Giving value to pastoral produce: The case for dairy products

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Giving value to pastoral produceThe case for
dairy products

• A Mauritanian Experiment
• Tiviski Dairy
• Maryam Abeiderrahmane

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Mauritania

• Land area 1,034,000 km2 in the Sahara and the
  Sahel.
• Rainfall between 0 and 200 mm/year (except in
  the southernmost region).
• Population app 3,000,000.
• In 1960, the population was 70 nomadic, now
  officially less than 15.
• GDP per capita app. 1,000.
• Agriculture 20 of GDP, of which 75-85 is from
  stock raising.
• National herd (estimated)
• 1,000,000 dromedary camels,
• 1,500,000 cattle (zebu),
• 8 12,000,000 sheep and goats.
• Public investment in the stock raising sector 5
  to 7 of total (up to 2007), and 33 to 45 of
  investment in the rural sector.

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Tiviski

• Tiviski private enterprise (initially
  mini-dairy) set up in 1987 by Nancy
  Abeiderrahmane (née Jones).
• Basic concept To establish a connection between
  the dairy potential of pastoral stock and
  city-based consumers of fresh produce, currently
  unable to access fresh milk, their basic
  foodstuff.
• Initial investment FF 1,500000 (230,000).
• First product in April 1989 Pasteurised camel
  milk in gable-top cartons.
• Financing, fully paid off
• Initial loan FF 1,000,000 (150,000) from the
  ADF.
• UHT factory (2001) 2,000,000 from EIB,
  Proparco and SFI

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Tiviski

• Cumulative investment app. 4,000,000
• Average annual turnover 3,100,000
• Daily output between 12,000 and the record of
  22,000 litres/day.
• Suppliers up to 1,000 families (seasonal
  variations).
• Personnel 200, all Mauritanians.
• Direct and indirect jobs created estimated at
  3,000.
• Average gross profit between 1989 and 2007 7.7
  , fully reinvested.

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Collecting the milk
The diary industry is a bridge between milk from
the herders and city-dwelling consumers.

• All the raw material camel, cow and goat milk
  is purchased from stock raisers, all of whom are
  nomadic not a single farm exists.
• There are two collection points, located at 200
  and 320 km from the factory the milk is bought
  directly from the individual stock herders,
  without the use of middle-men or collectors.
• The price paid for the raw milk is very high
  0.45/kg for cow and goat milk, 0.57/kg for
  camel milk.
• The milk is collected and delivered twice a day,
  over a radius extending as far as 90 km, by
  private, independent carriers.

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Collecting the milk

• In the heat, raw milk rapidly becomes dangerous,
  or simply spoils.
• For the milk to be healthy and safe, and to
  provide time for it to reach the urban markets,
  it must be processed. Heat treatment is used.
• Tiviski has always gone for cutting-edge
  technology in its determination to provide
  high-quality carton-packaged milk.
• Naturally, there have been many setbacks, and it
  has taken several tough years to reach the
  profitability threshold.

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Brief History
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The Challenges

• In addition to challenges associated with the
  business environment in a less developed country,
  the illustration highlights the specific
  challenges involved in placing a value on milk
  from pastoral sources
• huge distances between herds and markets
• low yield from stock (10 to 20 kg of milk per 24
  hours per supplier)
• lack of infrastructure (roads, electricity,
  water, etc.)
• unreliable climate
• supply subject to extreme seasonal variations
  always either too much milk or not enough
• uncertain quality of raw milk
• shortage of qualified manpower
• on top of everything else, huge imports of UHT
  milk by powerful business interests, with no
  State control
• ultra-liberal ideology of the Government,
  depriving national industry of support.

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The business-oriented approach

• The pragmatic approach adopted by Tiviski has
  turned out to be very powerful
• The company has kept going since 1989, paying
  back big loans.
• Hundreds of stock herders have been lifted out of
  poverty.
• The collection system allows herds to remain
  fairly mobile.
• Stock herders have adapted by separately managing
  non-productive beasts and dairy animals.
• The quality of raw milk is controlled by
  discarding all faulty deliveries.
• Greatest compliment five similar units are now
  competing in a very tight market.

