Why the milk value chain is getting it right 

During Women’s Day celebrations in Kiruhura District, the President said it is possible to fight poverty if farmers engaged in lucrative commercial agriculture such as dairy farming. Together with other students in 1966, they preached against nomadism which reduced calf mortality. Now the sector has better cattle management practices.
He notes that with such changes, milk production has increased from 200 million litres to  3.22 billion litres annually. Other gains in the sector include an increase in milk processing companies from one in 1986 where they were working with 60,000 litres per day to 145 processing 2.89 million litres per day. The country aims at taking it to 20 billion litres. 

Uganda’s dairy sector is now valued at US$3.8 billion while the export portion of brings in US$106.2m per year. While many people do not have access to large spans of land and hence cannot engage in ranching, they can engage in dairy farming as a ticket out of poverty.

With the spotlight on dairy farming, it helps to understand how else it has grown to become one of the biggest contributors to Uganda’s Gross Domestic Product (GDP).
In support of the dairy sector, the executive director of National Agricultural Advisory Services (NAADS), Dr Samuel Mugasi says in collaboration with Dairy Development Authority (DDA) and other partners, NAADS has made several contributions. 
These include 143 milk coolers to improve the storage and quality of milk, 370 tractors for pasture multiplication, more than 15,000 dairy heifers for increased milk production, and 124 solar water pumping systems for water.

Beneficiaries: Bugweri dairy farmers’ Co-operative 
Mr John Walubi, a member of the Bugweri Dairy Farmers’ Cooperative, says they were recipients of 60 heifers delivered in two phases between 2016 and 2017. 
“Before that, access to milk was a challenge in the region. Currently, there is not only milk for home consumption hence improved family health but also some for selling because there was a ready market. In the start, the cost dropped from Shs1,000 to Shs800 but has since increased to Shs2,000 due to increased demand,” he says. 

Mr Walubi adds that agricultural outputs have also improved as they use cow dung for fertilisers. 
The cooperative also got a tractor which eased the cost of ploughing from between Shs110,000 and Shs120,000Shs to Shs70,000 per acre. The latter was agreed on by the cooperative committee. 
“The fee was derived after a test drive showed we needed fuel worth Shs30,000. We then pay the driver Shs10,000. The balance; Shs30,000 goes to the SACCO to help in maintaining the tractor,” he says.
To spread the goodness of having a cow to interested community members, the cooperative committee created the idea of ‘send a cow’ where a member that received a cow gives back a female calf that is then given to another family. At the moment, there are 150 cows under the cooperative.

Balawoli Farmers’ Cooperative 
After the vandalism during the war, the 1968-born Balawoli farmers’ cooperative lost all its equipment hence going into limbo. However, in 2014, under a project dubbed Heifer, DDA and Heifer International project mobilised farmers in the villages to resume dairy farming. “The farmers started bulking milk but without a cooler, when the quantities got to the excess of 500 litres, we suffered milk spoilage, losing between 2,000 and 3,000 litres a week. It was a joy when NAADS gave us a 2000 litre cooler,” Mr Bosco Kaijanazo, one of the cooperative leaders says. From the milk sale proceeds, they bought a 3000-litre cooler with a capacity that further attracted farmers. They then bought another 3000-litre cooler, placing it in their newly opened depot in Jinja.

Sadly, in 2020, due to Covid-19 effects such as the deaths of some of their leaders (the chairperson and treasurer) and dipped sales, the cooperative almost collapsed. Thankfully, in 2021, they resumed operations and unlike in 2014, it was easier as they still had their equipment.
To boost their earnings, the cooperative ventured into milk processing, making yoghurt. “We do this on a small scale using local methods and in due course, we wrote to DDA and NAADS requesting for a mini diary processing equipment in August 2022. With proof for the need for the equipment, getting it was not that difficult,” Mr Kaijanazo says. 

With the equipment request, the cooperative’s assignment was to get water to the site, enough for the factory, and construct a house to accommodate the equipment. “We tapped the water from a source 500 metres away from the factory site and it cost us Shs20m while the construction was Shs70m. With these in place, equipment installation was done in January, 2023,” he says. Mr Kaijanazo says the next step is to get electricity to the site, which is approximated at Shs8.16m as well as get packaging material (Shs19m for pouches and cups). Thereafter, they will be ready to start using the factory. 

As a result of this equipment, Mr Kaijanazo says farmers have moved from local dairy breeds that gave only one liter per day to better breeds. “At the moment, milk production per cow is four litres per day though there are some that give 10 to 15 litres per day. Farmers are also doing artificial insemination, and bush clearing as a way to better their dairy farming experience,” he says.

