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Milk producers role, needs and response to market demands and conditions in Zanzibar.


1. Introduction
2. Present status of livestock in Zanzibar
3. Effect of policy changes on marketing of locally produced milk and milk products:
4. Milk production systems:
5. Milk production potential and future prospects.
6. Milk marketing
7. Conclusion
References


Rahma M. Mshangama and Suleiman O. Ali
Commission of Agriculture and Livestock Development Zanzibar

Abstract

Milk production in Zanzibar is estimated at 17.0 million litres per annum while the demand was 25 million litres in the year 1994. This demand and supply gap continues to persist because, among other reasons, milk marketing has not been given adequate attention resulting in some milk at the hinterlands not being easily disposed off. This frustrates producers to develop the sector. To date the producer role in the market is that of supplying milk and milk products with little or negligible influence on setting price for the products. The middle man who offers door to door delivery service dominate and centralize the market to his own benefit. The future prospect of milk production is bright provided that the farmers' needs on milk marketing is redressed. With growing demand in milk and dairy products farmers need to be motivated to produce more. Their present level of livestock management, experience gained over many years of intensive research and extension services is enough to sustain zero-grazing system involving highly productive stock. However, issues like poor market system and price structure will continue to be a constraint to the progressing farmer. The dairy sector is yet to benefit from the prevailing trade reforms, due to the nature of the products in question which is perishable making the market to be highly volatile and fluctuating. One may admit that due to geographical cattle population distribution which dispersed in nature, coupled with low productivity of the indigenous stock, door - to - door delivery services rendered by milk vendors cannot be easily replaced. And therefore farmers will continue to have no say on price structure. However, to offset the situation demands the increased productivity by total commercialization of farming systems. This exercise would involve among other things provision of better breeding stock, farmers credit schemes and better sustainable market arrangement.

1. Introduction

Zanzibar like many sub-saharan livestock keeping countries, cattle continues to be a key component of many small holder farms. Milk production, therefore, continues to bear economic importance in rural livestock households which is inherently a private sub-sector activity and essentially traditional in its characteristics albeit the emergence of commercial sub-sector involving improved breeds.

As dairy production is rapidly expanding in Zanzibar, the stock composition is gradually changing in favour of the improved stock and the changes in management systems are emerging. The stock composition has been reported to comprise of 3% improved stock and 97% indigenous Tanzania Short Horn Zebu (TSZ) (Livestock census 1993). This gradual substitution of indigenous stock by an improved high milk yielding animal bears significant importance in determining an improved marketing and market structure since relatively larger percentage of milk quantity comes from indigenous stocks which have low production capacities and its population distribution is geographically wide spread and uneven, as shown in Table 1.

Table 1: Number of Cattle by Class in Unguja and Pemba Districts:

DISTRICT

BULLS

COWS

HEIFERS

M/CALVES

F/CALVES

TOTAL

UNGUJA:













North A

952

4318

1601

730

853

8456

North B

1008

2930

1496

799

616

6849

Central

1386

5452

2665

1496

1744

12743

South

391

1641

535

386

460

3406

Urban

266

482

129

142

145

1164

West

1694

5578

2613

1647

1600

13132

Total Unguja

5699

20391

9039

5203

5418

45750

PEMBA:







Micheweni

3430

9341

4182

3431

3400

23784

Wete

3101

6512

3602

2198

2103

17516

Chake







Chake

2026

5370

2074

1530

1702

12702

Mkoani

1956

4930

2215

1527

1313

11941

Total Pemba

10513

26143

12073

8686

8518

65943

Source: Livestock Census Preliminary Report 1993

Cattle distribution also bears significant importance on milk production. Total milk production for both Unguja and Pemba Islands in 1993 was estimated at 13.8 million litres of which 48% and 52% originate from Unguja and Pemba respectively (Milk Marketing study Report 1994) Production is expected to be increasing at about 3.9% per annum up to the year 2000.

Milk production from traditional sector accounts for about 78% of the total milk production in Zanzibar not withstanding its low average yield of 2.2 litres/cow/day .

