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FINAL REPORT



     CONSULTANCY SERVICES FOR BUSINESS
DEVELOPMENT SERVICES (BDS) MARKET DIAGNOSTIC
                IN UGANDA


                                   CONDUCTED BY:




                                    FIT RESOURCES



                 SUBMITTED TO:
 EAST AFRICA DAIRY DEVELOPMENT (EADD) PROJECT

FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA           1
FIT RESOURCES JANUARY 2009
JANUARY 2009




FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA           2
FIT RESOURCES JANUARY 2009
CONTENTS


Background and introduction..................................................................................................4
Methodology and activities .....................................................................................................5
  Pre-planning .......................................................................................................................5
  Training...............................................................................................................................6
  Field work ...........................................................................................................................8
      Sampling .........................................................................................................................9
      Key challenges of fieldwork ...........................................................................................10
  Data processing ................................................................................................................10
  Presentations ....................................................................................................................11
  Key conclusions of the methodology ................................................................................11
Findings of fieldwork and data analysis ................................................................................12
Consumer survey .................................................................................................................12
  Locations covered and key informants interviewed ..........................................................12
  Targeted SME consumers interviewed .............................................................................12
  Market profiles ..................................................................................................................14
  Key demand side constraints and opportunities ...............................................................28
  Business development services that address those constraints and opportunities ..........29
  Specific policy constraints that are affecting MSE product markets ..................................29
Supplier diagnostic by location .............................................................................................30
  Existing providers/ services and their locations ................................................................30
  A workable data base of the BDS actors ..........................................................................31
  BDS suppliers interviewed ................................................................................................31
  Types of services and price of services, how providers cover costs, profitability, existing
  contractual arrangements/relationships and promotional/marketing strategies ................35
  Capacity gaps of interviewed suppliers.............................................................................40
  Priority supply side constraints, market failures, and market opportunities.......................40
  The enabling environment for BDS ...................................................................................46
  Characteristics of the market for BDS in each specific region in relation to existing supply,
  demand and transactions .................................................................................................48
  An insight into the potential of each target market location...............................................50
  Level of market distortion..................................................................................................51
  Comparative information on the in-country sites and the 3 markets ................................. 50
  Other current or proposed dairy sector interventions ........................................................53
  Sustainable solutions to address priority market constraints and market failures .............53
  ‘Illustrative’ market based interventions to develop the market for key identified services
  that are in demand or offer the greatest potential for stabilization or growth ....................62
  Approaches and methodologies .......................................................................................66
  Strategies which ensure effectiveness and efficiency .......................................................67
  Strategies which ensure sustainability ..............................................................................71
  Suggested BDS providers/delivery channels to target for future interventions .................74
  Selecting appropriate BDS providers ................................................................................75
FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                                                               3
FIT RESOURCES JANUARY 2009
BDS performance measurements at the BDS market level ..............................................76
Annexes ...............................................................................................................................80
  Database of SME actors including persons interviewed ...................................................80
  Database of BDS suppliers including persons interviewed ...............................................80
  Database of targeted suppliers .........................................................................................80
  Itinerary.............................................................................................................................80
  FIT/RI scope of work.........................................................................................................80
  Final instruments ..............................................................................................................80
  BDS training report ...........................................................................................................80
  Researcher training report ................................................................................................80




Background and Introduction

In a bid to improve life through poverty reduction, a Consortium of organisations comprising
of Heifer International as lead, TechnoServe Inc, ILRI, ABS-TCM and ICRAF launched a 4
year program dubbed EADD (East Africa Dairy Development) funded by Bill and Melinda
Gates Foundation. The program aims to move smallholder farmers out of poverty by
delivering farmer-focused, value-chain activities that are implemented simultaneously to
stimulate dairy farm production, dairy-sector services, business development and dairy
market pull. The vision of success for the EADD is that the lives of 179,000 families - or
approximately one million people, are transformed by doubling household dairy income by
year 2018, through integrated interventions in dairy production, market-access and
knowledge application.

The Consortium deemed it important to carry out a market assessment to understand the
characteristics of the BDS markets in relation to existing supply, demand and transactions in
the dairy sectors in some key sites in Kenya, Uganda and Rwanda. The information would:

     •    Provide an insight into the potential of each market
     •    Clarify opportunities for interventions
     •    Define broad strategic approaches

FIT Resources Kenya (FIT) in collaboration with Research International East Africa Ltd
(RIEAL) were contracted to coordinate the market diagnostic in key locations in Uganda.
The findings and recommendations of this consultancy will contribute to the market focused,
sub sector approach of the EADD aimed at improving the functioning of BDS markets. The
final scope of work is attached to this report (Annexes/ Final Revised SOW).

FIT Resources act as the lead agency and contract holder, to provide strategic leadership in
devising and conducting the business development service consumer research and supplier
diagnostic. Research International conduct the field work as a sub contractor, to collect
FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                                                               4
FIT RESOURCES JANUARY 2009
primary/secondary qualitative and quantitative information, analyse, process and present
the data.

Methodology and activities

To achieve the above results the following activities were agreed on:

   •   Pre-planning (planning meetings, research boundaries on the basis of project
       resources,       existing    sub      sector    information,     market      assessment
       goal/objectives/research hypothesis, developing and testing the tools, screening
       interviewers, target locations in each country, preliminary key informants, other current
       or proposed interventions)
   •   Training (training of EADD staff, field research teams and BDS training workshop)
   •   Field work (target groups, sample size, areas covered, team structure, consumer
       survey and supplier diagnostic)
   •   Data processing (developing the data base of BDS actors, profiling the markets,
       choose priority constraints, identifying and scoping out sustainable solutions, defining
       ‘illustrative’ market based interventions and strategies, suggest appropriate BDS
       providers, establishing comparative information, identifying BDS performance
       measurements)
   •   Presentations (stakeholder workshops and final presentation)


Pre-planning

Relevant background information was sourced via a series of planning meeting with
Technoserve and EADD Consortium members. Meeting presentations and minutes are
attached to this report (Annexes/Process meetings). These meetings also included setting
the research boundaries on the basis of project resources, preliminary selection of target
locations and the agreed definition of ‘small holder farmer’.

The market assessment goal, objectives and research hypothesis were agreed as follows:

The market assessment goal is:
To understand the characteristics of the BDS markets in relation to existing supply, demand
and transactions in key sites in Uganda.

The market assessment objectives are:
   • To provide an insight into the potential of each market
   • To clarify opportunities for interventions
   • To define broad strategic approaches

The research hypothesis is:



FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                      5
FIT RESOURCES JANUARY 2009
If current BDS market dynamics are better understood then strategic approaches and
interventions can be devised to develop BDS markets in a sustainable manner and thus
benefit SMEs.

It was agreed that the FIT/RI team would build capacity of the project staff to undertake
future market assessments during the life of the project. Due to budget constraints a
targeted number of sites were discussed that affords the best opportunities to kick-off the
project and generate some ‘quick wins’. A training itinerary was also agreed upon to
capacitate EADD project staff in BDS and research skills. FIT Resources provided lead for
the overall assignment and liaison with Technoserve and the country office on all the
pre-planning activities. FIT Resources coordinated the field preparation with Research
International and Technoserve including; tool development and testing, researcher selection
and training and itinerary development. Different tools were developed to cover the demand
(consumer) side and supply (supplier) side of the market. The final instruments and itinerary
are attached to this report (Annexes/Final Instruments). The following activities were
undertaken prior to the commencement of fieldwork: screening of team members,
preparation and translation of questionnaires and preparation of reporting tools and
manuals. Research International personnel met field staff/counterparts and finalised the
selection of target locations and identification of key informants in each location. Research
International finalised the training of field researchers including EADD project staff and
preparations for field research.

No secondary information was used, as the project is building on a baseline survey and an
existing value chain assessment. The comprehensive examination of targeted BDS markets
and value chains will assist EADD in designing systemic solutions to key market problems.
The two subsystems - BDS markets and value chains - are complementary components of
the larger market system into which MSEs must integrate.


Training

   1. BDS training workshop - FIT Resources personnel implemented an in-depth EADD
      staff stakeholder training in Uganda. This 2 day formal training in diagnostic skills
      covered the principles and practices of BDS, BDS market development, BDS market
      assessment and BDS market development programme design and performance
      measurement. The aim of this training was to capacitate project staff and provide
      stakeholders with a contextual framework for the research. The workshop
      presentations, training materials and training reports are attached (Annexes/BDS
      Training).

   2. Training of field research teams - teams including Technoserve and Consortium
      member staff, were subject to an in country briefing session prior to fieldwork
      commencement. The training sessions covered methodology of the assessment
      stages, sampling, tools and stimulus methods to use with market players and how to
      complete reporting formats. The aim of this training was to capacitate project staff to
      engage in further market diagnostics beyond the life of this collaboration. The
FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                   6
FIT RESOURCES JANUARY 2009
workshop presentation and training reports are attached (Annexes/Research
       Training).




FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                      7
FIT RESOURCES JANUARY 2009
Field work

In order to complete this assignment within the defined period, a large teams of
Interviewers, Team-Leaders and Supervisors were assigned. Team members were
recruited from the RIEAL regional offices, according to specifications based on experience
and qualifications. The RIEAL Principle Researcher and a Field Coordinator coordinated the
research at all stages, and focused on ensuring that outputs were planned in advance so
time-schedules were met. They worked alongside the RIEAL existing field management
structure that forms the line management for the Field Departments. Daily reporting of
results and activities from each team was channeled back through this Central Management
Team.

Research International led and implemented the field research in collaboration with EADD
project staff. However no staffs were on the ground during the fieldwork in some sites in
Uganda. Consultations and market observation were undertaken during the fieldwork which
included visiting identified target locations plus identifying and holding interviews with key
informants and targeted dairy sector stakeholders relevant to the selected sites.

Consumer survey - Consumer research was implemented with a selection of consumers
from the core market itself, with a focus on farmers and Chilling Plant stakeholders.
However the definition regarding ‘small holder farmer’ was reviewed and altered during a
process meeting and the ceiling lifted on the number of cows, as many farmers in Uganda
and Rwanda are large compared to Kenya’s extensive small holder population. Constraints
and opportunities were then identified in the areas of market access, input supply,
technology/product development, management and organisation, policy, finance and
infrastructure. The size and strength of the market in each specific area of the country for
those services was estimated broadly plus key sub sector constraints, market failures and
market opportunities defined from the demand side. Key business development services
were identified that address the specific constraints and opportunities.

Supplier diagnostic - Based on the identified priority services, relevant suppliers were
identified and a supplier survey implemented with service providers from the support
markets to determine who is supplying BDS and how. Constraints, market failures and
opportunities were then determined from the supply side. A comparison of suppliers was
also undertaken and the level of market distortion anticipated. Stakeholders from the
business environment such as Local Authorities, Regulators/Policy Makers were contacted
as required to provide an overview of the business environment.

The BDS survey fieldwork was conducted between the 24th and 30th of November 2008.
Three separate field teams of 4 Enumerators were used in each location. The Enumerator
groups were language specific for the purposes of ensuring consistence with instant
translation of the questions. The three teams were supervised by the co-ordinator. The
areas covered in the survey are shown below:

FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                    8
FIT RESOURCES JANUARY 2009
Luweero                             Masindi                        Kiboga
   Nakaseke (Wakyato)               Kiryandongo (Kakooko)               Kyankwanzi
       Katikamu                      Kimengo (Kijunjubwa)                Nsambya
      Bamunanika                      Bwijanga (Ntooma)                   Kapeke

New sites not included will be covered by Technoserve staff beyond the life of this
consultancy.
The interview length for each interview was approximately 30 minutes.

Sampling
The sample included 327 interviews spread across the 3 sites:
  • 300 farmers were interviewed.
  • The instruction to cover farmers within a 20Km radius from the proposed locations of
     the Chilling Plant/ hub was not adhered to for two reasons.
          o Farmers hold large tracts of land they use for grazing. The distance from one
              farm to the next was very big; it was not uncommon to find farmers holding 20
              to 80 acres. In this situation the 20Km radius was limiting access to prospective
              respondents.
          o The proposed sites of the Chilling Plants are in the main towns of the districts
              except for Kiboga where the site is Kyankwanzi. To access dairy farmers the
              field teams had to exceed the 20 Km limitation.
  • Depending on the number of locations located within the 20 KM radius, an equal
     number of sampling points were picked in each location to ensure spread of
     interviews. For each location, the Team Leader picked the starting point randomly,
     and using the Random Route Method, farmers who fitted the set criteria were
     interviewed: Selection criteria included:
          o Be a dairy farmer
          o Have mature milking cows
          o Be engaging in some milk sales irrespective of quantities sold
  • In Luweero, the team had to go beyond the Administrative Boundary of Luweero
     District into Nakaseke District. Nakaseke was previously a county within Luweero
     District. Discussions with members of the Interim Cooperative Committee revealed
     that the bulk of the milk for the Chilling Plant in Luweero will actually come from this
     area.
  • The other key consideration in the sampling was engagement of a farmer in milk
     sales. This consensus was reached in the course of field training. It was agreed that
     numbers of cattle kept did not necessarily imply active engagement in the dairy
     market.
  • As for suppliers (27 were interviewed), the team picked supplier names from the
     farmers, other suppliers and also those they came across in the market places. From
     the list, a score was given to each and every supplier based on set criteria (capacity to
     deliver services, closeness to SMEs e.g. in terms of understanding their culture and
     geography, commercial focus e.g. level of profitability, focus on services, SMEs or
     BDS, organizational independence- especially from donor funds, legally registered
     and willingness/interest/ability to partner). From the list, suppliers who met the above
     criteria were selected for the interviews.
FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                     9
FIT RESOURCES JANUARY 2009
Key challenges of fieldwork
  • No staff on ground in some sites
  • Suspicion and fatigue of consumers and suppliers (also Interviewees demanding
     money)
  • Few providers with little diversity to be found
  • Limited functional linkages (e.g. between EADD and Gov) and knowledge among
     clients about EADD
  • Definition of small holder farmer
  • Distances to farms
  • Lack of public transport
  • Clash of events



Data processing

Research International processed all the data collected on an ongoing basis. Research
International personnel have developed a database of actors (BDS providers in each of the
areas under study are listed, categorized by service provision and their location recorded). A
further database defines specific provider gaps and capacities including a score against
agreed selection criteria for determining target partner providers. A database of the small
and micro enterprises (SMEs) interviewed has also been developed. The full data set is
attached to this report (Annexes/Databases).

