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Ethiopia – great need for integr

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					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.

				
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