Lessons learned

Theme 1: Importance of informal dairy sector and quality and safety challenges

Theme 2: Training and certification to improve milk quality and business performance

Theme 3: Innovation in products and developing dairy markets

KENYA

Lessons learned: Informal dairy sector (Theme 1)

• If we look for problems, we will find them. Thus, instead of focusing on hazards, we need to focus on understanding what the milk-borne risks are and how they can be mitigated.
• Marketing systems/structures in the world have been changing and this will continue depending on the way the different actors evolve (small-scale to large-scale farms; formal to informal traders)
• Consumer needs and perceptions will continue to drive the evolution of the dairy sector.

Lessons learned: Training and certification (Theme 2)

• Culture and religion have a role in influencing business decisions
• Culture can also dictate whether or not consumers buy or drink milk

What is being done well?

• Business development service (BDS) model has allowed the Kenya Dairy Board to shift the role of service provision to the private sector
• Empowering the system to ensure there is capacity to train in the industry
• Flexibility in terms of the pricing of BDS
• Training by BDS providers is demand-driven

What is not being done well?

• Milk bars and milk traders are not maintaining high milk quality standards, due to lack of a quality-price linkage
• Consumer demand for milk is not linked to milk quality

UGANDA/TANZANIA

Lessons learned: Informal dairy sector (Theme 1)

• Dairy industries in East Africa and India have similar structures; the informal sector is predominant
• Poor milk handling by informal dairy sector actors gives the sector a bad image
• There is need for deliberate government effort to provide an enabling policy framework to transform the informal sector into formal.

Lessons learned: Training and certification (Theme 2)

• BDS is a good concept and should be supported. However, there is need to refine aspects of monitoring, stakeholder involvement and legal framework.
• Incentive-based BDS will contribute towards a successful certification program
• A legal framework is necessary as no legal instrument currently exists to deny licences to untrained actors.

What is being done well?

• Promotion
• Accreditation

What is not being done well?

• Monitoring is being done poorly
• Legal framework is lacking

INDIA

Experiences and lessons learned: Informal dairy sector (Theme 1)

• A major share of the milk market is dominated by the informal sector in most of the southern countries.
• The government and the Kenya Dairy Board have recognized the informal milk sector as a major entity and are helping this sector to improve its functioning, in contrast to India which ignores and neglects the informal sector.
• The informal sector should also function in conformity with the food safety standards of the country applicable for the organized sector (and all).

Experiences and lessons learned: Training and certification (Theme 2)

• Training and certification in the informal sector is yet to be formally initiated in India and a mechanism for this may be explored earliest. The World Trade Organization (WTO) regulations may also be considered while exploring the certification process so as not to dilute the standards only for the informal sector.
• Instead of waiting long to evolve a formal certification process (which might take a longer duration), those involved may start with practical actions of training, issue of training certificates, branding, logo development etc.
• Simultaneously, steps may be initiated to put in place a legally valid certification process.

What is being done well?

• A well-recognized path of transition from informal to formal exists and is being encouraged in India.
• A very dynamic/innovative system for improvement of various models (government to co-operatives to co-operative companies etc.) exists in the organized sector and is being encouraged.

What is not being done well?

• Thrusting one model for dairy development across a vast country like India without considering its vast diversity.
• The quality scenario in the informal dairy sector is bad. No serious effort exists to check the rampant adulteration

Lessons learned: Innovation (Theme 3)

• Research on innovation in the informal milk sector has been done at various levels but the outputs have not been put into practice. The challenge is how to mobilize the innovations. In addition, the role of stakeholders and policymakers to ensure that innovations are put into use is not well known. In some cases, financing of innovations is a problem.
• Innovations must ensure benefits along the milk value chain; innovations should be applied along the entire chain since the market is interdependent.
• Innovation can bring about changes in products (adaptation of technologies and development of the market).
• The use of one innovation may result in the establishment of a new innovation. For example, improved productivity may lead to market development and increased demand, or improved quality may lead to an increase in willingness to pay for quality.
• Innovation may result into moving from one market segment to another.
• A lot is known about the informal milk sector but the innovations for solving the problems in the sector are not known. For example, we know that demand exists for quality but we do not know how to deliver quality through the whole chain. We know how to minimize costs but we do not know how to maximize value addition along the whole value chain.