To understand the markets, RI examined three key issues - demand, supply and
transactions (the interaction between demand and supply) during the market assessment.
The outcome of analyzing this information forms a picture of each BDS market showing how
it works, where the opportunities for growth are, and where significant problems lie. Data
analysis was undertaken to profile the markets, establish comparative information on the in-
country sites (and the 3 countries) and draw conclusions from the data.

A round table meeting was held in early December 08 with stakeholders to overview the
methodology and process of data processing and analysis and reach consensus on the
priority constraints/opportunities and identify possible solutions. The meeting presentation is
attached to this report (Annexes/ Process meetings). Sustainable solutions that address
priority supply side and demand side constraints were discussed. Illustrative market based
interventions were also developed with a focus on potentially sustainable/profitable services
that are replicable in the private sector. Strategies which ensure effectiveness, efficiency
and sustainability were also discussed alongside suggested BDS performance
measurements. The data processing plan was then circulated for stakeholder feedback
during the analysis process and the data plan is attached to this report (Annexes/Process
meetings). Comparative information on the in-country sites and 3 BDS markets was also
produced.



FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                    10
FIT RESOURCES JANUARY 2009
Presentations

FIT Resources and Research International personnel collaboratively implemented a
presentation and action planning at a stakeholder workshop in Uganda with staff,
Consortium members and key informants on the 8th of January 09. This workshop included
a short review presentation on the basic principles and practices of BDS and the Market
Development Paradigm. All the research findings were presented and proposed illustrative
solutions and performance measurements discussed (Annexes/Process meetings).
Feedback was recorded and an action plan developed.

FIT Resources then prepared this final draft report and will present the final report to
Technoserve with support from Research International in Nairobi, Kenya on January 30th
2009.


Key conclusions of the methodology

   •   Outsourcing the MA to a research company ensured a more effective and efficient
       MA process.
   •   A combination of outsourcing and internal capacity building ensured the best possible
       results. The likelihood of useful research results was ensured as EADD stayed close
       to the MA process.
   •   The ability of EADD staff to remain consistent to the process was questionable. Staffs
       were not always available for the trainings and meetings as required plus EADD field
       staff were not available to partner on the field work in some locations drawing into
       question the long term ability of Field Staff to implement further diagnostics in new
       locations.
   •   Determining a clear hypotheses and outlined MA goal and objectives ensured a more
       effective delivery of analysed data from Research International.
   •   The MA focused on a holistic picture of the market and incorporated both sides of the
       market equation—demand and supply.




FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                  11
FIT RESOURCES JANUARY 2009
Findings of fieldwork and data analysis


 Consumer survey


 Locations covered and key informants interviewed

            Luweero                         Masindi                             Kiboga
       Nakaseke (Wakyato)           Kiryandongo (Kakooko)                     Kyankwanzi
           Katikamu                  Kimengo (Kijunjubwa)                      Nsambya
          Bamunanika                   Bwijanga (Ntooma)                        Kapeke
                                  Key Informants Interviewed
  •   Chairman Luweero             • Model Farmer and               • Member of Cooperative
      Cooperative                    Member of Cooperative            committee based in
  •   Member of Cooperative          Committee                        Kyankwanzi
      Committee- Katikamu Area • Chairman Kigomora-                 • Veterinary Assistant
  •   2 Dairy farmers; One zero      Bweyale Farmers                  Kyankwanzi Sub County
      grazing hybrid cattle and      Association                    • 2 local dairy both with local
      the other free grazing local • 2 local dairy both with          cattle
      cattle.                        local cattle                   • 1 Supplier in Kyankwanzi
  •   One Supplier in Luweero      • 1 Supplier in Masindi            Trading Centre
      Town                           Town


 Targeted SME consumers interviewed

 A total of 300 respondents were covered in the three survey sites in Uganda. Of these 264
 (88%) were male while 36 (12%) were female. In terms of specific sites; of the 300
 respondents, 100 (33%) were from Masindi, 98 (33%) from Kiboga and 102 (34%) were
 from Luweero. Most of the consumers were in the age groups; 36-45 (102), 26-35 (79) and
 46-55 (53%). The other age groups had fewer numbers (less than 34 or less than 12%) of
 consumers. The full distribution is shown in the table below:

Respondents
profile                        Gender                      Age                            Area
                  TOTA      Mal Femal        18-   26-   36- 46-        56-   66   Masi   Kibo   Luw
Area                L        e      e        25    35    45    55       65    +    ndi     ga    ero
Total Sample       300      264    36        19    79    102 53         33    14   100     98    102
Masindi            33       36     17        37    49    34    15       24    21   100      -     -
Kiboga              33       33    33        26    20    27    53       48    36    -     100     -
Luwero             34       32     50        37    30    38    32       27    43    -       -    100
 FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                        12
 FIT RESOURCES JANUARY 2009
As per the recruitment criteria, all the consumers interviewed were engaged in cattle
keeping. Other farming activities carried out, included food crop farming though their
mainstay was on cattle keeping for income and sustenance. With regard to numbers of
cattle kept, a majority of them kept more than 5 cows for milking. However, in Luweero, the
proportion of farmers with 5 cows and below was significantly higher -40% compared to
Masindi (10%) and Kiboga (24%). This is because Luweero is densely populated and
farmers have mainly resulted to zero grazing practice as farms are quite small.

Results concerning breeds kept indicated a ratio of 3:1 of Local Breeds to Cross Breeds.
The numbers of Pure Exotic Breeds was more or less insignificant with an overall mention of
only 3%, least in Kiboga at 2% and most in Luweero at 4%.

                                                    Area

Breeds of Cattle Kept                  TOTAL          Masindi         Kiboga            Luwero
BASE: Total Sample                        300          100              98               102
                                                                 %
Pure Breed                                  3              3              2              4
Cross Breed                                 33             28             42             28
Indigenous                                  91             98             89             85

On milk production, farmers claimed to produce an average of 25 litres with sales of up to
18.7 litres per day. Among the three study sites, Masindi had the highest milk production
and sales volumes, followed by Kiboga.

                                                                               Area
                                                      TOTA
Milk production and sale                                L        Masindi       Kiboga    Luwero
[Q4c1] Total (average) number of litres produced
per day (Mean)                                         25.1       33.1          26.1       16
[Q4d] Total (average) number of litres sold per
day (Mean)                                             18.7       27.5          17.4      10.6
Difference                                             6.4        5.6           8.7       5.4

Most farmers (78%) were found owning in excess of 5 acres of land. Amongst the study
sites, Luweero had the largest proportion of farmers (34%) with 5 acres and below, while in
Kiboga only 12% had 5 acres and below. However, regardless of the size most farmers
indicated that they use ¾ to almost all their land for dairy farming/ cattle keeping as shown
in the Table below:

                                                                          Area
Farm Sizes                                  TOTAL      Masindi           Kiboga         Luwero
BASE: Total Sample                           300        100                98            102
                                                                  %
FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                        13
FIT RESOURCES JANUARY 2009
Less than a quarter                         9           1            8             18
    Between a ¼ - ½                            20           18           24            19
    Between a ½ - ¾                            40           47           42            32
    Almost all                                 30           34           26            31

   To test the significance of dairy production, farmers were asked what proportion of their
   income came from dairy farming. Results showed that dairy contributes 31-50% of their total
   income as shown in the table below:

                                                                          Area
   Dairy contribution to HH income                  TOTAL   Masindi      Kiboga      Luweero
   BASE: Total Sample                                300     100           98          102

    Less than 10%                                    12          3         21           12
    11-30%                                           18          8         20           25
    31-50%                                           40          47        42           32
    51-70%                                           20          30        11           20
    71-90%                                           20          19        19           23
    Above 90%                                        14          23        13           6


   Market profiles

   Changes Farmers are likely to undertake
   Farmers were asked what changes they were likely to undertake on their farms. Results
   showed the 72% of the farmers were already planning to undertake changes on their farms.
   The highest ranked change farmers wanted to undertake was improvement of breeds
   reared through cross breeding and artificial insemination which was rated at 67% followed
   by the desire to increase the herd size (56%), improving access to veterinary services (55%)
   and improvement in knowledge on dairy farming (40%). See full list below:

Changes farmers are likely to undertake                                Masindi    Kiboga     Luwero
BASE: All plan to change                                                 215          57     83 75
                                                                                    %
Improve breeding / breed of cattle through breeding methods / use AI       67         77     71    56
Enlarge size of herd / Buy more cattle                                     56         79     57    39
Improve the veterinary treatment / drugs used on cattle                    55         68     66    32
Improve my knowledge about dairy farming                                   40         51     49    20
Buy farm equipments                                                        33         44     30    27
Group together with other farmers / join association / join coop /         24         30     30    13
Get more money for my milk through changing buyer (general)                23         35     24    12
Improve the management of my dairy as a business                           21         21     29    13
Grouping with other farmers to get a better price                          20         30     25     7
Improve feed through growing better / more feed                            18          9     11    32
   FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                  14
   FIT RESOURCES JANUARY 2009
Improve the quality of my milk / improve my milk handling skills                                                             18                   23      20    12
Get more money for my milk through increasing price                                                                          17                   47       6     7
Change feeding to zero grazing                                                                                               11                    9      12    11

   All the improvement aspirations were rated in terms of certainty of the farmers undertaking
   them. Results obtained generally depict the farmers more positive about issues that are
   within their sphere of influence. This result shows a general positive attitude of the farmers
   to change. There are generally few responses in the category ‘some what likely to make
   improvement’ which would depict a non committal attitude to change. The full result by
   various changes is depicted in the figure below:


               Definitely will do so have firm plans in place                                    Very likely to make this improvement
               Somewhat likely to make this improvement

                        Improve transport / invest in transport n=18    6                        50                                    44
                                 Improve feed storage methods n=9       11                                   78                                   11
          Improve the management of my dairy as a business n=46             17                          54                                  28
           Grouping with other farmers to get cheaper inputs n=14            21                              57                              21
                               Change feeding to zero grazing n=23               26                          48                             26
                        Improve feed by buying supplements n=88                  27                          45                             27
   Improve the quality of my milk / improve my milk handling skills
                                                                                  31                                   62                             8
                                n=39
   Group together with other farmers / join association / join coop /
                                                                                  31                              50                             19
                     join producer group n=52
                                          Improve technology n=20                     35                          45                         20
    Get more money for my milk through changing buyer (general)
                                                                                      35                               57                             8
                                 n=49
            Grouping with other farmers to get a better price n=53                    37                          40                         23
        Get more money for my milk through increasing price n=37                      38                                54                            8
                                         Buy farm equipments n=70                     39                                53                            9
     Improve the veterinary treatment / drugs used on cattle n=118                         46                                47                       8
                       Enlarge size of herd / Buy more cattle n=121                         50                                   43                   7
                  Improve my knowledge about dairy farming n=85                             53                              27               20
                                            Improve building n=13                           54                          23                   23
    Improve breeding / breed of cattle through breeding methods /
                                                                                                54                                37                  8
                           use AI n=145
           Improve feed through growing better / more feed n=38                                 58                                34                  8




   Awareness and frequency of use of the services
   The regularity of use of the different services available to the farmers was investigated.
   Results show that the most purchased services across the three study sites are veterinary
   treatment services, vaccination and products such as mineral supplements, sprays and
   disinfectants. In Kiboga (21%) and Masindi (30%) there was mention of purchases related to
   information/ training on Animal Husbandry while in Masindi had a reasonable proportion
   (20%) mentioning purchase of market information. The full general result is shown in the
   FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                                                                               15
   FIT RESOURCES JANUARY 2009
figure below:

                                   Aware                                                                                 Used                      Inadequate No times pst
                                                          Ever                   Purchased in
                                                                                                                       nowadays                      Amount    12 months
                                                       purchased                    P12M
         Veterinary
                                                                                                                                                                 51
        treatment services                   99                       98                             96
                                                                                                                                    76                                      8
         Veterinary
                                                 97                                                                                      74                           50
        vaccination                                                       98                             96                                                                     5
         Insecticides & tick                                                                                                                                          27
                                                  93                       99                                                                 86                            30
        sprays                                                                                            97

         Mineral                                                                                                                   63                            34             26
                                            78                       78                             73
        supplements
         Artificial                    59                   8                                                            2                                        71            5
                                                                                           5
        Insemination (AI)
         Milk coolers                        59                                                                                0                                       55       7
                                                                 4                              1
         Disinfectants - for                                                                                                                                                    13
                                                                                                                        25                               47
        cleaning and             56                         44                             35
        sterilizing
         Information/training                                                                                                                           51
                              44                       18                                                       8                                                               3
        on animal                                                                    14
        husbandry
      The result also highlighted the occasional nature of some services in dairy management
      such as artificial insemination, whereas awareness was above average (59%), purchases
      were low but adequate (71%). The overriding reason on non use of services and products
      was the level of expense involved in the use of the various available services.

