Dairy development and internal dairy marketing in sub-Saharan Africa: Performance, policies and options
Mbogoh, Stephen G
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Dairying in sub-Saharan Africa plays an important role, both as a means of generating income for livestock producers and in providing much needed food for Africa's consumers. As an illustration, the share of the value of milk in the value of all livestock food products in sub-Saharan Africa in 1977 was about 56%, while the share of the livestock subsector in the agricultural GDP of sub-Saharan Africa as a whole in 1980 was estimated to be 17%. The dairying subsector in sub-Saharan Africa has not performed satisfactorily in terms of achieving national self-sufficiency in dairy products over the last two decades. While the human population in the region was growing at the rate of about 2.9% p.a. during the 1970s, the total regional output of dairy products only grew at the rate of about 1.4% p.a. The fast growth in population led to proportionate increases in the demand for dairy products, and sub-Saharan Africa was able to more or less maintain its level of per caput consumption of dairy products only through increased imports of dairy products. Trends in production and consumption generally influence the environment within which marketing policies have to be designed, formulated and implemented. As production and consumption expand, marketing must change to involve not only the traditional redistribution from surplus producers to deficit consumers within the same rural areas and adjacent towns, but also the long-distance movement of products from far-removed rural producing areas to the rapidly expanding metropolises whose supplying hinterlands can no longer hope to match the rapidly expanding demand. It is now becoming increasingly obvious that for some time to come the imbalance between domestic demand and production of dairy products in many sub-Saharan African countries will be such that marketing must also involve the distribution of imported dairy products to consumers in the major cities and sometimes in rural areas as well. Hence there is need to plan and develop the dairy marketing systems in sub-Saharan Africa to cope with these extra demands on their capacities. This paper seeks to identify and examine the dairy marketing policies that have been pursued in different countries in sub-Saharan Africa with a view to assessing how such policies may influence the structure and performance of the markets of dairy products in the region. Such a review is expected to create an awareness of the appropriateness of different marketing policies for different sets of circumstances. Generally, it is recognized that improvements in the marketing infrastructure and the pursuit of appropriate policies can play a complementary role to development efforts. For instance, the provision of an assured dairy marketing outlet that is sufficiently remunerative to producers is a necessary condition for any significant increase in the production of dairy products for the market. The review of available literature indicates that hardly any detailed studies on internal dairy marketing systems have been undertaken in sub-Saharan Africa. Therefore, relatively little is known about the relative efficiency of alternative dairy marketing systems in terms of such criteria as costs and marketing margins, including matters of product hygiene and quality, range and stability of services offered, convenience and responsiveness to consumer demand, stability of producer and consumer prices, and ability to achieve specified goals for a marketing system. In spite of this gap in knowledge, many dairy development projects in sub-Saharan Africa in the past have been launched prior to detailed evaluation of the types of marketing systems which would best handle surpluses of dairy products which accrue to such projects. The same trend continues even today. Such projects have often been accompanied by the establishment of government marketing organisations which are given power to control both domestic and external trade in dairy products. Ironically, the establishment of such large-scale enterprises has often been justified on the grounds of their perceived efficacy in achieving the objectives of dairy marketing policies. This paper identifies the major objectives of dairy marketing policies in sub-Saharan Africa as: (i) provision of higher and more stable prices to producers; (ii) assurance of reliable milk supplies to urban consumers at reasonable prices; (iii) improvement of hygiene and quality of dairy products that flow through various marketing channels; (iv) provision of convenient services to dairy consumers at reasonable prices; and (v) assurance of the supply of dairy products to certain sectors of the population in order to ensure certain minimum nutritional standards for those sectors. The main policy instruments that have been deployed to try and achieve the objectives of dairy marketing policies in sub-Saharan Africa include: (i) establishment of monopolistic large-scale dairy marketing enterprises in order to try and achieve economies of scale and improvements in product hygiene and quality; (ii) licensing and inspection of competing traders to ensure adherence to certain minimum standards of product hygiene and quality; and (iii) encouragement of market competition as a means of enhancing marketing efficiency. The overall review indicates that some objectives have been achieved to some degree, but usually at the expense of others. The review further indicates that governments tend to favour the establishment of large-scale dairy marketing enterprises, which are often state-owned, despite the fact that little is known about the relative efficiency of alternative dairy marketing systems. The paper, therefore, concludes that there is a need to undertake comprehensive and detailed dairy marketing case studies in some selected sub-Saharan African countries in order to generate information that could facilitate the choice of the most appropriate dairy marketing systems to accompany dairy development projects under different circumstances.
- Faculty of Agriculture