Presented by Michael Peters at the CGIAR Research Program on Livestock and Fish Planning meeting, Nairobi, 27-29 September 2011

1. Update on dairy value chain
development in Nicaragua and
Honduras
Michael Peters and Rein van der Hoek (CIAT)
CGIAR Research Program on Livestock and Fish
Planning Meeting
ILRI Nairobi
27-29 September 2011

2. Why?
 Dairy products important dietary component across social strata
 Consumption growth rates 6.7/11.7% Honduras/ Nicaragua
 Per capita consumption low (100 kg milk equivalent/year)
 Urbanization/population growth, 56 million people, 40% in cities in 2030
 400,000 small scale livestock producers in Central America (1/2
Honduras/Nicaragua), 75% of income from milk sales
 Dairy sector 2nd fastest growing livestock sub-sector in region
 Growing diversity of consumer preferences > opportunity for small
industries to enter into market niches

3. Limitations
 Poor quality and productivity (5 to 10 milking cows,
30 animals per farm, 3 to 5 l milk/cow/day)
 Strong seasonal variation of production and prices
 Market linkages and organizational capacity weak
 Lack of information and technology
 Lack of quality based incentive systems
 Lack of integration with formal sector

4. Projects and capacities
to build on: Projects
 CFC ‘Enhancing Beef Productivity, Quality, Safety, and Trade
in Central America’ ILRI/CIAT
 ‘Value chain focus and targeted interventions can be effective in
generating benefits to small cattle producers, but best
opportunities for dairy production’
 Tropileche ILRI/CIAT
 Technology driven projects

5. Projects and capacities to
build on: Partners
 Long term presence in region/staff placed in Managua,
expertise in forages/feeds and value chains
 Old and new partners NARS, INTA,DICTA, CATIE,
Universities in region, international NGOs such as
CRS, local and regional NGOs (SERTEDESO, SIDE,
FIPAH)
 Link with private seed sector

6. Projects and capacities to build on:
Improved forages, processing,
working with farmers
 Highly productive forages with adaptation to
drought and/or water-logging
 Forage conservation technologies directed at
smallholders
 Farmer based seed supply and concentrate
production
 Experience with value chain work in Central
America
 Working with farmers

7. Engagement as part of CRP
 Communication with old (NARS, SIDE) and new
partners (CRS),
 Side and CATIE were part of consultation on
priority themes and priority regions (link with CRP
1.2, see also next 2 slides)
 Need for additional expertise in M&E and gender
analysis (through CRP); Animal health (but focus is
on service provision

8. Drought prone areas in Central
America
< 4 dry months
4-6 dry months
> 6 dry months
sequía
Drought prone
Fuente: FAO, 2002

9. Priority regions
 Nicaragua
Las Segovias
Matagalpa
Chinandega
León
Carazo
Raan
 Honduras
Yoro (Centro - Norte)

10. Entry points to enhance smallholder dairy
production: Overcoming production, supply
and market constraints
 Production: Enhancing dairy productivity and quality
 Supply: Overcoming seasonal variation and improving quality
and hygiene
 Market/Institutions: Responding to increasingly stringent food
safety standards for internal and external markets (trade
liberalization and urbanization)
 Other considerations: Social justice (gender, value chain
equity), ecological footprint and market differentiation

11. Planned activities: Overcoming the
constraints
 Improved forage, pasture and silvopastoral systems for higher productivity
and seasonal stability
 Improving milk quality/hygiene through better processing techniques
 Value chain analysis focusing on improving economic conditions at
producer level
 Facilitating integration of informal stakeholders (small farmers, processors
and traders) to more dynamic, differentiated markets
 Enhancement of partnerships around specific market opportunities for the
establishment of business models
 Capacity building including technological innovation, farm management and
linkage with service providers and industry
 Emphasizing the concept of eco-efficiency

12. Outcome pathway
certifications of private aninal health services/small holder
Social justice along value chain; ecological sustainability
Outcome: Actor(s)
Increased competitiveness of informal
Changes enabling environment: Recognition of
actors in dairy value chains
Marketing: Link smallholders with formal
markets, year round availability of Research:
SIDE;CATIE;
Supporting:
devlopment;
differentiated high quality dairy products NARS
Associations
Transport and processing: Provide Supporting
Research:
consumers year round with high quality SIDE, CATIE
Supporting:
NARS,
dairy producs: traceability systems Development
Farm and community level - Improved
production
productivity, milk quality and hygiene,
efficient input services, strengthen local Research:
NARS;SIDE;
Supporting:
Developmen;
dairy clusters, seed supply systems CATIE Association;NGOS

13. Gaps
 Adoption of forage grasses in LAC will happen, but M&E and
gender analysis to strengthen
 Regional focus of private sector seed partner
 Integrated analysis and innovation of value chains
 Secured funding for working with partners, operations and staff
Resource mobilization:
 Proposal CFC – advanced to Project pipeline
 Collaboration CRS – link with long term initiatives for improved
livelihoods, food security and NRM