      It is important to note that rating on information on dairy markets was highest in terms of
      farmers not knowing where to get it, while the frequently used products like sprays and
      disinfectants had quality issues. The full result is depicted in Figure below:

                 Information on dairy markets                                                                 100

                             Milk coolers n=14                                            64                                        21             7         7

                Insecticides & tick sprays n=4                                  50                                                  50

Disinfectants - for cleaning and sterilizing n=3                                          67                                                  33

                  Veterinary vaccination n=13                                              69                                                 31

            Veterinary treatment services n=9                                                   78                                                 22

                Artificial Insemination (AI) n=6                                          67                                                  33


      FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA it
        Too expensive        Dont know where to get                             Quality                             Services are too far       Refused                               16
      FIT RESOURCES JANUARY 2009
Constraints in the market for the services
To understand both the demand and supply side constraints that are occurring in the market
farmers were asked what problems they experienced with their dairy enterprises. The ranks
of the various problems are shown in the table below:

    Key challenges faced by Dairy
    Farmers                                   TOTAL   Masindi    Kiboga     Luwero
    BASE: Total Sample                         300     100         98        102
                                                                %
    Unaffordable animal health
    services- treatment, vaccination
    and drugs                                  47       61         53         28
    Unreliable animal health services-
    treatment, vaccination and drugs           38       31         56         26
    Low milk prices                            37       35         44         31
    Disease outbreaks                          31       43         23         27
    Inaccessible roads                         30       30         51         11
    Fluctuating milk prices                    24       28         29         16
    High transport cost                        22       37         18         10
    Poor climatic conditions                   22       15         30         21
    Delayed milk payments                      19       37         14          5
    Exploitation by middle men                 18       19         23         11
    Inaccessible loan facilities               17       16         32          5
    Unavailability of milk cooling facility    16       23         22          4
    Lack of adequate foliage e.g.
    grass, Napier grass etc                    12       7          14         15
    Inadequate foliage e.g. grass,
    Napier grass etc                           11       5          15         14
    Insecurity                                 11       6          13         13




FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                               17
FIT RESOURCES JANUARY 2009
Satisfaction with the service
From the results obtained in this survey the levels of satisfaction exhibited by farmers on
various services they had consumed was high across various services and products as
shown in the figure below:
                                           Completely satisf ied    Partly satisf ied        Not at all satisf ied

                           Seeds to grow feed n=7                  29                                     43                            29

                        Milk collection/bulking n=22                             58                                  8              33

                    Artificial Insemination (AI) n=24                            58                                  8              33

                Information on dairy markets n=31                                  61                                         32                           6

   Milk advance payments or credit services n=15                                  60                                     27                       13

    Information/training on animal husbandry n=55                                       67                                18                      15

                     Veterinary vaccination n=294                                       67                                    24                       9

              Veterinary treatment services n=295                                       66                                         28                          5

                            Metal milk churns n=17                                               82                                     6             12

                                  Milk coolers n=11                                              82                                         9          9

                               Milk testing kits n=32                                          78                                        16                6

   Disinfectants - for cleaning and sterilizing n=131                                           82                                       11                8

                   Insecticides & tick sprays n=298                                              83                                              16                1

                        Supplementary feeds n=32                                                    84                                       6         9

                       Mineral supplements n=234                                                    86                                            12               1




FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                                                                        18
FIT RESOURCES JANUARY 2009
Awareness and understanding of the services
Farmers across the three sites were aware and familiar with the benefits of some key
services. However, despite high awareness on AI Services only a few claimed to be familiar
with its benefits. Further availability and affordability of AI was rated too low. It is also worth
noting that almost an insignificant number of respondents consider AI as one of the most
important services.
                                                                                                                                Not
                                                            Completely                                                      affordable              Most
                                             Aware         familiar with              Easily          Very strongly         even after            important
                                                             benefit of                               needed
                                            (n=300)                                  available                              saving up              overall
                                                                                                         needed
        Veterinary treatment services                 99                  77                     60                    91                   32                      36
                Veterinary vaccination                97                 78                   57                       92               29                     15
            Insecticides & tick sprays                93                   94                      78                  86               22                       27
                 Mineral supplements                  78                  88                     63                    80               20                     8
            Artificial Insemination (AI)            59                                     13                                                51              2
                                                                    27                                            37
                          Milk coolers             59               34                    21                      55                        53             5
       Disinfectants - for cleaning and           56                 67                     48                    57                   25                  5

        Information/training on animal           44                 30                   23                       50                   39                  1
                       Milk testing kits    39              27                  24                      22                        60
                Supplementary feeds         34                 52               21                        42                   44
         Information on dairy markets       33             25                                                53                                   1
                    Metal milk churns       32              33                  15                       31                       73
                Milk collection/bulking     32              34                  22                        43                  42
      Milk advance payments or credit      23               29                                            49                  41                  1
                                                                                                                                                               Base:
                         Chuff Cutters     17               30                  16                      24                    41
                                                                                                                                                               all
                           Hay bailers     11              9                    12                      18                   25



Market access
The dairy market for farmers in the study sites is highly segmented with very many market
players. The main market players however are:

   1. Homes; this is when farmers directly supply milk to homes. Although this is not a
      preferred market (rated 31% for least preferred). It is a market that farmers recognize
      has an all round demand. Qualitative Interviews revealed that the main problem with
      this market is that sales are on credit and recovery is often very difficult.

   2. The other significant market players are the Hawkers; these are middle men between
      the towns and the remote villages where the milk is produced. This option was
      ranked highest in terms of least preference (38%) for reasons that have been
      discussed in the previous section. It is important to recognize that they also present a
      constant source of demand for milk (40%) and it is to them that farmers usually sell.
FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                                                                             19
FIT RESOURCES JANUARY 2009
3. Farmers recognize that the Cooling Plant is a potential market option (47%) and
      actually rated it the most preferred buyer (40%), but as discussed earlier existing
      plants are unreliable and are few with limited capacity.
                                                           Usually sells to        Buys most often                                  Least preferred
                                Could sell to                                                               Preferred buyer
                                                                                                                                    buyer
           Direct to homes
                                                      68                      44                  15                      10                    31
                    Hawker
                                                     66                       54                       50                 11                    38
              Cooling Plant
                                                47                        7                   3                                40           3
       Direct to institutions
                                              33                         10                   2                          8                  1
Farmers’ cooperative/group
                                         28                          5                    3                          13                 1

                    Milk bar             23                          11                   5                          1                  4

       Broker at farm gate          16                           9                    6                       3                     6

             Bulking center         12                           2                    1                          2                  2

                 Processor      7                            1                                               1                      1




Apart from buying milk, farmers were asked what other services they received from milk
buyers and what extra service, if any, they wanted. The result shows that farmers are
interested in an all-round market player, one who not only buys but offers other services as
well. Services currently offered and those desired are shown below:




FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                                                                        20
FIT RESOURCES JANUARY 2009
Services required                                                             Services received

                                                                         4
  Animal health services- treatment, vaccination and drugs                                                                       39
                                                                                      11
                  Milk collection from the farm or near farm                                                               30
                                                                             6
                                Advance on milk payments                                                             27
                                                                                  9
                              Information on market prices                                                21
                                                                         4
                             Training on animal husbandry                                            19
                                                                             5
         Delivery/Transport of farm inputs and animal feeds                                     15
                                                                 0
                                                 AI services                               13
                                                                     2
                                 Animal feeds/supplements                             11
                                                                 0
                              Farm inputs - seeds, fertilizer                         11

 To clearly understand the dynamics of this service delivery that is piggy backed onto milk
 purchases - farmers were asked whether they usually paid for the extra services they got
 from milk buyers. Results show that for most services there was no payment except where it
 involved Animal Health Services and Feeds/ Supplements or Milk Collections and
 Advances. The result is shown below:

                                                                     Yes         No

      Delivery/Transport of farm inputs and animal feeds n=15                                                  100

                           Information on market prices n=27                                                   100

                          Training on animal husbandry n=12                                                    100
     Animal health services- treatment, vaccination and drugs
                                                                         18                                           82
                               n=11
               Milk collection from the farm or near farm n=34       9                                           91

                              Animal feeds/supplements n=6                       33                                         67

                             Advance on milk payments n=19           11                                              89


 Forty two percent of the farmers involved in survey felt they were getting very little
 information on where they can sell their milk. In Kiboga half of the respondents felt they
 were getting very little while in Luwero, the majority (57%) of the farmers felt they were
 getting just enough.

Feeling about the information on where to sell milk TOTAL                                                            Masindi Kiboga       Luwero
BASE: Total Sample                                    300                                                               100      98          102
                                                                                                                            %
Very little                                                                                           42                 43      51          32
 FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                                                                   21
 FIT RESOURCES JANUARY 2009
Just enough                                                      46        47          35       57
A lot                                                            12        10          14       11

Farmers indicated they are currently transacting on credit terms where milk buyers pay them
after a specified time (65%). However, their preferred mode was cash on delivery with their
milk buyers (62%).

Payment modes                                  TOTAL            Masindi    Kiboga    Luwero
BASE: Total Sample                                 300               100         98      102
                                                                        %
Paid cash on delivery                                     28          21         32        30
Paid in cash after a specified period                     65          69         61        65
Cash deposited to a financial institution                  0   -          -                 1
Barter - exchange milk for other services                  1   -                  4 -




Cooling Plant
Awareness of existing Cooling Plants was low with only 22% of the respondents claiming to
be at least aware of a Cooling Plant.

 Cooling Plant awareness                    TOTAL          Masindi       Kiboga        Luwero

 BASE: Total Sample                                 300           100             98        102
                                                                     %
 Yes                                                 22            31             23            12
 No                                                  78            69             77            88

Some of the Cooling Plants mentioned include:
  • Bruban Cooling Plant
  • Mpora dairy
  • LC III chairman
  • Samayi
  • Kibogo dairy
  • Hajji briham Cooling Plant
  • Kasima Cooling Plant
  • Nalukonge dairy
  • Bwayale milk cooler
  • Kyakulogire
  • Fresh dairy
  • Nyamata dairy
  • Kyenja
  • Bukwiri dairy
FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                       22
FIT RESOURCES JANUARY 2009
•    Kiwarabwi dairy

Farmers mentioned that they preferred to have the services depicted below offered at the
Cooling Plant:

                                       AI services     19%
                                     Animal feeds       22%
            Farm inputs - seeds, fertilizer             24%
             vaccination and drugs                                  44%
          Training on animal husbandry                                      58%
       Milk collection from the farm or near farm                               60%
                      Information on market prices                                    69%
                                    Credit facility                                    69%
 Animal health services- treatment and prevention                                             83%


Asked how they would feel if they were asked to pay for the desired services, they all
answered in the affirmation at no less than 90%. Qualitative interviews revealed that farmers
are convinced that services that would be availed at a common point at the Cooling Plant
would be of quality and at rates well known to every one.

Information and training needs
From amongst all the farmers included in the survey only 24% claimed that they had all the
skills and information that one would need to be a good dairy farmer. This proportion was
highest in Luweero (31%), followed by Kiboga (26%) and in Masindi those attesting were
only 14%. To further understand this situation, farmers were asked the aspects of dairy
farming where they felt they needed more information. The result is depicted below:

Base: Total sample n=300
                          Record keeping Buyers               25%
           Public health issues and requirements              25%
               Awareness of government policies               25%
                                New animal feeds               26%
                                              Buyers             30%
                        Dairy farm record keeping                         38%
                                   Cattle breeding                               46%
                  Improvement of milk production                                       51%
                                        Milk prices                                          56%
                              Drug administration                                                   62%
 Disease identification, treatment and prevention                                                         72%


FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                                       23
FIT RESOURCES JANUARY 2009
From the issues highlighted above, it is apparent that most dairy farmers have a rural
background and lack exposure to modern dairy management practices. Information required
on services and products reflects none appreciation of issues like record keeping that are
critical to enterprise development and management. In addition, only 19% of the farmers
attested that they had received useful information about dairy farming in the past 12
months. The areas in which this information was received are depicted below:

                     Awareness of government policies                   7%
                                                Buyers                           9%
                                       Record keeping                             12%
                             Dairy farm record keeping                                14%
                                            Milk prices                               16%
                                        Cattle breeding                                     19%
                                    New animal feeds                                         21%
                 Public health issues and requirements                                           23%
                        Improvement of milk production                                                  30%
                                   Drug administration                                                                42%
       Disease identification, treatment and prevention                                                                                                    72%


The common channels of obtaining information are Government Extension Workers and
fellow farmers. This finding points to a few and weak private sector actors in the dairy
sector, especially with regard to responding to information and training needs. The full result
on information sources by category of information is shown in the figure below:

        Media                                Farmers                                                  Extension Worker (GOV)
        Buyer                                Supplier                                                 NGO

                                       Milk prices n=9                 22              11                        44                    11            11

                                          Buyers n=5                             40                         20             20                   20

                                 Record keeping n=7               14                   29                             43                         14

                 Improvement of milk production n=17      6                 18                   29               6         24                   18

          Public health issues and requirements n=13          8                        38                             38                              23

                Awareness of government policies n=4                                                      100

                                 Cattle breeding n=11                                       64                                  18          9         9

 Disease identification, treatment and prevention n=41        12            5                      49                            20                  15

                            Drug administration n=24      4                                       71                                            29

                              New animal feeds n=12               17                             42                                   42

                       Dairy farm record keeping n=8                                  50                                   38                        13


FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                                                                                        24
FIT RESOURCES JANUARY 2009
Taking from the result above on information and information sources; the result (figure
below) on adequacy of information has to be taken with caution. Qualitative evidence
obtained in the survey suggests that given the remoteness of the sites farmers feel that
what they are receiving is adequate in the circumstances. However the reality of the
situation is that some farmers take months on end without interacting with any information
source except for the numerous FM stations, fellow farmers and milk buyers. The result on
adequacy of channels is shown below:

                                                         Adequate            Inadequate         Paid by self

                               Milk prices n=9               78                       22               33
                                   Buyers n=5     20                    80
                          Record keeping n=7                  86                          14          29
         Improvement of milk production n=17            53                     47                      35
   Public health issues and requirements n=13          46                     54                       38
       Awareness of government policies n=11            50                     50                     25
                          Cattle breeding n=11             64                     36                  27
          Disease identification, treatment and
                                                         56                     44                      46
                   prevention n=41
                     Drug administration n=24             63                     38                         63
                       New animal feeds n=12                 75                     25                25
                Dairy farm record keeping n=8           50                     50                           63


The survey also sought to establish whether farmers keep their own records at the farm.
Results show that few farmers only 22% keep some records on their farmers; amongst the
records kept most are milk sales (66%), followed by treatment and vaccination records
(63%) and others are shown in the table below:


                                                                  AI services records          2%


                                                                        Feeds record           2%


                                                                      Milk production                            54%
                                      Yes,
              No,                     22                    Record on animal births                               58%
              78

                                                  Treatment and vaccination records                                    63%


                                                                             Milk sales                                66%

FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                                                25
FIT RESOURCES JANUARY 2009
From Qualitative Interviews and the farm visits conducted in the course of the survey, it
emerged that although farmers tried to keep records there are problems being experienced:

   1. The quality of records kept is poor. The records lack clarity in content; it’s hard for
      one to follow them without the assistance of the person who wrote the records.
   2. In addition ordinary school books are used to keep records which do not last long
      and easily get lost or spoilt.

