If comments by Godwin Emefiele, governor of the Central Bank of Nigeria (CBN) are anything to go by, Nigeria will soon restrict the provision of foreign exchange for the importation of Milk. However, the planned restriction appears to be less important for industry watchers, rather, the lack of adequate local production, which needs to scale up rapidly before such ‘ban’ as some have called it, comes into effect.
There are expectations that when this restriction takes off, consumers would feel its impact as milk producers are expected to hike the price of milk-based products. To scale up production, there is a need for Nigeria to learn from other countries where the dairy industries have grown from obscurity to being relatively successful.
A research by Sahel Consulting Agriculture and Nutrition Limited on “The Nigerian Dairy Sector” shows Nigeria can borrow a leaf from India and Kenya in laying a solid foundation to ensure a successful take-off of backward integration in the milk industry.
Kenya, according to the report is Africa’s leading milk producer with an annual production of 5.2 million metric tonnes. This is 8.7 times Nigeria’s output. Kenya’s dairy sector boasts of 1.8 million smallholder dairy farmers, 600 million litres of formally marketed milk per year, and 1.2 million jobs created directly and indirectly.
The establishment of a dairy board, the Kenya Dairy Board (KDB) in 1958 paved the way for a public-private partnership, which allowed private capital inflows to complement conducive government policies.
The partnership increased the attractiveness of the east African nation’s dairy sector, opening access to funds from financial institutions, developmental organizations and the government.
The Smallholder Dairy Commercialization program which ran from 2006-2016 fostered market-driven development of Kenya’s informal dairy industry, working with poor smallholder dairy producers and traders to strengthen their capacity to respond to market opportunities.
The International Fund for Agricultural Development (IFAD) led initiative cost $40.02 million, amounting to 88 percent of the project. The program helped improve understanding of the economics and agricultural best practices of dairy production in Kenya where about 75 percent of milk trading occurred outside the formal sector.
Between 2008 and 2018, the East Africa Dairy Development (EADD) program led by Heifer International helped increase milk yields and income of small holder farmers in East Africa countries including Kenya.
The program which attracted funding from the Bill & Melinda Gates Foundation, focused on building social capital, whilst encouraging partnerships with and investments from local processors and other private sector players.
In following suit, Nigeria would have to set up policies as well as boost infrastructure spending to de-risk the milk sector and allow private capital from local and international investors.
Nigeria would also have to organize its dairy farmers into cooperatives and interest groups rather than the current nomadic system that is fragmented.
In India, there is also has a dairy board, which promotes investment friendly policies whilst protecting the local industry through the imposition of tariffs on importation of milk products.
India, the world’s second largest milk producer organized dairy farmers into more than 130,000 cooperative societies at the rural level. These cooperatives aggregate the milk and sell to district cooperatives unions who in turn sell to state-level milk-marketing federations.
Like in Kenya where government helped improve dairy breeds by setting up Kenya Animal Genetic Resources Centre (KAGRC), India also has The National Dairy Research Institute, its premier institute for dairy research.
Both countries now have small holder farmers with exotic breeds which offer more milk per cow than Nigerian counterparts.
“There is no single breed of cow in Nigeria that compares with the production levels of exotic species,” said Chryss Onwuka, a professor of Ruminant Animal Nutrition at the Federal University of Agriculture, Abeokuta (FUNAAB) in an interview with BusinessDay. For Nigeria to go into the right production of milk, there is a need for cross breeding with the species that deliver high output. According to him, breeding is a long-term project that takes between 5 and 10 years or more to get an appropriate, competent breed.
This however does not rule out conventional cross breeding (such as through mating) in the interim. While Onwuka supports the restriction on milk imports “in the interest of local production”, he also agrees that a buffer period is necessary for the right things to be put in place.
