Advancing the Nigerian Dairy Industry Despite COVID-19 Constraints
Predictions of the impact of COVID-19 on the livelihood of Nigerians and on the economy has been nothing short of catastrophic! Restrictions on movement and association have had severe consequences on business activities and livelihoods of households, resulting in decline in consumer demand and general reduction in economic activity. In April 2020, McKinsey reported that a “contained outbreak” would lead to a 2.5% contraction, while an “uncontained” outbreak could see Nigeria’s economy shrinking 8.8%. Similarly, the International Monetary Fund estimated that the economy is expected to shrink by 3.4% this year and Nigeria could face a recession lasting until 2021.
The dairy industry is arguably the worst hit in the agriculture sector. Decline in household income has crashed consumer spending, necessitating a prioritization of expenditure. Unfortunately, most dairy products are not high on the list of consumer’s essential commodities. Consequently, many dairy businesses are now in jeopardy as their revenue is drying up faster than they can cut costs. Sadly, many will go bankrupt if the situation worsens and if they do not receive help from the government.
Indigenous dairy processors who have backward-integrated their milk supply chain are worst hit as they rely on dairy farmers to supply their raw milk requirements. The restriction of movement has disrupted their supply chain, negatively impacting their operations. The pastoralists are also affected as they no longer receive the sorely needed daily revenue from milk sales. With their livelihoods at stake, if suitable palliatives are not put in place, many of these pastoral families will become more vulnerable.
The local production and supply of milk is critical now more than ever as access to imported milk is now severely constrained due to a lull in international trade, devaluation of the Naira, and the Central Bank of Nigeria’s restriction on access to Forex. This presents a unique opportunity for the government and private sector stakeholders to collaborate to boost local production and support the development of a thriving local dairy industry.
Other countries have taken action to protect their dairy industry. The Indian government procures a million liters of milk daily to help dairies tide over the steep drop in sales reported due to COVID-19. The government plans to create a buffer stock of Skimmed Milk Powder with the milk procured, which would be sold at a later date. This ensures that dairy farmers are able to get daily income to sustain themselves and their cows. Similarly, the Kenyan National Assembly passed amendments that benefit dairy producers. The revised laws prevent milk processors from arbitrarily adjusting farmgate prices. The agriculture Cabinet Secretary and the Kenya Dairy Board now determines farmgate prices based on factors such as cost of production, transport, and statutory deductions. It is imperative that the Nigerian government pays concerted attention to supporting the growth of local dairy sector championed by indigenous companies. A thriving dairy sector in Nigeria will add value to the economy, empower local milk producers, create jobs, and improve the livelihoods of pastoral households.
Sahel Consulting is committed to addressing these problems. Through the Advancing Local Dairy Development in Nigeria (ALDDN) program, Sahel is catalyzing a vibrant local dairy sector in an inclusive way that improves the livelihoods, productivity, nutrition, and empowerment of smallholder women dairy farmers and the communities in which they live. Despite the restrictions necessitated by COVID-19, ALDDN’s processor partners and the Sahel team members are pushing ahead with the implementation of activities critical to ensuring sustainable dairy supply chains, and livelihoods of the dairy households in Adamawa, Jigawa, Kaduna, Kano, and Plateau states.
A key enabler of sustained program implementation is Sahel’s decision to engage extension officers who live close to identified pastoral communities. These extension agents have been able to seamlessly continue the identification, registration and integration of smallholder dairy farmers while observing health and safety protocols. The program has also created an online data portal to collect farmer information and QR codes for Unique Farmers Identification. The use of this system improves farmer tracking, traceability, and constitutes a formidable resource for financial inclusion which is critical for commercial sustainability. Accurate farmer data enables remote trainings which have become essential to conform with social distancing guidelines. Similarly, in addition to the use of infographic brochures and videos, the farmers’ training curriculum has been adapted to include Interactive Voice System (IVR) and radio which enables remote training and increases reach.
Additionally, ALDDN is supporting the growth of a commercial feed subsector to improve dairy farmers’ access to quality animal feed. The program is establishing sustainable fodder production business models in which commercial fodder producers (CFPs) are supported to produce quality feed for sale to dairy and other livestock farmers. ALDDN will provide direct funding support of up to 75% of the cost of production while qualified CFPs will contribute 25% to ensure sustainability. CFPs will recover their equity contribution and retain the profits as an incentive to reinvest in subsequent seasons. Land preparation activities commences in a few weeks and Sahel is determined to explore relevant options to ensure that inputs are procured, and fields are ready despite the ongoing pandemic. Along this line, collaboration with various stakeholders to support the CFPs with input subsidies in the form of fertilizer, seeds and crop protection products will go a long way to sustain the efforts towards the development of a vibrant domestic dairy industry.
Sahel will be providing facemasks to program beneficiaries to help curb the spread of coronavirus in program communities. Additionally, solar-powered boreholes will be constructed improve water supply and encourage good hygienic practices such as regular hand washing.
Sahel understands that the food sector is an essential service and those who are pushing on to nourish the continent at this time are heroes. Agriculture is a service to humanity and stakeholders need to come together to support the ecosystem to weather the storm and secure our immediate future.
The ALDDN program is funded by the Bill and Melinda Gates Foundation. Sahel is partnering with dairy processors, which include Integrated Dairies Limited, L&Z Integrated Farms Limited, Majestik Farms, Saj Foods Limited, and Sebore Farms to reach 15,000 dairy households and 210,000 beneficiaries over the next 5 years.
Policy Advocacy & Partnerships Coordinator
Advancing Local Dairy Development in Nigeria (ALDDN)
Sahel Consulting Agriculture and Nutrition Ltd.