Making the Connection: Value Chains for Transforming Smallholder Agriculture - Breakout session on
livestock and fish, 7 November 2012
As a result of population growth, rapid urbanization and changes in dietary patterns, there is fastgrowing demand for livestock and fish products in global markets and in developing countries. This
creates an opportunity for demand-led development interventions that have the potential to benefit the
1 billion people whose livelihoods directly or indirectly depend on livestock and the 0.5 billion people
that depend on fish globally. This round table, facilitated by Mr Derek Baker (ILRI), supported by Ms
Froukje Kruijssen (WorldFish) examined livestock and fish value chains and focused on drawing out
lessons from participants’ experience of interventions and the reasons contributing to interventions’
success or failure. Three panel members set the scene for the discussion in which the entire audience
was actively involved. Panel members:
 Mr Gizaw Negussie, Senior Technical Advisor of the Namibian Meat Board, the regulatory body of
the meat industry in Namibia. A unique feature of the Namibian livestock industry is its division into
two parts, the large scale export sector and the small scale communal segment. To support the
communal farmers, commercial farmers have self-imposed a levy on the exports of beef and
smallstock from commercial farms, thereby generating funds to help develop livestock in the
communal areas, north of the county’s export-enforced quarantine fence.
 Dr. Sherif Sadek, Aquaculture Consultant from Egypt, who has worked with aquaculture producers in
Egypt, Algeria, and other countries on a wide range of aquaculture development projects on mullet,
seabream and tilapia. He advises companies on production technologies and market-related issues
for both smallholders and large commercial farms.
 Ms Mayasa Ayoub Simba, Registrar of the Tanzanian Dairy Board, a statutory body which promotes
production, collection, and marketing of quality milk through facilitating dairy smallholders along
the value chain. Milk production in Tanzania is carried out in two distinct production systems: small,
low input extensive systems and large commercialised dairy farms - with the former producing the
great majority of milk.
Value proposition: when challenged by the facilitator, participants had initial difficulty in identifying
specific “value propositions” as offered by smallholder in livestock value chains. Discussion helped focus
these definitions, which centred on two themes: consumer segments (those demanding high quality)
and cost savings by way of improved organization or access to inputs and services. For example, poor
tilapia producers can take advantage of consumer segments by supplying lower grade fish to poor
consumers. Attributes identified by ILRI in the past such as food safety, colour, presentation, and
packaging as value propositions resonated with the participants’ experience.
Upgrading opportunities for smallholders: The panel members and the audience agreed that there is
great potential for poor, small-scale producers to take advantage of the opportunities presented by the
growing demand for meat, milk and fish. Interventions highlighted included organizational change
(collective action, auction systems), training for all value chain actors in value adding activities
(especially for producers and traders), facilitation and co-ordination of inputs and sales, and trade
interventions and barriers imposed by government. Examples were given of organization of dairy
farmers into farmer groups and cooperatives in Tanzania, Nigeria and Senegal and establishing
collection centres to overcome marketing and logistic challenges of dairy farmers’ being scattered over
large areas. These cooperative models also facilitated the introduction of capacity building and payment
systems based on quality. Cooperative models also have been successful for small-scale fish farmers,
allowing producers to share costs and make efficient use of natural resources. In terms of more direct
government interventions, Namibian experience of government-financed upgrading of facilities for
production of higher quality beef products was cited, enabling the product to compete in the
international market, and allowing access to new (international) markets for smallholders.
Formal and informal markets: Examples of co-existing formal and informal markets were provided from
the Tanzanian dairy sector and the South African beef market. The dual systems provide opportunities
for smallholders through different routes, either by providing more employment opportunities (dairy
Tanzania) or by allowing farmers to take advantage of price fluctuations in both markets (South African
beef).
Intermediaries: Participants expressed a range of opinions and experiences on the role of traders.
Informal Kenyan goat markets were reported to be constrained by excessive trader margins and traders
were considered to be exploiting farmers. However, experience in Ethiopian value chain development
focused on building relationships and trust so that market actors could work together. Also in Ethiopia,
traders were engaged in enabling pastoral farmers to supply dairy processors.
Financing for livestock and fish value chains: Participants highlighted options to attract more capital
into the chain. It was emphasized that cooperatives should operate as businesses rather than non-profit
organizations in order to attract investments. In some countries governments have provided funds to
lower risks and enhance incentives for commercial banks to lend to producers of livestock and fish. In
South Africa levies on meat exports contribute to investment. In several countries, it was reported that
government is offering grants and soft loans through development institutions for farmer organizations
which in turn lend to producers. Producer organisations are used in this way because they understand
the producers’ needs, and the risks they face.
Gender roles in livestock and fish value chains: All participants reported a clear role for women in
livestock and fish value chains and made observations about their control over income derived from
these chains. However, some participants reported appropriation of such benefits by men, as marketing
became more organized and profitable, although this was not observed everywhere (e.g. not in Tanzania
dairy). Simultaneously, women in some cases became liable for input costs and household expenses as
their income grew.
Roles for value chain actors and stakeholders
The best role for producer groups was stated to be the creation of critical mass of product and
producers, to attract buyers and input sellers and to create a visible partner for external contacts and
trade. Transformation of producer groups into financial and business entities was advocated by most
participants.
The majority of the group felt that their government did not have a vision to develop smallholder value
chains. This vision is considered important in order to transform subsistence farmers into productive
farmers. Ideas on ideal government roles included the provision of an enabling environment of
infrastructure such as roads and setting up institutional bodies that represent the interests of the
smallholders. Some participants also felt the government should protect the local producers by putting
in place tariffs on imported substitutes for local produce. In Nigeria, a policy forcing a large foreign dairy
company to include a proportion of local milk into their process, has helped local dairy producers to
overcome challenges in trying to compete with foreign powdered milk.
Examples were given of situations where governments were successful enablers, growing the livestock
sector through supportive policies, and providing preferred supplier arrangements for smallholders with
public institutions.
The ideal role for the private sector was among others seen to be promoted by public-private
partnerships. The proposed key to success of involvement of the private sector is that both buyers and
producers have an incentive to participate. An important role for the private sector was considered to
be training and information provision to producers so that they can produce high quality products that
meet the requirements of the buyer.