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Department of Agricultural Economics and Agribusiness, Sokoine University of Agriculture, P.O. Box 3007 Morogoro,
Tanzania.
2
Faculty of Veterinary Medicine, Sokoine University of Agriculture, P.O. Box 3015 Morogoro, Tanzania.
3
Institute of Continuing Education, Sokoine University of Agriculture, P.O. Box 3044 Morogoro, Tanzania.
Despite a large diversity of livestock species in Tanzania, most livestock keepers are not
commercial oriented. However, this paper analyzed commercial settings particularly the
efficiency of a pastoral milk marketing system in Kilosa District and identifies strategies to
improve milk marketing. A cross-sectional research design was employed to collect data using
interview schedule, focus group discussions and key informant interviews. Marketing margins,
descriptive statistics and Structure-Conduct-Performance (SCP) model were used as analytical
tools. The findings show that pastoral milk marketing is not efficient but profitable. This
signifies potential for increasing income for pastoralist if milk efficiency was improved. Net
profit margins realized per liter were TZS 332.00(1 USD = TZS 1800.00), TZS 65.00 and TZS
141.00 by producers, small scale milk vendors and retailers, respectively. The market
information flow was not transparent. The pastoral system had no defined standards, grades, or
product differentiation in packaging thus signaling market inefficiency. Commercialization
focusing on promotion of pastoral milk marketing, through introduction of community based
extension services and village community banks, empowerment of small and medium scale
processors, training on proper milking and milk handling need to be considered in the future
intervention strategies.
Key words: Marketing chains, profit margins, pastoralists, Kilosa district.
INTRODUCTION
The majority of the worlds estimated 1.3 billion poor
people live in developing countries where they depend
directly or indirectly on livestock for their livelihoods
(World Bank, 2008 and FAO, 2009). In Tanzania, out of
the 4.9 million agricultural households about 36% are
keeping livestock of whom 35% are engaged in both crop
and livestock production (Njombe et al, 2011). According
to Tanzanian Economic Survey of 2010, the sector grew
by 3.4%, and contributed about 3.8% to the Gross
Domestic Product (GDP) of which 40% came from beef,
A milk marketing system for pastoralists of Kilosa district in Tanzania: market access, opportunities and prospects
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A milk marketing system for pastoralists of Kilosa district in Tanzania: market access, opportunities and prospects
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Table 1. Number of mean cattle holding size and mean milk production of sample household pastoralists
Variable Category
Central Zone
Northern Zone
Southern Zone
Number of Cows
48
20
32
District
Average
28
47
1
116
23.73
23.62
35.97
20
0
48
13.10
11.83
17.91
32
0
83
9.44
7.38
9.76
28
0
70
14
12
18.11
15.26
9.26
5.44
8.87
Table 2: Mean milk yield per day and market share of pastoral household
Items
Season
Amount (Litres)
Wet season
Dry season
18.11
8.87
Wet season
Dry season
Wet season
18.11
5.08
27.08
A milk marketing system for pastoralists of Kilosa district in Tanzania: market access, opportunities and prospects
Leonard et al.
092
Cost item
Transport cost
Storage costs
Packaging costs
Measuring costs
Spoilage
Other costs
Total costs
Table 4. Average cost and Profitability of pastoral milk vendor per liter
Item
Average Buying price
Average Selling price
Transport costs
Storage costs
Packaging costs
Labour costs
Total costs
Marketing margin
Net Marketing margin (profit ) per liter
Costs(TZS)
408.82
535.29
36.06
6.25
7.81
10.52
60.64
126.47
65.83
Table 5. Average costs and profitability of pastoral milk retailers per liter
Item
Average Buying price
Average Selling price
Transport costs
Storage costs
Packaging costs
Measuring costs
Tax(District collection)
Spoilage
Labour costs
Other costs
Total costs
Marketing margin
Net Marketing margin (profit ) per liter
Costs (TZS)
607.69
942.31
31.09
2.91
7.81
0.18
5.41
2.05
112.65
31.27
193.37
334.62
141.25
A milk marketing system for pastoralists of Kilosa district in Tanzania: market access, opportunities and prospects
093
Small traders
Retailers
Cost (TZS)
518
120
66
332
409
535
61
65
608
942
193
141
Table 7. Average price of milk at different market levels and % share of consumer price
Selling price(TZS)
Pastoralists
Small traders
Retailers
518
535
942
%(gross
margin
55
15
30
marketing
A milk marketing system for pastoralists of Kilosa district in Tanzania: market access, opportunities and prospects
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A milk marketing system for pastoralists of Kilosa district in Tanzania: market access, opportunities and prospects
CONCLUSION
This paper intended to analyze and document the
efficiency of the pastoral milk marketing system so as to
recommend the strategies for sufficient marketing with
the view of the market structure, conduct and
performance (profitability) of the system in Kilosa district.
Results from this study indicate that pastoral milk
marketing was not efficient but profitable and not
competitive. The profit margins were found to vary
vertically across the chain. Pastoralists received higher
returns than small traders and retailers. The market
information flow was non-transparent and not helpful to
all market participants. It was also observed that the
system had no defined standards and grades and no
product differentiation in terms of defined packaging by
both pastoralists and traders signaling market
inefficiency. Pastoralists and traders have no
organizations where they can collectively influence
prices.
Pastoralists small holders were found to own cattle with
the average of 70 per household. Marketing could be a
means of income providing business opportunities for all
actors in the value chain. This implied that the
pastoralists are in better position to change the economy
of Kilosa district if the pastoral milk market will be
organized and operate efficiently. The government
attention is needed in improving the inefficient marketing
system. Commercialization focusing on promotion of
pastoral milk marketing, through introduction of
community based extension services and village
community banks, empowerment of small and medium
scale processors, training on proper milking and milk
handling; as well as group formation and organizations all
need to be considered in the future intervention
strategies.
095
ACKNOWLEDGEMENT
We would like to extend much gratitude to project entitled
Milk and Beef Value Chains in the Pastoral Livestock
System, Kilosa District under Enhancing Pro-poor
Innovation in Natural Resources and Agriculture Value
Chains (EPINAV) program which funded this research
work. We are grateful to project team leader Prof. Esron
D. Karimuribo and co-project team leader Prof.
Emmanuel K. Batamuzi and all the members of the
project team for their unconditional support and
contributions.
The
authors
acknowledged
the
contributions of Dr. Sylvia Angubua Baluka, ASHISH
PARASHARI, Dr. Mohammed Salem, Pramod Kumar
Mishra ALMAZ GIZIEW, Dr. Kheiry Hassan M. Ishag, Dr.
Prakashkumar Rathod, Dr. Workneh Abebe Wodajo,
Chisoni Mumba and Ritesh Patel for donating their time,
critical evaluation, constructive comments, and invaluable
assistance toward the improvement of this very
manuscript.
REFERENCES
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Sheik S, Edwards S, Allen AJ (2005).Market Structure
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A milk marketing system for pastoralists of Kilosa district in Tanzania: market access, opportunities and prospects
Leonard et al.
096
[http://www.econ.worldbank.org/Website/external/extde
c/extresearch/extwdrs/extwdr2008].
Accepted 17 December, 2015.
Citation: Leonard A, Gabagambi DM, Batamuzi EK,
Karimuribo ED, Wambura RM (2016). A milk marketing
system for pastoralists of Kilosa district in Tanzania:
market access, opportunities and prospects. International
Journal of Agricultural Marketing, 3(1): 090-096.
A milk marketing system for pastoralists of Kilosa district in Tanzania: market access, opportunities and prospects