Due to increasing demand of fresh milk coupled with conducive policy changes, dairy production keeps on expanding leading at commercialization of the dairy sub-sector. There are presently 606 pure bred and 2731 crossbreed dairy cattle owned by smallholder farmers of which 456 are on Unguja and 150 are on Pemba (as shown in table 2 below).

Table 2: Distribution of Improved Stock by Type Between Unguja and Pemba-1993:

Dairy Cattle type

UNGUJA

PEMBA

TOTAL

Pure breeds

456

150

606

Cross breeds

2149

582

2731

Source: Livestock Census Preliminary Report, 1993

2. Present status of livestock in Zanzibar

The livestock industry in Zanzibar continues to play significate role in the national economy and is vital to the rural household socio-economic development. However, the contribution of livestock industry to the national nutrition is minimal. This has been attributed to low production capacity of the indigenous breeds which form the main stay of milk production in Zanzibar. This has left a wider gap of nutritional requirements.

According to the Preliminary Livestock Census Report 1993, the Zanzibar cattle population was 111,695 of which Pemba has 59 percent against 41 percent of Unguja Island. With regard to intercensal annual average rate of growth, it has been established that between 1978-1993, the overall growth of cattle stock is 4.1 percent being 4.7 percent in Pemba as against 3.3 percent of Unguja Island. However, Unguja has 2.3 percent of improved breeds compared to only 0.6 percent of Pemba Island. The improved breeds are either in the hand of smallholder sub commercial milk producer or in the state farms. The bulk of the cattle population are in the traditional sector.

The prevailing change in attitude of traditional cattle keepers is brightening the future prospect of dairy production. Most traditional farmers, replace their low producing TSZ with cross breeds of TSZ with jerseys. By the use of artificial insemination the traditional stock is being gradually improved. In the near future, the number of improved animals will be greatly increased.

3. Effect of policy changes on marketing of locally produced milk and milk products:

The current efforts undertaken by the Government of Zanzibar in revamping the economy through the liberalization program has created the necessary economic environment for an accelerated growth of livestock industry. It is expected that with effective and efficient utilization of the resources available milk production could in the medium term be increased to an appreciable degree that would warrant an introduction of effective and very efficient system of processing and marketing.

With the emergency of tourist-industry the demand for milk and milk products has increased substantially. But due to low productivity and production, and because of non-existence of well organized milk marketing systems, trade liberalization policy has instead created conducive environment for importation of evaporated milk and milk products to meet the growing demand. However the imported commodities tend to be more expensive due to processing and transportation costs, and therefore only small portion of the population can afford to pay the high price. Although no study has so far been conducted on the effect of the imported milk on marketability of the locally produced milk, one can certainly say that a significant part of the urban market has been silently taken by imported milk.

It is therefore undisputable fact that, the increasing number of hotels and guest houses at the urban and peri-urban areas as well as those at the eastern and southern coasts have created market demand for milk and milk products which is yet to be recognized. Although recent data on imports of milk and milk products are not available, the recorded value of imports of Tshs. 110.9 million in 1992 indicate the possible loss of locally produced milk in domestic market share.

4. Milk production systems:

Dairy farming can be viewed at three different levels. These include:

i) Indigenous smallholders;
ii) Commercial smallholders
iii) State farms

i) Indigenous Smallholders (Traditional farmers):

Farmers under Indigenous smallholders continue to keep local breeds. Within the breed, production levels is determined by genetic make up and the eco-system. This sub-sector livestock management system is household based. According to the Zanzibar Base Line Survey of Farming System (1988) number of cattle per household ranges from 1 to 10 with recorded herd average production of 2 litres per cow per day. However, most households (75%) keep about 2 to 5 cattle. High concentration of livestock is found in plantation area where most land is privately owned averaging 3 acres per plots. Because of high level of soil fertility and evenly rainfall distribution, in addition to livestock keeping, the area is also suitable for intensive crop production. Therefore, in these areas, land use constraints are more pronounced and livestock keepers are forced to tether their animals in search of grazing pastures. Under this system feed for livestock consists of forages, straw and sometimes stovers. Their availability and quality is seasonal and forage conservation and preservation is no longer among the virtues of this system.