As a consequence of this situation only 32% of the farmers attested to knowing the
profitability of their dairy farming activities.
Technology and product development
Most farmers attested to owning mobile phones (69%). To follow up on how this technology
can be innovatively used, farmers were asked the types of information they would like to
access on their phones through SMS alerts; and assuming the information was trustworthy,
relevant and up to date. The most desired piece of information was on disease alerts and
milk prices as shown in the figure below. These were also the services that the majority of
them indicated high willingness to pay for.

 Milk rejected at processor level to inform farmer   3
                                                         6
                        Quantity of milk supplied            11
                                                                  15
                               Market for breeds                  16
                                                                       20
        Availability of new products and services                           26
                                                                                 29
                   Availability of milk payments                            26
                                                                                  31
                       New market opportunities                              28
                                                                                       36
                                    Sale of cows                                      34
                                                                                           38
    Trainings/field days/dairy farming workshops                                      35
                                                                                            41
                                   New markets                                                  43
                                                                                                 45
                                 Access to loans                                                 45
                                                                                                     47
                                       Milk prices                                                        72
                                                                                                          73
                              Cow disease alerts                                                           74
                                                                                                               76

                                     Information would be ready to pay for
                                     Information would like to access through a mobile phone


It should be noted that there is a phone mismatch between phone ownership and
competence to use the various functions of the phone. Qualitative results agree with the
FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                                           26
FIT RESOURCES JANUARY 2009
quantitative findings that there many phone owners but also allude to the fact that for most
farmers it’s the phone calls that matter and many are not conversant with SMS usage. This
finding is consistent with the relatively low literacy and formal education levels in the study
sites. Thus the use of mobile phones would involve embedding an element of training for
farmers on various phone applications. It was suggested though that this would not be mass
training but rather seed training where a few trained would teach the others and a multiplier
effect would take care of this limitation.

Finance
Nearly all dairy farming operations both productive and sales are financed through private
incomes and savings. Results show that 89% of the farmers would like to obtain lump sum
money to develop their dairy farming. Several known sources of finance were enumerated
by farmers and most the prominent were cooperative savings and credit (24%), followed by
Banks (18%) and Cooling Plants (17%). Microfinance institutions were mentioned at 12% as
shown in Figure 19 below:



                                                            No
                             Fa m il y/frie           s o u rce , 4
                              n ds , 1 4

                                                                            Ba n ks , 1 8




                                                                      C o o p e ra ti v
                              C o o lin g                             e SAC C O ,
                             p la n t , 1 7                                 24


                                                                               Micro
                                 N GOs , 5                                   fin a n ce
                                                                         i n s titu tio n s
                                         Su p pl ie rs ,                        , 12
                                              1


Policy and Advocacy
There are hardly any noticeable policies and advocacy initiatives that are currently taking
place in the dairy industry that are known by the farmers. In the qualitative interviews there
was ignorance of the operations of the diary development authority which as a national body
responsible for growth and development of the dairy sector. How ever the following issues
came up as important for policy and advocacy initiatives:

   1. The drive to transform dairy farming from herd size to individual stock productivity.
      This is a lead policy and advocacy issue because currently farmers mostly keep local
      breeds of cattle. These are low yielding and yet require a lot of space for grazing.
FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                     27
FIT RESOURCES JANUARY 2009
This effectively translates into erratic highly seasonal milk incomes. This will move
      many farmers from looking at milk as an incidental product to an intentioned product.
   2. Farmers also suggested that the rules by the National Drug Authority that require
      fixed premises for suppliers of certain requirements that are essential for them are
      limiting access to certain services.
   3. Farmers are suspicious of the operations of Cooperatives. This impart is explained by
      the history of the Cooperative Movement in Uganda but also by the fact that many of
      them indicated that they had lost savings and contributions to unscrupulous
      Cooperative Schemes. This was particularly expressed in Luweero where farmers
      said they wanted to see the Chilling Plant in place then they would buy into it.




Unmet demand and market opportunities
From the farmers the following are priority unmet demands which represent market
opportunities:

   1. There is clearly an unmet demand for artificial insemination services. Improved herd
      quality will ultimately result in increased production of milk and this is the underlying
      driver for the development of the sector.
   2. Milk collection and bulking is characterized by hawkers who increase the market
      chain at the cost of farmers. They have limited and unreliable capacity. This
      represents a market opportunity for strategically placed Chilling Plants which are
      essential for stable milk supply and longevity.
   3. For BDS related services, demand is generally skewed towards Production Support
      Services and not Sales Support Services. This is limiting income opportunities that
      would arise from knowledge of the market.


Key demand side constraints and opportunities

The following are the key demand side constraints that represent opportunities for BDS:

   1. Limited and fluctuating incomes are the key demand side constraint. This is
      essentially a result of farmers having low-unstable milk production which is supplied
      to an unpredictable milk market. The farmers hardly have any influence in the milk
      value chain. This presents an opportunity for BDS through seeking to empower
      farmers under a cooperative arrangement.
   2. There are few suppliers; and, hardly any institutionalized. Thus even though farmers
      are constrained by incomes the services offered by the current caliber of suppliers
      are not competitive both in quality and price and this presents an opportunity for more
      market entrants to stimulate a competitive market environment.
   3. Farmers simply do not know the wide range of services and the benefits that would
      accrue to consuming those services. This is evident in the mentions of what is
FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                    28
FIT RESOURCES JANUARY 2009
accessed and what is desired. This presents an opportunity for enlightening farmers
       on the range of services and benefits.


Business Development Services that address those constraints and opportunities

The following Business Development Services would be critical in responding to the
constraints and opportunities highlighted above:

  1. Facilitating the acquisition of chilling/ Cooling Plants; these respond to multiple
     constraints and opportunities including milk collection and bulking plus the market
     distortions created by milk hawkers and would enhance access to a stable predictable
     milk market. Facilitation here might be realized through cost recovery where the
     infrastructure is put in place and then the cost recovered as farmers buy into the plant.
  2. Specialized dairy farming services like artificial insemination need a high level of
     investment and need partnership with local government providers under specific
     memoranda of understanding for purposes of maintaining quality which will attract
     paid demand which is currently lacking. The capacity to deliver this service exists and
     farmers are willing to pay but the discord is with the quality of semen and this is the
     point of intervention.
  3. Farmers need information and training. Dairy production is generally rudimentary.
     Demand and supply decisions are not balanced, farmers simply do not know the
     range of various services and how these can enhance productivity. This aspect ties in
     to the issues of information and innovative product development - if ignorance is high
     then not much can be accomplished. This needs to be overcome.


Specific policy constraints that are affecting MSE product markets

Field findings showed that specific policy constraints on dairy products from medium and
small enterprises concern milk and milk products standards and manifest in the following:

   1. In Uganda some standards exist; however, both suppliers and consumers were not
      aware of these standards and how they were developed. And, these are limited in
      scope plus they do not cover on farm primary dairy production practices.
   2. The most commonly known issue on standards was amongst transporters. They
      claimed that they were banned from transporting milk in plastic Jerry Cans and yet
      the cost of Churns was prohibitory. However this also had an enforcement problem
      as Hawkers operating Motor Bikes were not adhering to this and continued using
      plastic Jerry Cans which have problems with maintaining the safety and quality of
      milk.
   3. In Uganda, it is common for milk to be vended in polythene bags in evening markets.
      This kind of milk is often adulterated and cheap and presents a public health and
      safety hazard.


FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                   29
FIT RESOURCES JANUARY 2009
Supplier diagnostic by location


Existing providers/ services and their locations

                          Type of                     Location
                        organization
Business Name              Private          Sub-       Trading        Services provided
                          comm…             location   centre
Ezinabala                     *             Luwero T/C Luwero         Treatment; Tick spray;
                                                                      Mineral supplement
Luwero Farmers                 *            Luwero        Luwero      Treatment; Tick spray;
shop                                                                  Mineral supplement
Ssosolye                       *            Luwero T/C Luwero         Treatment; Tick spray;
                                                                      Mineral supplement
Kikyusa Vet Drug               *            Kikyusa                   Veterinary vaccination;
shop                                                                  Veterinary treatment
                                                                      services
Bulemezi                       *            Luwero                    Treatment; Tick spray
                                            Town                      and Mineral feeds
Banabukalasa                   *            Wobulenzi     Wobulenzi   Treatment; Vaccination
Farm Supply                                                           and Minerals
Las Enterprises                *            Wobulenzi     Wobulenzi   Treatment, Sprays and
                                                                      Minerals, salts etc
No business name                                          Luwero      Treatment, Vaccination
specified                                                             and Spraying
Vet Point Clinic               *            Katikamu      Wobulenzi   Treatment, Sprays and
                                                                      Minerals salts etc




FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                       30
FIT RESOURCES JANUARY 2009
A workable data base of the BDS actors

 A workable data base of these BDS providers is attached to this report (Annexes/Databases).


 BDS suppliers interviewed

                                                                                                      WHOLESALE
                                                                                                      OR RETAIL?
                                                                                                      Retail Both
SUPPLIER NAME BUSINESS NAME                  P. O. BOX   ROAD/ STREET TOWN/ CENTRE Nature of Business Count Count
              ANIMAL LIFE                                KIGUMBA      MASINDI      Private Owned
              SVS                                        ROAD                                             1      0
BIKYENKYA     PIONEER FARM                               KIJUJUMBA                 Private Owned
HENRY         SUP                                        ROAD                                             0      1
BISASO        AGALI AWAMU                                NGOMA ROAD KIWOKO         Private Owned
IBRAHIM       VET                                                                                         1      0
BYAMUKAMA     YIGA BYAMU                     71 KIBOGA   HOIMA ROAD   KIBOGA TOWN Private Owned
ANNET                                                                                                     1      0
DAVIS BWIRE   VALID DRUG                     64          KLA-GULU     BWEYALE      Private Owned
              SHOP                           BWEYALE                                                      1      0
DENIS         KABWANGU VET                   7 KIBOGA    HOIMA ROAD   KIBOGA       Private Owned
ANTHONY       SHO                                                                                         1      0
DR.ATICOLO    JRA VET                                    ZAZA         KIBOGA       Private Owned
              PARTNERS                                                                                    1      0
JAMES         COP VET                                    ALONG        BWEYALE      Private Owned
                                                         HIGHWAY                                          1      0
KATORONGO           KATORONGO                            NTOOMA T C   NTOOMA TC    Private Owned
                    VET SH                                                                                1      0
KISAKYE             ENKUMBI                              WOBULENZI    KIKYUSA      Private Owned
MARGARET            BWEBUGAG                             ROAD                                             1      0
 FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                                    31
 FIT RESOURCES JANUARY 2009
MAHOORO             NTOOMA VET                         NTOOMA TC      NTOOMA         Private Owned
KELLEN                                                                                               1        0
MANDE JOYCE         REDEEMER VET                       BWEYALE TC     BWEYALE        Private Owned
                    CON                                                                              0        1
MOHOORO             NTOOMA VET                         NTOOMA         NTOOMA         Private Owned
KELLY                                                                                                1        0
MR. KALULE   LAS                             34        K'LA         WOBULENZI        Private Owned
             ENTERPRISES                     WOBULENZI LUWEERO RD                                    1        0
MR.KAMULASI  TOMKY VET                                 KIBOGA HOIMA KIBOGA           Private Owned
TOM          DRG SH                                    RD                                            1        0
NABULYA JANE EZINABALA VET                             KIKUBO       LUWEERO          Private Owned
             CE                                                     TOWN                             1        0
NABUNYA      SOSOLYE VET                               LUWERO PARK LUWERO            Private Owned
HARIET       DRG                                                                                     1        0
NALONGO      VET POINT                                 OFF KLA        WOBULENZI      Private Owned
             CLINIC                                    LUWERO RD                                     1        0
NANSEREKO    HAJJA FARM                                NGOMA ROAD     KIWOKO         Private Owned
HARIET       SUPPL                                                                                   1        0
NDAWULA      KIKYUSA VET                               KIKYUSA MAIN   KIKYUSA        Private Owned
RONALD       SHOP                                                                                    1        0
NDORI JULIUS NJ VET DRUG                               KIGANZI ROAD   KIBOGA TOWN    Private Owned
             SHOP                                                                                    1        0
SENTONGO DAN LUW FARMERS                               KIKUUBO        LUWEERO        Private Owned
             SHOP                                                                                    1        0
SUNDAY G.    KATUGO VET                                KATUGO ROAD KATUGO T/C        Private Owned
TUGUME       CENTR                                                                                   1        0
TUMWINE      BWEYALE VET                     98        BWEYALE TC     BWEYALE        Private Owned
ARNOLD       SHOP                            BWEYALE
TWEHEYO      AGRO VET                                  NTANGA         MASINDI TOWN   Private Owned
GASHOM       DRUG SH                                   STREET                                        1        0
WALULYA      WAL FARM                                  KASIISO ROAD   KASANA         Private Owned
MUKASA                                                                                               1        0

 FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                               32
 FIT RESOURCES JANUARY 2009
FIXED
                                                                               OR
                                                                             MOBILE
                                                                             BUSINE  IF FIXED,
                                                                                SS   PERMAN
             HOW OLD IS             PERMANENT                CASUAL          PREMIS   ENT OR
             BUSINESS?              EMPLOYEES               EMPLOYEES          ES?     SEMI?
n=         Le                                                                               Se
counts     ss  Betw Ov                                                       Fix           mi -
           tha een    er                                                     ed            Per
           n 1 1-2    2                                                      pre     Per   ma
SUPPLI     ye   year ye                                                      mis Bot man nen
ER         ar    s   ars            0    1    2    3    0     1     2    3   es   h ent      t
NAME       n   n     n          n       n    n    n    n     n     n    n    n   n   n      n
BIKYEN
KYA
HENRY         0       0     1       0    0    0    1    1      0    0    0    0    1     1        0
BISASO
IBRAHI
M             0       0     1       1    0    0    0    1      0    0    0    1    0     1        0
BYAMU
KAMA
ANNET         0       0     1       0    0    0    1    1      0    0    0    1    0     1        0
DAVIS
BWIRE         0       0     1       0    0    1    0    0      0    0    1    1    0     1        0
DENIS
ANTHO
NY            0       0     1       0    0    0    1    1      0    0    0    1    0     1        0
DR.ATIC
OLO           0       0     1       0    1    0    0    0      0    1    0    1    0     1        0
JAMES         0       0     1       0    1    0    0    1      0    0    0    1    0     1        0
KATOR
ONGO          0       1     0       0    1    0    0    1      0    0    0    1    0     0        1
KISAKY
E
MARGA
RET           0       0     1       1    0    0    0    1      0    0    0    1    0     1        0
MAHOO
RO
KELLEN        0       0     1       0    0    1    0    0      0    0    0    0    1
MANDE
JOYCE         0       0     1       0    0    1    0    1      0    0    0    1    0     1        0
MOHOO
RO            0       0     1       0    0    1    0    1      0    0    0    1    0     1        0
 FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                                   33
 FIT RESOURCES JANUARY 2009
KELLY
MR.
KALULE        0       0     1      0     1   0   0   1    0   0   0   1    0   1         0
MR.KAM
ULASI
TOM           0       0     1      0     1   0   0   0    1   0   0   1    0
NABULY
A JANE        0       0     1      0     1   0   0   1    0   0   0   1    0   1         0
NABUN
YA
HARIET        0       1     0      1     0   0   0   1    0   0   0   1    0   1         0
NALON
GO            0       0     1      0     1   0   0   1    0   0   0   1    0   1         0
NANSE
REKO
HARIET        1       0     0      1     0   0   0   1    0   0   0   1    0   1         0
NDAWU
LA
RONAL
D             0       0     1      0     0   0   0   0    1   0   0   1    0
NDORI
JULIUS        0       1     0      0     0   0   0   0    1   0   0            1         0
SENTO
NGO
DAN           0       0     1      0     1   0   0   1    0   0   0   1    0   1         0
SUNDA
Y G.
TUGUM
E             0       1     0      0     1   0   0   0    1   0   0   1    0   1         0
TUMWI
NE
ARNOL
D             0       1     0      0     0   1   0   1    0   0   0   0    1   1         0
TWEHE
YO
GASHO
M             0       0     1      0     1   0   0   1    0   0   0   1    0   1         0
WALUL
YA
MUKAS
A             0       0     1      1    0    0   0    1   0   0   0    1   0    1        0
Total         1       5    20      5   10    5   4   19   4   1   1   22   3   22        1




 FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA                                          34
 FIT RESOURCES JANUARY 2009
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda
Business Development Services (BDS) Market Diagnostics in Uganda

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Business Development Services (BDS) Market Diagnostics in Uganda

