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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

5.0 The performance of TDL

TDL is undergoing restructuring at the moment, as a step towards privatization. Even without the restructuring process its capability to handle local milk collection and marketing has proved to be efficient due to the following problems.

5.1 Low Milk Supply

The company has been operating in an environment where milk production is extremely low in comparison with the capacity of the milk processing plants. Low milk intake from local dairy farmers has declined from 14.3 million litre in 1978 to 10.1 million litres in 1992 (a decline of 71% (. This has often been caused by drought, poor feeding and management of dairy cattle, breed characteristics of local zebu, reluctancy of some farmers to sell their milk to TDL plants due to delayed payments, disagreements in milk prices and unreliable milk collection and transportation. The supply of BSMP and BO has not been adequate to cope with market requirements the company requirements for DSMP and BO is approximately 2,700 metric tonnes/year and 1,080 metric tonnes/year respectively.

5.2 Inconsistent Supply of Packing Materials,

It has been difficult for TDL to get the required packing materials on time for its processing operation due to shortage of foreign currency, as the result TDL setting their milk using plastic pails is disliked by consumers because milk is plastic pails can easily be adulterated with water etc. TDL needs approximately 4,000 rolls of Tetra packing materials and 12,000 kg of plastic film per year for packing milk, but was only able to produce one third of the required packing material.

5.3 Transport, and Plant Machinery Operations:

The few trucks available, majority of the are old and broken down. By 1993, the company required at least 36 new trucks for its plants to operate normal but the company failed to purchase the required number of trucks because its volume of sales was very low and most of the plants are making losses.

The company was affected by breakdown of plant machinery and outdated models of plant machinery which spare parts are no longer available in the market.

5.4 Water and Power Interruption

The intermittent water and power supply has affected milk processing and often leads to spoilage of milk products causing big loss. Although some plants have stand by generators, these are expensive to run.

5.5 Competition with Milk Producers in the market

Following the Government policy on trade liberalization, a number of large scale and small scale farmers who used to sell their milk to TDL milk plants have developed their own market outlets for the milk they produce (i.e are now selling the milk directly to the consumers) thus getting higher prices then TDL buying prices the milk plants which have been affected more are those which are near urban centers.

5.6 Processing Technology

The milk processing plants have been designed to make pasteurized milk with a maximum shelf life of 3 days. This was not different to what farmers ,were selling to local consumers.

5.7 Inflation and Devaluation

TDL like any other parastatals in tanzania has been hit seriously by inflation and devaluation of the Tanzania shilling affecting the operations of the company from 1984 up to this moment.

The control of Retail Milk prices by Government until 1991 made TDL to operate at losses as such its capital structure was eroded. This made the Company fail to operate profitably. On the part of Milk Marketing: TDL had to compete with vendors who were selling fresh milk - whole quality was not well controlled by Government, made TDL lose its milk market.