Data show Tanzania ranked the second with highest number of cattle in Africa, amounting over 33 million heads, after Ethiopia, the leading country with 65 million cattle.
However, Tanzania’s livestock sector productivity remains the biggest concern, continuing to limit growth; particularly smallholders.
The public sector participation in livestock sector, mainly cattle has been shrinking over the decades, following the underperformance of the National Ranching Company (Narco).
Diary sub-sector is now contributing thirty percent of domestic production of the livestock sector, which accounts 7 percent of the economy.
It is estimated that Tanzania produces 3.4 billion litres of milk per year, but only 77 million litres processed, contributing to highest post-harvest-losses, of which affects the incomes of keepers, according to Tanzania Dairy Board.
Rehema Mmali, a milk processor at Shambani Milk Ltd in Morogoro region believes increased investment in milk processing is very crucial to adding value to 90 percent of unprocessed milk.
This will also save billions of shillings in losses among farmers while boosting government revenue collections.
Currently, data show the consumption of milk stands at 49 litres per person per annum, which is lower than the 200 litres, as recommended by the World Health Organization (WHO).
Mmali insists that the government must create a good environment to ensure 90 percent of milk consumed as raw is processed, to add its shelf life and value.
Mmali explains that without investing fully in the milk value chain, it will not be easy for livestock keepers and processors to increase their productivity.
“We call on the government to set good infrastructure to enable processors to add value of the products at reasonable costs,” she says.
The Tanzania Milk Producers Association (TAMPRODA), Chairman Doreen Maro said milk productivity needs good feeds, management and good cattle breeds.
“Without good cattle breeds, it is not possible to increase milk production using indigenous cattle,” she said.
The government must import good breeds and distribute them in all regions to transform the sub-sector to contribute more to economy, she said.
She added that unprocessed and unregulated milk business was dangerous to people health and fuels tax evasion.
Victor Masueto, a livestock keeper residing in Chanika, on the outskirts of Dar es Salaam city is in the views that the government must come up with measures to ensure all produced milk is collected in official centres.
Health and nutrition officers have also advised that produced milk should not be sold directly to the consumers without being collected and processed at the centres.
In his study entitled “Sector Analysis: Price, Cost, Revenue, Profitability and Human capital chains in Tanzania’s Dairy Sector” , the coordinator – private desk at the ministry for livestock and fishery Steven Michael revealed that while Tanzania has a competitive advantage of a large livestock sector; opportunities within the diary sub-sector are still low.
“The productivity remains the biggest challenge in the sector limiting potential growth, particularly for smallholders. As a result the value chain faces pressures at both ends; producer productivity and consumption are insufficient, pressuring processors and enabling informality,” he noted.
Furthermore, Tanzania’s dairy sector comprises primarily small-scale producers, producing low volumes of milk for domestic consumption.
The dairy value chain is also semi-structured as the majority of milk sold locally marketed informally in villages, with few aggregators and processors.
Also, weak consumption plus insufficient raw milk input supply leads to poor processor utilization, driving down profitability.
“Despite lower prices, unprocessed milk retailers have higher margins due to limited transport and storage cost” the study said.
According to him, covering both policy and programmatic interventions, can drive sector growth and improve beneficiation.
“It is necessary to invest in addressing value chain inefficiencies –incentivizing processors to invest back into the value chain, while promoting ancillary service investments,” he recommended.
“Strong demand should be viable, but to strengthen the sector and drive processor utilization interventions are needed to unlock demand potential” he added.
Even if domestic demand was saturated, improved efficiency could unlock export markets, including Democratic Republic of Congo (DRC), Malawi and Mozambique, to further grow processor utilization.
However, driving sufficient demand in Tanzania will require intervention to address today’s low levels of consumption and prevalence of unprocessed milk sales.
National consumption for milk is low relative to neighbouring countries and WHO guidelines, while informal sales capturing a significant share of demand.
Unlike neighboring East African, Tanzania does not have a milk drinking culture –current consumption as neighouring Uganda, the per capital consumption is 53 litres, Kenya is 120 litres.
Processors have been taking steps to drive demand including promoting school milk-drinking programs, but utilization is still low.
Besides that, low demand is a significant binding constraint across the value chain –uncertainty about demand for additional product disincentives processors from improving utilization.
Increasing productivity of milk products is also constrained by a number of challenges such as quality inputs including breeds and feeds are expensive for most small-scale dairy farmers, quality input providers are far in between which drives up costs for farmers.
Most small-scale farmers mix their own feeds which often results in poor compound feeds due to a lack of understanding of ratios. Even when improved breeds and feeds are available, animal husbandry practices are not sufficient.
Nearly 20 percent of the ingredients into inputs are currently imported, which drives up costs –this adds to logistics costs and cost of finance (trade finance between orders being paid for and goods being delivered.