ii) Commercial Sub-sector:

The commercial smallholder sub-sector is characterized by intensive husbandry under zero grazing system which is optimal for the type of breeds kept. The average number of cattle per livestock keeping household averages between 2 and 5 animals. Major breeds kept under this system include jersey and crosses of jersey with TSZ mostly found in Unguja, and a composite breed of Sahiwal/Brown Swiss and Ayrshire is mostly preferred in Pemba. The jersey and their crosses are found to be superior in milk production ranging between 15 to 20 litres per cow/day. The breeds are adaptable to Zanzibar climatic condition with a certain degree of resistance of prevailing diseases. Considering a land shortage in Zanzibar, this sub sector has a major thrust in production for the future. In Unguja the improved stock are concentrated in the central district and peri-urban areas. In Pemba the concentration is in Wete district at the Northern region and Chake district at the Southern region. Commercial smallholder establish high yielding forage species to ensure adequate supply of feeds all the year round. In most cases the integration of crop and livestock on the same unit of land is practised to ensure efficient utilization of crop by products. Purchase of feed supplement is also undertaken.

iii) The State Farms:

These are operated by The Zanzibar Dairy Company (ZADACO). These farms include the Bambi Dairy Farm and Kizimbani Dairy Farms. The common dairy breeds found are the jersey at Bambi and jersey and friesian breed at Kizimbani.

The poor management of the farms by ZADACO has been the major causes of inefficiencies in production. There is a downwards trend in milk yields and herd performance. The herd average production has been steadily declining from 6.73 litres in 1985 to 4.1 litres in 1994. Both the herd size and total number of cows have been on declining trend suggesting acute short fall of replacement herd and supply of breeding stock to smallholder farmers. The total herd in 1985 was 367 animals compared to 148 in 1994. This can be attributed to high and unacceptable mortality rate (from 8% to 33%) recorded particularly between 1985 to 1994, on one hand and reproductive failures in calving rates ranged between 65% in 1986 to 44% in 1990 on the other hand. Current data (for 1995) were not available. The low management level does not show any signs of significant recovery in the near future unless drastic measures are taken to strengthen ZADACO management. Besides, the management the policy of the state farms is yet to be decided whether to continue with its out dated policy of milk production or to concentrate as nucleus for breeding stock to meet the emerging demand from smallholder farmers.

5. Milk production potential and future prospects.

Milk production is a function of genotype, management levels, population and nutrition. Vast differences in production levels between traditional and improved stock both in Unguja and Pemba have been noticed.

The milk production trend continues to be highly influenced by seasonal variation, and level of management since traditional sub-sector entirely depend on natural pasture as feeds and management level is substandard. In Zanzibar large milk quantities are recorded between mid-march to early June (Masika rains precipitation between 900mm to 1000mm), mid June to mid August (cool season with temperatures 18.10 to 20.00 degrees centigrade) and between October to December (the Vuli rains precipitation between 400mm-500mm).

The Zanzibar Dairy Company reported that milk production in state farms increases during rainy seasons. This is attributed to availability of pasture which in most cases is low in crude fibre. The amount of milk sold to the dairy plant from small scale commercial farmer also increases at this period of the year. During the dry season (January to mid March) the Island experiences an increase in temperature. The highest recorded temperature of 33.3 degree centigrade has been recorded during the first consecutive three months of the year 1983. Similar level of temperature was recorded again in February 1987 (The Zanzibar Statistic of Environment 1993) The dry period is accompanied by great shortages of pastures and if at all available is of very low nutritive quality due to high fibre content.