Additionally, previously, farmers were unable to gain from their evening milk hence giving to the cows, some going bad or just relegating it for home use. Today, they bring it to the collecting centre and it is sold the next day hence increasing household income.

Improving the dairy sector
Mr Samson Akankiza Mpiira, the acting Executive Director at DDA says the authority is mandated to do dairy development, and value addition is part of it. “We train dairy farmers and cooperatives every quarter with each region having its training programme,” he says. 
Mr Mpiira says while there is a lot to learn about value addition, they dwell on yoghurt making because it is simple and not capital intensive as to require a lot of equipment. 
“It does not require a lot of milk to make it and can be made in one’s kitchen. Even a cooperative with as little as 200 litres of milk can start making yoghurt,” he says.

Farmers are also making ghee though it is still an informal product.
“Capitalising it needs an investor but over the years, no one has shown interest. There is also cheese making but it is hampered by limited consumption. Nonetheless, butter is catching up in regards to production volumes as consumption is also increasing,” Mr Mpiira says. 

That said, Entebee Dairy Training School does residential training for cooperatives and it takes about two weeks. Groups are taken in after expressing their interest through DDA inspectors and regional offices. 
“The Authority also equips farmers with the right market tools such as proper packaging, and branding for their products to compete better in the market,” he says.

The Authority also does factory licensing and encourages more players to get into the milk sector because the more factories, the more milk is processed, which reduces wastage and increases proceeds.
DDA is also working on the rehabilitation of milk processing centres that were previously managed by Dairy Corporation.

“Upon its closure, a Dairy Development Act came into place, and the government pulled out to become an overseer. We thus rehabilitate these previously existing milk centres, equipping them with a milk cooler of between 3,000 and 5,000 litres, and a generator. Thereafter, we get a cooperative that can use the investment productively. From these, the large processors such as Jesa, and Brookside pick the milk,” he says.
Identifying model farmers
The Authority has a clean milk programme, under which they identify model farmers on whose farms they set up demonstration centres. 

“We buy equipment such as milking machines, and chaff cutters then install them on a given farm to help other farmers and cooperatives learn. The model farmer should be part of a cooperative because these are easy to access and will open their door to other farmers to learn,” he says. 
Chaff cutters are essential to cut down the feeds such as elephant grass so they can make it possible for the cattle to eat all the feeds without wasting anything. 

While DDA would like to do more, Mr Mpiira says their budget is limited. For instance, this year, they have only bought 11 chaff cutters and 11 milking machines. “Therefore, the target is those that are already in the business to show others how it is done. Then interested farmers or farmer groups can buy that which they find necessary,” he says.

Increasing milk processing
Setting up large milk processing plants is a capital-intensive activity, so it is left to multinationals such as Brookside, and Lakeside among others because they are already established.
“We participate in international conventions such as the international dairy to market our milk but also attract investors to set up shop here in various value addition levels,” he says. 

The future 
The sector is headed for bright days. For instance, Mr Mpiire says an investor is setting up shop in Lyantonde and will process more than one million litres a day.

“Previously, we only had Fresh Dairy and in some seasons, milk prices went as low as Shs400. However, today, even in bumper seasons, the situation can never be as bad. Therefore, the more processing players we get, the farmers will earn more,” he says.
He adds that with the new market of Algeria which will be taking powdered milk, by externalising the markets, Uganda will get more forex.  

Poor domestic consumption
The amount of milk produced in Uganda is not enough for her population but there is a surplus because of poor domestic consumption which is at 63 litres per capita annually. 
“That could be because not many are drawn to milk as they are to tea. For instance, if all schools took up milk for their students, there would be a milk deficit. However, it is not the case, hence the search of external markets such as Kenya, and Algeria,” he says.

However, DDA in partnership with SNV has piloted a school milk programme in Western Uganda for the past five years. This is where processors and parents co-share the cost hence allowing processors to give milk at a subsidised price. So parents can pay, say Shs5,000 per term for the children to consume this once or twice a week. Beginning last year, the central region (Kampala, Mukono and Wakiso) has been incorporated into the project. We hope it will grow because it is a voluntary programme,” Mr Mpiire says.

Suggested improvements
Mr John Walubi of Bugweri Dairy Farmers’ Cooperative, says the cow breeds they were given have a low milk production capacity. 
“These produce eight litres per day. We desire those that give at least 25 litres per day,” he says.
Mr Walubi adds that they need better insemination services because even the available semen is not good enough. 
“We had wanted to take one of our members for training so we can do local improvements on the breed we have,” he says.

The community also needs another tractor because the one they have is a two-disc plough which cannot manage to serve all the cooperative members and the community. 
“While we save money from its use, the cost of the tractor is between Shs150m and Shs200m which we have not been able to get,” Mr Walubi says.