  • 1. FINAL REPORT CONSULTANCY SERVICES FOR BUSINESS DEVELOPMENT SERVICES (BDS) MARKET DIAGNOSTIC IN UGANDA CONDUCTED BY: FIT RESOURCES SUBMITTED TO: EAST AFRICA DAIRY DEVELOPMENT (EADD) PROJECT FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 1 FIT RESOURCES JANUARY 2009
  • 2. JANUARY 2009 FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 2 FIT RESOURCES JANUARY 2009
  • 3. CONTENTS Background and introduction..................................................................................................4 Methodology and activities .....................................................................................................5 Pre-planning .......................................................................................................................5 Training...............................................................................................................................6 Field work ...........................................................................................................................8 Sampling .........................................................................................................................9 Key challenges of fieldwork ...........................................................................................10 Data processing ................................................................................................................10 Presentations ....................................................................................................................11 Key conclusions of the methodology ................................................................................11 Findings of fieldwork and data analysis ................................................................................12 Consumer survey .................................................................................................................12 Locations covered and key informants interviewed ..........................................................12 Targeted SME consumers interviewed .............................................................................12 Market profiles ..................................................................................................................14 Key demand side constraints and opportunities ...............................................................28 Business development services that address those constraints and opportunities ..........29 Specific policy constraints that are affecting MSE product markets ..................................29 Supplier diagnostic by location .............................................................................................30 Existing providers/ services and their locations ................................................................30 A workable data base of the BDS actors ..........................................................................31 BDS suppliers interviewed ................................................................................................31 Types of services and price of services, how providers cover costs, profitability, existing contractual arrangements/relationships and promotional/marketing strategies ................35 Capacity gaps of interviewed suppliers.............................................................................40 Priority supply side constraints, market failures, and market opportunities.......................40 The enabling environment for BDS ...................................................................................46 Characteristics of the market for BDS in each specific region in relation to existing supply, demand and transactions .................................................................................................48 An insight into the potential of each target market location...............................................50 Level of market distortion..................................................................................................51 Comparative information on the in-country sites and the 3 markets ................................. 50 Other current or proposed dairy sector interventions ........................................................53 Sustainable solutions to address priority market constraints and market failures .............53 ‘Illustrative’ market based interventions to develop the market for key identified services that are in demand or offer the greatest potential for stabilization or growth ....................62 Approaches and methodologies .......................................................................................66 Strategies which ensure effectiveness and efficiency .......................................................67 Strategies which ensure sustainability ..............................................................................71 Suggested BDS providers/delivery channels to target for future interventions .................74 Selecting appropriate BDS providers ................................................................................75 FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 3 FIT RESOURCES JANUARY 2009
  • 4. BDS performance measurements at the BDS market level ..............................................76 Annexes ...............................................................................................................................80 Database of SME actors including persons interviewed ...................................................80 Database of BDS suppliers including persons interviewed ...............................................80 Database of targeted suppliers .........................................................................................80 Itinerary.............................................................................................................................80 FIT/RI scope of work.........................................................................................................80 Final instruments ..............................................................................................................80 BDS training report ...........................................................................................................80 Researcher training report ................................................................................................80 Background and Introduction In a bid to improve life through poverty reduction, a Consortium of organisations comprising of Heifer International as lead, TechnoServe Inc, ILRI, ABS-TCM and ICRAF launched a 4 year program dubbed EADD (East Africa Dairy Development) funded by Bill and Melinda Gates Foundation. The program aims to move smallholder farmers out of poverty by delivering farmer-focused, value-chain activities that are implemented simultaneously to stimulate dairy farm production, dairy-sector services, business development and dairy market pull. The vision of success for the EADD is that the lives of 179,000 families - or approximately one million people, are transformed by doubling household dairy income by year 2018, through integrated interventions in dairy production, market-access and knowledge application. The Consortium deemed it important to carry out a market assessment to understand the characteristics of the BDS markets in relation to existing supply, demand and transactions in the dairy sectors in some key sites in Kenya, Uganda and Rwanda. The information would: • Provide an insight into the potential of each market • Clarify opportunities for interventions • Define broad strategic approaches FIT Resources Kenya (FIT) in collaboration with Research International East Africa Ltd (RIEAL) were contracted to coordinate the market diagnostic in key locations in Uganda. The findings and recommendations of this consultancy will contribute to the market focused, sub sector approach of the EADD aimed at improving the functioning of BDS markets. The final scope of work is attached to this report (Annexes/ Final Revised SOW). FIT Resources act as the lead agency and contract holder, to provide strategic leadership in devising and conducting the business development service consumer research and supplier diagnostic. Research International conduct the field work as a sub contractor, to collect FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 4 FIT RESOURCES JANUARY 2009
  • 5. primary/secondary qualitative and quantitative information, analyse, process and present the data. Methodology and activities To achieve the above results the following activities were agreed on: • Pre-planning (planning meetings, research boundaries on the basis of project resources, existing sub sector information, market assessment goal/objectives/research hypothesis, developing and testing the tools, screening interviewers, target locations in each country, preliminary key informants, other current or proposed interventions) • Training (training of EADD staff, field research teams and BDS training workshop) • Field work (target groups, sample size, areas covered, team structure, consumer survey and supplier diagnostic) • Data processing (developing the data base of BDS actors, profiling the markets, choose priority constraints, identifying and scoping out sustainable solutions, defining ‘illustrative’ market based interventions and strategies, suggest appropriate BDS providers, establishing comparative information, identifying BDS performance measurements) • Presentations (stakeholder workshops and final presentation) Pre-planning Relevant background information was sourced via a series of planning meeting with Technoserve and EADD Consortium members. Meeting presentations and minutes are attached to this report (Annexes/Process meetings). These meetings also included setting the research boundaries on the basis of project resources, preliminary selection of target locations and the agreed definition of ‘small holder farmer’. The market assessment goal, objectives and research hypothesis were agreed as follows: The market assessment goal is: To understand the characteristics of the BDS markets in relation to existing supply, demand and transactions in key sites in Uganda. The market assessment objectives are: • To provide an insight into the potential of each market • To clarify opportunities for interventions • To define broad strategic approaches The research hypothesis is: FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 5 FIT RESOURCES JANUARY 2009
  • 6. If current BDS market dynamics are better understood then strategic approaches and interventions can be devised to develop BDS markets in a sustainable manner and thus benefit SMEs. It was agreed that the FIT/RI team would build capacity of the project staff to undertake future market assessments during the life of the project. Due to budget constraints a targeted number of sites were discussed that affords the best opportunities to kick-off the project and generate some ‘quick wins’. A training itinerary was also agreed upon to capacitate EADD project staff in BDS and research skills. FIT Resources provided lead for the overall assignment and liaison with Technoserve and the country office on all the pre-planning activities. FIT Resources coordinated the field preparation with Research International and Technoserve including; tool development and testing, researcher selection and training and itinerary development. Different tools were developed to cover the demand (consumer) side and supply (supplier) side of the market. The final instruments and itinerary are attached to this report (Annexes/Final Instruments). The following activities were undertaken prior to the commencement of fieldwork: screening of team members, preparation and translation of questionnaires and preparation of reporting tools and manuals. Research International personnel met field staff/counterparts and finalised the selection of target locations and identification of key informants in each location. Research International finalised the training of field researchers including EADD project staff and preparations for field research. No secondary information was used, as the project is building on a baseline survey and an existing value chain assessment. The comprehensive examination of targeted BDS markets and value chains will assist EADD in designing systemic solutions to key market problems. The two subsystems - BDS markets and value chains - are complementary components of the larger market system into which MSEs must integrate. Training 1. BDS training workshop - FIT Resources personnel implemented an in-depth EADD staff stakeholder training in Uganda. This 2 day formal training in diagnostic skills covered the principles and practices of BDS, BDS market development, BDS market assessment and BDS market development programme design and performance measurement. The aim of this training was to capacitate project staff and provide stakeholders with a contextual framework for the research. The workshop presentations, training materials and training reports are attached (Annexes/BDS Training). 2. Training of field research teams - teams including Technoserve and Consortium member staff, were subject to an in country briefing session prior to fieldwork commencement. The training sessions covered methodology of the assessment stages, sampling, tools and stimulus methods to use with market players and how to complete reporting formats. The aim of this training was to capacitate project staff to engage in further market diagnostics beyond the life of this collaboration. The FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 6 FIT RESOURCES JANUARY 2009
  • 7. workshop presentation and training reports are attached (Annexes/Research Training). FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 7 FIT RESOURCES JANUARY 2009
  • 8. Field work In order to complete this assignment within the defined period, a large teams of Interviewers, Team-Leaders and Supervisors were assigned. Team members were recruited from the RIEAL regional offices, according to specifications based on experience and qualifications. The RIEAL Principle Researcher and a Field Coordinator coordinated the research at all stages, and focused on ensuring that outputs were planned in advance so time-schedules were met. They worked alongside the RIEAL existing field management structure that forms the line management for the Field Departments. Daily reporting of results and activities from each team was channeled back through this Central Management Team. Research International led and implemented the field research in collaboration with EADD project staff. However no staffs were on the ground during the fieldwork in some sites in Uganda. Consultations and market observation were undertaken during the fieldwork which included visiting identified target locations plus identifying and holding interviews with key informants and targeted dairy sector stakeholders relevant to the selected sites. Consumer survey - Consumer research was implemented with a selection of consumers from the core market itself, with a focus on farmers and Chilling Plant stakeholders. However the definition regarding ‘small holder farmer’ was reviewed and altered during a process meeting and the ceiling lifted on the number of cows, as many farmers in Uganda and Rwanda are large compared to Kenya’s extensive small holder population. Constraints and opportunities were then identified in the areas of market access, input supply, technology/product development, management and organisation, policy, finance and infrastructure. The size and strength of the market in each specific area of the country for those services was estimated broadly plus key sub sector constraints, market failures and market opportunities defined from the demand side. Key business development services were identified that address the specific constraints and opportunities. Supplier diagnostic - Based on the identified priority services, relevant suppliers were identified and a supplier survey implemented with service providers from the support markets to determine who is supplying BDS and how. Constraints, market failures and opportunities were then determined from the supply side. A comparison of suppliers was also undertaken and the level of market distortion anticipated. Stakeholders from the business environment such as Local Authorities, Regulators/Policy Makers were contacted as required to provide an overview of the business environment. The BDS survey fieldwork was conducted between the 24th and 30th of November 2008. Three separate field teams of 4 Enumerators were used in each location. The Enumerator groups were language specific for the purposes of ensuring consistence with instant translation of the questions. The three teams were supervised by the co-ordinator. The areas covered in the survey are shown below: FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 8 FIT RESOURCES JANUARY 2009
  • 9. Luweero Masindi Kiboga Nakaseke (Wakyato) Kiryandongo (Kakooko) Kyankwanzi Katikamu Kimengo (Kijunjubwa) Nsambya Bamunanika Bwijanga (Ntooma) Kapeke New sites not included will be covered by Technoserve staff beyond the life of this consultancy. The interview length for each interview was approximately 30 minutes. Sampling The sample included 327 interviews spread across the 3 sites: • 300 farmers were interviewed. • The instruction to cover farmers within a 20Km radius from the proposed locations of the Chilling Plant/ hub was not adhered to for two reasons. o Farmers hold large tracts of land they use for grazing. The distance from one farm to the next was very big; it was not uncommon to find farmers holding 20 to 80 acres. In this situation the 20Km radius was limiting access to prospective respondents. o The proposed sites of the Chilling Plants are in the main towns of the districts except for Kiboga where the site is Kyankwanzi. To access dairy farmers the field teams had to exceed the 20 Km limitation. • Depending on the number of locations located within the 20 KM radius, an equal number of sampling points were picked in each location to ensure spread of interviews. For each location, the Team Leader picked the starting point randomly, and using the Random Route Method, farmers who fitted the set criteria were interviewed: Selection criteria included: o Be a dairy farmer o Have mature milking cows o Be engaging in some milk sales irrespective of quantities sold • In Luweero, the team had to go beyond the Administrative Boundary of Luweero District into Nakaseke District. Nakaseke was previously a county within Luweero District. Discussions with members of the Interim Cooperative Committee revealed that the bulk of the milk for the Chilling Plant in Luweero will actually come from this area. • The other key consideration in the sampling was engagement of a farmer in milk sales. This consensus was reached in the course of field training. It was agreed that numbers of cattle kept did not necessarily imply active engagement in the dairy market. • As for suppliers (27 were interviewed), the team picked supplier names from the farmers, other suppliers and also those they came across in the market places. From the list, a score was given to each and every supplier based on set criteria (capacity to deliver services, closeness to SMEs e.g. in terms of understanding their culture and geography, commercial focus e.g. level of profitability, focus on services, SMEs or BDS, organizational independence- especially from donor funds, legally registered and willingness/interest/ability to partner). From the list, suppliers who met the above criteria were selected for the interviews. FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 9 FIT RESOURCES JANUARY 2009
