Low prices for dairy products and poor infrastructure are undermining the sector’s potential, livestock farmers say.

Gad Tegeri Gahiya is the president of Nyabihu dairy farmer cooperatives’ union. It has 534 members and between 25,000 and about 30,000 cows around Gishwati National Park and Nyabihu.

"We collect between 70,000 (during the dry season) and 90,000 litres per day (rainy season),” he said.

"But there is no ready market for our produce. Our cows can yield much more milk if well fed, but because of the lack of market, farmers are not motivated enough to feed their cows well,” he said.

He said some cows produce 10, eight or five litres while others can yield up to 20 litres if well fed, adding that they want to introduce hybrids that can produce up to 50 litres per day.

According to Ministry of Agriculture’s National Dairy Strategy, farmers’ share of the final retail price is low (less than 30 per cent for milk sold through the Alternative Milk Sector (AMS) and less than 20 per cent of milk sold through the formal sector) compared to international standards of 50 per cent.

The seven-year strategy estimates that the return on capital invested in dairy production ranged from 16 per cent in Gishwati to over 30 per cent in Nyagatare.

"A farmer gives medicine to a cow every three months. Each week, they are sprayed with antibiotics. They have to be fed and herdsmen are hired to look after the cattle. All that is investment,” Gahiya said.

"Artificial insemination ranges from Rwf10,000 to Rwf20,000 per cow, while fencing the feedlot costs about Rwf500,000,” he added, noting that at least a litre of milk should be sold at Rwf200 if the farmers are to make a profit.

Agnes Mukangiruwonsanga, the president of IAKIB, a dairy farmers’ cooperative in Gicumbi District, said they produce between 27,000 and 35,000 litres of milk per day and have constant customers who buy a litre at Rwf200.

‘‘Even then, Rwf200 was very low given the cost of milk production,’’ she said.

"We buy nutritious feeds to complement grass in order for the cows to produce quality milk. A cow consumes five or more jerry cans per day while a jerry of animal feeds costs Rwf200. And getting forage during the dry season is more difficult,” she said.

Grace Gasana, the Value Chain Development Coordinator at Land O’Lakes International Development, said the organisation has been implementing "Rwanda Dairy Competitiveness Programme II (RDCP II),” a five-year $15 million programme funded by USAID that will end in December, this year.

The project’s interventions revolve around milk value chain in the dairy sector, including milk production and processing.

In an interview with The New Times, she said: "The price for milk is not regulated and it’s a challenge.”

"There has been good progress in the dairy sector in recent years. But one of the issues we are facing in the sector is the pricing. The most a farmer can be paid in the Northern Province is Rwf150, a litre,” she said, adding that at least farmers should get Rwf200 per litre.

She said in the Eastern Province, a farmer gets about Rwf200 while some get Rwf180, with some farmers in Kigali selling at Rwf300 or even Rwf350 per litre.

Role of milk processing plants

Gahiya said once Mukamira Dairy plant starts operations, it will help address the market issue but added that it has capacity to process 40,000 litres of milk per day, yet the area needs a processing plant with a capacity of at least 100,000 litres.

Gasana said there is a need to invest more in milk processing plants in different districts across the country, because they help farmers get favourable markets for their milk.

The Permanent Secretary for the Ministry of Agriculture and Animal Resources, Jean Claude Kayisinga, acknowledged the problem of lack of harmonised prices but said there was a plan to address it.

"Because of the pricing issues, Rwanda Agriculture Board (RAB), and the Ministry for Agriculture and Animal Resources are going to work closely with RNDP to come up with a proposal on how we can harmonise prices,” he said.

In 2013, Rwanda produced approximately 445,000 tonnes of milk with an estimated farm value of Rwf70 billion ($115.3 million).

According to figures from RAB, milk production has since increased to over 710,000 tonnes against the target of 723,831 tonnes by 2017.

Currently, a Rwandan consumes an average of 59 litres of milk per year but strategies are being designed to double the consumption by 2020.

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