Industry seems to be more effective than
Philanthropy in building a sustainable pastoral
economy. "Social Enterprise"?
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The Tiviski Approach

• First of all, the best produce thanks to a
  strategy based on quality.

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Marketing challenges

• Milk and fresh dairy products, with a short
  shelf-life, are more naturally suited to local
  and national markets.
• The Mauritanian market has been swamped by
  imported UHT products, and consumers lean towards
  products that are 'made elsewhere'.
• To mitigate the seasonal fluctuations in camel
  milk, a camel cheese, the only one in the world,
  has been developed. Mauritanians dont eat
  cheese, but the European market is closed because
  of the absence of a European Union-approved
  laboratory located in Mauritania.
• To mitigate the seasonal fluctuations in cows
  milk, 3 millions have been invested in a UHT
  factory (under a Candia franchise), but the
  importers have boycotted the product.
• Since Mauritania is not a member of ECOWAS, and
  the markets of the North are closed to milk
  imports, regional opportunities are very limited.
• In view of the local competition in addition, the
  factory operates for the most part under
  capacity.

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Ecological repercussions

• It cannot be denied that dairy production leads
  to a greater concentration of stock numbers
  around elivery points.
• And it is a fact that the Mauritanian pastoral
  environment is very close to desert conditions,
  quite extreme and vulnerable.
• Through the sale of milk the stock raisers are
  able to feed their flocks and herds through the
  difficult dry season and in bad years.
• Stock raisers must achieve a balance between the
  cost of transport from distant pastures and the
  cost of fodder.
• The demand for stock feed could be profitable for
  farmers fodder production, agricultural
  by-products.
• All other things being equal, well-managed
  grazing is good for the environment Animals
  were invented by plants to disperse their seeds".

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General comments

• If the value of rural resources is to be raised,
  it will usually happen via the marketing of the
  produce in urban environments.
• This calls for an outlet, the "pull" factor
  INDUSTRIES and businesses which purchase, process
  and package agricultural produce for urban
  markets.
• In order to optimise results, finance and
  investment must be channelled towards these
  businesses.
• These businesses are also the essential route
  towards the export of meat and dairy products of
  pastoral origin.
• Stock raisers are unable to do it by themselves,
  but they have shown themselves to be by nature
  highly adaptable. They can be helped by support,
  but simply pushing them is not enough.

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Additional comments

• Tiviski has set up a number of support systems
  for the benefit of stock raisers milk
  collection, fodder supply at wholesale prices and
  end-of-month credit, veterinary care,
  vaccination, feeding and health information,
  loans from time to time, free mosquito net
  impregnation, etc.
• The basic advantage of operating via the factory
  is that it allows for payment for fodder and
  services to be made via a deduction from the milk
  payment.
• Even when suppliers have managed to organise
  themselves so that they can manage some of the
  services by themselves, they still require
  Tiviski to make payment deductions and then to
  reimburse the individual stock raisers.
• This important factor is sometimes poorly
  understood by well-intentioned NGOs, which act as
  though private enterprise was fundamentally EVIL.

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Conclusion

• If Europe were to amend its priorities and decide
  to help less-developed countries to develop,
  instead of protecting its own markets and forcing
  less developed countries to open up to its own
  products, it would be easier to create local
  added value based on pastoral stock-raising
  products, thus achieving a secure income for
  stock-rearing communities.
• Governments could be urged to implement policies
  which were more favourable to pastoralists, and
  above all to manage imports in a way that
  supports the access of local produce to the
  domestic market.
• It is crucial that financing be made available to
  private entrepreneurs who are prepared to enter
  the fray with no expectation of quick profits, in
  return for the great satisfaction of making a
  significant contribution to progress in their
  homelands.

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• Thank you!