  • 10. Key challenges of fieldwork • No staff on ground in some sites • Suspicion and fatigue of consumers and suppliers (also Interviewees demanding money) • Few providers with little diversity to be found • Limited functional linkages (e.g. between EADD and Gov) and knowledge among clients about EADD • Definition of small holder farmer • Distances to farms • Lack of public transport • Clash of events Data processing Research International processed all the data collected on an ongoing basis. Research International personnel have developed a database of actors (BDS providers in each of the areas under study are listed, categorized by service provision and their location recorded). A further database defines specific provider gaps and capacities including a score against agreed selection criteria for determining target partner providers. A database of the small and micro enterprises (SMEs) interviewed has also been developed. The full data set is attached to this report (Annexes/Databases). To understand the markets, RI examined three key issues - demand, supply and transactions (the interaction between demand and supply) during the market assessment. The outcome of analyzing this information forms a picture of each BDS market showing how it works, where the opportunities for growth are, and where significant problems lie. Data analysis was undertaken to profile the markets, establish comparative information on the in- country sites (and the 3 countries) and draw conclusions from the data. A round table meeting was held in early December 08 with stakeholders to overview the methodology and process of data processing and analysis and reach consensus on the priority constraints/opportunities and identify possible solutions. The meeting presentation is attached to this report (Annexes/ Process meetings). Sustainable solutions that address priority supply side and demand side constraints were discussed. Illustrative market based interventions were also developed with a focus on potentially sustainable/profitable services that are replicable in the private sector. Strategies which ensure effectiveness, efficiency and sustainability were also discussed alongside suggested BDS performance measurements. The data processing plan was then circulated for stakeholder feedback during the analysis process and the data plan is attached to this report (Annexes/Process meetings). Comparative information on the in-country sites and 3 BDS markets was also produced. FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 10 FIT RESOURCES JANUARY 2009
  • 11. Presentations FIT Resources and Research International personnel collaboratively implemented a presentation and action planning at a stakeholder workshop in Uganda with staff, Consortium members and key informants on the 8th of January 09. This workshop included a short review presentation on the basic principles and practices of BDS and the Market Development Paradigm. All the research findings were presented and proposed illustrative solutions and performance measurements discussed (Annexes/Process meetings). Feedback was recorded and an action plan developed. FIT Resources then prepared this final draft report and will present the final report to Technoserve with support from Research International in Nairobi, Kenya on January 30th 2009. Key conclusions of the methodology • Outsourcing the MA to a research company ensured a more effective and efficient MA process. • A combination of outsourcing and internal capacity building ensured the best possible results. The likelihood of useful research results was ensured as EADD stayed close to the MA process. • The ability of EADD staff to remain consistent to the process was questionable. Staffs were not always available for the trainings and meetings as required plus EADD field staff were not available to partner on the field work in some locations drawing into question the long term ability of Field Staff to implement further diagnostics in new locations. • Determining a clear hypotheses and outlined MA goal and objectives ensured a more effective delivery of analysed data from Research International. • The MA focused on a holistic picture of the market and incorporated both sides of the market equation—demand and supply. FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 11 FIT RESOURCES JANUARY 2009
  • 12. Findings of fieldwork and data analysis Consumer survey Locations covered and key informants interviewed Luweero Masindi Kiboga Nakaseke (Wakyato) Kiryandongo (Kakooko) Kyankwanzi Katikamu Kimengo (Kijunjubwa) Nsambya Bamunanika Bwijanga (Ntooma) Kapeke Key Informants Interviewed • Chairman Luweero • Model Farmer and • Member of Cooperative Cooperative Member of Cooperative committee based in • Member of Cooperative Committee Kyankwanzi Committee- Katikamu Area • Chairman Kigomora- • Veterinary Assistant • 2 Dairy farmers; One zero Bweyale Farmers Kyankwanzi Sub County grazing hybrid cattle and Association • 2 local dairy both with local the other free grazing local • 2 local dairy both with cattle cattle. local cattle • 1 Supplier in Kyankwanzi • One Supplier in Luweero • 1 Supplier in Masindi Trading Centre Town Town Targeted SME consumers interviewed A total of 300 respondents were covered in the three survey sites in Uganda. Of these 264 (88%) were male while 36 (12%) were female. In terms of specific sites; of the 300 respondents, 100 (33%) were from Masindi, 98 (33%) from Kiboga and 102 (34%) were from Luweero. Most of the consumers were in the age groups; 36-45 (102), 26-35 (79) and 46-55 (53%). The other age groups had fewer numbers (less than 34 or less than 12%) of consumers. The full distribution is shown in the table below: Respondents profile Gender Age Area TOTA Mal Femal 18- 26- 36- 46- 56- 66 Masi Kibo Luw Area L e e 25 35 45 55 65 + ndi ga ero Total Sample 300 264 36 19 79 102 53 33 14 100 98 102 Masindi 33 36 17 37 49 34 15 24 21 100 - - Kiboga 33 33 33 26 20 27 53 48 36 - 100 - Luwero 34 32 50 37 30 38 32 27 43 - - 100 FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 12 FIT RESOURCES JANUARY 2009
  • 13. As per the recruitment criteria, all the consumers interviewed were engaged in cattle keeping. Other farming activities carried out, included food crop farming though their mainstay was on cattle keeping for income and sustenance. With regard to numbers of cattle kept, a majority of them kept more than 5 cows for milking. However, in Luweero, the proportion of farmers with 5 cows and below was significantly higher -40% compared to Masindi (10%) and Kiboga (24%). This is because Luweero is densely populated and farmers have mainly resulted to zero grazing practice as farms are quite small. Results concerning breeds kept indicated a ratio of 3:1 of Local Breeds to Cross Breeds. The numbers of Pure Exotic Breeds was more or less insignificant with an overall mention of only 3%, least in Kiboga at 2% and most in Luweero at 4%. Area Breeds of Cattle Kept TOTAL Masindi Kiboga Luwero BASE: Total Sample 300 100 98 102 % Pure Breed 3 3 2 4 Cross Breed 33 28 42 28 Indigenous 91 98 89 85 On milk production, farmers claimed to produce an average of 25 litres with sales of up to 18.7 litres per day. Among the three study sites, Masindi had the highest milk production and sales volumes, followed by Kiboga. Area TOTA Milk production and sale L Masindi Kiboga Luwero [Q4c1] Total (average) number of litres produced per day (Mean) 25.1 33.1 26.1 16 [Q4d] Total (average) number of litres sold per day (Mean) 18.7 27.5 17.4 10.6 Difference 6.4 5.6 8.7 5.4 Most farmers (78%) were found owning in excess of 5 acres of land. Amongst the study sites, Luweero had the largest proportion of farmers (34%) with 5 acres and below, while in Kiboga only 12% had 5 acres and below. However, regardless of the size most farmers indicated that they use ¾ to almost all their land for dairy farming/ cattle keeping as shown in the Table below: Area Farm Sizes TOTAL Masindi Kiboga Luwero BASE: Total Sample 300 100 98 102 % FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 13 FIT RESOURCES JANUARY 2009
  • 14. Less than a quarter 9 1 8 18 Between a ¼ - ½ 20 18 24 19 Between a ½ - ¾ 40 47 42 32 Almost all 30 34 26 31 To test the significance of dairy production, farmers were asked what proportion of their income came from dairy farming. Results showed that dairy contributes 31-50% of their total income as shown in the table below: Area Dairy contribution to HH income TOTAL Masindi Kiboga Luweero BASE: Total Sample 300 100 98 102 Less than 10% 12 3 21 12 11-30% 18 8 20 25 31-50% 40 47 42 32 51-70% 20 30 11 20 71-90% 20 19 19 23 Above 90% 14 23 13 6 Market profiles Changes Farmers are likely to undertake Farmers were asked what changes they were likely to undertake on their farms. Results showed the 72% of the farmers were already planning to undertake changes on their farms. The highest ranked change farmers wanted to undertake was improvement of breeds reared through cross breeding and artificial insemination which was rated at 67% followed by the desire to increase the herd size (56%), improving access to veterinary services (55%) and improvement in knowledge on dairy farming (40%). See full list below: Changes farmers are likely to undertake Masindi Kiboga Luwero BASE: All plan to change 215 57 83 75 % Improve breeding / breed of cattle through breeding methods / use AI 67 77 71 56 Enlarge size of herd / Buy more cattle 56 79 57 39 Improve the veterinary treatment / drugs used on cattle 55 68 66 32 Improve my knowledge about dairy farming 40 51 49 20 Buy farm equipments 33 44 30 27 Group together with other farmers / join association / join coop / 24 30 30 13 Get more money for my milk through changing buyer (general) 23 35 24 12 Improve the management of my dairy as a business 21 21 29 13 Grouping with other farmers to get a better price 20 30 25 7 Improve feed through growing better / more feed 18 9 11 32 FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 14 FIT RESOURCES JANUARY 2009
  • 15. Improve the quality of my milk / improve my milk handling skills 18 23 20 12 Get more money for my milk through increasing price 17 47 6 7 Change feeding to zero grazing 11 9 12 11 All the improvement aspirations were rated in terms of certainty of the farmers undertaking them. Results obtained generally depict the farmers more positive about issues that are within their sphere of influence. This result shows a general positive attitude of the farmers to change. There are generally few responses in the category ‘some what likely to make improvement’ which would depict a non committal attitude to change. The full result by various changes is depicted in the figure below: Definitely will do so have firm plans in place Very likely to make this improvement Somewhat likely to make this improvement Improve transport / invest in transport n=18 6 50 44 Improve feed storage methods n=9 11 78 11 Improve the management of my dairy as a business n=46 17 54 28 Grouping with other farmers to get cheaper inputs n=14 21 57 21 Change feeding to zero grazing n=23 26 48 26 Improve feed by buying supplements n=88 27 45 27 Improve the quality of my milk / improve my milk handling skills 31 62 8 n=39 Group together with other farmers / join association / join coop / 31 50 19 join producer group n=52 Improve technology n=20 35 45 20 Get more money for my milk through changing buyer (general) 35 57 8 n=49 Grouping with other farmers to get a better price n=53 37 40 23 Get more money for my milk through increasing price n=37 38 54 8 Buy farm equipments n=70 39 53 9 Improve the veterinary treatment / drugs used on cattle n=118 46 47 8 Enlarge size of herd / Buy more cattle n=121 50 43 7 Improve my knowledge about dairy farming n=85 53 27 20 Improve building n=13 54 23 23 Improve breeding / breed of cattle through breeding methods / 54 37 8 use AI n=145 Improve feed through growing better / more feed n=38 58 34 8 Awareness and frequency of use of the services The regularity of use of the different services available to the farmers was investigated. Results show that the most purchased services across the three study sites are veterinary treatment services, vaccination and products such as mineral supplements, sprays and disinfectants. In Kiboga (21%) and Masindi (30%) there was mention of purchases related to information/ training on Animal Husbandry while in Masindi had a reasonable proportion (20%) mentioning purchase of market information. The full general result is shown in the FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 15 FIT RESOURCES JANUARY 2009
  • 16. figure below: Aware Used Inadequate No times pst Ever Purchased in nowadays Amount 12 months purchased P12M Veterinary 51 treatment services 99 98 96 76 8 Veterinary 97 74 50 vaccination 98 96 5 Insecticides & tick 27 93 99 86 30 sprays 97 Mineral 63 34 26 78 78 73 supplements Artificial 59 8 2 71 5 5 Insemination (AI) Milk coolers 59 0 55 7 4 1 Disinfectants - for 13 25 47 cleaning and 56 44 35 sterilizing Information/training 51 44 18 8 3 on animal 14 husbandry The result also highlighted the occasional nature of some services in dairy management such as artificial insemination, whereas awareness was above average (59%), purchases were low but adequate (71%). The overriding reason on non use of services and products was the level of expense involved in the use of the various available services. It is important to note that rating on information on dairy markets was highest in terms of farmers not knowing where to get it, while the frequently used products like sprays and disinfectants had quality issues. The full result is depicted in Figure below: Information on dairy markets 100 Milk coolers n=14 64 21 7 7 Insecticides & tick sprays n=4 50 50 Disinfectants - for cleaning and sterilizing n=3 67 33 Veterinary vaccination n=13 69 31 Veterinary treatment services n=9 78 22 Artificial Insemination (AI) n=6 67 33 FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA it Too expensive Dont know where to get Quality Services are too far Refused 16 FIT RESOURCES JANUARY 2009
  • 17. Constraints in the market for the services To understand both the demand and supply side constraints that are occurring in the market farmers were asked what problems they experienced with their dairy enterprises. The ranks of the various problems are shown in the table below: Key challenges faced by Dairy Farmers TOTAL Masindi Kiboga Luwero BASE: Total Sample 300 100 98 102 % Unaffordable animal health services- treatment, vaccination and drugs 47 61 53 28 Unreliable animal health services- treatment, vaccination and drugs 38 31 56 26 Low milk prices 37 35 44 31 Disease outbreaks 31 43 23 27 Inaccessible roads 30 30 51 11 Fluctuating milk prices 24 28 29 16 High transport cost 22 37 18 10 Poor climatic conditions 22 15 30 21 Delayed milk payments 19 37 14 5 Exploitation by middle men 18 19 23 11 Inaccessible loan facilities 17 16 32 5 Unavailability of milk cooling facility 16 23 22 4 Lack of adequate foliage e.g. grass, Napier grass etc 12 7 14 15 Inadequate foliage e.g. grass, Napier grass etc 11 5 15 14 Insecurity 11 6 13 13 FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 17 FIT RESOURCES JANUARY 2009
  • 18. Satisfaction with the service From the results obtained in this survey the levels of satisfaction exhibited by farmers on various services they had consumed was high across various services and products as shown in the figure below: Completely satisf ied Partly satisf ied Not at all satisf ied Seeds to grow feed n=7 29 43 29 Milk collection/bulking n=22 58 8 33 Artificial Insemination (AI) n=24 58 8 33 Information on dairy markets n=31 61 32 6 Milk advance payments or credit services n=15 60 27 13 Information/training on animal husbandry n=55 67 18 15 Veterinary vaccination n=294 67 24 9 Veterinary treatment services n=295 66 28 5 Metal milk churns n=17 82 6 12 Milk coolers n=11 82 9 9 Milk testing kits n=32 78 16 6 Disinfectants - for cleaning and sterilizing n=131 82 11 8 Insecticides & tick sprays n=298 83 16 1 Supplementary feeds n=32 84 6 9 Mineral supplements n=234 86 12 1 FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 18 FIT RESOURCES JANUARY 2009
  • 19. Awareness and understanding of the services Farmers across the three sites were aware and familiar with the benefits of some key services. However, despite high awareness on AI Services only a few claimed to be familiar with its benefits. Further availability and affordability of AI was rated too low. It is also worth noting that almost an insignificant number of respondents consider AI as one of the most important services. Not Completely affordable Most Aware familiar with Easily Very strongly even after important benefit of needed (n=300) available saving up overall needed Veterinary treatment services 99 77 60 91 32 36 Veterinary vaccination 97 78 57 92 29 15 Insecticides & tick sprays 93 94 78 86 22 27 Mineral supplements 78 88 63 80 20 8 Artificial Insemination (AI) 59 13 51 2 27 37 Milk coolers 59 34 21 55 53 5 Disinfectants - for cleaning and 56 67 48 57 25 5 Information/training on animal 44 30 23 50 39 1 Milk testing kits 39 27 24 22 60 Supplementary feeds 34 52 21 42 44 Information on dairy markets 33 25 53 1 Metal milk churns 32 33 15 31 73 Milk collection/bulking 32 34 22 43 42 Milk advance payments or credit 23 29 49 41 1 Base: Chuff Cutters 17 30 16 24 41 all Hay bailers 11 9 12 18 25 Market access The dairy market for farmers in the study sites is highly segmented with very many market players. The main market players however are: 1. Homes; this is when farmers directly supply milk to homes. Although this is not a preferred market (rated 31% for least preferred). It is a market that farmers recognize has an all round demand. Qualitative Interviews revealed that the main problem with this market is that sales are on credit and recovery is often very difficult. 2. The other significant market players are the Hawkers; these are middle men between the towns and the remote villages where the milk is produced. This option was ranked highest in terms of least preference (38%) for reasons that have been discussed in the previous section. It is important to recognize that they also present a constant source of demand for milk (40%) and it is to them that farmers usually sell. FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 19 FIT RESOURCES JANUARY 2009
  • 20. 3. Farmers recognize that the Cooling Plant is a potential market option (47%) and actually rated it the most preferred buyer (40%), but as discussed earlier existing plants are unreliable and are few with limited capacity. Usually sells to Buys most often Least preferred Could sell to Preferred buyer buyer Direct to homes 68 44 15 10 31 Hawker 66 54 50 11 38 Cooling Plant 47 7 3 40 3 Direct to institutions 33 10 2 8 1 Farmers’ cooperative/group 28 5 3 13 1 Milk bar 23 11 5 1 4 Broker at farm gate 16 9 6 3 6 Bulking center 12 2 1 2 2 Processor 7 1 1 1 Apart from buying milk, farmers were asked what other services they received from milk buyers and what extra service, if any, they wanted. The result shows that farmers are interested in an all-round market player, one who not only buys but offers other services as well. Services currently offered and those desired are shown below: FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 20 FIT RESOURCES JANUARY 2009
  • 21. Services required Services received 4 Animal health services- treatment, vaccination and drugs 39 11 Milk collection from the farm or near farm 30 6 Advance on milk payments 27 9 Information on market prices 21 4 Training on animal husbandry 19 5 Delivery/Transport of farm inputs and animal feeds 15 0 AI services 13 2 Animal feeds/supplements 11 0 Farm inputs - seeds, fertilizer 11 To clearly understand the dynamics of this service delivery that is piggy backed onto milk purchases - farmers were asked whether they usually paid for the extra services they got from milk buyers. Results show that for most services there was no payment except where it involved Animal Health Services and Feeds/ Supplements or Milk Collections and Advances. The result is shown below: Yes No Delivery/Transport of farm inputs and animal feeds n=15 100 Information on market prices n=27 100 Training on animal husbandry n=12 100 Animal health services- treatment, vaccination and drugs 18 82 n=11 Milk collection from the farm or near farm n=34 9 91 Animal feeds/supplements n=6 33 67 Advance on milk payments n=19 11 89 Forty two percent of the farmers involved in survey felt they were getting very little information on where they can sell their milk. In Kiboga half of the respondents felt they were getting very little while in Luwero, the majority (57%) of the farmers felt they were getting just enough. Feeling about the information on where to sell milk TOTAL Masindi Kiboga Luwero BASE: Total Sample 300 100 98 102 % Very little 42 43 51 32 FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 21 FIT RESOURCES JANUARY 2009