The biggest set back experienced by most farmers is the unavailability of animals of superior genetic make up. However records have shown that a cross of TSZ with jersey, under zero grazing on the commercial smallholder has recorded improved production. And this is where the future prospect of dairy industry in Zanzibar lies . According to Milk Marketing Study Report 1994 a selected TSZ/ jersey cross has shown following impressive production value parameters:

Average milk production per cow per day

: 10 litres

Lactation length

: 280 days

Calving interval

:12 months

Recognizing land shortage problem in Zanzibar this sub-sector with its zero grazing system deserves due attention. More co-ordinated effort is needed between researchers on one side and the farmers on the other in area of feed conservation, record keeping and re training in new production techniques. Also concerted efforts are required in improving livestock support services. It is encouraging that farmers have accepted changes. To date there is a fast shift from traditional livestock keeping to zero grazing. It is envisaged that the success in milk production toward self sufficiency rests on increase participation of commercial small holders. Studies have shown that milk production cost for commercial small holder is relatively lower than that of the state farm (72/= per litre vs 146/- per litre), and therefore smallholders have better competitive advantage over state farms.

It is high time that the extension services and other support services should be geared towards helping commercial smallholder farmers. Disease control services and health centres need to be strengthened. Milk market and marketing systems need to be improved by establishing collection and cooling facilities. Mini-processing facilities be provided at places where milk production averages are above 200 litres per day.

6. Milk marketing

6.1. Present Status:

In Zanzibar, sources of milk supply can be listed as:

a) Traditional producers;
b) The commercial smallholders producers;
c) The State Dairy Farms.

The existing milk marketing in Zanzibar is monopolistic in nature which entails few number of vendors who determine the volume and price of milk to be marketed. This market structure shadows the farmer from gaining access to market information and bargaining power. The milk marketing study done in Zanzibar in 1994 revealed absence of organized milk collection/cooling centre and facilities, consequently, the market for the traditional produced fresh milk is highly localized with surplus milk being sold either directly to consumers in market near the sources of production or sold to the dairy plant where it is converted into skimmed milk and other products as butter, ghee and yoghurt. the commercial smallholders producers who are mostly found in the central district and peri-urban areas, sell fresh milk direct to consumers at Tshs. 200 per litre.

6.2. The Role of Milk Vendors

The role of milk vendors in assisting the traditional producer in the marketing of fresh milk need special attention. In the Islands of Unguja and Pemba large quantities of milk is produced by the traditional livestock keepers who are scattered all over the country. Household milk production is very low to warrant an individual farmer to deliver his milk to the urban market, and due to the unorganized milk collection system in the rural areas, milk vendors takes the initiative of collecting milk from the production areas to the market centres.

The milk vendors have a significant role to play in the marketing of milk in the urban areas. In the rural area they perform the door to door milk collection from the milk producers and deliver the milk to the consumers. The milk marketing study 1994 revealed that, where milk vendors participation was not regular e.g Micheweni and Makaani in Pemba Island, and Makunduchi in Unguja, farmers had no market outlet for their milk and milking was erratic. This deprive the farmers of much needed income for their development.

However, milk vendors are faced by some constraints which include:

a) Inadequate and inefficient transport and equipment. Due to the fact that most of the farmers are scattered and far from the urban centres where milk consumers are, the vendors have to travel long distances everyday to collect and deliver milk using bicycles on bad feeder roads.

b) Frequent bicycle breakdowns, which make them spend more money on spare.

c) Seasonal availability of milk: During the rainy seasons there is plenty of milk to collect, but most of the roads are impassable and during the dry seasons there is shortage of milk for collection due to the non availability of feeds for cattle.

d) Frequent milk spoilage: Due to humid weather conditions, the poor design of the milk tanks used to collect milk and perishability of the product cause frequent spoilage of milk before it reaches the consumers. As such great loses are experienced.

6.3. Bottlenecks in Disposal of Fresh Milk:

Fresh milk disposal is constrained by the following factors:

a) Absence of milk collection/cooling system to facilitate collection from scattered milk producers in the rural areas to the urban consumers.

b) The bad condition of the rural feeder roads which limited accessibility of milk vendors to collect milk.

c) Long distances from producers to consumers: Because of the perishability nature of the product the long distances and time taken by the milk vendor to collect and distribute milk to consumers results into high incidence of milk spoilage.

6.4 Marketing system applicable to Zanzibar situation

It is suggested that milk marketing can be done at three different levels.

1) At the association/co-operative level
2) At ZADACO level
3) At the consumers level.

