Tetra Pak Food for Development Office 2006-06-20 Ethiopia – School milk and integrated dairy development Background Ethiopia has a lot of cattle. Around 10 million cattle produce meat and milk and these two sectors are gradually developing and getting more and more specialized. Dairy stakeholders in Ethiopia are organizing themselves more and more. The Dutch funded organization SNV is facilitating stakeholders meetings regularly and a dairy processors organization has just been established. There are a number of dairy cooperatives, some of which receive assistance from donors. There are several dairy development programmes running, for example Land O’Lakes’ project to develop dairy farming and milk collection in two regions of the country. Land O’Lakes is also making a market study on demand and consumption of dairy products. SNV is going to make research on the milk production and processing in Ethiopia. Despite the positive developments, the value chain for milk in Ethiopia is still very weak. Dairy processors are now investing in increased capacity and it is crucial that they get support in collecting more milk of good quality and that the market for dairy products is developed. The biggest dairy in the country, the private company Sebeta Agro Industry, processes around 30 000 litres per day at present. Around 6 000 - 10 000 litres of this milk comes from the owner’s own dairy farm with 600 cows. Some milk is also collected from other dairy farmers in the region. Still, the major part of the milk processed is milk powder which is reconstituted into liquid milk. Sebeta Agro Industry is in the process of establishing the first UHT dairy processing facility in the country, which is expected to start operation in September 2006. The new production lines will produce 500 ml carton pouches (Tetra Fino Aseptic) and 250 ml portion packages (Tetra Brik Aseptic). The other major dairy in the country, the state owned Dairy Development Enterprise, has been allocated a budget to upgrade its operations and is also considering investing in UHT technology for production of long life dairy products. At present they produce pasteurized milk in 500 ml plastic pouches. The introduction of UHT dairy products on the market will be a great step forward to even out the seasonalities in milk production and consumption. UHT products are aseptically processed and packaged, which gives them a shelf life of 6-12 months without the need for cooling during storage and transportation. Tetra Pak Food for Development Office 2006-06-20 At present the demand for milk and dairy products is very much affected by the fact that a large group of Ethiopia’s population are fasting more than 200 days per year, during which time they are not consuming animal products. When dairies process only pasteurized milk with a short shelf life, this means that processed volumes go down during the time when people consume less. Once UHT technology has been introduced, processing of milk can be more regular leading to a stable sourcing of raw milk for processing as well. This will benefit dairy farmers, who can start to develop production when they have a safe market for their milk. In many countries school milk has proven a very effective way of increasing demand for locally produced, quality dairy products, as is described below. Children are not fasting and could therefore consume milk in school also during the periods when parents are not consuming milk and when therefore milk usually is not available at home. School Milk as a driver of dairy development To build a successful and sustainable dairy industry, all parts of the value chain for milk have to be addressed; from cow to consumer. Different parts of the value chain needs different kinds of support and the situation of course various from case to case. Farmers might need support and training to develop production of milk and increase yields and quality. Dairies might need assistance in evaluating the feasibility of investments and financing for investment in equipment. The dairy relies on a good supply of milk and systems for collection of milk need to be in place. Dairies also need distributors and retailers to reach out to customers. Finally consumers need information on what the dairies offer and on the benefits of drinking good quality milk. School children are one important consumer group. See below illustration of the value chain. Raw Milk Dairy Distribution/ Supply Processing Retail Consumers - support for training - commercial - support for - support of dairy farmers financing of market for consumer - commercial financing equi pment devel opment information of equi pment - school milk From Cow to Consumer – A model for sustainable development School milk programmes create a milk drinking habit that benefits both individua ls and society as a whole. Many countries are involved in school milk programmes and the structures and financing of these programmes vary. Also the reasoning behind the implementation of the programmes vary. The reasons for a government or local authority to support or sponsor school milk could be one or several of the following: Tetra Pak Food for Development Office 2006-06-20 to improve the health of school children – with proper nutrition children grow better and stay healthy to improve academic results of school children – it is difficult to learn on an empty stomach to promote school attendance – parents are more likely to send their children to school (especially girls) if they are fed at school to support the development of the agricultural sector – school milk programmes increase the demand for locally produced milk or eliminates milk surpluses. Jobs are created though the milk value chain. to support the development of the private sector – school milk programmes increase the demand for locally processed milk and supports the local dairy industry School feeding programmes increase the demand for similar products in the commercial market, further