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close this bookStrategies for market orientation of small scale milk producers and their organisations. Proceedings of a worshop held at Mogororo Hotel, Mogororo, Tanzania, 20-24 March 1995. (1995)
close this folderSession 5: Comparative evaluation of dairy marketing systems.
close this folderAlternatives to a parastatal marketing monopoly
View the document(introduction...)
View the document1.0 Introduction
View the document2.0 History of the dairy industry in Tanzania
View the document3.0 Present demand of supply of milk and milk products.
View the document4.0 Policy on milk marketing
View the document5.0 The performance of TDL
View the document6.0 Current milk marketing systems in Tanzania
View the document7.0 Recommended alternative to monopoly milk marketing
View the document8.0 The role of ministry of agriculture
View the document9.0 Conclusion

3.0 Present demand of supply of milk and milk products.

Tanzania is far from self sufficient in milk and milk products. In most parts of the country supplies of liquid milk and manufactured dairy products are insufficient to meet consumers demand. This shortfall is most significant in the urban areas, where there is a growing demand from rising populations for dairy products. However, per capital consumption differ from region to region as shown in Table 1.

Data on milk consumption in the rural and urban markets are inadequate and so accurate demand projections have been difficult to establish. Therefore current consumption levels and the potentials for market expansion of milk and milk products can only be estimated. However, it is clear from past experience and from various house-hold budget surveys of 1984 and 1993; that her is a large unsatisfied demand for dairy products both in urban and parts of rural areas. Despite the large number of cattle in Tanzania, production of milk and milk products has not satisfied the demand. Particularly in the urban market. By 1970 the traditional livestock sector commercial sector produced 22.9 million litres of milk (Shayo et at 1982). Estimated national milk consumption levels of milk 1981 litres by 1990 after the World Bank supported dairy project - IDA Credit 580 TA completion. This could have raised the per capital consumption of milk from 22.4 to 25 litres. The general performance of the dairy industry has been not encouraging despite the Government efforts to be self sufficiency in milk supply.

Milk production, collection and marketing

Milk production trend

The livestock development sub-division and the dairy parastatal companies in Tanzania responsible for milk production, processing and marketing have experienced serious problems in conducting their business leading to decline in their performance and finally ending into liquidity problems.

Despite the large number of cattle in Tanzania, production of milk and milk products has not satisfied the demand, particularly in the urban market. Estimated national milk production and consumption levels for the past 20 years in Tanzania is as shown by the Table 2 below.

Several studies by the Household Budget Survey have indicated that milk and milk products were not sufficient to meet the local demand and the Government has been spending a great proportion of the scarce foreign exchange in importing dairy products to bridge the gap between demand and supply.

Table 2: Milk production and consumption trend in Tanzania

YEAR

POPULATION (MILLION)

MILK PRODUCTION (MILL. LITRES)

PER CAPITA CONSUMPTION (LITRES)

1970/71

13.3

303

22.9

1977/78

16.3

334

20.5

1981/82

17.5

391

22.4

1985/86

21.7

442

20.4

1988/89

23.4

258

20.5

1989/90

24.2

490

20.4

1990/91

25.2

500

19.8

1991/92

25.9

525

20.3

1992/93

26.6

585

21.0

1993/94

27.3

555

21.3

Source:

1. Livestock Development Program 1989
2. MALD - Budget Speech 1987/86 - 1993/94
3. National Food Strategy 1985.

3.2. Milk collection

Most of the milk produced in the country is consumed at the farm level or sold to neighbors. The government's policy is however, to attempt to channel surplus milk to dairy plants for commercial processing with a view to supply urban markets with hygienic milk and milk products, at the required standard.

Rural Milk collection had been organized by the TDL. A network of collection routes on the village feeder roads has been established by each plant, these routes on the village feeder roads has been established by each plant, these routes had collection centers equipped with cooling facilities which were provided and operated by Tanzania Dairy Limited (TDL). In addition, a number of producers deliver their milk directly to the processing plants, earning a collection margin.


Milk collection and processing is carried out by seven processing plants with total installed capacity of 309,000 litres per day. However, other small processing plants are undertaken by other parastatals and private companies. The rural performance of milk collection has been poor as indicated on table below.