6.4.1 The association/cooperative

The dairy associations/cooperative are farmers institution which are vital in ensuring that farmers can organize themselves for input supplies and marketing of the outputs. In so doing farmers bargaining power is enhanced. The association / cooperative can be effective tool in influencing decision of the common interest and mobilizing resources for the development. The association / cooperatives could also act as link between farmers and the state in the exercise of policy making and execution.

In the marketing of individual farmers milk, the association shall operate cooling centres. The centre shall take over the milk collection and disposal from its member thus change the dependency of milk vendors whose market monopoly has persistently exploited farmers. However the role of milk vendors in the door to door collection of milk and its delivery to the cooling centre will still be required. It is suggested that the milk vendors be contracted by farmers associations to bring milk to the centres which will be paid for according to quality and quantity. Special bonus would be instituted.

In this connection market information system including milk price will be known to the farmers through their groups/association/cooperatives. The bargaining power in milk pricing shall be promoted.

6.4.2 The ZADACO level

ZADACO operate the dairy processing plant. this institution shall buy milk from the association cooling centres and brings it to the plant. There shall be price consensus between the cooperative and ZADACO. The plant shall process the milk to get the pasteurized skim milk and butter. These final products shall be delivered to the market for consumers.

6.4.3 The Consumers

The consumers are the target of the producers. The scope of marketing of ZADACO processed milk is wide because of the fast increasing urban population which (about 16.0 million litres per annum) than the current production estimated at 13.6 million litres. ZADACO should exploit these opportunities by adopting aggressive approaches in collection and distribution. The plant marketing department would plan and run various selling points in the high urban population concentration areas. The milk vendors will, without discrimination be allowed to continue distributing pasteurized milk to their traditional consumers. It is also important that ZADACO should enter into supply contracts with hotels and guest houses to recapture the lost market.

7. Conclusion

1. The scope of milk production in Zanzibar is wide considering fast growing urban population demand, continuous awareness towards improved human nutrition and acquisition of modern technology in dairy production system. This justify deliberate policies and an increase in resources allocation to promote milk production and marketing.

2. The absence of well organized network of milk and dairy products has adversely affected producers benefits and created disincentive to seriously invest in the industry. Likewise, the situation has deprived the consumers of accessibility to milk and milk products. Improvement in marketing could solve both problems.

3. The shift in policy orientation by the Government from total public participation to gradual promotion of privatization in dairy development is highly commendable.

4. Sustainable milk production, processing and marketing can only be attained through encouragement and assistance to the formation of commercial oriented dairy farmers association. This process may enhance participation of the target groups.

5. Dairy processing plant has not achieved its objectives and targets in promoting raw milk processing. Dairy producers and consumers in Zanzibar have yet to benefit from this important establishment.

References

1. Commission of Agriculture - 1992/1993 Livestock Census and Livestock Preliminary Report.
2. Department of Statistics - Zanzibar Statistic of Environment 2nd Release.
3. World Food Programme - Milk Marketing in Tan 2298 Zanzibar 1994.
4. Ministry of Agriculture - Zanzibar Baseline Survey Livestock and Natural 1988. resources

DISCUSSION

Q. Dr. G. Mwakatundu

What is the role of LADACO in the dairy industry, the company is making losses and yet is decreasing milk price and therefore counter productive to the dairy industry?

Response:

In the case of state farms LADACO is not viable and this is due to the fact that there is, a tremendous decline in milk production and herd size hence there is a need to privatised the sector.

However, in the case of milk ZADACO will continue since they owned the diary plant but there should be price consensus between associations or individual farmers with ZADACO.

Q. Dr. Ghamunga Sudi

Are milk vendors lincenced? How can you have control on them and be sure that they collect milk from farmers. Suppose they don't.

Response

In Zanzibar milk vendors are organized. Milk cooperatives could enter into contract with milk vendors. ZADACO milk plant could also hire the vendors to sell milk to consumers.

Q. S. Mbogoh

Recommendation to use vendors even after forming producers associations/coops; would this not be in conflict with associations/coops objectives?

Response: No, it would not

Q. S.Mbogo:

I disagree with the response as it overlooks a basic business principal.


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