fuelling growth. Except for all positive effects listed above, society as a whole benefits when costs for health care are reduced through the increased health and nutritional status of its population. Despite all the positive effects on children’s wellbeing, many governments see school milk mainly as a way of supporting agricultural development. In Thailand and China, the governments have introduced and sponsored school milk to create demand for locally produced milk and increase milk production and processing, thereby creating jobs in the rural areas and in the dairy industry. Bangladesh is one of several countries that has benefited from school feeding funded by USDA. In this case the school milk programme has led to the establishment of two new dairy plants in the country, thereby starting the development of a new industry in the country. From all of these countries there are statistics showing the impact on the dairy sector, for example in the number of jobs created. Milk and nutrition Milk is more than a drink; it is also a very complete food product. Milk contains virtually all the vital nutrients required for growth of young animals and humans. Milk contains 14 of 18 minerals and vitamins that humans need. Both dairy and non-dairy drinks could be fortified with nutrients tailored to meet the nutritional needs of the target population. Tetra Pak has experience from working with many types of fortified products, ranging from fortified water to milk, juices and other drinks. Kazakhstan, Guatemala and Palestine are all examples of countries where Tetra Pak has assisted with the development of fortified milk for school milk programmes. The milk has been fortified with additional nutrients such as Vitamin A, Vitamin D, Folic Acid, Zinc, Iron, etc to address nutrient deficiencies with the children in these programmes. Tetra Pak Food for Development Office 2006-06-20 In 2004 the Copenhagen Consensus concluded that nutrition interventions generate returns among the highest of 17 potential development investments. Overall the benefit- cost ratios for nutrition interventions range between 5 and 200. This is described also in a report recently published by the World Bank called “Repositioning Nutrition as Cent ral to Development – A strategy for Large-Scale Action”. The World Bank report concludes that malnutrition slows economic growth in several ways; direct losses in productivity from poor physical status, indirect losses from poor cognitive function and deficits in schooling and losses owing to increased health costs, which the state ultimately bears. Malnutrition’s economic costs are substantial: productivity losses to individuals are estimated at more than 10 percent of lifetime earnings and gross domestic product (GDP) lost to malnutrition runs as high as 2 to 3 percent. Workshop on school milk and dairy development How can stakeholders continue to support the development of the dairy sector? How can the value chain for milk be further improved? We propose that key stakeholders get together to discuss how school milk based on locally produced and processed milk could be introduced in Ethiopia. Some of the key stakeholders to take part in the School Milk Workshop could be: Ethiopian Ministries of Agriculture, Health, Education, Trade and Industry Dairy companies in Ethiopia Chamber of Commerce NEPAD African Union World Bank World Food Programme FAO USAID Global Alliance for Improved Nutrition (GAIN) University of Michigan advising on Food Security & N utrition Millennium Challenge Corporation Tetra Pak South Africa / Food for Development Office De Laval During the workshop, Tetra Pak and its sister company DeLaval will present its experiences in integrated dairy development and school milk as a catalyst for dairy development. An outline of a pilot school milk programme will also be presented. Very preliminary estimations suggest that a pilot programme covering 50 000 children for one year (200 school days) will create demand for 10 million litres of milk and cost about 2 million USD. Tetra Pak Food for Development Office 2006-06-20 Experience in the Tetra Laval Group Tetra Pak is a world leader in processing and packaging of liquid foods, present in more than 165 countries. Using the aseptic technology, enabling production of long- life products, the milk, juice, water etc can be stored and distributed without refrigeration for a long time without added preservatives or loss of quality. Tetra Pak’s sister company DeLaval is a world- leading supplier of equipment, systems, accessories and consumables for dairy farming and animal husbandry. Tetra Pak Food for Development Office (FfDO) is the mechanism the Company uses to employ the extensive base of knowledge gathered over the years in school feeding and agricultural development programmes and to put that experience to work as part of Tetra Pak’s overall Corporate Social Responsibility efforts. The Tetra Laval group has a long experience in assisting developing countries in building up sustainable integrated dairy production. There are no other companies that can offer systems and expertise in all parts of the value chain – from cow to consumer. In order to develop a sustainable dairy sector it is necessary to use an integrated approach covering the whole chain from the production of raw milk to a demand driven market with well- informed consumers. For more than 40 years, Tetra Pak has been involved in providing milk and other nutritious drinks to school children around the globe, cooperating with stakeholders. Every year, more than 1000 million litres are delivered to schools in Tetra Pak packages, to the benefit of around 40 million school children. An estimated 15 million children of these live in developing countries and countries in transition. It is our experience that with an integrated approach, a sustainable development of an industry based on locally produced inputs can be achieved, jobs created and poverty reduced.