 per day which contradicts other figures provided in this Workshop.
Response:
The sample methodology was explained and it is recognised that it was not possible to obtain a representative sample. The table refers only households that consume milk regularly and these probably only represent 30% of households which would then imply a much lower overall consumption figure.
Q. W. Schulthess
A world average producer price of 28 US cents has been mentioned. Is it not dangerous to mention a world average considering the big variations 10 US cents and 80 US cents
Response
28 US cents is a very recent average cited by US Department of Agriculture deducting subsidies in various countries.
Q. Tsehay Redda
The information/data collected under the title raw milk also include the raw milk supply produced by the Massai farmer. The question is asked to have a clear vision on the information gathered.
Response:
None of the consumers are taking raw milk from the Masai farmer as they deliver their milk to other collection point, Chalinze.
