Opportunities for Livestock in Promoting Rural Commercialization in Tanzania
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1 Opportunities for Livestock in Promoting Rural Commercialization in Tanzania Amos Omore, Country Representative, ILRI-Tanzania 3rd Annual Policy Conference on The Role of Agri-food Systems in Promoting Industrialization in Tanzania : Enhancing Linkage of Upstream and Downstream Value Chain Activities in the Context of Agriculture Transformation, 1-3 March 2017, Dar es Salaam
2 Key messages Livestock is central to livelihoods in Tanzania but is frequently overlooked. Examples: Livestock sector makes up about 40% of ag GDP in developing countries, including those with fewer livestock numbers than Tanzania where the sector contributes only 7.5% With only 3% improved breeds, Tanzania s dairy industry contributes 30% to livestock GDP, 13% to agricultural GDP and 1.5% to overall GDP. These numbers could be five times higher going by neighbors achievements Livestock receives only 4% of agricultural financial assistance globally. Need for more investments!
3 There has been underinvestment! Tanzania livestock and its economy Third highest livestock numbers in Africa contribute to only 13% to ag GDP Tanzania cattle examples: 25m cattle - Africa's 3 rd largest 0.72 m improved dairy 2 billion litres per yr Dairy cattle contributes 1.5% of total GDP History of low private and public investments Investments now increasing (e.g., ongoing PAID project) Comparison with elsewhere (Ke, Rw) Globally, the livestock sector makes up about 40% of ag GDP (e.g., 42% of Ag GDP in Kenya) Kenya/Rwanda cattle examples: 18m cattle in Kenya Africa s 5 th 3.8m improved dairy Africa s largest 5 billion litres per yr Dairy cattle contribute 8% of total GDP in Kenya; 6% in Rwanda Long history of private and public investments (e.g., AI subsidy for 10 years)
4 Global context on animal source foods: 5 of 6 highest value global commodities (total value of these 5=US Int $715 billion) Cow milk has overtaken rice Net production value (Int $) billion net production value (Int $) billion production (MT) Production (MT) millions 0 0 High value = foremost agribusiness opportunity: the market value of Africa s animalsource foods in 2050 estimated at USD151 billion! FAOSTAT 2015 (values for 2013)
5 Drivers of change: population growth mostly in Africa Anticipated change Asia: +20% Africa: +113% Europe: -4%
6 Tanzania continues to be among countries with hi IMF (2015) World Economic Outlook
7 Gains in meat consumption in developing countries are outpacing those of developed Million metric tonnes developing developed
8 % growth in demand for livestock products Beef 250 Pork E.Asia Pacific South Asia China Poultry SSA High income E.Asia Pacific China South Asia Milk SSA High income High income SSA South Asia China E.Asia Pacific High income SSA South Asia China E.Asia Pacific Figure 1. Estimates of the % growth in demand for animal source foods in different World regions, comparing 2005 and Estimates were developed using the IMPACT model, courtesy Dolapo Enahoro, ILRI. 8
9 What s special about animal/smallholder food? 90% of animal products are produced and consumed in the same country or region Most are produced by smallholders Over 70% of livestock products are sold informally Almost 1 billion rely on livestock for livelihoods
10 Demand for livestock commodities in developing economies will be met the only question is how Scenario #1 Meeting livestock demand by importing livestock products Scenario #2 Meeting livestock demand by importing livestock industrial production know-how Scenario #3 Meeting livestock demand by transforming smallholder livestock systems
11 Replacing the 90% of locally produced animal commodities with imports is not feasible Economically Africa s food import bill (2013): US $ 44 billion About one fifth is livestock (highest after cereals): Meat: US $ 5 billion; Milk: US $ 4 billion Business as usual: the import bill doubles
12 Challenges and opportunities in advocating livestock Communicating: Diversity Complexity Balancing messages goods (e.g., good nutrition, livelihoods) bads (e.g., zoonoses, GHG)
13 Trends of sector contributions to GDP and returns to investments in Tanzania
14 Access & use of inputs and services increases productivity significantly but is limited to only 20% The 20% of households that use extension services earn thrice than those who don t!
15 Huge productivity gaps persist between rich and poor countries Gaps of up to 430% in milk for Africa! The opportunity for agribisiness: By 2050 the world will consume 1 billion tonnes of dairy/year Demand in Africa, especially E.Africa triples Steinfeld et al. 2006
16 Need to identify clear entry points for growing each value chain Example of identified entry points to grow commercial dairying where it is yet to take root Investments upstream in capital-intensive processing plants to pull production are underutilized (<30% capacity utilization) Investments downstream in inputs and services to push production have been inadequate, Therefore, Maziwa Zaidi partners chose to Strengthen the weak middle comprising; building hubs around milk traders Innovation platforms / alliances at various levels complement for co-learning and dialogue to catalyze widespread innovation (e.g., DDF) Promoting sustained R&D partnerships to generate and spread benefits (e.g., platforms for genetics recording and feedbacks through ICT and have been initiated)
17 Tanzania Livestock Modernization Initiative (TLMI) identified various entry points to build upon Entry points identified for: Rangeland conservation Genetics gains Beef value chains Poultry value chains Livestock markets Animal health & human welfare Livestock research and extension Resilient pastoral communities Livestock and conservation Private investment driven transformation Mainstreaming livestock into rural development The MALF Livestock Master Plan is contributing evidence for returns to investment options across major livestock value chains MALF 2015:
18 Pathways towards more investments require concerted and coherent action through strong R&D partnerships Maziwa Zaidi program aims to catalyze changes towards more investments, focusing on a few changes at a time Coming soon: Conference on opportunities for inclusive investments in dairy value chains in Tanzania.
19 better lives through livestock ilri.org The presentation has a Creative Commons licence. You are free to re-use or distribute this work, provided credit is given to ILRI.
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