Small-scale dairy farming dominates the milk production system in Sub-Saharan Africa. Over 80 percent of milk produced comes from these small-scale dairy farmers. If well developed, milk production can generate employment and stable income for millions of farmers. It also contributes to the fight against food insecurity and malnutrition in the region. Dairy production faces multiple challenges in SSA as in other developing countries. Most of them are related to the dairy industry itself, while others are shared with other industries in the agricultural sector.
The overall challenges of the agricultural sector are the lack of institutional capacity, financing, poor infrastructure development, rain-fed agriculture, small-scale farming, etc. While the challenges specific to the dairy industry vary along its value chain: milk production, milk collection, dairy processing, distribution, and marketing. Most of these challenges are related to the supply chain, at the level of dairy farms and milk collection. Less productive local breeds are the common cow breeds owned by farmers. These local breeds produce only 1.5 liters per day and are characterized by a short lactation period, 105 days compared to 305 days for improved breeds. The animal feed also affects milk production in Sub-Saharan Africa. The dairy cows are mainly fed by poor quality hay and crop residues, which availability is seasonal. The other challenges are the water shortage and the lack of animal health services.
Milk collection is crucial to supply sufficient quantity and quality milk, either to the market or the dairy processors. A milk collection system refers to the system which gathers milk produced from small-scale dairy farmers, its storage in a refrigerated tank, and its transportation to a dairy processing plant or directly to the market. A milk collection center is a facility where milk is gathered and stored. The perishable nature of milk increases the storage and transportation problems in developing countries, where access to electricity is challenging. Handling raw milk from the farm to the dairy processing plant requires a cold chain to preserve its quality. In a large dairy farming system in developed countries, milk is immediately cooled and stored in a refrigerated tank during the milking. In a small-scale system, investing in a cooling tank at the farm level is unrealistic and financially unfeasible. Farmers have only two choices, transporting and supplying a milk collection center or selling directly to the urban market or households as raw milk.
There are a few milk collection system models, but the choice to implement each model depends on the quantity of milk produced, the geographical distribution of dairy farmers, and the availability of financing. Establishing a milk collection center requires a building, an investment in a cooling tank, a connection to electricity, which runs the cooling system, and a few milk-testing materials and products. Each model also depends on who owned and managed these milk collection centers.
First, a dairy farmer cooperative or association owns a milk collection center or a network of milk collection centers. The dairy farmer cooperative can rent or build a facility to host the center, invest in a tank with a refrigeration system, and buy testing materials. To sustain the operation, the cooperative has to manage efficiently the center, financially and technically. The advantage of this model is the bargaining power the cooperative has in terms of the milk price negotiation. Usually, milk processing plants buy milk at a lesser price than selling it directly to consumers as raw or boiled milk. However, having a contract with a processing dairy company is beneficial for farmers because it overcomes the boom and bust of milk price given its seasonality. In addition, it is also financially manageable compared to the milk price volatility in the market. The most disadvantage of the model is the delay in the payment, which can go from several weeks to a couple of months. Furthermore, the maintenance cost of the cooling system is a burden for the cooperative. The availability of parts, the electricity outages, or the running cost of a generator, including the supply of fuel, is high and can be a source of financial inefficiency.
The second model is a milk collection system owned and managed by a dairy processing company. The smallholder dairy farmers deliver directly their milk to the milk collection centers. The model does not require the establishment of a dairy cooperative, even though that helps to leverage the voice of smallholder dairy farmers. The sustainability of the model depends on the trust between the company and farmers, which have also the option to deliver their milk to competitors or directly to the urban market. The availability of other services, such as grass seeds, fertilizer, supplemental feeds, medicines for animals can increase that trust. The dairy company has the power to set the milk price, which weakens the bargaining power of the dairy farmers or the cooperative.
Lastly, the third model or the hybrid model is the combination of the two and may take different formats. For instance, a processing company owned the milk collection centers with the dairy equipment, but transfer their management to the farmers. Another scenario is the dairy processing company assures the maintenance of equipment owned by the cooperative, supply fuel for the generator, the testing materials and product, or pay the cost of electricity. Regardless of the format, smallholder dairy farmers must establish a cooperative or association and signed a contract describing the arrangement and the milk price with the dairy company. The hybrid model also weakens the bargaining power of the farmers. However, it provides more flexibility to the dairy company, especially for the milk collection centers where the operating cost is high or located outside the operation radius of the processing plant.
Even though the first model, a milk collection center owned by a dairy farmer cooperative, may dominate in developing countries; no one solution fits all. Each country or region should adapt and adopt a model that fits its local context. The goal is to limit the amount of milk wasted due to the deterioration of its quality. Consequently, that increases farmers' capabilities and their income.