  • 22. Just enough 46 47 35 57 A lot 12 10 14 11 Farmers indicated they are currently transacting on credit terms where milk buyers pay them after a specified time (65%). However, their preferred mode was cash on delivery with their milk buyers (62%). Payment modes TOTAL Masindi Kiboga Luwero BASE: Total Sample 300 100 98 102 % Paid cash on delivery 28 21 32 30 Paid in cash after a specified period 65 69 61 65 Cash deposited to a financial institution 0 - - 1 Barter - exchange milk for other services 1 - 4 - Cooling Plant Awareness of existing Cooling Plants was low with only 22% of the respondents claiming to be at least aware of a Cooling Plant. Cooling Plant awareness TOTAL Masindi Kiboga Luwero BASE: Total Sample 300 100 98 102 % Yes 22 31 23 12 No 78 69 77 88 Some of the Cooling Plants mentioned include: • Bruban Cooling Plant • Mpora dairy • LC III chairman • Samayi • Kibogo dairy • Hajji briham Cooling Plant • Kasima Cooling Plant • Nalukonge dairy • Bwayale milk cooler • Kyakulogire • Fresh dairy • Nyamata dairy • Kyenja • Bukwiri dairy FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 22 FIT RESOURCES JANUARY 2009
  • 23. Kiwarabwi dairy Farmers mentioned that they preferred to have the services depicted below offered at the Cooling Plant: AI services 19% Animal feeds 22% Farm inputs - seeds, fertilizer 24% vaccination and drugs 44% Training on animal husbandry 58% Milk collection from the farm or near farm 60% Information on market prices 69% Credit facility 69% Animal health services- treatment and prevention 83% Asked how they would feel if they were asked to pay for the desired services, they all answered in the affirmation at no less than 90%. Qualitative interviews revealed that farmers are convinced that services that would be availed at a common point at the Cooling Plant would be of quality and at rates well known to every one. Information and training needs From amongst all the farmers included in the survey only 24% claimed that they had all the skills and information that one would need to be a good dairy farmer. This proportion was highest in Luweero (31%), followed by Kiboga (26%) and in Masindi those attesting were only 14%. To further understand this situation, farmers were asked the aspects of dairy farming where they felt they needed more information. The result is depicted below: Base: Total sample n=300 Record keeping Buyers 25% Public health issues and requirements 25% Awareness of government policies 25% New animal feeds 26% Buyers 30% Dairy farm record keeping 38% Cattle breeding 46% Improvement of milk production 51% Milk prices 56% Drug administration 62% Disease identification, treatment and prevention 72% FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 23 FIT RESOURCES JANUARY 2009
  • 24. From the issues highlighted above, it is apparent that most dairy farmers have a rural background and lack exposure to modern dairy management practices. Information required on services and products reflects none appreciation of issues like record keeping that are critical to enterprise development and management. In addition, only 19% of the farmers attested that they had received useful information about dairy farming in the past 12 months. The areas in which this information was received are depicted below: Awareness of government policies 7% Buyers 9% Record keeping 12% Dairy farm record keeping 14% Milk prices 16% Cattle breeding 19% New animal feeds 21% Public health issues and requirements 23% Improvement of milk production 30% Drug administration 42% Disease identification, treatment and prevention 72% The common channels of obtaining information are Government Extension Workers and fellow farmers. This finding points to a few and weak private sector actors in the dairy sector, especially with regard to responding to information and training needs. The full result on information sources by category of information is shown in the figure below: Media Farmers Extension Worker (GOV) Buyer Supplier NGO Milk prices n=9 22 11 44 11 11 Buyers n=5 40 20 20 20 Record keeping n=7 14 29 43 14 Improvement of milk production n=17 6 18 29 6 24 18 Public health issues and requirements n=13 8 38 38 23 Awareness of government policies n=4 100 Cattle breeding n=11 64 18 9 9 Disease identification, treatment and prevention n=41 12 5 49 20 15 Drug administration n=24 4 71 29 New animal feeds n=12 17 42 42 Dairy farm record keeping n=8 50 38 13 FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 24 FIT RESOURCES JANUARY 2009
  • 25. Taking from the result above on information and information sources; the result (figure below) on adequacy of information has to be taken with caution. Qualitative evidence obtained in the survey suggests that given the remoteness of the sites farmers feel that what they are receiving is adequate in the circumstances. However the reality of the situation is that some farmers take months on end without interacting with any information source except for the numerous FM stations, fellow farmers and milk buyers. The result on adequacy of channels is shown below: Adequate Inadequate Paid by self Milk prices n=9 78 22 33 Buyers n=5 20 80 Record keeping n=7 86 14 29 Improvement of milk production n=17 53 47 35 Public health issues and requirements n=13 46 54 38 Awareness of government policies n=11 50 50 25 Cattle breeding n=11 64 36 27 Disease identification, treatment and 56 44 46 prevention n=41 Drug administration n=24 63 38 63 New animal feeds n=12 75 25 25 Dairy farm record keeping n=8 50 50 63 The survey also sought to establish whether farmers keep their own records at the farm. Results show that few farmers only 22% keep some records on their farmers; amongst the records kept most are milk sales (66%), followed by treatment and vaccination records (63%) and others are shown in the table below: AI services records 2% Feeds record 2% Milk production 54% Yes, No, 22 Record on animal births 58% 78 Treatment and vaccination records 63% Milk sales 66% FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 25 FIT RESOURCES JANUARY 2009
  • 26. From Qualitative Interviews and the farm visits conducted in the course of the survey, it emerged that although farmers tried to keep records there are problems being experienced: 1. The quality of records kept is poor. The records lack clarity in content; it’s hard for one to follow them without the assistance of the person who wrote the records. 2. In addition ordinary school books are used to keep records which do not last long and easily get lost or spoilt. As a consequence of this situation only 32% of the farmers attested to knowing the profitability of their dairy farming activities. Technology and product development Most farmers attested to owning mobile phones (69%). To follow up on how this technology can be innovatively used, farmers were asked the types of information they would like to access on their phones through SMS alerts; and assuming the information was trustworthy, relevant and up to date. The most desired piece of information was on disease alerts and milk prices as shown in the figure below. These were also the services that the majority of them indicated high willingness to pay for. Milk rejected at processor level to inform farmer 3 6 Quantity of milk supplied 11 15 Market for breeds 16 20 Availability of new products and services 26 29 Availability of milk payments 26 31 New market opportunities 28 36 Sale of cows 34 38 Trainings/field days/dairy farming workshops 35 41 New markets 43 45 Access to loans 45 47 Milk prices 72 73 Cow disease alerts 74 76 Information would be ready to pay for Information would like to access through a mobile phone It should be noted that there is a phone mismatch between phone ownership and competence to use the various functions of the phone. Qualitative results agree with the FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 26 FIT RESOURCES JANUARY 2009
  • 27. quantitative findings that there many phone owners but also allude to the fact that for most farmers it’s the phone calls that matter and many are not conversant with SMS usage. This finding is consistent with the relatively low literacy and formal education levels in the study sites. Thus the use of mobile phones would involve embedding an element of training for farmers on various phone applications. It was suggested though that this would not be mass training but rather seed training where a few trained would teach the others and a multiplier effect would take care of this limitation. Finance Nearly all dairy farming operations both productive and sales are financed through private incomes and savings. Results show that 89% of the farmers would like to obtain lump sum money to develop their dairy farming. Several known sources of finance were enumerated by farmers and most the prominent were cooperative savings and credit (24%), followed by Banks (18%) and Cooling Plants (17%). Microfinance institutions were mentioned at 12% as shown in Figure 19 below: No Fa m il y/frie s o u rce , 4 n ds , 1 4 Ba n ks , 1 8 C o o p e ra ti v C o o lin g e SAC C O , p la n t , 1 7 24 Micro N GOs , 5 fin a n ce i n s titu tio n s Su p pl ie rs , , 12 1 Policy and Advocacy There are hardly any noticeable policies and advocacy initiatives that are currently taking place in the dairy industry that are known by the farmers. In the qualitative interviews there was ignorance of the operations of the diary development authority which as a national body responsible for growth and development of the dairy sector. How ever the following issues came up as important for policy and advocacy initiatives: 1. The drive to transform dairy farming from herd size to individual stock productivity. This is a lead policy and advocacy issue because currently farmers mostly keep local breeds of cattle. These are low yielding and yet require a lot of space for grazing. FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 27 FIT RESOURCES JANUARY 2009
  • 28. This effectively translates into erratic highly seasonal milk incomes. This will move many farmers from looking at milk as an incidental product to an intentioned product. 2. Farmers also suggested that the rules by the National Drug Authority that require fixed premises for suppliers of certain requirements that are essential for them are limiting access to certain services. 3. Farmers are suspicious of the operations of Cooperatives. This impart is explained by the history of the Cooperative Movement in Uganda but also by the fact that many of them indicated that they had lost savings and contributions to unscrupulous Cooperative Schemes. This was particularly expressed in Luweero where farmers said they wanted to see the Chilling Plant in place then they would buy into it. Unmet demand and market opportunities From the farmers the following are priority unmet demands which represent market opportunities: 1. There is clearly an unmet demand for artificial insemination services. Improved herd quality will ultimately result in increased production of milk and this is the underlying driver for the development of the sector. 2. Milk collection and bulking is characterized by hawkers who increase the market chain at the cost of farmers. They have limited and unreliable capacity. This represents a market opportunity for strategically placed Chilling Plants which are essential for stable milk supply and longevity. 3. For BDS related services, demand is generally skewed towards Production Support Services and not Sales Support Services. This is limiting income opportunities that would arise from knowledge of the market. Key demand side constraints and opportunities The following are the key demand side constraints that represent opportunities for BDS: 1. Limited and fluctuating incomes are the key demand side constraint. This is essentially a result of farmers having low-unstable milk production which is supplied to an unpredictable milk market. The farmers hardly have any influence in the milk value chain. This presents an opportunity for BDS through seeking to empower farmers under a cooperative arrangement. 2. There are few suppliers; and, hardly any institutionalized. Thus even though farmers are constrained by incomes the services offered by the current caliber of suppliers are not competitive both in quality and price and this presents an opportunity for more market entrants to stimulate a competitive market environment. 3. Farmers simply do not know the wide range of services and the benefits that would accrue to consuming those services. This is evident in the mentions of what is FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 28 FIT RESOURCES JANUARY 2009
  • 29. accessed and what is desired. This presents an opportunity for enlightening farmers on the range of services and benefits. Business Development Services that address those constraints and opportunities The following Business Development Services would be critical in responding to the constraints and opportunities highlighted above: 1. Facilitating the acquisition of chilling/ Cooling Plants; these respond to multiple constraints and opportunities including milk collection and bulking plus the market distortions created by milk hawkers and would enhance access to a stable predictable milk market. Facilitation here might be realized through cost recovery where the infrastructure is put in place and then the cost recovered as farmers buy into the plant. 2. Specialized dairy farming services like artificial insemination need a high level of investment and need partnership with local government providers under specific memoranda of understanding for purposes of maintaining quality which will attract paid demand which is currently lacking. The capacity to deliver this service exists and farmers are willing to pay but the discord is with the quality of semen and this is the point of intervention. 3. Farmers need information and training. Dairy production is generally rudimentary. Demand and supply decisions are not balanced, farmers simply do not know the range of various services and how these can enhance productivity. This aspect ties in to the issues of information and innovative product development - if ignorance is high then not much can be accomplished. This needs to be overcome. Specific policy constraints that are affecting MSE product markets Field findings showed that specific policy constraints on dairy products from medium and small enterprises concern milk and milk products standards and manifest in the following: 1. In Uganda some standards exist; however, both suppliers and consumers were not aware of these standards and how they were developed. And, these are limited in scope plus they do not cover on farm primary dairy production practices. 2. The most commonly known issue on standards was amongst transporters. They claimed that they were banned from transporting milk in plastic Jerry Cans and yet the cost of Churns was prohibitory. However this also had an enforcement problem as Hawkers operating Motor Bikes were not adhering to this and continued using plastic Jerry Cans which have problems with maintaining the safety and quality of milk. 3. In Uganda, it is common for milk to be vended in polythene bags in evening markets. This kind of milk is often adulterated and cheap and presents a public health and safety hazard. FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 29 FIT RESOURCES JANUARY 2009
  • 30. Supplier diagnostic by location Existing providers/ services and their locations Type of Location organization Business Name Private Sub- Trading Services provided comm… location centre Ezinabala * Luwero T/C Luwero Treatment; Tick spray; Mineral supplement Luwero Farmers * Luwero Luwero Treatment; Tick spray; shop Mineral supplement Ssosolye * Luwero T/C Luwero Treatment; Tick spray; Mineral supplement Kikyusa Vet Drug * Kikyusa Veterinary vaccination; shop Veterinary treatment services Bulemezi * Luwero Treatment; Tick spray Town and Mineral feeds Banabukalasa * Wobulenzi Wobulenzi Treatment; Vaccination Farm Supply and Minerals Las Enterprises * Wobulenzi Wobulenzi Treatment, Sprays and Minerals, salts etc No business name Luwero Treatment, Vaccination specified and Spraying Vet Point Clinic * Katikamu Wobulenzi Treatment, Sprays and Minerals salts etc FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 30 FIT RESOURCES JANUARY 2009
  • 31. A workable data base of the BDS actors A workable data base of these BDS providers is attached to this report (Annexes/Databases). BDS suppliers interviewed WHOLESALE OR RETAIL? Retail Both SUPPLIER NAME BUSINESS NAME P. O. BOX ROAD/ STREET TOWN/ CENTRE Nature of Business Count Count ANIMAL LIFE KIGUMBA MASINDI Private Owned SVS ROAD 1 0 BIKYENKYA PIONEER FARM KIJUJUMBA Private Owned HENRY SUP ROAD 0 1 BISASO AGALI AWAMU NGOMA ROAD KIWOKO Private Owned IBRAHIM VET 1 0 BYAMUKAMA YIGA BYAMU 71 KIBOGA HOIMA ROAD KIBOGA TOWN Private Owned ANNET 1 0 DAVIS BWIRE VALID DRUG 64 KLA-GULU BWEYALE Private Owned SHOP BWEYALE 1 0 DENIS KABWANGU VET 7 KIBOGA HOIMA ROAD KIBOGA Private Owned ANTHONY SHO 1 0 DR.ATICOLO JRA VET ZAZA KIBOGA Private Owned PARTNERS 1 0 JAMES COP VET ALONG BWEYALE Private Owned HIGHWAY 1 0 KATORONGO KATORONGO NTOOMA T C NTOOMA TC Private Owned VET SH 1 0 KISAKYE ENKUMBI WOBULENZI KIKYUSA Private Owned MARGARET BWEBUGAG ROAD 1 0 FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 31 FIT RESOURCES JANUARY 2009
  • 32. MAHOORO NTOOMA VET NTOOMA TC NTOOMA Private Owned KELLEN 1 0 MANDE JOYCE REDEEMER VET BWEYALE TC BWEYALE Private Owned CON 0 1 MOHOORO NTOOMA VET NTOOMA NTOOMA Private Owned KELLY 1 0 MR. KALULE LAS 34 K'LA WOBULENZI Private Owned ENTERPRISES WOBULENZI LUWEERO RD 1 0 MR.KAMULASI TOMKY VET KIBOGA HOIMA KIBOGA Private Owned TOM DRG SH RD 1 0 NABULYA JANE EZINABALA VET KIKUBO LUWEERO Private Owned CE TOWN 1 0 NABUNYA SOSOLYE VET LUWERO PARK LUWERO Private Owned HARIET DRG 1 0 NALONGO VET POINT OFF KLA WOBULENZI Private Owned CLINIC LUWERO RD 1 0 NANSEREKO HAJJA FARM NGOMA ROAD KIWOKO Private Owned HARIET SUPPL 1 0 NDAWULA KIKYUSA VET KIKYUSA MAIN KIKYUSA Private Owned RONALD SHOP 1 0 NDORI JULIUS NJ VET DRUG KIGANZI ROAD KIBOGA TOWN Private Owned SHOP 1 0 SENTONGO DAN LUW FARMERS KIKUUBO LUWEERO Private Owned SHOP 1 0 SUNDAY G. KATUGO VET KATUGO ROAD KATUGO T/C Private Owned TUGUME CENTR 1 0 TUMWINE BWEYALE VET 98 BWEYALE TC BWEYALE Private Owned ARNOLD SHOP BWEYALE TWEHEYO AGRO VET NTANGA MASINDI TOWN Private Owned GASHOM DRUG SH STREET 1 0 WALULYA WAL FARM KASIISO ROAD KASANA Private Owned MUKASA 1 0 FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 32 FIT RESOURCES JANUARY 2009
  • 33. FIXED OR MOBILE BUSINE IF FIXED, SS PERMAN HOW OLD IS PERMANENT CASUAL PREMIS ENT OR BUSINESS? EMPLOYEES EMPLOYEES ES? SEMI? n= Le Se counts ss Betw Ov Fix mi - tha een er ed Per n 1 1-2 2 pre Per ma SUPPLI ye year ye mis Bot man nen ER ar s ars 0 1 2 3 0 1 2 3 es h ent t NAME n n n n n n n n n n n n n n n BIKYEN KYA HENRY 0 0 1 0 0 0 1 1 0 0 0 0 1 1 0 BISASO IBRAHI M 0 0 1 1 0 0 0 1 0 0 0 1 0 1 0 BYAMU KAMA ANNET 0 0 1 0 0 0 1 1 0 0 0 1 0 1 0 DAVIS BWIRE 0 0 1 0 0 1 0 0 0 0 1 1 0 1 0 DENIS ANTHO NY 0 0 1 0 0 0 1 1 0 0 0 1 0 1 0 DR.ATIC OLO 0 0 1 0 1 0 0 0 0 1 0 1 0 1 0 JAMES 0 0 1 0 1 0 0 1 0 0 0 1 0 1 0 KATOR ONGO 0 1 0 0 1 0 0 1 0 0 0 1 0 0 1 KISAKY E MARGA RET 0 0 1 1 0 0 0 1 0 0 0 1 0 1 0 MAHOO RO KELLEN 0 0 1 0 0 1 0 0 0 0 0 0 1 MANDE JOYCE 0 0 1 0 0 1 0 1 0 0 0 1 0 1 0 MOHOO RO 0 0 1 0 0 1 0 1 0 0 0 1 0 1 0 FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 33 FIT RESOURCES JANUARY 2009
  • 34. KELLY MR. KALULE 0 0 1 0 1 0 0 1 0 0 0 1 0 1 0 MR.KAM ULASI TOM 0 0 1 0 1 0 0 0 1 0 0 1 0 NABULY A JANE 0 0 1 0 1 0 0 1 0 0 0 1 0 1 0 NABUN YA HARIET 0 1 0 1 0 0 0 1 0 0 0 1 0 1 0 NALON GO 0 0 1 0 1 0 0 1 0 0 0 1 0 1 0 NANSE REKO HARIET 1 0 0 1 0 0 0 1 0 0 0 1 0 1 0 NDAWU LA RONAL D 0 0 1 0 0 0 0 0 1 0 0 1 0 NDORI JULIUS 0 1 0 0 0 0 0 0 1 0 0 1 0 SENTO NGO DAN 0 0 1 0 1 0 0 1 0 0 0 1 0 1 0 SUNDA Y G. TUGUM E 0 1 0 0 1 0 0 0 1 0 0 1 0 1 0 TUMWI NE ARNOL D 0 1 0 0 0 1 0 1 0 0 0 0 1 1 0 TWEHE YO GASHO M 0 0 1 0 1 0 0 1 0 0 0 1 0 1 0 WALUL YA MUKAS A 0 0 1 1 0 0 0 1 0 0 0 1 0 1 0 Total 1 5 20 5 10 5 4 19 4 1 1 22 3 22 1 FINAL REPORT FOR BDS DIAGNOSTIC IN UGANDA 34 FIT RESOURCES JANUARY 2009