Enhancing Smallholder Dairy Farmers’ Marketing Opportunities in Uganda

Abstract

Dairy is one of the sectors that have been identified by the Government of Uganda as key in its objective of poverty reduction. The Ministry of Agriculture Animal Industry and Fisheries (MAAIF), in its Development Strategy and Investment Plan (DISP) for the period 2010/11 – 2014/15 has prioritized ten strategic enterprises and dairy is ranked number four on the list. Subsequently the draft National Dairy Strategy (2011 -2015) has set four objectives for its development agenda including enhancing dairy market access and value addition among others.

Marketing of milk has long been identified as one of the major constraints limiting the development of the dairy sector in Uganda. This problem has been appreciated not only in terms of stimulating increased production and productivity but also improving dairy farmers’ household incomes, food and nutritional security and generally alleviating poverty in Uganda. Considering the fact that smallholder dairy farmers dominate (90%) the dairy industry, it’s prudent to assert that enhancing their participation in the milk marketing systems will go a long way in developing the entire dairy industry in Uganda.

This study sought to benchmark Korean best practices and policies on milk and dairy processing and marketing focusing on stabilization of milk supply and demand as well as the dairy cooperative marketing system. The tusk was accomplished through field tours, attending lectures, consulting with relevant researchers at Korea Rural Economic Institute (KREI) as well as reviewing literature. All this was carried out during a five months training program that ran from July to November, 2014.

Korean milk and dairy products processing and marketing system has registered remarkable success in stabilizing supply and demand of raw milk as well as ensuring improved income for dairy farmers. The system involves government maintaining some degree of control over the price of raw milk in consultation with all major stakeholders from producers to consumers. Basic price of raw milk is determined and fixed for period talking into consideration raw milk production costs, processing costs and consumer prices. A system of price premiums and penalty is used to encourage production of the highest quality raw milk. In addition a milk price differentiation system based on milk quotas is used to discourage overproduction. Generally the Korean milk and dairy processing and marketing model is built on interactions between dairy farmers, cooperatives, government controlling agency and dairy processors.